SECOND DIVISION

G.R. No. 141463            August 6, 2002

VICTOR ORQUIOLA and HONORATA ORQUIOLA, petitioners,

vs.
HON. COURT OF APPEALS, HON. VIVENCIO S. BACLIG, Presiding Judge, Regional Trial
Court, Branch 77, Quezon City, THE SHERIFF OF QUEZON CITY and HIS/HER DEPUTIES and
PURA KALAW LEDESMA, substituted by TANDANG SORA DEVELOPMENT
CORPORATION, respondents.

QUISUMBING, J.:

This petition for review seeks the reversal of the decision 1 of the Court of Appeals dated January 28,
1999 in CA-G.R. SP No. 47422, which dismissed the petition to prohibit Judge Vivencio Baclig of the
Regional Trial Court of Quezon City, Branch 77, from issuing a writ of demolition against petitioners,
and the sheriff and deputy sheriff of the same court from implementing an alias writ of execution.
Also assailed is the resolution2 of the Court of Appeals dated December 29, 1999 which denied
petitioners’ motion for reconsideration.

The facts are as follows:

Pura Kalaw Ledesma was the registered owner of Lot 689, covered by TCT Nos. 111267 and
111266, in Tandang Sora, Quezon City. This parcel of land was adjacent to certain portions of Lot
707 of the Piedad Estates, namely, Lot 707-A and 707-B, registered in the name of Herminigilda
Pedro under TCT Nos. 16951 and 16952, respectively. On October 29, 1964, Herminigilda sold Lot
707-A and 707-B to Mariano Lising who then registered both lots and Lot 707-C in the name of M.B.
Lising Realty and subdivided them into smaller lots.1âwphi1.nêt

Certain portions of the subdivided lots were sold to third persons including herein petitioners,
spouses Victor and Honorata Orquiola, who purchased a portion of Lot 707-A-2, Lot 5, Block 1 of the
subdivision plan (LRC), Psd-42965. The parcel is now #33 Doña Regina St., Regina Village,
Tandang Sora, Quezon City. The other portions were registered in the name of the heirs of Pedro,
heirs of Lising, and other third persons.

Sometime in 1969, Pura Kalaw Ledesma filed a complaint, docketed as Civil Case No. Q-12918,
with the Regional Trial Court of Quezon City against Herminigilda Pedro and Mariano Lising for
allegedly encroaching upon Lot 689. During the pendency of the action, Tandang Sora Development
Corporation replaced Pura Kalaw Ledesma as plaintiff by virtue of an assignment of Lot 689 made
by Ledesma in favor of said corporation. Trial continued for three decades.

On August 21, 1991, the trial court finally adjudged defendants Pedro and Lising jointly and severally
liable for encroaching on plaintiff’s land and ordered them:
 (a) to solidarily pay the plaintiff Tandang Sora Dev. Corp. actual damages in the amount of
P20,000 with interest from date of filing of the complaint;

(b) to remove all construction, including barbed wires and fences, illegally constructed by
defendants on plaintiff’s property at defendants’ expense;

(c) to replace the removed concrete monuments removed by defendants, at their own
expense;

(d) to pay attorney’s fees in the amount of FIVE THOUSAND PESOS (P5,000.00) with
interest computed from the date of filing of the complaint;

(e) to relocate the boundaries to conform with the Commissioners’ Report, particularly,
Annexes "A" and "B" thereof, at the expense of the defendants. 3

As a result, in February 1998, the Deputy Sheriff of Quezon City directed petitioners, through
an alias writ of execution, to remove the house they constructed on the land they were occupying.

On April 2, 1998, petitioners received a Special Order dated March 30, 1998, from the trial court
stating as follows:

Before the Court for resolution is the "Ex-Parte Motion For The Issuance of A Writ of
Demolition," filed by plaintiff, through counsel, praying for the issuance of an Order directing
the Deputy Sheriff to cause the removal and/or demolition of the structures on the plaintiff’s
property constructed by defendants and/or the present occupants. The defendants-heirs of
Herminigilda Pedro filed their comment on the said Motion.

Considering that the decision rendered in the instant case had become final and executory,
the Court, in its Order of November 14, 1997, directed the issuance of an alias writ of
execution for the enforcement of the said decision. However, despite the service of the said
writ to all the defendants and the present occupants of the subject property, they failed to
comply therewith, as per the Partial Sheriff’s Return, dated February 9, 1998, issued by the
Deputy Sheriff of this branch of the Court. Thus, there is now a need to demolish the
structures in order to implement the said decision.

WHEREFORE, the defendants are hereby directed to remove, at their expense, all
constructions, including barbed wires and fences, which defendants constructed on plaintiff’s
property, within fifteen (15) days from notice of this Order; otherwise, this Court will issue a
writ of demolition against them.

SO ORDERED.4

To prohibit Judge Vivencio Baclig of the Regional Trial Court of Quezon City from issuing a writ of
demolition and the Quezon City sheriff from implementing the alias writ of execution, petitioners filed
with the Court of Appeals a petition for prohibition with prayer for a restraining order and preliminary
injunction on April 17, 1998.5 Petitioners alleged that they bought the subject parcel of land in good
faith and for value, hence, they were parties in interest. Since they were not impleaded in Civil Case
No. Q-12918, the writ of demolition issued in connection therewith cannot be enforced against them
because to do so would amount to deprivation of property without due process of law.
The Court of Appeals dismissed the petition on January 28, 1999. It held that as buyers and
successors-in-interest of Mariano Lising, petitioners were considered privies who derived their rights
from Lising by virtue of the sale and could be reached by the execution order in Civil Case No. Q-
12918. Thus, for lack of merit, the petition was ordered dismissed. 6

Petitioners’ motion for reconsideration was denied. Hence, this petition, where petitioners aver that:

I.

THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THE DECISION IN

CIVIL CASE NO. Q-12918 CAN ALSO BE ENFORCED AGAINST THE PETITIONERS
EVEN IF THEY WERE NOT IMPLEADED AS PARTIES THERETO.

II.

THE HONORABLE COURT OF APPEALS ERRED IN NOT UPHOLDING PETITIONERS’

TITLE DESPITE THEIR BEING BUILDER IN GOOD FAITH AND INNOCENT PURCHASER
AND FOR VALUE.

III.

PETITIONERS ARE ENTITLED TO INJUNCTIVE RELIEF CONSIDERING THAT THEY

STAND TO SUFFER GRAVE AND IRREPARABLE INJURY IF ALIAS WRIT OF
EXECUTION AND THE SPECIAL ORDER ISSUED BY THE COURT A QUO IN CIVIL
CASE NO. Q-12918 FOR THE DEMOLITION OF ALL THE STRUCTURES ON THE
DISPUTED PROPERTY WERE ENFORCED AGAINST THE PETITIONERS WHO WERE
NOT EVEN GIVEN THEIR DAY IN COURT.7

For our resolution are the following issues: (1) whether the alias writ of execution may be enforced
against petitioners; and (2) whether petitioners were innocent purchasers for value and builders in
good faith.

On the first issue, petitioners claim that the alias writ of execution cannot be enforced against them.
They argue that the appellate court erred when it relied heavily on our ruling in Vda. de Medina vs.
Cruz8 in holding that petitioners are successors-in-interest of Mariano Lising, and as such, they can
be reached by the order of execution in Civil Case No. Q-12918 even though they were not
impleaded as parties thereto. Petitioners submit that Medina is not applicable in this case because
the circumstances therein are different from the circumstances in the present case.

In Medina, the property in dispute was registered under Land Registration Act No. 496 in 1916 and
Original Certificate of Title No. 868 was issued in the name of Philippine Realty Corporation (PRC).
In 1949, Benedicta Mangahas and Francisco Ramos occupied and built houses on the lot without
the PRC’s consent. In 1959, PRC sold the lot to Remedios Magbanua. Mangahas and Ramos
opposed and instituted Civil Case No. C-120 to annul the sale and to compel PRC to execute a
contract of sale in their favor. The trial court dismissed the complaint and ordered Mangahas and
Ramos to vacate the lot and surrender possession thereof to Magbanua. The judgment became final
and executory. When Magbanua had paid for the land in full, PRC executed a deed of absolute sale
in her favor and a new title was consequently issued in her name. Magbanua then sought the
execution of the judgment in Civil Case No. C-120. This was opposed by petitioner Medina who
alleged that she owned the houses and lot subject of the dispute. She said that she bought the
houses from spouses Ricardo and Eufrocinia de Guzman, while she purchased the lot from the heirs
of the late Don Mariano San Pedro y Esteban. The latter held the land by virtue of a Titulo de
Composicion Con El Estado Num. 4136, dated April 29, 1894. In opposing the execution, Medina
argued that the trial court did not acquire jurisdiction over her, claiming that she was not a party in
Civil Case No. C-120, thus, she could not be considered as "a person claiming under" Ramos and
Mangahas.

When Medina reached this Court, we held that the decision in Civil Case No. C-120, which had long
become final and executory, could be enforced against petitioner even though she was not a party
thereto. We found that the houses on the subject lot were formerly owned by Mangahas and Ramos
who sold them to spouses de Guzman, who in turn sold them to Medina. Under the circumstances,
petitioner was privy to the two judgment debtors Mangahas and Ramos, and thus Medina could be
reached by the order of execution and writ of demolition issued against the two. As to the lot under
dispute, we sustained Magbanua’s ownership over it, she being the holder of a Torrens title. We
declared that a Torrens title is generally conclusive evidence of ownership of the land referred to
therein, and a strong presumption exists that a Torrens title was regularly issued and valid. A
Torrens title is incontrovertible against any informacion possessoria, or other title existing prior to the
issuance thereof not annotated on the Torrens title. Moreover, persons dealing with property
covered by a Torrens certificate of title are not required to go beyond what appears on its face.

Medina markedly differs from the present case on major points. First, the petitioner
in Medina acquired the right over the houses and lot subject of the dispute after the original action
was commenced and became final and executory. In the present case, petitioners acquired the
lot before the commencement of Civil Case No. Q-12918. Second, the right over the disputed land of
the predecessors-in-interest of the petitioner in Medina was based on a title of doubtful authenticity,
allegedly a Titulo de Composicion Con El Estado issued by the Spanish Government in favor of one
Don Mariano San Pedro y Esteban, while the right over the land of the predecessors-in-interest of
herein petitioners is based on a fully recognized Torrens title. Third, petitioners in this case acquired
the registered title in their own names, while the petitioner in Medina merely relied on the title of her
predecessor-in-interest and tax declarations to prove her alleged ownership of the land.

We must stress that where a case like the present one involves a sale of a parcel of land under the
Torrens system, the applicable rule is that a person dealing with the registered property need not go
beyond the certificate of title; he can rely solely on the title and he is charged with notice only of such
burdens and claims as are annotated on the title.9 It is our view here that the petitioners, spouses
Victor and Honorata Orquiola, are fully entitled to the legal protection of their lot by the Torrens
system, unlike the petitioner in the Medina case who merely relied on a mere Titulo de Composicion.

Coming now to the second issue, were petitioners purchasers in good faith and for value? A buyer in
good faith is one who buys the property of another without notice that some other person has a right
to or interest in such property. He is a buyer for value if he pays a full and fair price at the time of the
purchase or before he has notice of the claim or interest of some other person in the property. 10 The
determination of whether one is a buyer in good faith is a factual issue which generally is outside the
province of this Court to determine in a petition for review. An exception is when the Court of
Appeals failed to take into account certain relevant facts which, if properly considered, would justify a
different conclusion.11 The instant case is covered by this exception to the general rule. As found by
the Court of Appeals and not refuted by private respondent, petitioners purchased the subject land in
1964 from Mariano Lising.12 Civil Case No. Q-12918 was commenced sometime in 1969. The Court
of Appeals overlooked the fact that the purchase of the land took place prior to the institution of Civil
Case No. Q-12918. In other words, the sale to petitioners was made before Pura Kalaw Ledesma
claimed the lot. Petitioners could reasonably rely on Mariano Lising’s Certificate of Title which at the
time of purchase was still free from any third party claim. Hence, considering the circumstances of
this case, we conclude that petitioners acquired the land subject of this dispute in good faith and for
value.

The final question now is: could we consider petitioners builders in good faith? We note that this is
the first time that petitioners have raised this issue. As a general rule, this could not be done. Fair
play, justice, and due process dictate that parties should not raise for the first time on appeal issues
that they could have raised but never did during trial and even during proceedings before the Court
of Appeals.13 Nevertheless, we deem it proper that this issue be resolved now, to avoid circuitous
litigation and further delay in the disposition of this case. On this score, we find that petitioners are
indeed builders in good faith.

A builder in good faith is one who builds with the belief that the land he is building on is his, and is
ignorant of any defect or flaw in his title. 14 As earlier discussed, petitioner spouses acquired the land
in question without knowledge of any defect in the title of Mariano Lising. Shortly afterwards, they
built their conjugal home on said land. It was only in 1998, when the sheriff of Quezon City tried to
execute the judgment in Civil Case No. Q-12918, that they had notice of private respondent’s
adverse claim. The institution of Civil Case No. Q-12918 cannot serve as notice of such adverse
claim to petitioners since they were not impleaded therein as parties.

As builders in good faith and innocent purchasers for value, petitioners have rights over the subject
property and hence they are proper parties in interest in any case thereon. 15 Consequently, private
respondents should have impleaded them in Civil Case No. Q-12918. Since they failed to do so,
petitioners cannot be reached by the decision in said case. No man shall be affected by any
proceeding to which he is a stranger, and strangers to a case are not bound by any judgment
rendered by the court. In the same manner, a writ of execution can be issued only against a party
and not against one who did not have his day in court. Only real parties in interest in an action are
bound by the judgment therein and by writs of execution and demolition issued pursuant thereto. 16 In
our view, the spouses Victor and Honorata Orquiola have valid and meritorious cause to resist the
demolition of their house on their own titled lot, which is tantamount to a deprivation of property
without due process of law. 1âwphi1.nêt

WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals dated January 28,
1999, and its resolution dated December 29, 1999, in CA-G.R. SP No. 47422,
are REVERSED and SET ASIDE. Respondents are hereby enjoined from enforcing the decision in
Civil Case No. Q-12918 through a writ of execution and order of demolition issued against
petitioners. Costs against private respondent.

SO ORDERED.
U.S. Supreme Court
Time, Inc. v. Hill, 385 U.S. 374 (1967)

Time, Inc. v. Hill

No. 22

Argued April 27, 1966

Reargued October 18-19, 1966

Decided January 9, 1967

385 U.S. 374

APPEAL FROM THE COURT OF APPEALS OF NEW YORK

Syllabus

Appellee, Hill, and his family, in 1952, were held hostage in their home by some
escaped convicts, and were ultimately released unharmed without any violence having
occurred. They later moved away, and appellee discouraged further publicity efforts
about the incident, which had caused extensive involuntary notoriety. A novel about a
hostage incident, but depicting considerable violence, later appeared, and was
subsequently made into a play, these portrayals having been shaped by several
incidents. Appellant's magazine, Life, published an account of the play, relating it to the
Hill incident, describing the play as a reenactment, and using as illustrations
photographs of scenes staged in the former Hill home. Alleging that the Life article gave
the knowingly false impression that the play depicted the Hill incident, appellee sued for
damages under a New York statute providing a cause of action to a person whose
name or picture is used by another without consent for purposes of trade or advertising.
Appellant maintained that the article concerned a subject of general interest, and was
published in good faith. The trial court instructed the jury that liability under the statute
depended upon a finding that the Life article was published not to disseminate news,
but as a fictionalized version of the Hill incident and for the purpose of advertising the
play or increasing the magazine's circulation. The court also instructed the jury that
punitive damages were justified if the jury found that the appellant falsely connected Hill
with the play knowingly or through failure to make a reasonable investigation, and that
personal malice need not be found if there was reckless or wanton disregard of Hill's
rights. The jury awarded compensatory and punitive damages. Though liability was
sustained on appeal, the Appellate Division ordered a new trial as to damages, at which
only compensatory damages were awarded, and the Court of Appeals affirmed. The
New York courts have limited the reach of the statute as applied to reports of
newsworthy persons or events, and have made it clear since reargument here that truth
is a complete defense. (Spahn v. Julian Messner, Inc., 18

Page 385 U. S. 375

N.Y.2d 324, 221 N.E.2d 543 (1966)). However, the New York courts allow recovery
under the statute when such reports are "fictitious."

Held:

1. Constitutional protections for free expression preclude applying New York's statute to
redress false reports of newsworthy matters absent proof that the publisher knew of
their falsity or acted in reckless disregard of the truth. Cf. New York Times Co. v.
Sullivan, 376 U. S. 254. Pp. 385 U. S. 380-391.

(a) Erroneous statements about a matter of public interest, like the opening of a new
play linked to an actual incident, which was the subject of the Life article, are inevitable,
and, if innocent or merely negligent, must be protected if "freedoms of expression are to
have the breathing space' that they 'need to survive. . . .'" Id. at 376 U. S. 271-272.
Pp. 385 U. S. 388-389.

(b) But constitutional guarantees of free expression can tolerate sanctions against
calculated falsehood without impairment of their essential function. P. 385 U. S. 389.

2. Since the evidence in this case would support a jury finding either (1) that appellant's
inaccurate portrayal of the Hill incident was innocent or merely negligent or (2) that it
was recklessly untrue or knowingly false, the trial court's failure properly to instruct the
jury that a verdict of liability could be predicated only on a finding of knowing or reckless
falsity in the publication of the Life article constituted reversible error. Pp. 385 U. S. 391-
397.

3. A declaration would be unwarranted that the New York statute is unconstitutional on

its face even if construed by the New York courts to impose liability without proof of
knowing or reckless falsity, because the New York courts have been assiduous to
construe the statute to avoid invasion of freedom of speech and of the press. P. 385 U.
S. 397.

15 N.Y.2d 986, 207 N.E.2d 604, reversed and remanded.

Page 385 U. S. 376

MR. JUSTICE BRENNAN delivered the opinion of the Court.

The question in this case is whether appellant, publisher of Life Magazine, was denied
constitutional protections of speech and press by the application by the New York courts
of §§ 551 of the New York Civil Rights Law [Footnote 1] to award appellee damages on
allegations

Page 385 U. S. 377

that Life falsely reported that a new play portrayed an experience suffered by appellee
and his family.

The article appeared in Life in February, 1955. It was entitled "True Crime Inspires
Tense Play," with the subtitle, "The ordeal of a family trapped by convicts gives
Broadway a new thriller, The Desperate Hours.'" The text of the article reads as follows:

"Three years ago, Americans all over the country read about the desperate ordeal of the
James Hill family, who were held prisoners in their home outside Philadelphia by three
escaped convicts. Later, they read about it in Joseph Hayes' novel, The Desperate
Hour, inspired by the family's experience. Now they can see the story reenacted in
Hayes' Broadway play based on the book, and next year will see it in his movie, which
has been filmed but is being held up until the play has a chance to pay off."

"The play, directed by Robert Montgomery and expertly acted, is a heart-stopping

account of how a family rose to heroism in a crisis. LIFE photographed the play during
its Philadelphia tryout, transported some of the actors to the actual house where the
Hills were besieged. On the next page, scenes from the play are reenacted on the site
of the crime."

The pictures on the ensuing two pages included an enactment of the son being
"roughed up" by one of the convicts, entitled "brutish convict," a picture of the

Page 385 U. S. 378

daughter biting the hand of a convict to make him drop a gun, entitled "daring daughter,"
and one of the father throwing his gun through the door after a "brave try" to save his
family is foiled.

The James Hill referred to in the article is the appellee. He and his wife and five children
involuntarily became the subjects of a front-page news story after being held hostage by
three escaped convicts in their suburban Whitemarsh, Pennsylvania, home for 19 hours
on September 11-12, 1952. The family was released unharmed. In an interview with
newsmen after the convicts departed, appellee stressed that the convicts had treated
the family courteously, had not molested them, and had not been at all violent. The
convicts were thereafter apprehended in a widely publicized encounter with the police
which resulted in the killing of two of the convicts. Shortly thereafter, the family moved to
Connecticut. The appellee discouraged all efforts to keep them in the public spotlight
through magazine articles or appearances on television.
In the spring of 1953, Joseph Hayes' novel, The Desperate Hours, was published. The
story depicted the experience of a family of four held hostage by three escaped convicts
in the family's suburban home. But, unlike Hill's experience, the family of the story suffer
violence at the hands of the convicts; the father and son are beaten and the daughter
subjected to a verbal sexual insult.

The book was made into a play, also entitled The Desperate Hours, and it is Life's
article about the play which is the subject of appellee's action. The complaint sought
damages under §§ 551 on allegations that the Life article was intended to, and did, give
the impression that the play mirrored the Hill family's experience, which, to the
knowledge of defendant ". . . was false and untrue." Appellant's defense was that

Page 385 U. S. 379

the article was "a subject of legitimate news interest," "a subject of general interest and
of value and concern to the public" at the time of publication, and that it was "published
in good faith without any malice whatsoever. . . ." A motion to dismiss the complaint for
substantially these reasons was made at the close of the case, and was denied by the
trial judge on the ground that the proofs presented a jury question as to the truth of the
article.

The jury awarded appellee $50,000 compensatory and $25,000 punitive damages. On
appeal, the Appellate Division of the Supreme Court ordered a new trial as to damages,
but sustained the jury verdict of liability. The court said as to liability:

"Although the play was fictionalized, Life's article portrayed it as a reenactment of the

Hills' experience. It is an inescapable conclusion that this was done to advertise and
attract further attention to the play, and to increase present and future magazine
circulation as well. It is evident that the article cannot be characterized as a mere
dissemination of news, nor even an effort to supply legitimate newsworthy information in
which the public had, or might have a proper interest."

18 App.Div.2d 485, 489, 240 N.Y.S.2d 286, 290. At the new trial on damages, a jury
was waived and the court awarded $30,000 compensatory damages, without punitive
damages. [Footnote 2]

The New York Court of Appeals affirmed the Appellate Division "on the majority and
concurring opinions

Page 385 U. S. 380

at the Appellate Division," two judges dissenting. 15 N.Y.2d 986, 207 N.E.2d 604. We
noted probable jurisdiction of the appeal to consider the important constitutional
questions of freedom of speech and press involved. 382 U.S. 936. After argument last
Term, the case was restored to the docket for reargument, 384 U.S. 995. We reverse
and remand the case to the Court of Appeals for further proceedings not inconsistent
with this opinion.

Since the reargument, we have had the advantage of an opinion of the Court of Appeals
of New York which has materially aided us in our understanding of that court's
construction of the statute. It is the opinion of Judge Keating for the court in Spahn v.
Julian Messner, Inc., 18 N.Y.2d 324, 221 N.E.2d 543 (1966). The statute was enacted
in 1903 following the decision of the Court of Appeals in 1902 in Roberson v. Rochester
Folding Box Co., 171 N.Y. 538, 64 N.E. 442. Roberson was an action against
defendants for adorning their flour bags with plaintiff's picture without her consent. It
was grounded upon an alleged invasion of a "right of privacy," defined by the Court of
Appeals to be

"the claim that a man has the right to pass through this world, if he wills, without having
his picture published . . . or his eccentricities commented upon either in handbills,
circulars, catalogues, periodicals or newspapers. . . ."

171 N.Y. at 544, 64 N.E. at 443. The Court of Appeals traced the theory to the
celebrated article of Warren and Brandeis, entitled The Right to Privacy, published in
1890. 4 Harv.L.Rev.193. [Footnote 3] The

Page 385 U. S. 381

Court of Appeals, however, denied the existence of such a right at common law, but
observed that

"[t]he legislative body could very well interfere and arbitrarily provide that no one should
be permitted for his own selfish purpose to use the picture or the name of another for
advertising purposes without his consent."

171 N.Y. at 545, 64 N.E. at 443. The legislature enacted §§ 50-51 in response to that
observation.

Although "Right of Privacy" is the caption of §§ 50-51, the term nowhere appears in the
text of the statute itself. The text of the statute appears to proscribe only conduct of the
kind involved in Roberson, that is, the appropriation and use in advertising or to promote
the sale of goods, of another's name, portrait or picture without his consent. [Footnote 4]
An application of that limited scope would present different questions of violation of the
constitutional protections for speech and press. Compare Valentine v. Chrestensen, 316
U. S. 52, with New York Times Co. v. Sullivan, 376 U. S. 254, 376 U. S. 265-266.

The New York courts have, however, construed the statute to operate much more
broadly. In Spahn, the Court of Appeals stated that,
"Over the years since the statute's enactment in 1903, its social desirability and
remedial nature have led to its being given a liberal construction consonant with its
over-all purpose. . . ."

18 N.Y.2d at 327, 221 N.E.2d at 544. Specifically,

Page 385 U. S. 382

it has been held in some circumstances to authorize a remedy against the press and
other communications media which publish the names, pictures, or portraits of people
without their consent. Reflecting the fact, however, that such applications may raise
serious questions of conflict with the constitutional protections for speech and press,
decisions under the statute have tended to limit the statute's application. [Footnote 5]

"[E]ver mindful that the written word or picture is involved, courts have engrafted
exceptions and restrictions onto the statute to avoid any conflict with the free
dissemination of thoughts, ideas, newsworthy events, and matters of public interest."

Id. 18 N.Y.2d at 328, 221 N.E.2d at 54545.

In the light of questions that counsel were asked to argue on reargument, [Footnote 6] it
is particularly relevant that the

Page 385 U. S. 383

Court of Appeals made crystal clear in the Spahn opinion that truth is a complete
defense in actions under the statute based upon reports of newsworthy people or
events. The opinion states: "The factual reporting of newsworthy persons and events is
in the public interest, and is protected." 18 N.Y.2d at 328, 221 N.E.2d at 545. [Footnote
7] Constitutional questions which might

Page 385 U. S. 384

arise if truth were not a defense are therefore of no concern. Cf. Garrison v.

Louisiana, 379 U. S. 64, 379 U. S. 72-75.

But although the New York statue affords "little protection" to the "privacy" of a
newsworthy person, "whether he be such by choice or involuntarily," [Footnote 8] the
statute gives him a right of action when his name, picture, or portrait is the subject of a
"fictitious" report or article. [Footnote 9]

Page 385 U. S. 385

Spahn points up the distinction. Spahn was an action under the statute brought by the

well known professional baseball pitcher, Warren Spahn. He sought an injunction and
damages against the unauthorized publication of what purported to be a biography of
his life. The trial judge had found that

"the record unequivocally establishes

Page 385 U. S. 386

that the book publicizes areas of Warren Spahn's personal and private life, albeit
inaccurate and distorted, and consists of a host, a preponderant percentage, of factual
errors, distortions and fanciful passages. . . ."

43 Misc.2d 219, 232, 250 N.Y.S.2d 529, 542. The Court of Appeals sustained the
holding that, in these circumstances, the publication was proscribed by § 51 of the Civil
Rights Law, and was not within the exceptions and restrictions for newsworthy events
engrafted onto the statute. The Court of Appeals said:

"But it is erroneous to confuse privacy with 'personality,' or to assume that privacy,

though lost for a certain time or in a certain context, goes forever unprotected. . . . Thus,
it may be appropriate to say that the plaintiff here, Warren Spahn, is a public personality
and that, insofar as his professional career is involved, he is substantially without a right
to privacy. That is not to say, however, that his 'personality' may be fictionalized and
that, as fictionalized, it may be exploited for the defendants' commercial benefit through
the medium of an unauthorized biography."

Spahn, supra, at 328, 221 N.E.2d at 545.

As the instant case went to the jury, appellee, too, was regarded to be a newsworthy
person "substantially without a right to privacy" insofar as his hostage experience was
involved, but to be entitled to his action insofar as that experience was "fictionalized"
and "exploited for the defendants' commercial benefit." "Fictionalization,"
the Spahn opinion states, "is the heart of the cases in point." 18 N.Y.2d at 328, 221
N.E.2d at 545.

The opinion goes on to say that the "establishment of minor errors in an otherwise
accurate" report does not prove "fictionalization." Material and substantial falsification is
the test. However, it is not clear whether

Page 385 U. S. 387

proof of knowledge of the falsity or that the article was prepared with reckless disregard
for the truth is also required. In New York Times Co. v. Sullivan, 376 U. S. 254, we held
that the Constitution delimits a State's power to award damages for libel in actions
brought by public officials against critics of their official conduct. Factual error, content
defamatory of official reputation, or both, are insufficient for an award of damages for
false statements unless actual malice -- knowledge that the statements are false or in
reckless disregard of the truth -- is alleged and proved. The Spahn opinion reveals that
the defendant in that case relied on New York Times as the basis of an argument that
application of the statute to the publication of a substantially fictitious biography would
run afoul of the constitutional guarantees. The Court of Appeals held that New York
Times had no application. The court, after distinguishing the cases on the ground
that Spahn did not deal with public officials or official conduct, then says,

"The free speech which is encouraged and essential to the operation of a healthy
government is something quite different from an individual's attempt to enjoin the
publication of a fictitious biography of him. No public interest is served by protecting the
dissemination of the latter. We pereceive no constitutional infirmities in this respect."

18 N.Y.2d at 329, 221 N.E.2d at 546.

If this is meant to imply that proof of knowing or reckless falsity is not essential to a
constitutional application of the statute in these cases, we disagree with the Court of
Appeals. [Footnote 10] We hold that the constitutional protections for speech and press
preclude the application

Page 385 U. S. 388

of the New York statute to redress false reports of matters of public interest in the
absence of proof that the defendant published the report with knowledge of its falsity or
in reckless disregard of the truth.

The guarantees for speech and press are not the preserve of political expression or
comment upon public affairs, essential as those are to healthy government. One need
only pick up any newspaper or magazine to comprehend the vast range of published
matter which exposes persons to public view, both private citizens and public officials.
Exposure of the self to others in varying degrees is a concomitant of life in a civilized
community. The risk of this exposure is an essential incident of life in a society which
places a primary value on freedom of speech and of press.

"Freedom of discussion, if it would fulfill its historic function in this nation, must embrace
all issues about which information is needed or appropriate to enable the members of
society to cope with the exigencies of their period."

Thornhill v. Alabama, 310 U. S. 88, 310 U. S. 102.

"No suggestion can be found in the Constitution that the freedom there guaranteed for
speech and the press bears an inverse ratio to the timeliness and importance of the
ideas seeking expression."

Bridges v. California, 314 U. S. 252, 314 U. S. 269. We have no doubt that the subject

of the Life article, the opening of a new play linked to an actual incident, is a matter of
public interest. "The line between the informing and the entertaining is too elusive for
the protection of . . . [freedom of the press]." Winters v. New York, 333 U. S. 507, 333 U.
S. 510. Erroneous statement is no less inevitable in such a case than in the case of
comment upon public affairs, and in both, if innocent or merely negligent, ". . . it must be
protected if the freedoms of expression are to have the breathing space' that they 'need
. . . to survive'. . . ." New York Times Co. v. Sullivan, supra, at 376 U. S. 271-272. As
James Madison said, "Some degree of abuse is inseparable from

Page 385 U. S. 389

the proper use of everything, and in no instance is this more true than in that of the
press." 4 Elliot's Debates on the Federal Constitution 571 (1876 ed.). We create a grave
risk of serious impairment of the indispensable service of a free press in a free society if
we saddle the press with the impossible burden of verifying to a certainty the facts
associated in news articles with a person's name, picture or portrait, particularly as
related to nondefamatory matter. Even negligence would be a most elusive standard,
especially when the content of the speech itself affords no warning of prospective harm
to another through falsity. A negligence test would place on the press the intolerable
burden of guessing how a jury might assess the reasonableness of steps taken by it to
verify the accuracy of every reference to a name, picture or portrait.

In this context, sanctions against either innocent or negligent misstatement would

present a grave hazard of discouraging the press from exercising the constitutional
guarantees. Those guarantees are not for the benefit of the press so much as for the
benefit of all of us. A broadly defined freedom of the press assures the maintenance of
our political system and an open society. Fear of large verdicts in damage suits for
innocent or merely negligent misstatement, even fear of the expense involved in their
defense, must inevitably cause publishers to "steer . . . wider of the unlawful zone," New
York Times Co. v. Sullivan, 376 U.S. at 376 U. S. 279; see also Speiser v. Randall, 357
U. S. 513, 357 U. S. 526; Smith v. California, 361 U. S. 147, 361 U. S. 153-154, and
thus "create the danger that the legitimate utterance will be penalized." Speiser v.
Randall, supra, at 357 U. S. 526.

But the constitutional guarantees can tolerate sanctions against calculated falsehood

without significant impairment of their essential function. We held in New York
Times that calculated falsehood enjoyed no immunity

Page 385 U. S. 390

in the case of alleged defamation of a public official concerning his official conduct.
Similarly, calculated falsehood should enjoy no immunity in the situation here presented
us. What we said in Garrison v. Louisiana, supra, at 379 U. S. 75, is equally applicable:

"The use of calculated falsehood . . . would put a different cast on the constitutional
question. Although honest utterance, even if inaccurate, may further the fruitful exercise
of the right of free speech, it does not follow that the lie, knowingly and deliberately
published . . . should enjoy a like immunity. . . . For the use of the known lie as a tool is
at once at odds with the premises of democratic government and with the orderly
manner in which economic, social, or political change is to be effected. Calculated
falsehood falls into that class of utterances which 'are no essential part of any exposition
of ideas, and are of such slight social value as a step to truth that any benefit that may
be derived from them is clearly outweighed by the social interest in order and
morality. . . .' Chaplinsky v. New Hampshire, 315 U. S. 568, 315 U. S. 572. Hence, the
knowingly false statement and the false statement made with reckless disregard of the
truth do not enjoy constitutional protection."

We find applicable here the standard of knowing or reckless falsehood, not through
blind application of New York Times Co. v. Sullivan, relating solely to libel actions by
public officials, but only upon consideration of the factors which arise in the particular
context of the application of the New York statute in cases involving private individuals.
This is neither a libel action by a private individual nor a statutory action by a public
official. Therefore, although the First Amendment principles pronounced in New York
Times guide our conclusion,

Page 385 U. S. 391

we reach that conclusion only by applying these principles in this discrete context. It
therefore serves no purpose to distinguish the facts here from those in New York
Times. Were this a libel action, the distinction which has been suggested between the
relative opportunities of the public official and the private individual to rebut defamatory
charges might be germane. And the additional state interest in the protection of the
individual against damage to his reputation would be involved. Cf. Rosenblatt v.
Baer, 383 U. S. 75, 383 U. S. 91 (STEWART, J., concurring). Moreover, a different test
might be required in a statutory action by a public official, as opposed to a libel action by
a public official or a statutory action by a private individual. Different considerations
might arise concerning the degree of "waiver" of the protection the State might afford.
But the question whether the same standard should be applicable both to persons
voluntarily and involuntarily thrust into the public limelight is not here before us.

II

Turning to the facts of the present case, the proofs reasonably would support either a
jury finding of innocent or merely negligent misstatement by Life, or a finding that Life
portrayed the play as a reenactment of the Hill family's experience reckless of the truth
or with actual knowledge that the portrayal was false. The relevant testimony is as
follows:

Joseph Hayes, author of the book, also wrote the play. The story theme was inspired by
the desire to write about "true crime," and, for years before writing the book, he
collected newspaper clippings of stories of hostage incidents. His story was not shaped
by any single incident, but by several, including incidents which occurred in California,
New York, and Detroit. He said that he did not consciously portray any member of the
Hill family,
Page 385 U. S. 392

or the Hill family's experience, although admitting that, "in a very direct way," the Hill
experience "triggered" the writing of the book and the play.

The Life article was prepared at the direction and under the supervision of its
entertainment editor, Prideaux. He learned of the production of the play from a news
story. ~ The play's director, Robert Montgomery, later suggested to him that its
interesting stage setting would make the play a worthwhile subject for an article in Life.
At about the same time, Prideaux ran into a friend of author Hayes, a freelance
photographer, who told Prideaux in casual conversation that the play had a "substantial
connection with a true life incident of a family being held by escaped convicts near
Philadelphia." As the play was trying out in Philadelphia, Prideaux decided to contact
the author. Hayes confirmed that an incident somewhat similar to the play had occurred
in Philadelphia, and agreed with Prideaux to find out whether the former Hill residence
would be available for the shooting of pictures for a Life article. Prideaux then met with
Hayes in Philadelphia where he saw the play and drove with Hayes to the former Hill
residence to test its suitability for a picture story. Neither then nor thereafter did
Prideaux question Hayes about the extent to which the play was based on the Hill
incident.

"A specific question of that nature was never asked, but a discussion of the play itself,
what the play was about, in the light of my own knowledge of what the true incident was
about, confirmed in my mind beyond any doubt that there was a relationship, and Mr.
Hayes' presence at this whole negotiation was tacit proof of that."

Prideaux sent photographers to the Hill residence for location photographs of scenes of
the play enacted in the home, and proceeded to construct the text of the article.

Page 385 U. S. 393

In his "story file" were several news clippings about the Hill incident which revealed its
nonviolent character, and a New York Times article by Hayes in which he stated that the
play "was based on various news stories," mentioning incidents in New York, California,
Detroit and Philadelphia.

Prideaux's first draft made no mention of the Hill name except for the caption of one of
the photographs. The text related that a true story of a suburban Philadelphia family had
"sparked off" Hayes to write the novel, that the play was a "somewhat fictionalized"
account of the family's heroism in time of crisis. Prideaux's research assistant, whose
task it was to check the draft for accuracy, put a question mark over the words
"somewhat fictionalized." Prideaux testified that the question mark "must have been"
brought to his attention, although he did not recollect having seen it. The draft was also
brought before the copy editor, who, in the presence of Prideaux, made several
changes in emphasis and substance. The first sentence was changed to focus on the
Hill incident, using the family's name; the novel was said to have been "inspired" by that
incident, and the play was referred to as a "reenactment." The words "somewhat
fictionalized" were deleted.

Prideaux labeled as "emphatically untrue" defense counsel's suggestion during redirect

examination that, from the beginning, he knew that the play had no relationship to the
Hill incident apart from being a hostage incident. Prideaux admitted that he knew the
play was "between a little bit and moderately fictionalized," but stated that he thought
beyond doubt that the important quality, the "heart and soul" of the play, was the Hill
incident.

The jury might reasonably conclude from this evidence -- particularly that the New York
Times article

Page 385 U. S. 394

was in the story file, that the copy editor deleted "somewhat fictionalized" after the
research assistant questioned its accuracy, and that Prideaux admitted that he knew the
play was "between a little bit and moderately fictionalized" -- that Life knew the falsity of,
or was reckless of the truth in, stating in the article that "the story reenacted" the Hill
family's experience. On the other hand, the jury might reasonably predicate a finding of
innocent or only negligent misstatement on the testimony that a statement was made to
Prideaux by the freelance photographer that linked the play to an incident in
Philadelphia, that the author Hayes cooperated in arranging for the availability of the
former Hill home, and that Prideaux thought beyond doubt that the "heart and soul" of
the play was the Hill incident. [Footnote 11]

III

We do not think, however, that the instructions confined the jury to a verdict of liability
based on a finding that the statements in the article were made with knowledge of their
falsity or in reckless disregard of the truth. The jury was instructed that liability could not
be found under §§ 50-51 "merely because of some incidental mistake of fact, or some
incidental incorrect statement," and that a verdict of liability could rest only on findings
that (1) Life published the article "not to disseminate news, but was using plaintiffs'
names, in connection with a fictionalized episode as to plaintiffs' relationship to The
Desperate Hours"; the Court variously restated this "fictionalization" requirement in
terms such as whether appellant

"altered or changed the true facts concerning

Page 385 U. S. 395

plaintiffs' relationship to The Desperate Hours, so that the article, as published,

constituted substantially fiction or a fictionalized version . . . ,"
whether the article constituted "fiction," or was "fictionalized", and that (2) the article was
published to advertise the play or "for trade purposes." This latter purpose was variously
defined as one "to amuse, thrill, astonish or move the reading public so as to increase
the circulation of the magazine or for some other material benefit," "to increase
circulation or enhance the standing of the magazine with its readers," and "for the
publisher's profits through increased circulation, induced by exploitation of the plaintiffs."

The court also instructed the jury that an award of punitive damages was justified if the
jury found that the appellant falsely connected appellee to the play "knowingly or
through failure to make a reasonable investigation," adding

"You do not need to find that there was any actual ill will or personal malice toward the
plaintiffs if you find a reckless or wanton disregard of the plaintiffs' rights."

Appellee argues that the instructions to determine whether Life "altered or changed" the
true facts, and whether, apart from incidental errors, the article was a "substantial
fiction" or a "fictionalized version" were tantamount to instructions that the jury must find
that Life knowingly falsified the facts. We do not think that the instructions bear that
interpretation, particularly in light of the marked contrast in the instructions on
compensatory and punitive damages. The element of "knowingly" is mentioned only in
the instruction that punitive damages must be supported by a finding that Life falsely
connected the Hill family with the play "knowingly or through failure to make a
reasonable investigation." Moreover, even as to punitive damages, the instruction that
such damages were justified on the

Page 385 U. S. 396

basis of "failure to make a reasonable investigation" is an instruction that proof of

negligent misstatement is enough, and we have rejected the test of negligent
misstatement as inadequate. [Footnote 12] Next, the trial judge plainly did not regard his
instructions as limiting the jury to a verdict of liability based on a finding of knowing or
reckless falsity; he denied appellant's motion to dismiss after the close of the evidence
because he perceived that it was for the jury to find "whether the Life article was true, or
whether an inference could be obtained from reading it that it was not true." This implies
a view that "fictionalization" was synonymous with "falsity" without regard to knowledge
or even negligence, except for the purpose of an award of punitive damages. Finally,
nothing in the New York cases decided at the time of trial limited liability to cases of
knowing or reckless falsity, and Spahn, decided since, has left the question in doubt.
[Footnote 13]

The requirement that the jury also find that the article was published "for trade
purposes," as defined in

Page 385 U. S. 397

the charge, cannot save the charge from constitutional infirmity.

"That books, newspapers, and magazines are published and sold for profit does not
prevent them from being a form of expression whose liberty is safeguarded by the First
Amendment."

Joseph Burstyn, Inc. v. Wilson, 343 U. S. 495, 343 U. S. 501-502; see New York Times

Co. v. Sullivan, 376 U.S. at 376 U. S. 266; Smith v. California, 361 U. S. 147, 361 U. S.
150; cf. Ex parte Jackson, 96 U. S. 727, 96 U. S. 733; Grosjean v. American Press
Co., 297 U. S. 233; Lovell v. Griffin, 303 U. S. 444.

IV

The appellant argues that the statute should be declared unconstitutional on its face if
construed by the New York courts to impose liability without proof of knowing or
reckless falsity. [Footnote 14] Such a declaration would not be warranted even if it were
entirely clear that this had previously been the view of the New York courts. The New
York Court of Appeals, as the Spahn opinion demonstrates, has been assiduous in
construing the statute to avoid invasion of the constitutional protections of speech and
press. We, therefore, confidently expect that the New York courts will apply the statute
consistently with the constitutional command. Any possible difference with us as to the
thrust of the constitutional command is narrowly limited in this case to the failure of the
trial judge to instruct the jury that a verdict of liability could be predicated only on a
finding of knowing or reckless falsity in the publication of the Life article.

Page 385 U. S. 398

The judgment of the Court of Appeals is set aside, and the case is remanded for further
proceedings not inconsistent with this opinion.

It is so ordered.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-19550             June 19, 1967

HARRY S. STONEHILL, ROBERT P. BROOKS, JOHN J. BROOKS and KARL BECK, petitioners,

vs.
HON. JOSE W. DIOKNO, in his capacity as SECRETARY OF JUSTICE; JOSE LUKBAN, in his
capacity as Acting Director, National Bureau of Investigation; SPECIAL PROSECUTORS
PEDRO D. CENZON, EFREN I. PLANA and MANUEL VILLAREAL, JR. and ASST. FISCAL
MANASES G. REYES; JUDGE AMADO ROAN, Municipal Court of Manila; JUDGE ROMAN
CANSINO, Municipal Court of Manila; JUDGE HERMOGENES CALUAG, Court of First
Instance of Rizal-Quezon City Branch, and JUDGE DAMIAN JIMENEZ, Municipal Court of
Quezon City, respondents.

Paredes, Poblador, Cruz and Nazareno and Meer, Meer and Meer and Juan T. David for petitioners.
Office of the Solicitor General Arturo A. Alafriz, Assistant Solicitor General Pacifico P. de Castro,
Assistant Solicitor General Frine C. Zaballero, Solicitor Camilo D. Quiason and Solicitor C. Padua for
respondents.

CONCEPCION, C.J.:

Upon application of the officers of the government named on the margin 1 — hereinafter referred to
as Respondents-Prosecutors — several judges 2 — hereinafter referred to as Respondents-Judges
— issued, on different dates,3 a total of 42 search warrants against petitioners herein 4 and/or the
corporations of which they were officers,5 directed to the any peace officer, to search the persons
above-named and/or the premises of their offices, warehouses and/or residences, and to seize and
take possession of the following personal property to wit:

Books of accounts, financial records, vouchers, correspondence, receipts, ledgers, journals,

portfolios, credit journals, typewriters, and other documents and/or papers showing all
business transactions including disbursements receipts, balance sheets and profit and loss
statements and Bobbins (cigarette wrappers).

as "the subject of the offense; stolen or embezzled and proceeds or fruits of the offense," or "used or
intended to be used as the means of committing the offense," which is described in the applications
adverted to above as "violation of Central Bank Laws, Tariff and Customs Laws, Internal Revenue
(Code) and the Revised Penal Code."

Alleging that the aforementioned search warrants are null and void, as contravening the Constitution
and the Rules of Court — because, inter alia: (1) they do not describe with particularity the
documents, books and things to be seized; (2) cash money, not mentioned in the warrants, were
actually seized; (3) the warrants were issued to fish evidence against the aforementioned petitioners
in deportation cases filed against them; (4) the searches and seizures were made in an illegal
manner; and (5) the documents, papers and cash money seized were not delivered to the courts that
issued the warrants, to be disposed of in accordance with law — on March 20, 1962, said petitioners
filed with the Supreme Court this original action for certiorari, prohibition, mandamus and injunction,
and prayed that, pending final disposition of the present case, a writ of preliminary injunction be
issued restraining Respondents-Prosecutors, their agents and /or representatives from using the
effects seized as aforementioned or any copies thereof, in the deportation cases already adverted
to, and that, in due course, thereafter, decision be rendered quashing the contested search warrants
and declaring the same null and void, and commanding the respondents, their agents or
representatives to return to petitioners herein, in accordance with Section 3, Rule 67, of the Rules of
Court, the documents, papers, things and cash moneys seized or confiscated under the search
warrants in question.

In their answer, respondents-prosecutors alleged, 6 (1) that the contested search warrants are valid
and have been issued in accordance with law; (2) that the defects of said warrants, if any, were
cured by petitioners' consent; and (3) that, in any event, the effects seized are admissible in
evidence against herein petitioners, regardless of the alleged illegality of the aforementioned
searches and seizures.

On March 22, 1962, this Court issued the writ of preliminary injunction prayed for in the petition.
However, by resolution dated June 29, 1962, the writ was partially lifted or dissolved, insofar as the
papers, documents and things seized from the offices of the corporations above mentioned are
concerned; but, the injunction was maintained as regards the papers, documents and things found
and seized in the residences of petitioners herein. 7

Thus, the documents, papers, and things seized under the alleged authority of the warrants in
question may be split into two (2) major groups, namely: (a) those found and seized in the offices of
the aforementioned corporations, and (b) those found and seized in the residences of petitioners
herein.

As regards the first group, we hold that petitioners herein have no cause of action to assail the
legality of the contested warrants and of the seizures made in pursuance thereof, for the simple
reason that said corporations have their respective personalities, separate and distinct from the
personality of herein petitioners, regardless of the amount of shares of stock or of the interest of
each of them in said corporations, and whatever the offices they hold therein may be. 8 Indeed, it is
well settled that the legality of a seizure can be contested only by the party whose rights have been
impaired thereby,9 and that the objection to an unlawful search and seizure is purely personal and
cannot be availed of by third parties. 10 Consequently, petitioners herein may not validly object to the
use in evidence against them of the documents, papers and things seized from the offices and
premises of the corporations adverted to above, since the right to object to the admission of said
papers in evidence belongs exclusively to the corporations, to whom the seized effects belong, and
may not be invoked by the corporate officers in proceedings against them in their individual
capacity. 11 Indeed, it has been held:

. . . that the Government's action in gaining possession of papers belonging to

the corporation did not relate to nor did it affect the personal defendants. If these papers
were unlawfully seized and thereby the constitutional rights of or any one were invaded, they
were the rights of the corporation and not the rights of the other defendants. Next, it is clear
that a question of the lawfulness of a seizure can be raised only by one whose rights have
been invaded. Certainly, such a seizure, if unlawful, could not affect the constitutional rights
of defendants whose property had not been seized or the privacy of whose homes had not
been disturbed; nor could they claim for themselves the benefits of the Fourth Amendment,
when its violation, if any, was with reference to the rights of another. Remus vs. United
States (C.C.A.)291 F. 501, 511. It follows, therefore, that the question of the admissibility of
the evidence based on an alleged unlawful search and seizure does not extend to the
 personal defendants but embraces only the corporation whose property was taken. . . . (A
Guckenheimer & Bros. Co. vs. United States, [1925] 3 F. 2d. 786, 789, Emphasis supplied.)

With respect to the documents, papers and things seized in the residences of petitioners herein, the
aforementioned resolution of June 29, 1962, lifted the writ of preliminary injunction previously issued
by this Court, 12 thereby, in effect, restraining herein Respondents-Prosecutors from using them in
evidence against petitioners herein.

In connection with said documents, papers and things, two (2) important questions need be settled,
namely: (1) whether the search warrants in question, and the searches and seizures made under the
authority thereof, are valid or not, and (2) if the answer to the preceding question is in the negative,
whether said documents, papers and things may be used in evidence against petitioners herein. 1äwphï1.ñët

Petitioners maintain that the aforementioned search warrants are in the nature of general warrants
and that accordingly, the seizures effected upon the authority there of are null and void. In this
connection, the Constitution 13 provides:

The right of the people to be secure in their persons, houses, papers, and effects against
unreasonable searches and seizures shall not be violated, and no warrants shall issue but
upon probable cause, to be determined by the judge after examination under oath or
affirmation of the complainant and the witnesses he may produce, and particularly describing
the place to be searched, and the persons or things to be seized.

Two points must be stressed in connection with this constitutional mandate, namely: (1) that no
warrant shall issue but upon probable cause, to be determined by the judge in the manner set forth
in said provision; and (2) that the warrant shall particularly describe the things to be seized.

None of these requirements has been complied with in the contested warrants. Indeed, the same
were issued upon applications stating that the natural and juridical person therein named had
committed a "violation of Central Ban Laws, Tariff and Customs Laws, Internal Revenue (Code) and
Revised Penal Code." In other words, no specific offense had been alleged in said applications. The
averments thereof with respect to the offense committed were abstract. As a consequence, it
was impossible for the judges who issued the warrants to have found the existence of probable
cause, for the same presupposes the introduction of competent proof that the party against whom it
is sought has performed particular acts, or committed specific omissions, violating a given provision
of our criminal laws. As a matter of fact, the applications involved in this case do not allege any
specific acts performed by herein petitioners. It would be the legal heresy, of the highest order, to
convict anybody of a "violation of Central Bank Laws, Tariff and Customs Laws, Internal Revenue
(Code) and Revised Penal Code," — as alleged in the aforementioned applications — without
reference to any determinate provision of said laws or

To uphold the validity of the warrants in question would be to wipe out completely one of the most
fundamental rights guaranteed in our Constitution, for it would place the sanctity of the domicile and
the privacy of communication and correspondence at the mercy of the whims caprice or passion of
peace officers. This is precisely the evil sought to be remedied by the constitutional provision above
quoted — to outlaw the so-called general warrants. It is not difficult to imagine what would happen,
in times of keen political strife, when the party in power feels that the minority is likely to wrest it,
even though by legal means.

Such is the seriousness of the irregularities committed in connection with the disputed search
warrants, that this Court deemed it fit to amend Section 3 of Rule 122 of the former Rules of
Court 14 by providing in its counterpart, under the Revised Rules of Court 15 that "a search warrant
shall not issue but upon probable cause in connection with one specific offense." Not satisfied with
this qualification, the Court added thereto a paragraph, directing that "no search warrant shall issue
for more than one specific offense."

The grave violation of the Constitution made in the application for the contested search warrants was
compounded by the description therein made of the effects to be searched for and seized, to wit:

Books of accounts, financial records, vouchers, journals, correspondence, receipts, ledgers,

portfolios, credit journals, typewriters, and other documents and/or papers showing all
business transactions including disbursement receipts, balance sheets and related profit and
loss statements.

Thus, the warrants authorized the search for and seizure of records pertaining to all business
transactions of petitioners herein, regardless of whether the transactions were legal or illegal. The
warrants sanctioned the seizure of all records of the petitioners and the aforementioned
corporations, whatever their nature, thus openly contravening the explicit command of our Bill of
Rights — that the things to be seized be particularly described — as well as tending to defeat its
major objective: the elimination of general warrants.

Relying upon Moncado vs. People's Court (80 Phil. 1), Respondents-Prosecutors maintain that,
even if the searches and seizures under consideration were unconstitutional, the documents, papers
and things thus seized are admissible in evidence against petitioners herein. Upon mature
deliberation, however, we are unanimously of the opinion that the position taken in the Moncado
case must be abandoned. Said position was in line with the American common law rule, that the
criminal should not be allowed to go free merely "because the constable has blundered," 16 upon the
theory that the constitutional prohibition against unreasonable searches and seizures is protected by
means other than the exclusion of evidence unlawfully obtained, 17 such as the common-law action
for damages against the searching officer, against the party who procured the issuance of the
search warrant and against those assisting in the execution of an illegal search, their criminal
punishment, resistance, without liability to an unlawful seizure, and such other legal remedies as
may be provided by other laws.

However, most common law jurisdictions have already given up this approach and eventually
adopted the exclusionary rule, realizing that this is the only practical means of enforcing the
constitutional injunction against unreasonable searches and seizures. In the language of Judge
Learned Hand:

As we understand it, the reason for the exclusion of evidence competent as such, which has
been unlawfully acquired, is that exclusion is the only practical way of enforcing the
constitutional privilege. In earlier times the action of trespass against the offending official
may have been protection enough; but that is true no longer. Only in case the prosecution
which itself controls the seizing officials, knows that it cannot profit by their wrong will that
wrong be repressed.18

In fact, over thirty (30) years before, the Federal Supreme Court had already declared:

If letters and private documents can thus be seized and held and used in evidence against a
citizen accused of an offense, the protection of the 4th Amendment, declaring his rights to be
secure against such searches and seizures, is of no value, and, so far as those thus placed
are concerned, might as well be stricken from the Constitution. The efforts of the courts and
their officials to bring the guilty to punishment, praiseworthy as they are, are not to be aided
 by the sacrifice of those great principles established by years of endeavor and suffering
which have resulted in their embodiment in the fundamental law of the land.19

This view was, not only reiterated, but, also, broadened in subsequent decisions on the same
Federal Court. 20 After reviewing previous decisions thereon, said Court held, in Mapp vs.
Ohio (supra.):

. . . Today we once again examine the Wolf's constitutional documentation of the right of
privacy free from unreasonable state intrusion, and after its dozen years on our books, are
led by it to close the only courtroom door remaining open to evidence secured by official
lawlessness in flagrant abuse of that basic right, reserved to all persons as a specific
guarantee against that very same unlawful conduct. We hold that all evidence obtained by
searches and seizures in violation of the Constitution is, by that same authority, inadmissible
in a State.

Since the Fourth Amendment's right of privacy has been declared enforceable against the
States through the Due Process Clause of the Fourteenth, it is enforceable against them by
the same sanction of exclusion as it used against the Federal Government. Were it
otherwise, then just as without the Weeks rule the assurance against unreasonable federal
searches and seizures would be "a form of words," valueless and underserving of mention in
a perpetual charter of inestimable human liberties, so too, without that rule the freedom from
state invasions of privacy would be so ephemeral and so neatly severed from its conceptual
nexus with the freedom from all brutish means of coercing evidence as not to permit this
Court's high regard as a freedom "implicit in the concept of ordered liberty." At the time that
the Court held in Wolf that the amendment was applicable to the States through the Due
Process Clause, the cases of this Court as we have seen, had steadfastly held that as to
federal officers the Fourth Amendment included the exclusion of the evidence seized in
violation of its provisions. Even Wolf "stoutly adhered" to that proposition. The right to when
conceded operatively enforceable against the States, was not susceptible of destruction by
avulsion of the sanction upon which its protection and enjoyment had always been deemed
dependent under the Boyd, Weeks and Silverthorne Cases. Therefore, in extending the
substantive protections of due process to all constitutionally unreasonable searches — state
or federal — it was logically and constitutionally necessarily that the exclusion doctrine — an
essential part of the right to privacy — be also insisted upon as an essential ingredient of the
right newly recognized by the Wolf Case. In short, the admission of the new constitutional
Right by Wolf could not tolerate denial of its most important constitutional privilege, namely,
the exclusion of the evidence which an accused had been forced to give by reason of the
unlawful seizure. To hold otherwise is to grant the right but in reality to withhold its privilege
and enjoyment. Only last year the Court itself recognized that the purpose of the
exclusionary rule to "is to deter — to compel respect for the constitutional guaranty in the
only effectively available way — by removing the incentive to disregard it" . . . .

The ignoble shortcut to conviction left open to the State tends to destroy the entire system of
constitutional restraints on which the liberties of the people rest. Having once recognized that
the right to privacy embodied in the Fourth Amendment is enforceable against the States,
and that the right to be secure against rude invasions of privacy by state officers is, therefore
constitutional in origin, we can no longer permit that right to remain an empty promise.
Because it is enforceable in the same manner and to like effect as other basic rights secured
by its Due Process Clause, we can no longer permit it to be revocable at the whim of any
police officer who, in the name of law enforcement itself, chooses to suspend its enjoyment.
Our decision, founded on reason and truth, gives to the individual no more than that which
the Constitution guarantees him to the police officer no less than that to which honest law
 enforcement is entitled, and, to the courts, that judicial integrity so necessary in the true
administration of justice. (emphasis ours.)

Indeed, the non-exclusionary rule is contrary, not only to the letter, but also, to the spirit of the
constitutional injunction against unreasonable searches and seizures. To be sure, if the applicant for
a search warrant has competent evidence to establish probable cause of the commission of a given
crime by the party against whom the warrant is intended, then there is no reason why the applicant
should not comply with the requirements of the fundamental law. Upon the other hand, if he has no
such competent evidence, then it is not possible for the Judge to find that there is probable cause,
and, hence, no justification for the issuance of the warrant. The only possible explanation (not
justification) for its issuance is the necessity of fishing evidence of the commission of a crime. But,
then, this fishing expedition is indicative of the absence of evidence to establish a probable cause.

Moreover, the theory that the criminal prosecution of those who secure an illegal search warrant
and/or make unreasonable searches or seizures would suffice to protect the constitutional guarantee
under consideration, overlooks the fact that violations thereof are, in general, committed By agents
of the party in power, for, certainly, those belonging to the minority could not possibly abuse a power
they do not have. Regardless of the handicap under which the minority usually — but,
understandably — finds itself in prosecuting agents of the majority, one must not lose sight of the
fact that the psychological and moral effect of the possibility 21 of securing their conviction, is watered
down by the pardoning power of the party for whose benefit the illegality had been committed.

In their Motion for Reconsideration and Amendment of the Resolution of this Court dated June 29,
1962, petitioners allege that Rooms Nos. 81 and 91 of Carmen Apartments, House No. 2008, Dewey
Boulevard, House No. 1436, Colorado Street, and Room No. 304 of the Army-Navy Club, should be
included among the premises considered in said Resolution as residences of herein petitioners,
Harry S. Stonehill, Robert P. Brook, John J. Brooks and Karl Beck, respectively, and that,
furthermore, the records, papers and other effects seized in the offices of the corporations above
referred to include personal belongings of said petitioners and other effects under their exclusive
possession and control, for the exclusion of which they have a standing under the latest rulings of
the federal courts of federal courts of the United States. 22

We note, however, that petitioners' theory, regarding their alleged possession of and control over the
aforementioned records, papers and effects, and the alleged "personal" nature thereof, has Been
Advanced, not in their petition or amended petition herein, but in the Motion for Reconsideration and
Amendment of the Resolution of June 29, 1962. In other words, said theory would appear to be
readjustment of that followed in said petitions, to suit the approach intimated in the Resolution
sought to be reconsidered and amended. Then, too, some of the affidavits or copies of alleged
affidavits attached to said motion for reconsideration, or submitted in support thereof, contain either
inconsistent allegations, or allegations inconsistent with the theory now advanced by petitioners
herein.

Upon the other hand, we are not satisfied that the allegations of said petitions said motion for
reconsideration, and the contents of the aforementioned affidavits and other papers submitted in
support of said motion, have sufficiently established the facts or conditions contemplated in the
cases relied upon by the petitioners; to warrant application of the views therein expressed, should
we agree thereto. At any rate, we do not deem it necessary to express our opinion thereon, it being
best to leave the matter open for determination in appropriate cases in the future.

We hold, therefore, that the doctrine adopted in the Moncado case must be, as it is hereby,
abandoned; that the warrants for the search of three (3) residences of herein petitioners, as
specified in the Resolution of June 29, 1962, are null and void; that the searches and seizures
therein made are illegal; that the writ of preliminary injunction heretofore issued, in connection with
the documents, papers and other effects thus seized in said residences of herein petitioners is
hereby made permanent; that the writs prayed for are granted, insofar as the documents, papers
and other effects so seized in the aforementioned residences are concerned; that the
aforementioned motion for Reconsideration and Amendment should be, as it is hereby, denied; and
that the petition herein is dismissed and the writs prayed for denied, as regards the documents,
papers and other effects seized in the twenty-nine (29) places, offices and other premises
enumerated in the same Resolution, without special pronouncement as to costs.

It is so ordered.

Reyes, J.B.L., Dizon, Makalintal, Bengzon, J.P., Zaldivar and Sanchez, JJ., concur.

CASTRO, J., concurring and dissenting:

From my analysis of the opinion written by Chief Justice Roberto Concepcion and from the import of
the deliberations of the Court on this case, I gather the following distinct conclusions:

1. All the search warrants served by the National Bureau of Investigation in this case are
general warrants and are therefore proscribed by, and in violation of, paragraph 3 of section
1 of Article III (Bill of Rights) of the Constitution;

2. All the searches and seizures conducted under the authority of the said search warrants
were consequently illegal;

3. The non-exclusionary rule enunciated in Moncado vs. People, 80 Phil. 1, should be, and is
declared, abandoned;

4. The search warrants served at the three residences of the petitioners

are expressly declared null and void the searches and seizures therein made
are expressly declared illegal; and the writ of preliminary injunction heretofore issued against
the use of the documents, papers and effect seized in the said residences is made
permanent; and

5. Reasoning that the petitioners have not in their pleadings satisfactorily demonstrated that
they have legal standing to move for the suppression of the documents, papers and effects
seized in the places other than the three residences adverted to above, the opinion written
by the Chief Justice refrains from expressly declaring as null and void the such warrants
served at such other places and as illegal the searches and seizures made therein, and
leaves "the matter open for determination in appropriate cases in the future."

It is precisely the position taken by the Chief Justice summarized in the immediately preceding
paragraph (numbered 5) with which I am not in accord.

I do not share his reluctance or unwillingness to expressly declare, at this time, the nullity of the
search warrants served at places other than the three residences, and the illegibility of the searches
and seizures conducted under the authority thereof. In my view even the exacerbating passions and
prejudices inordinately generated by the environmental political and moral developments of this case
should not deter this Court from forthrightly laying down the law not only for this case but as well for
future cases and future generations. All the search warrants, without exception, in this case are
admittedly general, blanket and roving warrants and are therefore admittedly and indisputably
outlawed by the Constitution; and the searches and seizures made were therefore unlawful. That the
petitioners, let us assume in gratia argumente, have no legal standing to ask for the suppression of
the papers, things and effects seized from places other than their residences, to my mind, cannot in
any manner affect, alter or otherwise modify the intrinsic nullity of the search warrants and the
intrinsic illegality of the searches and seizures made thereunder. Whether or not the petitioners
possess legal standing the said warrants are void and remain void, and the searches and seizures
were illegal and remain illegal. No inference can be drawn from the words of the Constitution that
"legal standing" or the lack of it is a determinant of the nullity or validity of a search warrant or of the
lawfulness or illegality of a search or seizure.

On the question of legal standing, I am of the conviction that, upon the pleadings submitted to this
Court the petitioners have the requisite legal standing to move for the suppression and return of the
documents, papers and effects that were seized from places other than their family residences.

Our constitutional provision on searches and seizures was derived almost verbatim from the Fourth
Amendment to the United States Constitution. In the many years of judicial construction and
interpretation of the said constitutional provision, our courts have invariably regarded as doctrinal the
pronouncement made on the Fourth Amendment by federal courts, especially the Federal Supreme
Court and the Federal Circuit Courts of Appeals.

The U.S. doctrines and pertinent cases on standing to move for the suppression or return of
documents, papers and effects which are the fruits of an unlawful search and seizure, may be
summarized as follows; (a) ownership of documents, papers and effects gives "standing;" (b)
ownership and/or control or possession — actual or constructive — of premises searched gives
"standing"; and (c) the "aggrieved person" doctrine where the search warrant and the sworn
application for search warrant are "primarily" directed solely and exclusively against the "aggrieved
person," gives "standing."

An examination of the search warrants in this case will readily show that, excepting three, all were
directed against the petitioners personally. In some of them, the petitioners were named personally,
followed by the designation, "the President and/or General Manager" of the particular corporation.
The three warrants excepted named three corporate defendants. But the
"office/house/warehouse/premises" mentioned in the said three warrants were also the same
"office/house/warehouse/premises" declared to be owned by or under the control of the petitioners in
all the other search warrants directed against the petitioners and/or "the President and/or General
Manager" of the particular corporation. (see pages 5-24 of Petitioners' Reply of April 2, 1962). The
searches and seizures were to be made, and were actually made, in the
"office/house/warehouse/premises" owned by or under the control of the petitioners.

Ownership of matters seized gives "standing."

Ownership of the properties seized alone entitles the petitioners to bring a motion to return and
suppress, and gives them standing as persons aggrieved by an unlawful search and seizure
regardless of their location at the time of seizure. Jones vs. United States, 362 U.S. 257, 261 (1960)
(narcotics stored in the apartment of a friend of the defendant); Henzel vs. United States, 296 F. 2d.
650, 652-53 (5th Cir. 1961), (personal and corporate papers of corporation of which the defendant
was president), United States vs. Jeffers, 342 U.S. 48 (1951) (narcotics seized in an apartment not
belonging to the defendant); Pielow vs. United States, 8 F. 2d 492, 493 (9th Cir. 1925) (books seized
from the defendant's sister but belonging to the defendant); Cf. Villano vs. United States, 310 F. 2d
680, 683 (10th Cir. 1962) (papers seized in desk neither owned by nor in exclusive possession of the
defendant).
In a very recent case (decided by the U.S. Supreme Court on December 12, 1966), it was held that
under the constitutional provision against unlawful searches and seizures, a person places himself
or his property within a constitutionally protected area, be it his home or his office, his hotel room or
his automobile:

Where the argument falls is in its misapprehension of the fundamental nature and scope of
Fourth Amendment protection. What the Fourth Amendment protects is the security a man
relies upon when he places himself or his property within a constitutionally protected area,
be it his home or his office, his hotel room or his automobile. There he is protected from
unwarranted governmental intrusion. And when he puts some thing in his filing cabinet, in his
desk drawer, or in his pocket, he has the right to know it will be secure from an unreasonable
search or an unreasonable seizure. So it was that the Fourth Amendment could not tolerate
the warrantless search of the hotel room in Jeffers, the purloining of the petitioner's private
papers in Gouled, or the surreptitious electronic surveilance in Silverman. Countless other
cases which have come to this Court over the years have involved a myriad of differing
factual contexts in which the protections of the Fourth Amendment have been appropriately
invoked. No doubt, the future will bring countless others. By nothing we say here do we
either foresee or foreclose factual situations to which the Fourth Amendment may be
applicable. (Hoffa vs. U.S., 87 S. Ct. 408 (December 12, 1966). See also U.S. vs. Jeffers,
342 U.S. 48, 72 S. Ct. 93 (November 13, 1951). (Emphasis supplied).

Control of premises searched gives "standing."

Independent of ownership or other personal interest in the records and documents seized, the
petitioners have standing to move for return and suppression by virtue of their proprietary or
leasehold interest in many of the premises searched. These proprietary and leasehold interests have
been sufficiently set forth in their motion for reconsideration and need not be recounted here, except
to emphasize that the petitioners paid rent, directly or indirectly, for practically all the premises
searched (Room 91, 84 Carmen Apts; Room 304, Army & Navy Club; Premises 2008, Dewey
Boulevard; 1436 Colorado Street); maintained personal offices within the corporate offices (IBMC,
USTC); had made improvements or furnished such offices; or had paid for the filing cabinets in
which the papers were stored (Room 204, Army & Navy Club); and individually, or through their
respective spouses, owned the controlling stock of the corporations involved. The petitioners'
proprietary interest in most, if not all, of the premises searched therefore independently gives them
standing to move for the return and suppression of the books, papers and affects seized therefrom.

In Jones vs. United States, supra, the U.S. Supreme Court delineated the nature and extent of the
interest in the searched premises necessary to maintain a motion to suppress. After reviewing what
it considered to be the unduly technical standard of the then prevailing circuit court decisions, the
Supreme Court said (362 U.S. 266):

We do not lightly depart from this course of decisions by the lower courts. We are
persuaded, however, that it is unnecessarily and ill-advised to import into the law
surrounding the constitutional right to be free from unreasonable searches and seizures
subtle distinctions, developed and refined by the common law in evolving the body of private
property law which, more than almost any other branch of law, has been shaped by
distinctions whose validity is largely historical. Even in the area from which they derive, due
consideration has led to the discarding of those distinctions in the homeland of the common
law. See Occupiers' Liability Act, 1957, 5 and 6 Eliz. 2, c. 31, carrying out Law Reform
Committee, Third Report, Cmd. 9305. Distinctions such as those between "lessee",
"licensee," "invitee," "guest," often only of gossamer strength, ought not be determinative in
 fashioning procedures ultimately referable to constitutional safeguards. See also Chapman
vs. United States, 354 U.S. 610, 616-17 (1961).

It has never been held that a person with requisite interest in the premises searched must own the
property seized in order to have standing in a motion to return and suppress. In Alioto vs. United
States, 216 F. Supp. 48 (1963), a Bookkeeper for several corporations from whose apartment the
corporate records were seized successfully moved for their return. In United States vs. Antonelli,
Fireworks Co., 53 F. Supp. 870, 873 (W D. N. Y. 1943), the corporation's president successfully
moved for the return and suppression is to him of both personal and corporate documents seized
from his home during the course of an illegal search:

The lawful possession by Antonelli of documents and property, "either his own or the
corporation's was entitled to protection against unreasonable search and seizure. Under the
circumstances in the case at bar, the search and seizure were unreasonable and unlawful.
The motion for the return of seized article and the suppression of the evidence so obtained
should be granted. (Emphasis supplied).

Time was when only a person who had property in interest in either the place searched or the
articles seize had the necessary standing to invoke the protection of the exclusionary rule. But
in MacDonald vs. Unite States, 335 U.S. 461 (1948), Justice Robert Jackson joined by Justice Felix
Frankfurter, advanced the view that "even a guest may expect the shelter of the rooftree he is under
against criminal intrusion." This view finally became the official view of the U.S. Supreme Court and
was articulated in United States vs. Jeffers, 432 U.S 48 (1951). Nine years later, in 1960, in Jones
vs. Unite States, 362 U.S. 257, 267, the U.S. Supreme Court went a step further. Jones was a mere
guest in the apartment unlawfully searched but the Court nonetheless declared that the exclusionary
rule protected him as well. The concept of "person aggrieved by an unlawful search and seizure"
was enlarged to include "anyone legitimately on premise where the search occurs."

Shortly after the U.S. Supreme Court's Jones decision the U.S. Court of Appeals for the Fifth Circuit
held that the defendant organizer, sole stockholder and president of a corporation had standing in a
mail fraud prosecution against him to demand the return and suppression of corporate
property. Henzel vs. United States, 296 F 2d 650, 652 (5th Cir. 1961), supra. The court conclude
that the defendant had standing on two independent grounds: First — he had a sufficient interest in
the property seized, and second — he had an adequate interest in the premises searched (just like
in the case at bar). A postal inspector had unlawfully searched the corporation' premises and had
seized most of the corporation's book and records. Looking to Jones, the court observed:

Jones clearly tells us, therefore, what is not required qualify one as a "person aggrieved by
an unlawful search and seizure." It tells us that appellant should not have been precluded
from objecting to the Postal Inspector's search and seizure of the corporation's books and
records merely because the appellant did not show ownership or possession of the books
and records or a substantial possessory interest in the invade premises . . . (Henzel vs.
United States, 296 F. 2d at 651). .

Henzel was soon followed by Villano vs. United States, 310 F. 2d 680, 683, (10th Cir. 1962).
In Villano, police officers seized two notebooks from a desk in the defendant's place of employment;
the defendant did not claim ownership of either; he asserted that several employees (including
himself) used the notebooks. The Court held that the employee had a protected interest and that
there also was an invasion of privacy. Both Henzel and Villano considered also the fact that the
search and seizure were "directed at" the moving defendant. Henzel vs. United States, 296 F. 2d at
682; Villano vs. United States, 310 F. 2d at 683.
In a case in which an attorney closed his law office, placed his files in storage and went to Puerto
Rico, the Court of Appeals for the Eighth Circuit recognized his standing to move to quash as
unreasonable search and seizure under the Fourth Amendment of the U.S. Constitution a grand jury
subpoena duces tecum directed to the custodian of his files. The Government contended that the
petitioner had no standing because the books and papers were physically in the possession of the
custodian, and because the subpoena was directed against the custodian. The court rejected the
contention, holding that

Schwimmer legally had such possession, control and unrelinquished personal rights in the
books and papers as not to enable the question of unreasonable search and seizure to be
escaped through the mere procedural device of compelling a third-party naked possessor to
produce and deliver them. Schwimmer vs. United States, 232 F. 2d 855, 861 (8th Cir. 1956).

Aggrieved person doctrine where the search warrant s primarily directed against said person
gives "standing."

The latest United States decision squarely in point is United States vs. Birrell, 242 F. Supp. 191
(1965, U.S.D.C. S.D.N.Y.). The defendant had stored with an attorney certain files and papers,
which attorney, by the name of Dunn, was not, at the time of the seizing of the records, Birrell's
attorney. * Dunn, in turn, had stored most of the records at his home in the country and on a farm
which, according to Dunn's affidavit, was under his (Dunn's) "control and management." The papers
turned out to be private, personal and business papers together with corporate books and records of
certain unnamed corporations in which Birrell did not even claim ownership. (All of these type
records were seized in the case at bar). Nevertheless, the search in Birrell was held invalid by the
court which held that even though Birrell did not own the premises where the records were stored,
he had "standing" to move for the return of all the papers and properties seized. The court, relying
on Jones vs. U.S., supra; U.S. vs. Antonelli Fireworks Co., 53 F. Supp. 870, Aff'd 155 F. 2d
631: Henzel vs. U.S., supra; and Schwimmer vs. U.S., supra, pointed out that

It is overwhelmingly established that the searches here in question were directed solely and
exclusively against Birrell. The only person suggested in the papers as having violated the
law was Birrell. The first search warrant described the records as having been used "in
committing a violation of Title 18, United States Code, Section 1341, by the use of the mails
by one Lowell M. Birrell, . . ." The second search warrant was captioned: "United States of
America vs. Lowell M. Birrell. (p. 198)

Possession (actual or constructive), no less than ownership, gives standing to move to

suppress. Such was the rule even before Jones. (p. 199)

If, as thus indicated Birrell had at least constructive possession of the records stored with
Dunn, it matters not whether he had any interest in the premises searched. See also Jeffers
v. United States, 88 U.S. Appl. D.C. 58, 187 F. 2d 498 (1950), affirmed 432 U.S. 48, 72 S.
Ct. 93, 96 L. Ed. 459 (1951).

The ruling in the Birrell case was reaffirmed on motion for reargument; the United States did not
appeal from this decision. The factual situation in Birrell is strikingly similar to the case of the present
petitioners; as in Birrell, many personal and corporate papers were seized from premises not
petitioners' family residences; as in Birrell, the searches were "PRIMARILY DIRECTED SOLETY
AND EXCLUSIVELY" against the petitioners. Still both types of documents were suppressed
in Birrell because of the illegal search. In the case at bar, the petitioners connection with the
premises raided is much closer than in Birrell.
Thus, the petitioners have full standing to move for the quashing of all the warrants regardless
whether these were directed against residences in the narrow sense of the word, as long as the
documents were personal papers of the petitioners or (to the extent that they were corporate papers)
were held by them in a personal capacity or under their personal control.

Prescinding a from the foregoing, this Court, at all events, should order the return to the petitioners
all personal and private papers and effects seized, no matter where these were seized, whether
from their residences or corporate offices or any other place or places. The uncontradicted sworn
statements of the petitioners in their, various pleadings submitted to this Court indisputably show
that amongst the things seized from the corporate offices and other places
were personal and private papers and effects belonging to the petitioners.

If there should be any categorization of the documents, papers and things which where the objects
of the unlawful searches and seizures, I submit that the grouping should be:
(a) personal or private papers of the petitioners were they were unlawfully seized, be it their family
residences offices, warehouses and/or premises owned and/or possessed (actually or
constructively) by them as shown in all the search and in the sworn applications filed in securing the
void search warrants and (b) purely corporate papers belonging to corporations. Under such
categorization or grouping, the determination of which unlawfully seized papers, documents and
things are personal/private of the petitioners or purely corporate papers will have to be left to the
lower courts which issued the void search warrants in ultimately effecting the suppression and/or
return of the said documents.

And as unequivocally indicated by the authorities above cited, the petitioners likewise have clear
legal standing to move for the suppression of purely corporate papers as "President and/or General
Manager" of the corporations involved as specifically mentioned in the void search warrants.

Finally, I must articulate my persuasion that although the cases cited in my disquisition were criminal
prosecutions, the great clauses of the constitutional proscription on illegal searches and seizures do
not withhold the mantle of their protection from cases not criminal in origin or nature.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 153675             April 19, 2007

GOVERNMENT OF HONG KONG SPECIAL ADMINISTRATIVE REGION, represented by the

Philippine Department of Justice, Petitioner,
vs.
HON. FELIXBERTO T. OLALIA, JR. and JUAN ANTONIO MUÑOZ, Respondents.

DECISION

SANDOVAL-GUTIERREZ, J.:

For our resolution is the instant Petition for Certiorari under Rule 65 of the 1997 Rules of Civil
Procedure, as amended, seeking to nullify the two Orders of the Regional Trial Court (RTC), Branch
8, Manila (presided by respondent Judge Felixberto T. Olalia, Jr.) issued in Civil Case No. 99-95773.
These are: (1) the Order dated December 20, 2001 allowing Juan Antonio Muñoz, private
respondent, to post bail; and (2) the Order dated April 10, 2002 denying the motion to vacate the
said Order of December 20, 2001 filed by the Government of Hong Kong Special Administrative
Region, represented by the Philippine Department of Justice (DOJ), petitioner. The petition alleges
that both Orders were issued by respondent judge with grave abuse of discretion amounting to lack
or excess of jurisdiction as there is no provision in the Constitution granting bail to a potential
extraditee.

The facts are:

On January 30, 1995, the Republic of the Philippines and the then British Crown Colony of Hong
Kong signed an "Agreement for the Surrender of Accused and Convicted Persons." It took effect on
June 20, 1997.

On July 1, 1997, Hong Kong reverted back to the People’s Republic of China and became the Hong
Kong Special Administrative Region.

Private respondent Muñoz was charged before the Hong Kong Court with three (3) counts of the
offense of "accepting an advantage as agent," in violation of Section 9 (1) (a) of the Prevention of
Bribery Ordinance, Cap. 201 of Hong Kong. He also faces seven (7) counts of the offense of
conspiracy to defraud, penalized by the common law of Hong Kong. On August 23, 1997 and
October 25, 1999, warrants of arrest were issued against him. If convicted, he faces a jail term of
seven (7) to fourteen (14) years for each charge.

On September 13, 1999, the DOJ received from the Hong Kong Department of Justice a request for
the provisional arrest of private respondent. The DOJ then forwarded the request to the National
Bureau of Investigation (NBI) which, in turn, filed with the RTC of Manila, Branch 19 an application
for the provisional arrest of private respondent.
On September 23, 1999, the RTC, Branch 19, Manila issued an Order of Arrest against private
respondent. That same day, the NBI agents arrested and detained him.

On October 14, 1999, private respondent filed with the Court of Appeals a petition for certiorari,
prohibition and mandamus with application for preliminary mandatory injunction and/or writ
of habeas corpus questioning the validity of the Order of Arrest.

On November 9, 1999, the Court of Appeals rendered its Decision declaring the Order of Arrest void.

On November 12, 1999, the DOJ filed with this Court a petition for review on certiorari, docketed as
G.R. No. 140520, praying that the Decision of the Court of Appeals be reversed.

On December 18, 2000, this Court rendered a Decision granting the petition of the DOJ and
sustaining the validity of the Order of Arrest against private respondent. The Decision became final
and executory on April 10, 2001.

Meanwhile, as early as November 22, 1999, petitioner Hong Kong Special Administrative Region
filed with the RTC of Manila a petition for the extradition of private respondent, docketed as Civil
Case No. 99-95733, raffled off to Branch 10, presided by Judge Ricardo Bernardo, Jr. For his part,
private respondent filed, in the same case,- a petition for bail which was opposed by petitioner.

After hearing, or on October 8, 2001, Judge Bernardo, Jr. issued an Order denying the petition for
bail, holding that there is no Philippine law granting bail in extradition cases and that private
respondent is a high "flight risk."

On October 22, 2001, Judge Bernardo, Jr. inhibited himself from further hearing Civil Case No. 99-
95733. It was then raffled off to Branch 8 presided by respondent judge.

On October 30, 2001, private respondent filed a motion for reconsideration of the Order denying his
application for bail. This was granted by respondent judge in an Order dated December 20, 2001
allowing private respondent to post bail, thus:

In conclusion, this Court will not contribute to accused’s further erosion of civil liberties. The petition
for bail is granted subject to the following conditions:

1. Bail is set at Php750,000.00 in cash with the condition that accused hereby undertakes
that he will appear and answer the issues raised in these proceedings and will at all times
hold himself amenable to orders and processes of this Court, will further appear for
judgment. If accused fails in this undertaking, the cash bond will be forfeited in favor of the
government;

2. Accused must surrender his valid passport to this Court;

3. The Department of Justice is given immediate notice and discretion of filing its own motion
for hold departure order before this Court even in extradition proceeding; and

4. Accused is required to report to the government prosecutors handling this case or if they
so desire to the nearest office, at any time and day of the week; and if they further desire,
manifest before this Court to require that all the assets of accused, real and personal, be
filed with this Court soonest, with the condition that if the accused flees from his undertaking,
 said assets be forfeited in favor of the government and that the corresponding
lien/annotation be noted therein accordingly.

SO ORDERED.

On December 21, 2001, petitioner filed an urgent motion to vacate the above Order, but it was
denied by respondent judge in his Order dated April 10, 2002.

Hence, the instant petition. Petitioner alleged that the trial court committed grave abuse of discretion
amounting to lack or excess of jurisdiction in admitting private respondent to bail; that there is
nothing in the Constitution or statutory law providing that a potential extraditee has a right to bail, the
right being limited solely to criminal proceedings.

In his comment on the petition, private respondent maintained that the right to bail guaranteed under
the Bill of Rights extends to a prospective extraditee; and that extradition is a harsh process resulting
in a prolonged deprivation of one’s liberty.

Section 13, Article III of the Constitution provides that the right to bail shall not be impaired, thus:

Sec. 13. All persons, except those charged with offenses punishable by reclusion perpetua when
evidence of guilt is strong, shall, before conviction, be bailable by sufficient sureties, or be released
on recognizance as may be provided by law. The right to bail shall not be impaired even when the
privilege of the writ of habeas corpus is suspended. Excessive bail shall not be required.

Jurisprudence on extradition is but in its infancy in this jurisdiction. Nonetheless, this is not the first
time that this Court has an occasion to resolve the question of whether a prospective extraditee may
be granted bail.

In Government of United States of America v. Hon. Guillermo G. Purganan, Presiding Judge, RTC of

Manila, Branch 42, and Mark B. Jimenez, a.k.a. Mario Batacan Crespo,1 this Court, speaking
through then Associate Justice Artemio V. Panganiban, later Chief Justice, held that the
constitutional provision on bail does not apply to extradition proceedings. It is "available only in
criminal proceedings," thus:

x x x. As suggested by the use of the word "conviction," the constitutional provision on bail quoted
above, as well as Section 4, Rule 114 of the Rules of Court, applies only when a person has been
arrested and detained for violation of Philippine criminal laws. It does not apply to extradition
proceedings because extradition courts do not render judgments of conviction or acquittal.

Moreover, the constitutional right to bail "flows from the presumption of innocence in favor of every
accused who should not be subjected to the loss of freedom as thereafter he would be entitled to
acquittal, unless his guilt be proved beyond reasonable doubt" (De la Camara v. Enage, 41 SCRA 1,
6, September 17, 1971, per Fernando, J., later CJ). It follows that the constitutional provision on bail
will not apply to a case like extradition, where the presumption of innocence is not at issue.

The provision in the Constitution stating that the "right to bail shall not be impaired even when the
privilege of the writ of habeas corpus is suspended" does not detract from the rule that the
constitutional right to bail is available only in criminal proceedings. It must be noted that the
suspension of the privilege of the writ of habeas corpus finds application "only to persons judicially
charged for rebellion or offenses inherent in or directly connected with invasion" (Sec. 18, Art. VIII,
Constitution). Hence, the second sentence in the constitutional provision on bail merely emphasizes
the right to bail in criminal proceedings for the aforementioned offenses. It cannot be taken to mean
that the right is available even in extradition proceedings that are not criminal in nature.

At first glance, the above ruling applies squarely to private respondent’s case. However, this Court
cannot ignore the following trends in international law: (1) the growing importance of the individual
person in public international law who, in the 20th century, has gradually attained global recognition;
(2) the higher value now being given to human rights in the international sphere; (3) the
corresponding duty of countries to observe these universal human rights in fulfilling their treaty
obligations; and (4) the duty of this Court to balance the rights of the individual under our
fundamental law, on one hand, and the law on extradition, on the other.

The modern trend in public international law is the primacy placed on the worth of the
individual person and the sanctity of human rights. Slowly, the recognition that the individual
person may properly be a subject of international law is now taking root. The vulnerable doctrine that
the subjects of international law are limited only to states was dramatically eroded towards the
second half of the past century. For one, the Nuremberg and Tokyo trials after World War II resulted
in the unprecedented spectacle of individual defendants for acts characterized as violations of the
laws of war, crimes against peace, and crimes against humanity. Recently, under the Nuremberg
principle, Serbian leaders have been persecuted for war crimes and crimes against humanity
committed in the former Yugoslavia. These significant events show that the individual person is now
a valid subject of international law.

On a more positive note, also after World War II, both international organizations and states gave
recognition and importance to human rights. Thus, on December 10, 1948, the United Nations
General Assembly adopted the Universal Declaration of Human Rights in which the right to life,
liberty and all the other fundamental rights of every person were proclaimed. While not a treaty, the
principles contained in the said Declaration are now recognized as customarily binding upon
the members of the international community. Thus, in Mejoff v. Director of Prisons,2 this Court,
in granting bail to a prospective deportee, held that under the Constitution, 3 the principles set
forth in that Declaration are part of the law of the land. In 1966, the UN General Assembly also
adopted the International Covenant on Civil and Political Rights which the Philippines signed and
ratified. Fundamental among the rights enshrined therein are the rights of every person to life,
liberty, and due process.

The Philippines, along with the other members of the family of nations, committed to uphold the
fundamental human rights as well as value the worth and dignity of every person. This commitment
is enshrined in Section II, Article II of our Constitution which provides: "The State values the dignity
of every human person and guarantees full respect for human rights." The Philippines, therefore, has
the responsibility of protecting and promoting the right of every person to liberty and due process,
ensuring that those detained or arrested can participate in the proceedings before a court, to enable
it to decide without delay on the legality of the detention and order their release if justified. In other
words, the Philippine authorities are under obligation to make available to every person under
detention such remedies which safeguard their fundamental right to liberty. These remedies include
the right to be admitted to bail. While this Court in Purganan limited the exercise of the right to bail to
criminal proceedings, however, in light of the various international treaties giving recognition and
protection to human rights, particularly the right to life and liberty, a reexamination of this Court’s
ruling in Purganan is in order.

First, we note that the exercise of the State’s power to deprive an individual of his liberty is
not necessarily limited to criminal proceedings. Respondents in administrative proceedings,
such as deportation and quarantine,4 have likewise been detained.
 Second, to limit bail to criminal proceedings would be to close our eyes to our jurisprudential
history. Philippine jurisprudence has not limited the exercise of the right to bail to criminal
proceedings only. This Court has admitted to bail persons who are not involved in criminal
proceedings. In fact, bail has been allowed in this jurisdiction to persons in detention during
the pendency of administrative proceedings, taking into cognizance the obligation of the
Philippines under international conventions to uphold human rights.

The 1909 case of US v. Go-Sioco5 is illustrative. In this case, a Chinese facing deportation for failure
to secure the necessary certificate of registration was granted bail pending his appeal. After noting
that the prospective deportee had committed no crime, the Court opined that "To refuse him bail is to
treat him as a person who has committed the most serious crime known to law;" and that while
deportation is not a criminal proceeding, some of the machinery used "is the machinery of criminal
law." Thus, the provisions relating to bail was applied to deportation proceedings.

In Mejoff v. Director of Prisons6 and Chirskoff v. Commission of Immigration,7 this Court ruled that

foreign nationals against whom no formal criminal charges have been filed may be released on bail
pending the finality of an order of deportation. As previously stated, the Court in Mejoff relied upon
the Universal declaration of Human Rights in sustaining the detainee’s right to bail.

If bail can be granted in deportation cases, we see no justification why it should not also be allowed
in extradition cases. Likewise, considering that the Universal Declaration of Human Rights applies to
deportation cases, there is no reason why it cannot be invoked in extradition cases. After all, both
are administrative proceedings where the innocence or guilt of the person detained is not in issue.

Clearly, the right of a prospective extraditee to apply for bail in this jurisdiction must be viewed in the
light of the various treaty obligations of the Philippines concerning respect for the promotion and
protection of human rights. Under these treaties, the presumption lies in favor of human liberty.
Thus, the Philippines should see to it that the right to liberty of every individual is not impaired.

Section 2(a) of Presidential Decree (P.D.) No. 1069 (The Philippine Extradition Law) defines
"extradition" as "the removal of an accused from the Philippines with the object of placing him at the
disposal of foreign authorities to enable the requesting state or government to hold him in connection
with any criminal investigation directed against him or the execution of a penalty imposed on him
under the penal or criminal law of the requesting state or government."

Extradition has thus been characterized as the right of a foreign power, created by treaty, to demand
the surrender of one accused or convicted of a crime within its territorial jurisdiction, and the
correlative duty of the other state to surrender him to the demanding state. 8 It is not a criminal
proceeding.9 Even if the potential extraditee is a criminal, an extradition proceeding is not by its
nature criminal, for it is not punishment for a crime, even though such punishment may follow
extradition.10 It is sui generis, tracing its existence wholly to treaty obligations between different
nations.11 It is not a trial to determine the guilt or innocence of the potential extraditee.12 Nor is
it a full-blown civil action, but one that is merely administrative in character.13 Its object is to prevent
the escape of a person accused or convicted of a crime and to secure his return to the state from
which he fled, for the purpose of trial or punishment. 14

But while extradition is not a criminal proceeding, it is characterized by the following: (a) it entails a
deprivation of liberty on the part of the potential extraditee and (b) the means employed to attain
the purpose of extradition is also "the machinery of criminal law." This is shown by Section 6 of
P.D. No. 1069 (The Philippine Extradition Law) which mandates the "immediate arrest and
temporary detention of the accused" if such "will best serve the interest of justice." We further
note that Section 20 allows the requesting state "in case of urgency" to ask for the "provisional
arrest of the accused, pending receipt of the request for extradition;" and that release from
provisional arrest "shall not prejudice re-arrest and extradition of the accused if a request for
extradition is received subsequently."

Obviously, an extradition proceeding, while ostensibly administrative, bears all earmarks of a

criminal process. A potential extraditee may be subjected to arrest, to a prolonged restraint of
liberty, and forced to transfer to the demanding state following the proceedings. "Temporary
detention" may be a necessary step in the process of extradition, but the length of time of the
detention should be reasonable.

Records show that private respondent was arrested on September 23, 1999, and remained
incarcerated until December 20, 2001, when the trial court ordered his admission to bail. In other
words, he had been detained for over two (2) years without having been convicted of any
crime. By any standard, such an extended period of detention is a serious deprivation of his
fundamental right to liberty. In fact, it was this prolonged deprivation of liberty which prompted the
extradition court to grant him bail.

While our extradition law does not provide for the grant of bail to an extraditee, however, there is no
provision prohibiting him or her from filing a motion for bail, a right to due process under the
Constitution.

The applicable standard of due process, however, should not be the same as that in criminal
proceedings. In the latter, the standard of due process is premised on the presumption of innocence
of the accused. As Purganan correctly points out, it is from this major premise that the ancillary
presumption in favor of admitting to bail arises. Bearing in mind the purpose of extradition
proceedings, the premise behind the issuance of the arrest warrant and the "temporary detention" is
the possibility of flight of the potential extraditee. This is based on the assumption that such
extraditee is a fugitive from justice.15 Given the foregoing, the prospective extraditee thus bears
the onus probandi of showing that he or she is not a flight risk and should be granted bail.

The time-honored principle of pacta sunt servanda demands that the Philippines honor its
obligations under the Extradition Treaty it entered into with the Hong Kong Special Administrative
Region. Failure to comply with these obligations is a setback in our foreign relations and defeats the
purpose of extradition. However, it does not necessarily mean that in keeping with its treaty
obligations, the Philippines should diminish a potential extraditee’s rights to life, liberty, and due
process. More so, where these rights are guaranteed, not only by our Constitution, but also by
international conventions, to which the Philippines is a party. We should not, therefore, deprive an
extraditee of his right to apply for bail, provided that a certain standard for the grant is satisfactorily
met.

An extradition proceeding being sui generis, the standard of proof required in granting or denying
bail can neither be the proof beyond reasonable doubt in criminal cases nor the standard of proof of
preponderance of evidence in civil cases. While administrative in character, the standard of
substantial evidence used in administrative cases cannot likewise apply given the object of
extradition law which is to prevent the prospective extraditee from fleeing our jurisdiction. In his
Separate Opinion in Purganan, then Associate Justice, now Chief Justice Reynato S. Puno,
proposed that a new standard which he termed "clear and convincing evidence" should be used
in granting bail in extradition cases. According to him, this standard should be lower than proof
beyond reasonable doubt but higher than preponderance of evidence. The potential extraditee must
prove by "clear and convincing evidence" that he is not a flight risk and will abide with all the orders
and processes of the extradition court.
In this case, there is no showing that private respondent presented evidence to show that he is not
a flight risk. Consequently, this case should be remanded to the trial court to determine whether
private respondent may be granted bail on the basis of "clear and convincing evidence."

WHEREFORE, we DISMISS the petition. This case is REMANDED to the trial court to determine
whether private respondent is entitled to bail on the basis of "clear and convincing evidence." If not,
the trial court should order the cancellation of his bail bond and his immediate detention; and
thereafter, conduct the extradition proceedings with dispatch.

SO ORDERED.
U.S. Supreme Court
Hudgens v. NLRB, 424 U.S. 507 (1976)

Hudgens v. National Labor Relations Board

No. 74-773

Argued October 14, 1975

Decided March 3, 1976

424 U.S. 507

CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

Syllabus

When striking members of respondent union picketed in front of their employer's leased
store located in petitioner's shopping center, the shopping center's general manager
threatened them with arrest for criminal trespass if they did not depart, and they left.
The union then filed unfair labor practice charges against petitioner, alleging that the
threat constituted interference with rights protected by § 7 of the National Labor
Relations Act (NLRA). The National Labor Relations Board (NLRB), concluding that the
NLRA had been violated, issued a cease and desist order against petitioner, and the
Court of Appeals enforced the order. Petitioner and respondent union contend that the
respective rights and liabilities of the parties are to be decided under the criteria of the
NLRA alone, whereas the NLRB contends that such rights and liabilities must be
measured under a First Amendment standard.

Held:

1. Under the present state of the law, the constitutional guarantee of free expression
has no part to play in a case such as this, and the pickets here did not have a First
Amendment right to enter the shopping center for the purpose of advertising their strike
against their employer. Lloyd Corp. v. Tanner, 407 U. S. 551. Pp. 424 U. S. 512-521.

2. The rights and liabilities of the parties are dependent exclusively upon the NLRA,
under which it is the NLRB's task, subject to judicial review, to resolve conflicts between
§ 7 rights and private property rights and to seek accommodation of such rights "with as
little destruction of one as is consistent with the maintenance of the other," NLRB v.
Babcock & Wilcox Co., 351 U. S. 105, 351 U. S. 112. Hence, the case is remanded so
that the NLRB may reconsider the case under the NLRA's statutory criteria alone.
Pp. 424 U. S. 521-523.

501 F.2d 161, vacated and remanded.

STEWART, J., delivered the opinion of the Court, in which BURGER, C.J., and
BLACKMUN, POWELL, and REHNQUIST, JJ., joined.

Page 424 U. S. 508

POWELL, filed a concurring opinion, in which BURGER, C.J., joined, post, p. 424 U. S.

523. WHITE, J., filed an opinion concurring in the result, post, p. 424 U. S. 524.
MARSHALL, J., filed a dissenting opinion, in which BRENNAN, J., joined, post, p. 424
U. S. 525. STEVENS, J., took no part in the consideration or decision of the case.

MR. JUSTICE STEWART delivered the opinion of the Court.

A group of labor union members who engaged in peaceful primary picketing within the
confines of a privately owned shopping center were threatened by an agent of the
owner with arrest for criminal trespass if they did not depart. The question presented is
whether this threat violated the National Labor Relations Act, 49 Stat. 449, as amended
61 Stat. 136, 29 U.S.C. 151 et seq. The National Labor Relations Board concluded that
it did, 205 N.L.R.B. 628, and the Court of Appeals for the Fifth Circuit agreed. 501 F.2d
161. We granted certiorari because of the seemingly important questions of federal law
presented. 420 U.S. 971.

Page 424 U. S. 509

The petitioner, Scott Hudgens, is the owner of the North DeKalb Shopping Center,
located in suburban Atlanta, Ga. The center consists of a single large building with an
enclosed mall. Surrounding the building is a parking area which can accommodate
2,640 automobiles. The shopping center houses 60 retail stores leased to various
businesses. One of the lessees is the Butler Shoe Co. Most of the stores, including
Butler's, can be entered only from the interior mall.

In January, 1971, warehouse employees of the Butler Shoe Co. went on strike to
protest the company's failure to agree to demands made by their union in contract
negotiations. [Footnote 1] The strikers decided to picket not only Butler's warehouse,
but its nine retail stores in the Atlanta area as well, including the store in the North
DeKalb Shopping Center. On January 22, 1971, four of the striking warehouse
employees entered the center's enclosed mall carrying placards which read: "Butler
Shoe Warehouse on Strike, AFL-CIO, Local 315." The general manager of the shopping
center informed the employees that they could not picket within the mall or on the
parking lot and threatened them with arrest if they did not leave. The employees
departed, but returned a short time later and began picketing in an area of the mall
immediately adjacent to the entrances of the Butler store. After the picketing had
continued for approximately 30 minutes, the shopping center manager again informed
the pickets that, if they did not leave, they would be arrested for trespassing. The
pickets departed.

The union subsequently filed with the Board an unfair labor practice charge against
Hudgens, alleging interference with rights protected by § 7 of the Act, 29

Page 424 U. S. 510

U.S.C. § 157. [Footnote 2] Relying on this Court's decision in Food Employees v. Logan
Valley Plaza, 391 U. S. 308, the Board entered a cease and desist order against
Hudgens, reasoning that, because the warehouse employees enjoyed a First
Amendment right to picket on the shopping center property, the owner's threat of arrest
violated § 8(a)(1) of the Act, 29 U.S.C. § 15,8(a)(1). [Footnote 3] Hudgens filed a
petition for review in the Court of Appeals for the Fifth Circuit. Soon thereafter this Court
decided Lloyd Corp. v. Tanner, 407 U. S. 551, and Central Hardware Co. v. NLRB, 407
U. S. 539, and the Court of Appeals remanded the case to the Board for reconsideration
in light of those two decisions.

The Board, in turn, remanded to an Administrative Law Judge, who made findings of
fact, recommendations, and conclusions to the effect that Hudgens had committed an
unfair labor practice by excluding the pickets.

Page 424 U. S. 511

This result was ostensibly reached under the statutory criteria set forth in NLRB v.
Babcock & Wilcox Co., 351 U. S. 105, a case which held that union organizers who
seek to solicit for union membership may intrude on an employer's private property if no
alternative means exist for communicating with the employees. But the Administrative
Law Judge's opinion also relied on this Court's constitutional decision in Logan
Valley for a "realistic view of the facts." The Board agreed with the findings and
recommendations of the Administrative Law Judge, but departed somewhat from his
reasoning. It concluded that the pickets were within the scope of Hudgens' invitation to
members of the public to do business at the shopping center, and that it was, therefore,
immaterial whether or not there existed an alternative means of communicating with the
customers and employees of the Butler store. [Footnote 4]

Hudgens again petitioned for review in the Court of Appeals for the Fifth Circuit, and
there the Board changed its tack and urged that the case was controlled not
by Babcock & Wilcox, but by Republic Aviation Corp. v. NLRB, 324 U. S. 793 a case
which held that an employer commits an unfair labor practice if he enforces a no-
solicitation rule against employees on his premises who are also union organizers,
unless he can prove that the rule is necessitated by special circumstances. The Court of
Appeals enforced the Board's cease and desist order, but on the basis of yet another
theory. While acknowledging that the source of the pickets' rights was § 7 of the Act, the
Court of Appeals held that the competing constitutional and property right
considerations discussed in Lloyd Corp. v. Tanner, supra, "burde[n] the General
Counsel with the duty to

Page 424 U. S. 512

prove that other locations less intrusive upon Hudgens' property rights than picketing
inside the mall were either unavailable or ineffective," 501 F.2d at 169, and that the
Board's General Counsel had met that burden in this case.

In this Court, the petitioner Hudgens continues to urge that Babcock & Wilcox Co. is the
controlling precedent, and that, under the criteria of that case, the judgment of the Court
of Appeals should be reversed. The respondent union agrees that a statutory standard
governs, but insists that, since the § 7 activity here was not organizational as
in Babcock, but picketing in support of a lawful economic strike, an appropriate
accommodation of the competing interests must lead to an affirmance of the Court of
Appeals' judgment. The respondent Board now contends that the conflict between
employee picketing rights and employer property rights in a case like this must be
measured in accord with the commands of the First Amendment, pursuant to the
Board's asserted understanding of Lloyd Corp. v. Tanner, supra, and that the judgment
of the Court of Appeals should be affirmed on the basis of that standard.

II

As the above recital discloses, the history of this litigation has been a history of shifting
positions on the part of the litigants, the Board, and the Court of Appeal. It has been a
history, in short, of considerable confusion, engendered at least in part by decisions of
this Court that intervened during the course of the litigation. In the present posture of the
case, the most basic question is whether the respective rights and liabilities of the
parties are to be decided under the criteria of the National Labor Relations Act alone,
under a First Amendment standard, or under some combination of the two. It is to that
question, accordingly, that we now turn.

Page 424 U. S. 513

It is, of course, a commonplace that the constitutional guarantee of free speech is a

guarantee only against abridgment by government, federal or state. See Columbia
Broadcasting System, Inc. v. Democratic National Comm., 412 U. S. 94. Thus, while
statutory or common law may in some situations extend protection or provide redress
against a private corporation or person who seeks to abridge the free expression of
others, no such protection or redress is provided by the Constitution itself.

This elementary proposition is little more than a truism. But even truisms are not always
unexceptionably true, and an exception to this one was recognized almost 30 years ago
in Marsh v. Alabama, 326 U. S. 501. In Marsh, a Jehovah's Witness who had distributed
literature without a license on a sidewalk in Chickasaw, Ala., was convicted of criminal
trespass. Chickasaw was a so-called company town, wholly owned by the Gulf
Shipbuilding Corp. It was described in the Court's opinion as follows:

"Except for [ownership by a private corporation] it has all the characteristics of any other
American town. The property consists of residential buildings, streets, a system of
sewers, a sewage disposal plant and a 'business block' on which business places are
situated. A deputy of the Mobile County Sheriff, paid by the company, serves as the
town's policeman. Merchants and service establishments have rented the stores and
business places on the business block and the United States uses one of the places as
a post office from which six carriers deliver mail to the people of Chickasaw and the
adjacent area. The town and the surrounding neighborhood, which can not be
distinguished from the Gulf property by anyone not familiar with the property lines, are
thickly

Page 424 U. S. 514

settled, and according to all indications the residents use the business block as their
regular shopping center. To do so, they now, as they have for many years, make use of
a company-owned paved street and sidewalk located alongside the store fronts in order
to enter and leave the stores and the post office. Intersecting company-owned roads at
each end of the business block lead into a four-lane public highway which runs parallel
to the business block at a distance of thirty feet. There is nothing to stop highway traffic
from coming onto the business block and upon arrival a traveler may make free use of
the facilities available there. In short, the town and its shopping district are accessible to
and freely used by the public in general and there is nothing to distinguish them from
any other town and shopping center except the fact that the title to the property belongs
to a private corporation."

Id. at 326 U. S. 502-503.

The Court pointed out that, if the "title" to Chickasaw had

"belonged not to a private but to a municipal corporation and had appellant been
arrested for violating a municipal ordinance rather than a ruling by those appointed by
the corporation to manage a company town it would have been clear that appellant's
conviction must be reversed."

Id. at 326 U. S. 504. Concluding that Gulf's "property interests" should not be allowed to
lead to a different result in Chickasaw, which did "not function differently from any other
town," id. at 326 U. S. 506 508, the Court invoked the First and Fourteenth
Amendments to reverse the appellant's conviction.

It was the Marsh case that, in 1968 provided the foundation for the Court's decision
in Amalgamated Food Employees Union v. Logan Valley Plaza, 391 U. S. 308. That
case involved peaceful picketing within a large
Page 424 U. S. 515

shopping center near Altoona, Pa. One of the tenants of the shopping center was a
retail store that employed a wholly nonunion staff. Members of a local union picketed
the store, carrying signs proclaiming that it was nonunion and that its employees were
not receiving union wages or other union benefits. The picketing took place on the
shopping center's property in the immediate vicinity of the store. A Pennsylvania court
issued an injunction that required all picketing to be confined to public areas outside the
shopping center, and the Supreme Court of Pennsylvania affirmed the issuance of this
injunction. This Court held that the doctrine of the Marsh case required reversal of that
judgment.

The Court's opinion pointed out that the First and Fourteenth Amendments would clearly
have protected the picketing if it had taken place on a public sidewalk:

"It is clear that, if the shopping center premises were not privately owned, but instead
constituted the business area of a municipality, which they to a large extent resemble,
petitioners could not be barred from exercising their First Amendment rights there on
the sole ground that title to the property was in the municipality. Lovell v. Griffin, 303 U.
S. 444 (1938); Hague v. CIO, 307 U. S. 496 (1939); Schneider v. State, 308 U. S.
147 (1939); Jamison v. Texas, 318 U. S. 413 (1943). The essence of those opinions is
that streets, sidewalks, parks, and other similar public places are so historically
associated with the exercise of First Amendment rights that access to them for the
purpose of exercising such rights cannot constitutionally be denied broadly and
absolutely."

391 U.S. at 391 U. S. 315.

The Court's opinion then reviewed the Marsh case in detail, emphasized the similarities
between the business

Page 424 U. S. 516

block in Chickasaw, Ala., and the Logan Valley shopping center, and unambiguously
concluded:

"The shopping center here is clearly the functional equivalent of the business district of
Chickasaw involved in Marsh."

391 U.S. at 391 U. S. 318. Upon the basis of that conclusion, the Court held that the
First and Fourteenth Amendments required reversal of the judgment of the
Pennsylvania Supreme Court.

There were three dissenting opinions in the Logan Valley case, one of them by the
author of the Court's opinion in Marsh, Mr. Justice Black. His disagreement with the
Court's reasoning was total:
"In affirming petitioners' contentions, the majority opinion relies on Marsh v. Alabama,
supra, and holds that respondents' property has been transformed to some type of
public property. But Marsh was never intended to apply to this kind of
situation. Marsh dealt with the very special situation of a company-owned town,
complete with streets, alleys, sewers, stores, residences, and everything else that goes
to make a town. . . . I can find very little resemblance between the shopping center
involved in this case and Chickasaw, Alabama. There are no homes, there is no
sewage disposal plant, there is not even a post office on this private property which the
Court now considers the equivalent of a 'town.'"

391 U.S. at 391 U. S. 330-331 (footnote omitted).

"The question is, under what circumstances can private property be treated as though it
were public? The answer that Marsh gives is when that property has taken on all the
attributes of a town, i.e., "residential buildings, streets, a system of sewers, a sewage
disposal plant and a business block' on which business places are situated.""

326 U.S. at 326 U. S. 502. I

Page 424 U. S. 517

can find nothing in Marsh which indicates that, if one of these features is present, e.g., a
business district, this is sufficient for the Court to confiscate a part of an owner's private
property and give its use to people who want to picket on it.

Id. at 391 U. S. 332.

"To hold that store owners are compelled by law to supply picketing areas for pickets to
drive store customers away is to create a court-made law wholly disregarding the
constitutional basis on which private ownership of property rests in this country. . . ."

Id. at 391 U. S. 332-333.

Four years later, the Court had occasion to reconsider the Logan Valley doctrine
in Lloyd Corp. v. Tanner, 407 U. S. 551. That case involved a shopping center covering
some 50 acres in downtown Portland, Ore. On a November day in 1968, five young
people entered the mall of the shopping center and distributed handbills protesting the
then ongoing American military operations in Vietnam. Security guards told them to
leave, and they did so, "to avoid arrest." Id. at 407 U. S. 556. They subsequently
brought suit in a Federal District Court, seeking declaratory and injunctive relief. The
trial court ruled in their favor, holding that the distribution of handbills on the shopping
center's property was protected by the First and Fourteenth Amendments. The Court of
Appeals for the Ninth Circuit affirmed the judgment, 446 F.2d 545, expressly relying on
this Court's Marsh and Logan Valley decisions. This Court reversed the judgment of the
Court of Appeals.
The Court in its Lloyd opinion did not say that it was overruling the Logan
Valley decision. Indeed, a substantial portion of the Court's opinion in Lloyd was
devoted to pointing out the differences between the two cases, noting particularly that,
in contrast to the handbilling in Lloyd, the picketing in Logan Valley had been

Page 424 U. S. 518

specifically directed to a store in the shopping center, and the pickets had had no other
reasonable opportunity to reach their intended audience. 407 U.S. at 407 U. S. 561-567.
[Footnote 5] But the fact is that the reasoning of the Court's opinion in Lloyd cannot be
squared with the reasoning of the Court's opinion in Logan Valley.

It matters not that some Members of the Court may continue to believe that the Logan
Valley case was rightly decided. [Footnote 6] Our institutional duty is to follow until
changed the law as it now is, not as some Members of the Court might wish it to be.
And, in the performance of that duty, we make clear now, if it was not clear before, that
the rationale of Logan Valley did not survive the Court's decision in the Lloyd case.
[Footnote 7] Not only did the Lloyd opinion incorporate lengthy excerpts from two of the
dissenting opinions in Logan Valley, 407 U.S. at 407 U. S. 562-563, 565; the ultimate
holding in Lloyd amounted to a total rejection of the holding in Logan Valley:

"The basic issue in this case is whether respondents, in the exercise of asserted First
Amendment

Page 424 U. S. 519

rights, may distribute handbills on Lloyd's private property contrary to its wishes and
contrary to a policy enforced against all handbilling. In addressing this issue, it must be
remembered that the First and Fourteenth Amendments safeguard the rights of free
speech and assembly by limitations on state action, not on action by the owner of
private property used nondiscriminatorily for private purposes only. . . ."

407 U.S. at 407 U. S. 567.

"Respondents contend . . . that the property of a large shopping center is 'open to the
public,' serves the same purposes as a 'business district' of a municipality, and therefore
has been dedicated to certain types of public use. The argument is that such a center
has sidewalks, streets, and parking areas which are functionally similar to facilities
customarily provided by municipalities. It is then asserted that all members of the public,
whether invited as customers or not, have the same right of free speech as they would
have on the similar public facilities in the streets of a city or town."

"The argument reaches too far. The Constitution by no means requires such an
attenuated doctrine of dedication of private property to public use. The closest decision
in theory, Marsh v. Alabama, supra, involved the assumption by a private enterprise of
all of the attributes of a state-created municipality and the exercise by that enterprise of
semi-social municipal functions as a delegate of the State. In effect, the owner of the
company town was performing the full spectrum of municipal powers, and stood in the
shoes of the State. In the instant case, there is no comparable assumption or exercise
of municipal functions or power."

Id. at 407 U. S. 568-569 (footnote omitted).

Page 424 U. S. 520

"We hold that there has been no such dedication of Lloyd's privately owned and
operated shopping center to public use as to entitle respondents to exercise therein the
asserted First Amendment rights. . . ."

Id. at 407 U. S. 570.

If a large self-contained shopping center is the functional equivalent of a municipality,

as Logan Valley held, then the First and Fourteenth Amendments would not permit
control of speech within such a center to depend upon the speech's content. [Footnote
8] For while a municipality may constitutionally impose reasonable time, place, and
manner regulations on the use of its streets and sidewalks for First Amendment
purposes, see Cox v. New Hampshire, 312 U. S. 569; Poulos v. New Hampshire, 345
U. S. 395, and may even forbid altogether such use of some of its facilities, see
Adderley v. Florida, 385 U. S. 39, what a municipality may not do under the First and
Fourteenth Amendments is to discriminate in the regulation of expression on the basis
of the content of that expression, Erznoznik v. City of Jacksonville, 422 U. S. 205.

"[A]bove all else, the First Amendment means that government has no power to restrict
expression because of its message, its ideas, its subject matter, or its content"

Police Dept. of Chicago v. Mosley, 408 U. S. 92, 408 U. S. 95. [Footnote 9] It conversely

follows, therefore, that, if the respondents in the Lloyd case did not have a First
Amendment right to enter that shopping center to distribute handbills concerning
Vietnam, then the pickets in the present case did not have a First Amendment

Page 424 U. S. 521

right to enter this shopping center for the purpose of advertising their strike against the
Butler Shoe Co.

We conclude, in short, that, under the present state of the law, the constitutional
guarantee of free expression has no part to play in a case such as this.

III

From what has been said, it follows that the rights and liabilities of the parties in this
case are dependent exclusively upon the National Labor Relations Act. Under the Act,
the task of the Board, subject to review by the courts, is to resolve conflicts between § 7
rights and private property rights, "and to seek a proper accommodation between the
two." Central Hardware Co. v. NLRB, 407 U.S. at 407 U. S. 543. What is "a proper
accommodation" in any situation may largely depend upon the content and the context
of the § 7 rights being asserted. The task of the Board and the reviewing courts under
the Act, therefore, stands in conspicuous contrast to the duty of a court in applying the
standards of the First Amendment, which requires, "above all else," that expression
must not be restricted by government "because of its message, its ideas, its subject
matter, or its content."

In the Central Hardware case, and earlier in the case of NLRB v. Babcock & Wilcox
Co., 351 U. S. 105, the Court considered the nature of the Board's task in this area
under the Act. Accommodation between employees' § 7 rights and employers' property
rights, the Court said in Babcock & Wilcox, "must be obtained with as little destruction of
one as is consistent with the maintenance of the other." 351 U.S. at 351 U. S. 112.

Both Central Hardware and Babcock & Wilcox involved organizational activity carried on

by nonemployees on the employers' property. [Footnote 10] The context of the § 7

Page 424 U. S. 522

activity in the present case was different in several respects which may or may not be
relevant in striking the proper balance. First, it involved lawful economic strike activity,
rather than organizational activity. See Steelworkers v. NLRB, 376 U. S. 492, 376 U. S.
499; Bus Employees v. Missouri, 374 U. S. 74, 374 U. S. 82; NLRB v. Erie Resistor
Corp., 373 U. S. 221, 373 U. S. 234. Cf. Houston Insulation Contractors Assn. v.
NLRB, 386 U. S. 664, 386 U. S. 668-669. Second, the § 7 activity here was carried on
by Butler's employees (albeit not employees of its shopping center store), not by
outsiders. See NLRB v. Babcock & Wilcox Co., supra at 351 U. S. 111-113. Third, the
property interests impinged upon in this case were not those of the employer against
whom the § 7 activity was directed, but of another. [Footnote 11]

The Babcock & Wilcox opinion established the basic objective under the Act:
accommodation of § 7 rights and private property rights "with as little destruction of one
as is consistent with the maintenance of the other." [Footnote 12] The locus of that
accommodation, however, may fall at differing points along the spectrum depending on
the nature and strength of the respective § 7 rights and private property rights asserted
in any given context. In each generic situation, the primary responsibility for making this
accommodation must rest with the Board in the first instance. See NLRB v. Babcock &
Wilcox, supra at 351 U. S. 112; cf. NLRB v. Erie Resistor Corp., supra at 373 U. S. 235-
236;

Page 424 U. S. 523

NLRB v. Truckdrivers Union, 353 U. S. 87, 353 U. S. 97. "The responsibility to adapt the
Act to changing patterns of industrial life is entrusted to the Board." NLRB v.
Weingarten, Inc., 420 U. S. 251, 420 U. S. 266.

For the reasons stated in this opinion, the judgment is vacated and the case is
remanded to the Court of Appeals with directions to remand to the National Labor
Relations Board so that the case may be there considered under the statutory criteria of
the National Labor Relations Act alone.

It is so ordered.

MR. JUSTICE STEVENS took no part in the consideration or decision of this case.
 Republic of the Philippines
SUPREME COURT
Baguio City

EN BANC

G.R. No. 203335               April 22, 2014

JOSE JESUS M. DISINI, JR., ROWENA S. DISINI, LIANNE IVY P. MEDINA, JANETTE TORAL
and ERNESTO SONIDO, JR., Petitioners,
vs.
THE SECRETARY OF JUSTICE, THE SECRETARY OF THE DEPARTMENT OF THE INTERIOR
AND LOCAL GOVERNMENT, THE EXECUTIVE DIRECTOR OF THE INFORMATION AND
COMMUNICATIONS TECHNOLOGY OFFICE, THE CHIEF OF THE PHILIPPINE NATIONAL
POLICE and THE DIRECTOR OF THE NATIONAL BUREAU OF INVESTIGATION, Respondents.

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

G.R. No. 203299

LOUIS "BAROK" C. BIRAOGO, Petitioner,

vs.
NATIONAL BUREAU OF INVESTIGATION and PHILIPPINE NATIONAL POLICE, Respondents.

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

G.R. No. 203306

ALAB NG MAMAMAHAYAG (ALAM), HUKUMAN NG MAMAMAYAN MOVEMENT, INC., JERRY

S. YAP, BERTENI "TOTO" CAUSING, HERNANI Q. CUARE, PERCY LAPID, TRACY CABRERA,
RONALDO E. RENTA, CIRILO P. SABARRE, JR., DERVIN CASTRO, ET AL., Petitioners,
vs.
OFFICE OF THE PRESIDENT, represented by President Benigno Simeon Aquino III, SENATE
OF THE PHILIPPINES, and HOUSE OF REPRESENTATIVES, Respondents.

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

G.R. No. 203359

SENATOR TEOFISTO DL GUINGONA III, Petitioner,

vs.
EXECUTIVE SECRETARY, THE SECRETARY OF JUSTICE, THE SECRETARY OFTHE
DEPARTMENT OF INTERIOR AND LOCAL GOVERNMENT, THE CHIEF OF THE PHILIPPINE
NATIONAL POLICE, and DIRECTOR OF THE NATIONAL BUREAU OF
INVESTIGATION, Respondents.

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

G.R. No. 203378

ALEXANDER ADONIS, ELLEN TORDESILLAS, MA. GISELA ORDENES-CASCOLAN, H. HARRY
L. ROQUE, JR., ROMEL R. BAGARES, and GILBERT T. ANDRES, Petitioners,
vs.
THE EXECUTIVE SECRETARY, THE DEPARTMENT OF BUDGET AND MANAGEMENT, THE
DEPARTMENT OF JUSTICE, THE DEPARTMENT OF THE INTERIOR AND LOCAL
GOVERNMENT, THE NATIONAL BUREAU OF INVESTIGATION, THE PHILIPPINE NATIONAL
POLICE, AND THE INFORMATION AND COMMUNICATIONS TECHNOLOGY OFFICE-
DEPARTMENT OF SCIENCE AND TECHNOLOGY, Respondents.

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

G.R. No. 203391

HON. RAYMOND V. PALATINO, HON. ANTONIO TINIO, VENCER MARI CRISOSTOMO OF

ANAKBAYAN, MA. KATHERINE ELONA OF THE PHILIPPINE COLLEGIAN, ISABELLE
THERESE BAGUISI OF THE NATIONAL UNION OF STUDENTS OF THE PHILIPPINES, ET
AL., Petitioners,
vs.
PAQUITO N. OCHOA, JR., in his capacity as Executive Secretary and alter-ego of President
Benigno Simeon Aquino III, LEILA DE LIMA in her capacity as Secretary of
Justice, Respondents.

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

G.R. No. 203407

BAGONG ALYANSANG MAKABAYAN SECRETARY GENERAL RENATO M. REYES, JR.,

National Artist BIENVENIDO L. LUMBERA, Chairperson of Concerned Artists of the
Philippines, ELMER C. LABOG, Chairperson of Kilusang Mayo Uno, CRISTINA E. PALABAY,
Secretary General of Karapatan, FERDINAND R. GAITE, Chairperson of COURAGE, JOEL B.
MAGLUNSOD, Vice President of Anakpawis Party-List, LANA R. LINABAN, Secretary General
Gabriela Women’s Party, ADOLFO ARES P. GUTIERREZ, and JULIUS GARCIA
MATIBAG, Petitioners,
vs.
BENIGNO SIMEON C. AQUINO III, President of the Republic of the Philippines, PAQUITO N.
OCHOA, JR., Executive Secretary, SENATE OF THE PHILIPPINES, represented by SENATE
PRESIDENT JUAN PONCE ENRILE, HOUSE OF REPRESENTATIVES, represented by
SPEAKER FELICIANO BELMONTE, JR., LEILA DE LIMA, Secretary of the Department of
Justice, LOUIS NAPOLEON C. CASAMBRE, Executive Director of the Information and
Communications Technology Office, NONNATUS CAESAR R. ROJAS, Director of the National
Bureau of Investigation, D/GEN. NICANOR A. BARTOLOME, Chief of the Philippine National
Police, MANUEL A. ROXAS II, Secretary of the Department of the Interior and Local
Government, Respondents.

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

G.R. No. 203440

MELENCIO S. STA. MARIA, SEDFREY M. CANDELARIA, AMPARITA STA. MARIA, RAY

PAOLO J. SANTIAGO, GILBERT V. SEMBRANO, and RYAN JEREMIAH D. QUAN (all of the
Ateneo Human Rights Center), Petitioners,
vs.
HONORABLE PAQUITO OCHOA in his capacity as Executive Secretary, HONORABLE LEILA
DE LIMA in her capacity as Secretary of Justice, HONORABLE MANUEL ROXAS in his
capacity as Secretary of the Department of Interior and Local Government, The CHIEF of the
Philippine National Police, The DIRECTOR of the National Bureau of Investigation (all of the
Executive Department of Government), Respondents.

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

G.R. No. 203453

NATIONAL UNION OF JOURNALISTS OF THE PHILIPPINES (NUJP), PHILIPPINE PRESS

INSTITUTE (PPI), CENTER FOR MEDIA FREEDOM AND RESPONSIBILITY, ROWENA
CARRANZA PARAAN, MELINDA QUINTOS-DE JESUS, JOSEPH ALWYN ALBURO, ARIEL
SEBELLINO AND THE PETITIONERS IN THE e-PETITION http://www.nujp.org/no-to-
ra10175/, Petitioners,
vs.
THE EXECUTIVE SECRETARY, THE SECRETARY OF JUSTICE, THE SECRETARY OF THE
INTERIOR AND LOCAL GOVERNMENT, THE SECRETARY OF BUDGET AND MANAGEMENT,
THE DIRECTOR GENERAL OF THE PHILIPPINE NATIONAL POLICE, THE DIRECTOR OF THE
NATIONAL BUREAU OF INVESTIGATION, THE CYBERCRIME INVESTIGATION AND
COORDINATING CENTER, AND ALL AGENCIES AND INSTRUMENTALITIES OF
GOVERNMENT AND ALL PERSONS ACTING UNDER THEIR INSTRUCTIONS, ORDERS,
DIRECTION IN RELATION TO THE IMPLEMENTATION OF REPUBLIC ACT NO.
10175, Respondents.

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

G.R. No. 203454

PAUL CORNELIUS T. CASTILLO & RYAN D. ANDRES, Petitioners,

vs.
THE HON. SECRETARY OF JUSTICE, THE HON. SECRETARY OF INTERIOR AND LOCAL
GOVERNMENT, Respondents.

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

G.R. No. 203469

ANTHONY IAN M. CRUZ; MARCELO R. LANDICHO; BENJAMIN NOEL A. ESPINA; MARCK

RONALD C. RIMORIN; JULIUS D. ROCAS; OLIVER RICHARD V. ROBILLO; AARON ERICK A.
LOZADA; GERARD ADRIAN P. MAGNAYE; JOSE REGINALD A. RAMOS; MA. ROSARIO T.
JUAN; BRENDALYN P. RAMIREZ; MAUREEN A. HERMITANIO; KRISTINE JOY S.
REMENTILLA; MARICEL O. GRAY; JULIUS IVAN F. CABIGON; BENRALPH S. YU; CEBU
BLOGGERS SOCIETY, INC. PRESIDENT RUBEN B. LICERA, JR; and PINOY EXPAT/OFW
BLOG AWARDS, INC. COORDINATOR PEDRO E. RAHON; Petitioners,
vs.
HIS EXCELLENCY BENIGNO S. AQUINO III, in his capacity as President of the Republic of the
Philippines; SENATE OF THE PHILIPPINES, represented by HON. JUAN PONCE ENRILE, in
his capacity as Senate President; HOUSE OF REPRESENTATIVES, represented by
FELICIANO R. BELMONTE, JR., in his capacity as Speaker of the House of Representatives;
HON. PAQUITO N. OCHOA, JR., in his capacity as Executive Secretary; HON. LEILA M. DE
LIMA, in her capacity as Secretary of Justice; HON. LOUIS NAPOLEON C. CASAMBRE, in his
capacity as Executive Director, Information and Communications Technology Office; HON.
NONNATUS CAESAR R. ROJAS, in his capacity as Director, National Bureau of Investigation;
and P/DGEN. NICANOR A. BARTOLOME, in his capacity as Chief, Philippine National
Police, Respondents.

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

G.R. No. 203501

PHILIPPINE BAR ASSOCIATION, INC., Petitioner,

vs.
HIS EXCELLENCY BENIGNO S. AQUINO III, in his official capacity as President of the
Republic of the Philippines; HON. PAQUITO N. OCHOA, JR., in his official capacity as
Executive Secretary; HON. LEILA M. DE LIMA, in her official capacity as Secretary of Justice;
LOUIS NAPOLEON C. CASAMBRE, in his official capacity as Executive Director, Information
and Communications Technology Office; NONNATUS CAESAR R. ROJAS, in his official
capacity as Director of the National Bureau of Investigation; and DIRECTOR GENERAL
NICANOR A. BARTOLOME, in his official capacity as Chief of the Philippine National
Police, Respondents.

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

G.R. No. 203509

BAYAN MUNA REPRESENTATIVE NERI J. COLMENARES, Petitioner,

vs.
THE EXECUTIVE SECRETARY PAQUITO OCHOA, JR., Respondent.

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

G.R. No. 203515

NATIONAL PRESS CLUB OF THE PHILIPPINES, INC. represented by BENNY D. ANTIPORDA

in his capacity as President and in his personal capacity, Petitioner,
vs.
OFFICE OF THE PRESIDENT, PRES. BENIGNO SIMEON AQUINO III, DEPARTMENT OF
JUSTICE, DEPARTMENT OF INTERIOR AND LOCAL GOVERNMENT, PHILIPPINE NATIONAL
POLICE, NATIONAL BUREAU OF INVESTIGATION, DEPARTMENT OF BUDGET AND
MANAGEMENT AND ALL OTHER GOVERNMENT INSTRUMENTALITIES WHO HAVE HANDS
IN THE PASSAGE AND/OR IMPLEMENTATION OF REPUBLIC ACT 10175, Respondents.

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

G.R. No. 203518

PHILIPPINE INTERNET FREEDOM ALLIANCE, composed of DAKILA- PHILIPPINE

COLLECTIVE FOR MODERN HEROISM, represented by Leni Velasco, PARTIDO LAKAS NG
MASA, represented by Cesar S. Melencio, FRANCIS EUSTON R. ACERO, MARLON ANTHONY
ROMASANTA TONSON, TEODORO A. CASIÑO, NOEMI LARDIZABAL-DADO, IMELDA
MORALES, JAMES MATTHEW B. MIRAFLOR, JUAN G.M. RAGRAGIO, MARIA FATIMA A.
VILLENA, MEDARDO M. MANRIQUE, JR., LAUREN DADO, MARCO VITTORIA TOBIAS
SUMAYAO, IRENE CHIA, ERASTUS NOEL T. DELIZO, CRISTINA SARAH E. OSORIO, ROMEO
FACTOLERIN, NAOMI L. TUPAS, KENNETH KENG, ANA ALEXANDRA C. CASTRO, Petitioners,
vs.
THE EXECUTIVE SECRETARY, THE SECRETARY OF JUSTICE, THE SECRETARY OF
INTERIOR AND LOCAL GOVERNMENT, THE SECRETARY OF SCIENCE AND TECHNOLOGY,
THE EXECUTIVE DIRECTOR OF THE INFORMATION TECHNOLOGY OFFICE, THE DIRECTOR
OF THE NATIONAL BUREAU OF INVESTIGATION, THE CHIEF, PHILIPPINE NATIONAL
POLICE, THE HEAD OF THE DO OFFICE OF CYBERCRIME, and THE OTHER MEMBERS OF
THE CYBERCRIME INVESTIGATION AND COORDINATING CENTER, Respondents.

RESOLUTION

ABAD, J.:

A number of petitioners seek reconsideration of the Court's February 18, 2014 Decision that
declared invalid and unconstitutional certain provisions of Republic Act 10125 or the Cybercrime
Prevention Act of 2012 and upheld the validity of the others. The respondents, represented by the
Office of the Solicitor General, also seek reconsideration of portions of that decision. After going over
their motions, however, the Court sees no substantial arguments from either side to warrant the
reversal of its February 18, 2014 Decision.

The point about the legislative bicameral committee's insertions of certain provisions that were
neither in the House bill nor in the Senate bill is something that the Court is not inclined to
investigate since insertions are within the power of those committees to make so long as the
passage of the law complies with the constitutional requirements.  The Cybercrime Prevention Act
1

went through both houses and they approved it. Any issue concerning alleged non-compliance with
the governing rules of both houses regarding committee insertions have to be internally resolved by
each house.

In any event, the Court will briefly address certain aspects of the decision that drew the most
objections.

Section 6 of the cybercrime law imposes penalties that are one degree higher when the crimes
defined in the Revised Penal Code and certain special laws are committed with the use of
information and communication technologies (ICT). Some of the petitioners insist that Section 6 is
invalid since it produces an unusual chilling effect on users of cyberspace that would hinder free
expression.

Petitioner Bloggers and Netizens for Democracy insist that Section 6 cannot stand in the absence of
a definition of the term "information and communication technology".  But petitioner seems to forget
2

the basic tenet that statutes should not be read in isolation from one another. The parameters of that
ICT exist in many other laws. Indeed those parameters have been used as basis for establishing
government systems and classifying evidence.  These along with common usage provide the
3

needed boundary within which the law may be applied.

The Court had ample opportunity to consider the proposition that Section 6 violates the equal
protection clause via the parties’ pleadings, oral arguments, and memoranda. But, as the Decision
stressed, the power to fix the penalties for violations of penal laws, like the cybercrime law,
exclusively belongs to Congress.

In any event, Section 6 of the cybercrime law merely makes the commission of existing crimes
through the internet a qualifying circumstance that raises by one degree the penalties corresponding
to such crimes. This is not at all arbitrary since a substantial distinction exists between crimes
committed through the use of ICT and similar crimes committed using conventional means.

The United Nations Special Rapporteur,  Frank La Rue, acknowledged the material distinction. He
4

pointed out that "[t]he vast potential and benefits of the Internet are rooted in its unique
characteristics, such as its speed, worldwide reach and relative anonymity." For this reason, while
many governments advocate freedom online, they recognize the necessity to regulate certain
aspects of the use of this media to protect the most vulnerable. 5

Not infrequently, certain users of the technology have found means to evade being identified and for
this reason have been emboldened to reach far more victims or cause greater harm or both. It is,
therefore, logical for Congress to consider as aggravating the deliberate use of available ICT by
those who ply their wicked trades.

Compared to traditional crimes, cybercrimes are more perverse. In traditional estafa for example, the
offender could reach his victim only at a particular place and a particular time. It is rare that he could
consummate his crime without exposing himself to detection and prosecution. Fraud online,
however, crosses national boundaries, generally depriving its victim of the means to obtain
reparation of the wrong done and seek prosecution and punishment of the absent criminal.
Cybercriminals enjoy the advantage of anonymity, like wearing a mask during a heist.

Petitioners share the Chief Justice’s concern for the overall impact of those penalties, being one
degree higher than those imposed on ordinary crimes, including the fact that the prescriptive periods
for the equivalent cybercrimes have become longer. 6

Prescription is not a matter of procedure over which the Court has something to say. Rather, it is
substantive law since it assumes the existence of an authority to punish a wrong, which authority the
Constitution vests in Congress alone. Thus, there is no question that Congress may provide a
variety of periods for the prescription of offenses as it sees fit. What it cannot do is pass a law that
extends the periods of prescription to impact crimes committed before its passage. 7

It is pointed out that the legislative discretion to fix the penalty for crimes is not absolute especially
when this discretion is exercised in violation of the freedom of expression. The increase in the
penalty for online libel creates, according to this view, greater and unusual chilling effect that violates
the protection afforded to such freedom.

But what the stiffer penalty for online libel truly targets are those who choose to use this most
pervasive of media without qualms, tearing down the reputation of private individuals who value their
names and community standing. The law does not remotely and could not have any chilling effect on
the right of the people to disagree, a most protected right, the exercise of which does not constitute
libel.

The majority of the movants believe that the Court’s decision upholding the constitutionality of
Section 4(c)(4), which penalizes online libel, effectively tramples upon the right to free
expression.  But libel is not a protected speech. There is no freedom to unjustly destroy the
1âwphi1

reputation of a decent woman by publicly claiming that she is a paid prostitute.

As early as 1912, the Court held that libel is a form of expression not protected by the
Constitution.  Libel, like obscenity, belongs to those forms of speeches that have never attained
8

Constitutional protection and are considered outside the realm of protected freedom. As explained
by the US Supreme Court in Champlinsky v. New Hampsire: 9
Allowing the broadest scope to the language and purpose of the Fourteenth Amendment, it is well
understood that the right of free speech is not absolute at all times and under all circumstances.
There are certain well-defined and narrowly limited classes of speech, the prevention and
punishment of which have never been thought to raise any Constitutional problem. These include
the lewd and obscene, the profane, the libelous, and the insulting or "fighting" words – those which,
by their very utterance, inflict injury or tend to incite an immediate breach of the peace.

It has been well observed that such utterances are no essential part of any exposition of ideas, and
are of such slight social value as a step to truth that any benefit that may be derived from them is
clearly outweighed by the social interest in order and morality. "Resort to epithets or personal abuse
is not in any proper sense communication of information or opinion safeguarded by the Constitution,
and its punishment as a criminal act would raise no question under that instrument." (Emphasis
supplied)

The constitutional guarantee against prior restraint and subsequent punishment, the jurisprudential
requirement of "actual malice," and the legal protection afforded by "privilege communications" all
ensure that protected speech remains to be protected and guarded. As long as the expression or
speech falls within the protected sphere, it is the solemn duty of courts to ensure that the rights of
the people are protected.

At bottom, the deepest concerns of the movants seem to be the fact that the government seeks to
regulate activities in the internet at all. For them, the Internet is a place where a everyone should be
free to do and say whatever he or she wants. But that is anarchical. Any good thing can be
converted to evil use if there are no laws to prohibit such use. Indeed, both the United States and the
Philippines have promulgated laws that regulate the use of and access to the Internet. 10

The movants argue that Section 4(c)(4) is both vague and overbroad. But, again, online libel is not a
new crime. It is essentially the old crime of libel found in the 1930 Revised Penal Code and
transposed to operate in the cyberspace. Consequently, the mass of jurisprudence that secures the
freedom of expression from its reach applies to online libel. Any apprehended vagueness in its
provisions has long been settled by precedents.

The parties' other arguments in their respective motions for reconsideration are mere reiterations
that the Court already considered and ruled upon when it promulgated its earlier Decision.

WHEREFORE, the Court DENIES with finality the various motions for reconsideration that both the
petitioners and the respondents, represented by the Office of the Solicitor General, filed for lack of
merit.

SO ORDERED.

ROBERTO A. ABAD
Associate Justice

WE CONCUR:

DISSENTING AND CONCURRING OPINION

SERENO, J.:
Freedoms such as these are protected not only against heavy-handed frontal attack, but also from
being stifled by more subtle governmental interference.

Justice Potter Stewart 1

Nothing can be more plain and unambiguous than the Constitutional command that "No law shall be
passed abridging the freedom of speech, of expression, or of the press, or the right of the people
peaceably to assemble and petition the government for redress of grievances." The Constitution’s
mantle of protection is not limited to direct interference  with the right to free speech; it prohibits
2

anything that as much as subtly chills its exercise.

I maintain my dissent insofar as the application of Section 6 to libel is concerned because the one
degree higher penalty it imposes creates a chilling effect on the exercise of free speech. Hence,
while a solitary sentence to that effect would have sufficed, I respectfully but vigorously reassert my
dissent, considering the far-reaching effects of Section 6 on the lives and liberty of the Filipino
people. Freedom of speech is the nucleus of other rights. That is why it is the first right that is
curtailed when a free society falls under a repressive regime.  That is also why this Court has
3

acknowledged freedom of speech as occupying a preferred position in the hierarchy of rights. 4

Unfortunately, the questioned provision was discussed only cursorily in the Court’s Decision, –
through a single paragraph, – and again in the resolution of the motions for reconsideration, despite
the gravity of its consequences. The Decision dismissively disposes of the issue by 1) stating that
Section 6 operates only to make commissions of crimes through the Internet a qualifying
circumstance and 2) substantial distinctions justify a higher penalty for crimes through information
communication technology (ICT). I believe that it is the Court’s constitutional duty to explain to the
people its decision exhaustively, especially when the issue has broad implications on the national
life. Indeed, if the majority had only thoroughly examined the implications of Section 6, at least as far
as its application to libel is concerned, they might have seen how the provision subtly but surely
endangers the preferred right to free speech.

It is also the Court’s duty to address the confusion that may have resulted from its Decision when the
matter of such confusion is raised in a motion for reconsideration. Especially so when several parties
raise the issue, since it would show how widespread the misconception is. Failure to do so may
create and propagate unfounded fears with inevitable adverse effects. If the Court takes the time to
resolve moot and academic cases when doing so will be instructive to the bar and bench and the
public, and when the issues raised are of paramount public interest,  all the more should it
5

endeavour to allay the concrete fears of the population, no matter how absurd, by clarifying and
untangling the confusion that caused them. This I will do in relation to the wild conclusions some
parties hold about the nature of ICT in Section 6.

I had fervently hoped that this conscientious reiteration of my reasons for asserting the
unconstitutionality of Section 6 insofar as its application to libel is concerned would have the effect of
convincing those who take a contrary position – within and outside of the Court – to reconsider their
strongly-held position on Section 6. It would be a glimmer of hope should this reassertion even as
much as nudge them slightly to be open to this different view being offered in the marketplace of
ideas. Incidentally, the marketplace has moved into cyberspace which we must now protect, not for
its own sake, but for the vast possibilities for robust exchange of ideas it has opened, especially
those pertaining to politics and governance. ICT has proven to be an ally of democracy. Hence,
nowhere is the protection of free speech more imperative than in this ubiquitous medium.

I also explain my position on the validity of regulating the transmission of unsolicited commercial
communications under Section 4(c)(3). I believe that the regulation prevents harmful conduct that
may interfere with an e-mail user’s enjoyment of his e-mail. Consequently, the interference may
possibly affect his online exercise of his right to free speech, free expression and free association,
that e-mail services facilitate.

Urgent need to remove the chilling

effect of Section 6 insofar as its
application to cyberlibel is concerned.

The Court had struck down unconstitutional provisions of the Cybercrime Prevention Act, in the
exercise of its duty as the ultimate guardian of the Constitution. However, it has left Section 6
completely unscathed. In doing so, the Court would appear not to have completely slain the beast
still poised to attack the right to freedom of speech. Perhaps it is the deceivingly simple and
innocuous wording of the provision that has successfully masked its invidious repercussions. Or
perhaps, it is because of the provision’s indirect, rather than frontal attack on free speech that has
left the majority unconcerned. Indeed, it is often the quiet and creeping interference upon
fundamental rights that succeeds in absolutely undermining liberty. It is the Court’s duty to examine
and expose to light this hidden peril and rouse the complacent from her complacency.

I believe that the Court should now closely scrutinize Section 6 anew if it had failed to do so the first
time around.

As a general rule, penal statutes cannot be facially invalidated on the ground that they produce a
"chilling effect," since they are intended to have an in terrorem effect  to deter criminality.  However,
6 7

when a law provides for a penalty that goes beyond the in terrorem effect needed to deter crimes
and impedes the exercise of freedom of speech, it should be quashed at once without hesitation. As
I previously demonstrated, the increase in penalty under this seemingly innocuous provision of
Section 6, insofar as it is applied to libel, indirectly but absolutely results in chilling the right of the
people to free speech and expression. Therefore, it is unconstitutional.

Section 6 creates an additional in

terrorem effect on top of that
already created by Article 355 of
the Revised Penal Code.

Our Revised Penal Code is based on the premise that humans are rational beings who refrain from
criminal acts if threatened with punishment sufficient to outweigh any expected gain in committing
the crime.  This consequence is the intended in terrorem effect of penal statutes.  Hence, in their
8 9

exercise of freedom of speech, people circumspectly weigh the severity of the punishment if the
speech turns out to be libelous against the possible benefit to be derived from it.

However, additional in terrorem effect may be validly created by law to discourage resort to greater
perversity in the commission of a felony. Hence, under the Revised Penal Code the imposable
penalty is increased when there are aggravating circumstances showing a greater perversity in the
commission of a felony. 10

Section 6 of the Cybercrime Prevention Act introduces the use of ICT as a qualifying aggravating
circumstance, thusly:

SEC. 6. All crimes defined and penalized by the Revised Penal Code, as amended, and special
laws, if committed by, through and with the use of information and communications technologies
shall be covered by the relevant provisions of this Act: Provided, That the penalty to be imposed
shall be one (1) degree higher than that provided for by the Revised Penal Code, as amended, and
special laws, as the case may be. (Emphases supplied)

Article 355 of the Revised Penal Code, provides for libel the penalty of prisión correccional in its
minimum (from 6 months and 1 day to 2 years and 4 months) and medium (from 2 years, 4 months,
and 1 day to 4 years and 2 months) periods. However, with the increase in penalty by one degree
under the Cybercrime Prevention Act, libel qualified by the use of ICT is now punishable by prisión
correccional in its maximum period (from 4 years, 2 months and 1 day to 6 years) to prisión mayor in
its minimum period (from 6 years and 1 day to 8 years).  Therefore, Section 6 doubles the maximum
11

penalty for online libel.

Thus, Section 6 effectively creates an additional in terrorem effect by introducing ICT as a qualifying
aggravating circumstance. This burden is imposed on top of the intended in terrorem effect of the
original penalties imposed by the Revised Penal Code. Thus, the public will now have to take this
additional burden into account in their calculation of penalties. As if the need to weigh the costs and
benefits of whether to exercise freedom of speech is not burdened enough by the possibility of a libel
suit, the public will now have to additionally mull over their use of ICT in the exercise of this freedom
through ICT.

Every individual, including those of us in the judiciary, who rely heavily on the use of ICT can easily
see how burdensome this state of affairs is. Significantly, the statistical facts show that the
Philippines depends greatly on ICT as a means of communication and of expression. As pointed out
by Justice Leonen in his Separate Dissenting and Concurring Opinion to the main Decision, a global
study of internet users showed that 78% of Filipino respondents said that they access the Internet
several times a day, while 79% used e-mail at least once a day.  Additionally, 72% used social
12

media at least once a day. This shows the inextricability of ICT from our national life. Indeed, we do
not need statistics to convince us of this fact. What office or establishment or individual can function
without the Internet nowadays? Given this reality, it is inevitable that the increase in penalty per se
will effectively chill the exercise of the preferred constitutional right to free speech.

Worse, as will be shown below, this increase in penalty has domino effects which combine to create
a behemoth that treacherously tramples over freedom of speech – the imposition of harsher
accessory penalties, the neutralization of the full benefits of the law on probation, the increase in the
prescription periods for the crime of cyberlibel and its penalty, and the fact that the aggravating
circumstance cannot be offset by any mitigating circumstance. Additionally, all these extra burden
can be easily imposed since the use of ICT per se, without need to prove criminal intent,
automatically calls for the application of a penalty one degree higher.

The increase in penalty also

results in the imposition of
harsher accessory penalties

As explained earlier, before the Cybercrime Prevention Act, the imposable penalty for libel under Art.
355 of the Revised Penal Code, even if committed by means of ICT, was prisión correccional in its
minimum and medium periods. Now, under Section 6 of the Cybercrime Prevention Act, the
imposable penalty for libel qualified by ICT has been increased to prisión correccional in its
maximum period to prisión mayor in its minimum period.  Consequently, it is now possible for the
13

harsher accessory penalties for prisión mayor to attach. These are: the deprivation of public offices
and employments even if conferred by popular election, the deprivation of the right to vote,
disqualification from offices or public employments and the forfeiture of retirement pay. Undeniably,
public office and employment as well as the right to vote, and retirement pay are not trifling privileges
that one can easily risk losing. Hence, the public will now have to factor in these severe
consequences into their calculations. The exercise of freedom of speech through ICT is thereby
further burdened.

I also note that these accessory penalties hit public officers hardest. This can be troubling because it
is often public servants who know about and may expose corruption within their ranks. Such harsher
penalties will certainly discourage public servants from exercising their freedom of speech to
denounce wrongdoing. We are therefore depriving ourselves of a potent check against official
abuse.

The increase in penalty

neutralizes the full benefits of the
law on probation, consequently
threatening the public with the
guaranteed imposition of
imprisonment and the accessory
penalties thereof.

Under Presidential Decree No. (P.D.) 968 or the Probation Law,  qualified offenders who
14

immediately admit to their liability and thus renounce the right to appeal are given the chance to
avoid the stigma of incarceration by making them undergo rehabilitation outside prison instead.

However, Section 9 of the law excludes those sentenced to serve a maximum term of imprisonment
of more than six years from its coverage. Since the maximum penalty for libel committed through the
use of ICT has been increased two-fold to 8 years, a convicted offender may now be disqualified
from availing of the benefits of probation.

Given the basic postulate animating our penal laws that humans are calculating beings who weigh
the perils of their actions, it is possible that people may risk a conviction for libel, since they may
avail themselves of the privilege of probation. They may find that the exercise of their freedom to
speak and to express themselves is worth the threat. But when this very beneficial  technology is
15

made a qualifying aggravating circumstance that guarantees imprisonment, the in terrrorem effect of
libel is further magnified and becomes unduly oppressive to the exercise of free speech.
Furthermore, it should be noted that offenders will now lose the additional benefit of probation – the
suspension of accessory penalties.

Section 6 increases the

prescription periods for the crime
of cyberlibel and its penalty to 15 years.

Before the passage of the Cybercrime Prevention Act, the State waives its right to prosecute libel
after only one year. With the increase in penalty by one degree pursuant to Section 6 of the
Cybercrime Prevention Act, however, the penalty for libel through ICT becomes afflictive under
Article 25 of the Revised Penal Code. Accordingly, while a charge for ordinary libel may be filed
within the limited period of only one year from its commission, the charge for online libel can be
instituted within 15 years since under Article 90 that is the prescription period for crimes punishable
by afflictive penalties, other than reclusion perpetua and reclusion temporal.  This is not a trivial
16

matter since, in effect, the threat of prosecution for online libel lingers for 14 years more. Similarly,
the prescription period for the penalty of libel through ICT is increased from 10 to 15 years.

These increases in the prescription periods are additional factors in the rational calculation of
whether or not to exercise freedom of speech through ICT. Obviously, this adverse change further
tilts the scales against the exercise of freedom of speech.
ICT as a qualifying aggravating
circumstance cannot be offset by
any mitigating circumstance.

A qualifying aggravating circumstance like the use of ICT increases the penalty by degrees, not by
period as a generic aggravating circumstance does.  Moreover, while a generic aggravating
17

circumstance may be offset by a generic mitigating circumstance such as voluntary surrender, a

qualifying aggravating circumstance is more onerous in that it cannot be similarly offset.  Hence,
18

since Section 6 now punishes the offender with a higher range of penalty – prisión correccional in its
maximum period (from 4 years, 2 months and 1 day to 6 years) to prisión mayor in its minimum
period (from 6 years and 1 day to 8 years) -- the period of imprisonment will remain within this higher
and harsher range.

It is not difficult to see how Section 6 subjugates freedom of speech through its combined effects –
longer prison terms, harsher accessory penalties, loss of benefits under the Probation Law,
extended prescription periods, and ineligibility of these penalties to be offset by mitigating
circumstances. We cannot turn a blind eye to this and turn our backs on the Filipino people. I am
convinced more than ever of the unconstitutionality of Section 6, as far as libel is concerned.

For providing that the use per se of

ICT, even without malicious intent,
aggravates the crime of libel, Section
6 is seriously flawed and burdens
free speech.

I now discuss an additional factor by which free speech is burdened.

Petitioners Cruz et al.  observe in their motion for reconsideration that Section 6 increases by one
19

degree the penalty for a crime committed through ICT without regard to how ICT contributed to the
gravity of the crime.  Hence, even if the use of ICT is "completely arbitrary" and unintended, it merits
20

a higher penalty that is double that imposed for ordinary libel.

21

They also note that provisions of the Cybercrime Prevention Act appear to be malum prohibitum.
Hence, they penalize acts by their mere commission regardless of the intent of the actor.  Petitioners
22

then proceed to explain that this is inconsistent with the idea of criminalizing the act of aiding and
abetting the commission of a crime as well as the attempt to commit a crime that operate within the
concept of malum in se, where intent or mens rea is essential to justify culpability and penalty.
Hence, the mere fact of having aided the commission of a crime already becomes criminal even
without criminal intent under Section 5.

While petitioners Cruz et al. raise the criticism of inconsistency with regard to Section 5, I believe
that it is more appropriately raised against Section 6. Their observation is true in the way ICT as a
qualifying circumstance is applied: the use of ICT per se, even without criminal intent, merits an
automatic one degree increase in penalty. This application, I believe, is inconsistent with the
philosophy animating the Revised Penal Code. It also burdens free speech since the provision
makes it extremely easy to prove the existence of this qualifying circumstance against an offender.
How can a simple click of the mouse, without more, earn a person a penalty one degree higher than
the original penalty for libel, with all its consequent oppressive effects discussed above?

Under the Revised Penal Code the basic consideration for criminal liability to arise is the mens rea of
the accused.  He must be shown to have possessed a guilty mind or criminal intent on top of
23

committing the physical act prohibited by law.  Hence, as a general rule, it is necessary for criminal
24
liability that the act be committed by means of dolo or "malice";  otherwise, there can be no crime.
25

That is why crimes under the Revised Penal Code, including libel, are generally characterized as
crimes mala in se, for which there must be malicious intent.

It follows that to incur greater criminal liability and consequently higher penalty, such as that
provided under Section 6, there must also be a greater perversity of the mind, a greater mens rea, or
a greater criminal intent. Hence, for the existence of a circumstance to be considered in increasing
criminal liability, it is essential that such circumstance clearly reveal the guiltier mind and greater
criminal intent of the accused. Thus, there must be a clear intent and purposeful taking advantage of
an aggravating circumstance. This is the fundamental principle behind the application of an
aggravating circumstance.

The heavier punishment resulting from the attendance of so-called aggravating circumstances under
Article 14 of the Revised Penal Code is attributed to various factors, which may be categorized as
(1) the motivating power itself (e.g. "in consideration of a price, reward, or promise" ); (2) the place
26

of commission (e.g. "dwelling of the offended party" ); (3) the means and ways employed (e.g. use
27

of vehicle), (4) the time (e.g. nighttime ); or (5) the personal circumstances of the offender or of the
28

offended party (e.g. "insult or disregard of respect due to a party on account of rank, age, sex"29).

Most aggravating circumstances are in the nature of means and ways employed to commit a
crime.  The use of ICT logically falls under this category as a means for the commission of libel and
30

other crimes under the Revised Penal Code. Hence, we proceed to further analyze this category. A
closer look below at the circumstances falling under this category  reveals a shared principle behind
31

their appreciation and application: that they must be abused deliberately with criminal intent. The
same principle should then properly apply to the use of ICT, since it belongs to the same category.
Hence, the need for criminal intent in the use of ICT before it can be deemed aggravating.

Taking advantage of a public position.

The circumstance of (the offender’s) public position is not aggravating by itself. It only becomes so if
it was taken advantage of and there is proof that it was.  It means that the offenders must have used
32

the influence, prestige or ascendancy that their office gives them as the means by which they realize
their purpose.  The offenders must have abused their office in order to commit the offense.  In that
33 34

way, the malicious intent of the mind is revealed. If the accused did not avail themselves of their
authority, their public position would not be aggravating;  not even if they were sergeants in the
35

Philippine Army and were in fatigue uniform and had army rifles at the time they committed a
crime.  Hence, the intent to use a public position for the purpose of committing a crime appears to
36

be essential.

By a band or with the aid of armed men

Similarly, the circumstance of commission of a crime by a band should have been especially sought
and taken advantage of.  Jurisprudence is consistent that the aid of armed men is not aggravating
37

unless the accused availed themselves of that aid or relied upon it.  The accused must have
38

knowingly counted upon the assistance of the armed men in the commission of the crime. 39

Abuse of Superior strength

The same is required of superior strength – it must have been abused purposely.  It is present when
40

the offenders assess a superiority of strength that they select and take advantage of in the
commission of the crime.  The mere fact of superiority in the number of assailants does not suffice;
41
they must have taken advantage of their combined strength.  They must have cooperated in such a
42

way as to secure advantage from their superiority in strength. 43

Abuse of confidence

For the aggravating circumstance of abuse of confidence, it is necessary that there exists a
relationship of trust and confidence between the accused and the victim, and that the culprits took
advantage of the trust reposed in them by the offended party.  Indeed, it is essential that the
44

confidence between the parties was immediate and personal, such that it gave the accused some
advantage or made it easier for them to commit the criminal act.  Again, intent is essential for this
45

circumstance to aggravate the crime.

Use of vehicle

Among the aggravating circumstances, the one closest to the use of ICT would be the use of
vehicles, since both are tangible tools and are by themselves neutral, if not beneficial. But again, like
the other aggravating circumstances, the mere use of a vehicle will not qualify it as an aggravating
circumstance. The use of vehicle has to be purposely sought to facilitate the commission of the
offense or to render the escape of the offender easier and his apprehension more difficult.
Otherwise, the circumstance is not aggravating. 46

Like other means of committing a

crime which are made
aggravating circumstances, the
use of ICT has to be purposely
sought to show criminal intent
justifying a higher penalty.

It is clear from this sampling that for aggravating circumstances that refer to the means employed to
commit the crime, it is essential that deliberately employing or taking advantage of them either to
facilitate the crime or to insure impunity must be proven. This is as it should be, since it is the
knowing and purposive resort to the aggravating circumstances − the added criminal intent − that
aggravates the crime. In other words, the aggravation arises because of a more perverse mind, not
from the mere presence or use of the means. It is this malicious intent in the adoption of the
circumstance that reveals an added perversity that justifies a greater penalty.

The same principle should be applied to ICT. The mere use of ICT by itself should not automatically
make it aggravating. It has to be purposely sought to facilitate the crime, maximize damage or
ensure impunity. It must be established that the otherwise beneficial nature of ICT was selected and
intentionally sought, deliberately and consciously adopted to advance the perpetration of the crime.
That is the only way to attribute greater perversity on the part of the offender in using ICT and to
justify the imposition of a penalty one degree higher. If there is no such intent, there can be no
aggravation. If the mind is innocent as to the adoption of a particular means, there can be no
aggravating circumstance. This malicious intent, like the elements of the crimes itself, must be
proven beyond reasonable doubt. If not so proven, the ICT cannot qualify the crime, and the criminal
cannot be penalized one degree higher.

Hence, there is a need to spell out the condition that ICT be specifically taken advantage of and
abused to facilitate the commission of a crime, ensure impunity, or maximize damage. In other
words, its use has to be abused to be aggravating.
That the law failed to specify that ICT must be taken advantage of and abused with intent – in order
to facilitate the crime, ensure impunity or maximize the damage − is lamentable. Again, considering
how ICT has become so ubiquitously indispensable and how it has penetrated almost every facet of
life, the need to specifically show intent in the use of ICT for the commission of a crime like libel
becomes all the more crucial, logical and just.

Because of this unclear requirement of criminal intent in the application of the qualifying
circumstance of use of ICT, Section 6 of the Cybercrime Prevention Act effectively scares the public
from using ICT and exacerbates the chilling effect on free speech.

Considering all these, it is not difficult to see how the increase of the penalty under Section 6 mutes
freedom of speech. It creates a domino effect that effectively subjugates the exercise of the freedom
– longer prison terms, harsher accessory penalties, loss of benefits under the Probation Law,
extended prescription periods, and ineligibility of these penalties to be offset by mitigating
circumstances. Worse, the qualifying circumstance can be applied easily by simply proving the use
of ICT, sans proof of criminal intent to purposely use ICT for libel, thereby further chilling freedom of
speech.

The Court must clarify that ICT

should not refer to "stand alone"
devices but should be connected to
the Internet.

The Court must also take the time to clarify that ICT as used in Section 6 should refer only to
devices connected to the Internet and does not include stand alone devices. This should necessarily
follow from the avowed reasons of the government for imposing one degree higher penalty on
crimes committed with the use of ICT.

As the Court had said, the use of ICT enables the offender to evade identification and to reach far
more victims or cause greater harm. Indeed, respondents in their Memorandum prepared by the
Office of the Solicitor General (OSG) enumerate three factors which justify the higher penalty for
crimes committed with the use of ICT.  First, the OSG explains that cybercrimes are limitless as to
47

their scope because they are not bound by time and geography. On the other hand, non-
cybercrimes are limited by distance, border security, various regulations and time. Secondly,
respondents explain that cybercrimes are easily committed due to the accessibility of ICT.  There
48

are approximately 30 million internet users in the country and a billion more worldwide. Hence, any
person can create widespread chaos with anonymity. Thirdly, criminal purpose is accomplished with
greater impact with the use of ICT. 49

"Stand alone" devices do not have these consequences. Hence, they could not have been
contemplated under Section 6.

While this may seem obvious to most, many people are confused as seen from the number of
motions for reconsideration that raised this issue.  Many think that the mere use of a "stand alone"
50

computer device will automatically trigger the application of Section 6. If this is not clarified, it will
sow unnecessary fear of using computer technology with adverse effects on individual and
organizational efficiency and productivity. In fact some petitioners  have made the absurd conclusion
51

that even the use of hardware in the commission of the crime, such as physically injuring a person
by hitting him with a mobile phone, will now be penalized under the questioned provision, with all its
concomitant penalties.
Validity of regulating unsolicited
commercial communications under
Section 4(c)(3).

I have previously found the petitions questioning Section 4(c)(3) dismissible because of a failure to
establish that a pre-enforcement judicial review thereof was warranted. Hence, without delving into
the merits of petitioners’ arguments, I disagreed with the majority when they declared the questioned
provision unconstitutional; first, because the said petitions are dismissible per se. However, since the
majority had proceeded to review Section 4(c)(3), let me now explain my position on the matter.

I fully agree with the opinion of Justice Roberto Abad that commercial speech should be protected
even if it does not enjoy the same level of protection as other categories of free speech and
expression. However, may I emphasize that the questioned provision is not burdensome to
commercial speech at all since the law does not prohibit the sending of unsolicited e-mail per se.
Section 4(c)(3)(iii) allows the sending of unsolicited e-mails, provided that the following conditions
are present: (a) the commercial electronic communication contains a simple, valid, and reliable way
for the recipient to reject receipt of further commercial electronic messages (opt-out) from the same
source; (b) the commercial electronic communication does not purposely disguise the source of the
electronic message; and (c) the commercial electronic communication does not purposely include
misleading information in any part of the message in order to induce the recipients to read the
message.

Additionally, Petitioners Cruz et al., make a valid observation when they point out in their motions for
reconsideration that contrary to the holding of the majority, online transmission of unsolicited
commercial communications is not of the same level as unsolicited advertisements by mail. 52

Firstly, ordinary mail advertisements are not as voluminous while e-mail ads can be so voluminous
that they interfere with an e-mail user’s enjoyment of his e-mail account. Indeed, the assailed
provision seeks to prevent malicious attacks done through the sending of e-mails, which the victim
cannot opt out from. One of those forms of attack includes what is called "mail bombing."  Here, an
53

attacker intentionally sends large volumes of e-mail to a single address in an effort to overwhelm the
mail server and degrade the communication system by making it unserviceable.  This is a form of
54

Denial of Service (DoS) attack, as it prevents other users who are using the same server from
accessing their e-mails.  We can thus imagine a situation in which an e-mail account reaches its
55

storage capacity, thereby preventing the account holder from receiving legitimate mails, as these e-
mails are "bounced" back to the senders.  This situation would impede the robust exchange of ideas
56

as well as the speedy flow of information and communication. It is precisely so that recipients of
unsolicited commercial communications can prevent the congestion of their e-mail accounts that the
provision requires that recipients of unsolicited commercial communications be allowed to opt out
under Section 4(c)(3)(iii).

Secondly, as petitioners pointed out, unsolicited e-mail commercial communications, unlike ordinary
mail commercial communications can be used for another form of attack called "phishing."  It is an
57

internet scam done by offering enticing deals or false statements (such as winning a cash prize),
aimed at tricking users into disclosing their personal, financial, and other confidential
information.  The message used for phishing may appear to be coming from a department store, a
58

known company, a bank, the government, or even from a contact whose e-mail account has been
"hacked."  Phishing can attack millions of e-mail addresses around the world, and has emerged as
59

an effective method of stealing personal and confidential data of users.  It is said that phishing is
60

typically executed as follows:61

A successful phishing attack deceives and convinces users with fake technical content and social
engineering practices. Most phishing attacks are initiated through e-mails, where the user gets an e-
mail that prompts him or her to follow a link given in the e-mail. This link leads to a phishing Web
site, though the e-mail says otherwise. The e-mail may contain a message stating that a particular
transaction has taken place on the user’s account, and a link is provided to check his or her balance.
Or the e-mail may contain a link to perform a security check on the user’s account.

Hence, Section 4(c)(3) is valid because it seeks to regulate a potentially harmful conduct. Such
harmful conduct may interfere with a user’s enjoyment of his e-mail and consequently of his
legitimate exercise of his fundamental rights that e-mail facilitates. Thus, I respectfully disagree with
the facial invalidation of Section 4(c)(3) and hold that it is not unconstitutional.

Call to vigilance

The Court has struck down provisions of the Cybercrime Prevention Act that clearly violate
constitutional rights such as Section 12 and Section 19. It also partially struck down as
unconstitutional Section 7 insofar as it applies to cyberlibel and online child pornography and Section
4(c)(4) insofar as it creates criminal liability on the part of persons who receive a libelous post and
merely react to it. However, we left Section 6 completely untouched while wrongly invalidating
Section 4(c)(3). The motions for reconsideration of the two provisions had given the Court another
opportunity to complete the job it has started by also striking down as unconstitutional Section 6
insofar as its application to libel clearly chills freedom of speech and by upholding the
constitutionality of Section 4(c)(3). It is an opportunity we should not have squandered.

We cannot be complacent. The very fabric of our democratic society is in danger of being slowly torn
apart. The Court staunchly defended the right to commercial speech of advertisers by declaring
unconstitutional Section 4(c)(3) which simply regulates the sending of unsolicited commercial
communications even as it admits that commercial speech is not accorded the same level of
protection as that given to other constitutionally guaranteed forms of expression. On the other hand,
it does not give the same steadfast protection for freedom of speech which Section 6 clearly chills.
Hence, it is puzzling that the Court is willing to uphold commercial speech than the preferred right to
free speech of citizens.

True, the State has a legitimate interest in the preservation of order. For that purpose, it also has the
power, exercised through the legislature, to criminalize acts and provide penalties therefor. Hence, it
can validly regulate harmful conduct under Section 4(c)(3). Section 6, however, is a different matter.
The State cannot override a clear Constitutional command that no law shall be passed abridging the
freedom of speech. I believe that the interest in encouraging free speech in a democratic society
outweighs any theoretical but unproven benefit of an unduly harsher penalty for cyberlibel. 62

The history of our nation has shown that we do not lack for brave people who dutifully speak against
the excesses of government and at great cost to themselves. In recent times, ICT has been used to
generate mass protests against perceived corruption and excesses in government. But the
guaranteed imposition of imprisonment of as much as eight years and harsher accessory penalties
that Section 6 mandates, together with the fact that they may be imposed so easily since no criminal
intent is necessary to make the use of ICT a qualifying circumstance, may force even the bravest
and most conscientious dissenters among us to forego their prized constitutional right to free speech
and expression. That would be the start of the slow, quiet, but sure demise of our democracy. We
can be complacent only at our own peril.

I had earlier voted with the majority to uphold Section 4(c)(4) on cyberlibel – save for its application
to those who merely react to a libelous post – on the presumption that Section 6, which imposes a
one degree higher penalty on crimes committed using ICT, would be declared unconstitutional
insofar as it is applied to cyberlibel. However, in view of the ultimate ruling of the majority affirming
the constitutionality of Section 6, I consequently conclude that Section 4(c)( 4) is wholly
unconstitutional. The invalidation of Section 6 would have removed the heavy burden on free speech
exercised online. Indeed, Section 6 is completely incompatible with free speech. To reiterate, the
majority's insistence that Section 4(c)( 4) cannot be implemented without at the same time imposing
the higher penalty provided by Section 6 - with its invidious chilling effects discussed above
-constrains me to hold that Section 4( c )( 4) is wholly unconstitutional as well. If free speech is to be
truly defended as a right with a preferred position in the hierarchy of rights, its online exercise should
also be vigorously protected.

WHEREFORE, I vote to DECLARE:

1. Section 6 UNCONSTITUTIONAL, insofar as it applies to libel, for unduly curtailing

freedom of speech;

2. Section 4(c)(4) UNCONSTITUTIONAL; and

3. Section 4(c)(3) NOT UNCONSTITUTIONAL for being a valid regulation of a harmful

conduct.

Nevertheless, I CONCUR with the majority in its other dispositions.

MARIA LOURDES P. A. SERENO

Chief Justice

DISSENTING OPINION

BRION, J.:

I write this dissenting opinion to the Court's resolution denying the motions for reconsideration
regarding the constitutionality of the Cybercrime Prevention Act (Cybercrime Law) to reiterate my
stance regarding cyberlibel, and urge my colleagues to reconsider its earlier ruling upholding the
constitutionality of the application of Section 6  of the Cybercrime Law to cyberlibel.
1 2

The ponencia denied the motions for reconsideration, and upheld the constitutionality of the
application of Section 6 of the Cybercrime Law to cyberlibel. According to the ponencia, Section 6,
which qualifies the crime of libel when committed through Information Communications Technology
(ICT) and increases its penalty, is not unconstitutional because it is a valid exercise of Congress’
power to define and penalize crimes. The ponencia also alleged substantial distinctions between
cyberlibel and libel that warrant an increase in the penalty of the former.

At the outset, allow me to clarify that I do not think that libel per se is unconstitutional; neither is its
application in communications made through ICT violative of the Constitution. Jurisprudence has
long settled that libel is not protected speech, and that Congress, in the exercise of its power to
define and penalize crimes, may validly prohibit its utterance.

Increasing the penalty of libel when committed through ICT, however, is another matter. I submit that
Section 6 of the Cybercrime Law, insofar as it qualifies the crime of libel, violates freedom of speech
because it unduly increases the prohibitive effect of libel law on online speech.
My reasons are twofold: first, I do not believe that there is sufficient distinction between libelous
speech committed online and speech uttered in the real, physical world to warrant increasing the
prohibitive impact of penal law in cyberlibel.

Second, the increase in the penalty of libel when committed through computer systems can have the
effect of imposing self-censorship in the Internet and of curtailing an otherwise robust avenue for
debate and discussion on public issues. In other words, over-penalizing online speech could
overreach into matters other than libelous and can thus prevent protected speech from being
uttered.

Cyberlibel as libelous speech committed through the Internet

The ponencia pointed out as justifications for increasing the penalty of cyberlibel the following
characteristics of communications in the Internet: its speed, worldwide reach and relative anonymity.
The ponencia notes that cybercrimes, including cyberlibel, are more perverse than traditional crimes
because of the anonymity of its perpetrator and the difficulty of prosecuting cybercrimes.

Viewed at its most extreme, cyberlibel’s impact on a person’s reputation would indeed be more
perverse than ordinary libel – the speed, worldwide reach and the sender’s relative anonymity in
Internet communications all contribute to increasing a libelous statement’s harmful effect on a
person’s reputation. Thus, a libelous article, once published and shared in the Internet, could reach
millions in a short period of time, and injure reputation more than if it had been published in the
traditional sense.

But allow me to point out the other side of the impact of qualifying cyberlibel: a person, who sent an
e-mail containing a libelous statement against another person, with the intent of sending that e-mail
only to the latter and has in fact been viewed only by that person, would be penalized with cyberlibel
and its corresponding higher penalty. A person, who through the course of chatting online with
another person privately uttered a libelous statement about a third person may also be penalized
with cyberlibel. The definition of publication, after all, has not been changed when the elements of
libel in the Revised Penal Code had been adopted into the definition of cyberlibel. For libel
prosecution purposes, a defamatory statement is considered published when a third person, other
than the speaker or the person defamed, is informed of it. 3

In the examples I have cited, the reach of the libelous statement committed through the Internet is
more or less the same as its reach had it been published in the real, physical world. Thus, following
the ponencia’s reasoning, we will have a situation where a libelous statement that has reached one
person would be punished with a higher penalty because it was committed through the Internet, just
because others could reach millions when communicating through the same medium.

The same reasoning applies to anonymity in Internet communications: an anonymous libeler would
be penalized in the same manner as an identified person, because both of them used the Internet as
a medium of communicating their libelous utterance.

The apparent misfit between the ponencia’s reasons behind the increase in the penalty of cyberlibel
and its actual application lies in the varying characteristics of online speech: depending on the
platform of communications used, online speech may reach varying numbers of people:

it could reach a single person (or more) through e-mail and chat; it could be seen by anyone who
wants to view it (amounting to millions or more, depending on the website’s traffic) through a public
website.
Worthy of note too, is that the publicity element of libel in the Revised Penal Code does not take into
consideration the amount of audience reached by the defamatory statement.  Libelous speech may
1âwphi1

be penalized when, for instance, it reaches a third person by mail,  or through a television
4

program,  or through a newspaper article published nationwide.  All these defamatory imputations
5 6

are punishable with the same penalty of prision correccional in its minimum and medium periods or a
fine ranging from 200 to 6,000 pesos or both.  I do not see any reason why libel committed through
7

ICT should be treated in a harsher manner.

I submit that we cannot rule on the basis of extreme, outlying situations, especially since, as I would
explain in my succeeding discussion, increasing the penalty of cyberlibel could curtail speech in the
Internet. If we must err in this decision, we must err on the side of protecting freedom of speech, a
fundamental right ranking high in the value of constitutional freedoms, so cherished because it is
crucial to the functioning of a working democracy.

As a final point in the matter, I note that despite the Cybercrime Law’s passage, bills punishing
cyber-bullying and electronic violence have been filed in Congress. As filed, the bills penalize cyber-
bullying, or the act of using social media to "harm or harass other people in a deliberate, repeated
and hostile manner."  Electronic Violence, on the other hand, has been defined as any act involving
8

the exploitation of data that "can cause or is likely to cause mental, emotional and psychological
distress or suffering to the victim." 9

To my mind, these bills represent Congress’ intent to penalize the extreme situation that the
ponencia contemplates; at most, these bills are a recognition that cyberlibel has not been intended
to cover such extreme situation, but only to recognize and clarify that the crime of libel may be
committed through computer systems.

The increase in penalty under Section 6 of the Cybercrime Law overreaches and curtails protected
speech

I further agree with the Chief Justice’s arguments regarding the application of Section 6 to libel. 1âwphi1

As Chief Justice Sereno points out, Section 6 not only considers ICT use to be a qualifying
aggravating circumstance, but also has the following effects: first, it increases the accessory
penalties of libel; second, it disqualifies the offender from availing of the privilege of probation; third,
it increases the prescriptive period for the crime of libel from one year to fifteen years, and the
prescriptive period for its penalty from ten years to fifteen years; and fourth, its impact cannot be
offset by mitigating circumstances.

These effects, taken together, unduly burden the freedom of speech because the inhibiting effect of
the crime of libel is magnified beyond what is necessary to prevent its commission. Thus, it can
foster self-censorship in the Internet and curtail otherwise protected online speech.

ARTURO D. BRION
Associate Justice

DISSENTING OPINION

LEONEN, J.:

I reiterate my dissent in this case.

I am also of the view that the seven (7) Motions for Partial Reconsideration  and the Motion for
1

Reconsideration  have raised very serious constitutional issues that should merit a second full
2

deliberation by this court. At the very least, we should have required the opposing parties to file their
comments on these motions. Thereafter, a full analytical evaluation of each and every argument
should have been done. The members of this court should have been given enough time to be open
and reflect further on the points raised by the parties.

The matters raised by the parties revolve around the cherished right to free expression in the
internet age. The brief resolution issued on behalf of the majority of this court fails to do justice to the
far-reaching consequences of our decision in this case.

It is not enough that we proclaim, as the majority does, that libel is unprotected speech. The
ponencia’s example, i.e. "[t]here is no freedom to unjustly destroy the reputation of a decent woman
by publicly claiming that she is a paid prostitute,"  fails to capture the nuances of criminalizing libel in
3

our jurisprudence and in reality. It is a precarious simplification of the issue inferred from one
imagined case. This obfuscation practically neuters the ability of this court to do incisive analysis in
order to provide the necessary protection to speech as it applies to the internet.

The ponencia cites the 1912 case of Worcester v Ocampo  to support its argument. There was no
4

internet in 1912. The jurisprudential analysis of problems relating to speech criticizing public officers
and public figures took many turns since then. 5

The analysis of libel is compounded by the unfortunate confusion by the ponencia of "libelous
speech" and "hate speech" by citing a case decided beyond our jurisdiction, that of Chaplinsky v.
New Hampsire.  Chaplinsky was a case decided in 1942 and the words uttered there were "fighting
6

words" within the context of another language and another culture. This case should have been
taken in the context of subsequent declarations from the Supreme Court of that jurisdiction which
asserted that debates on public issues will occasionally be caustic but needs to be "uninhibited,
robust and wide open."  This was the 1964 case of New York Times Co. v. Sullivan.
7 8

Until the promulgation of the main opinion in this case, Ayer Productions Pty. Ltd. v. Capulong  was 9

the controlling case in this jurisdiction, not Chaplinsky v. New Hampshire. Ayer Productions clarified
jurisprudence that emerged since US v. Bustos  and expanded the protection of free speech as
10

against prosecutions for libel for both public officers and public figures. These precedents were
unbroken until our decision in this case.

The majority now condones the same 1930s text definition of libel effectively discarding the carefully
crafted exception painstakingly built from the assertion of fundamental rights in this court. This
condonation reveals the legislative blinders to the radically different context of the internet. The text
of Section 4(c)(4) of the Cybercrime Prevention Act of 2012 is a swing towards lesser protection of
the primordial right to speech. The position taken by the majority deserves a second hard look, if
only to ensure the constitutional guarantee that our people truly have freedom of expression as a
means to assert their sovereignty and governmental authority in cyberspace.

Further reflection and deliberation is necessary, aided by comments from all the parties to this case,
to determine the effect of such simplified referral to the 1930s provision on libel in a law that seeks to
regulate networked and layered communities in the internet. The lines that distinguish what is private
and what is public in cyberspace are not as clear as in the physical world. Social media creates
various interlocking communities of friends and followers. The ponencia’s concept of author and its
simplified distinction of those that post and those that "like" posted comments are not entirely
accurate as used in the internet.  A Twitter community of twenty followers should not be likened to a
11
Twitter community of thousands. Conversations limited to a small group should not be considered
public for purposes of libel.

"Public defamation" as a category might not make sense in cyberspace. Unlike various types of
media for which our courts may now be familiar with, entry into various cyberspace communities
may require several conscious acts by the user which may negate the evils that criminal libel is
supposed to prevent. For instance, the user agrees to end-user license agreements (EULA).

The chilling effect on various types of speech with just the possibility of criminal libel prosecution
compared with the consequences of civil liabilities for defamation presents another dimension that
have been glossed over by the main opinion and the resolution on the various motions for
reconsideration.  We have to acknowledge the real uses of criminal libel if we are to be consistent to
12

protect speech made to make public officers and government accountable. Criminal libel has an in
terrorem effect that is inconsistent with the contemporary protection of the primordial and necessary
right of expression enshrined in our Constitution. The history and actual use of criminal libel  should
13

be enough for us to take a second look at the main opinion in this case. The review should include a
consideration of the nature of cyberspace as layered communities used to evolve ideas. Such review
should result in a declaration of unconstitutionality of criminal libel in the Revised Penal Code and in
the Cybercrime Prevention Act of 2012.

The resolution of these motions for reconsideration does not even consider the arguments raised
against the overbroad concept of "lascivious" in Section 4 (c)(1) or the prohibition of cybersex. This
standard is an unacceptable retreat from our current jurisprudential concepts of obscenity  that
14

produced a refined balance between expression and public rights. This court should seriously take
the allegations of vagueness and overbroadness  and the possibility that the leeway given to law
15

enforcers  can actual limit the fundamental rights of privacy and autonomy as well as the freedoms
16

to express sexual intimacies.

Also neglected are the issues raised in relation to section 4 (c)(3) which the Solicitor General
characterized as sufficient and narrowly tailored to meet the public objective of preventing spam
while at the same time solicitous of speech in the form of advertisements.  I view the current
17

provisions as sufficiently narrow and tailored to meet legitimate and compelling state interests. It
protects the ordinary internet user against unwarranted intrusions. Certainly, freedom of expression
should not evolve into a fundamental and protected right to badger. The Cybercrime Prevention Act
of 2012 does not prohibit advertising. It simply requires that whoever advertises must be
accountable to the user, not use false identities and allow for opt out mechanisms so that the user
will not continue to receive unwelcome advertising ad nauseum. 18

I agree with the Chief Justice that Section 6 attenuates the penalties unjustifiably. I add that this
amounts to a greater chilling effect when speech in any of its forms (political, commercial or with
sexual content) transfers from physical spaces to the internet. There can be no reason for such
additional deterrence: none that would justify the increase in the penalties. This issue, too, requires
better comment from all the parties and a fuller and more deliberate deliberation from this court.

Further comment from the parties will allow us to fully appreciate the nuances, layers, and
dimensions occasioned by the various platforms in the internet that color the seemingly simple
issues involved in this case. We have to be open to understanding the context of these issues from
parties that may have used the internet in a more pervasive manner and are more familiar with the
terrain than the members of this court. Comment from the other parties could have enlightened us
further. We lose nothing with better clarification of context from the parties.
ACCORDINGLY, I vote against the issuance, at this juncture, of a resolution denying, all seven (7)
Motions for Partial Reconsideration and the Motion for Reconsideration for lack of merit. I also vote
to REQUIRE all the parties to comment on the seven (7) Motions for Partial Reconsideration and the
Motion for Reconsideration within a non-extendible period of thirty (30) days from notice.

I maintain the vote I manifested in my Dissenting and Concurring Opinion to the February 18, 2014
decision. Thus, I vote to declare as unconstitutional for being overbroad and violative of Article III,
Section 4 of the Constitution the following provisions of Republic Act No. 10175 or the Cybercrime
Prevention Act of 2012:

(a) The entire Section 19 or the "take down" provision;

(b) The entire Section 4(c)(4) on cyber libel as well as Articles 353, 354, and 355 on libel of
the Revised Penal Code;

(c) The entire Section 4(c)( 1) on cybersex; .

(d) Section 5 as it relates to Sections 4(c)(l) and 4(c)(4);

(e) Section 6 as it increases the penalties to Sections 4(c)(1) and 4(c)(4);

(f) Section 7 as it allows impermissibly countless prosecution of Sections 4(c)(1) and 4(c)(4);
and

(g) Section 12 on warrantless real-time traffic data surveillance.

Likewise, I maintain my dissent with the majority's finding that Section 4(c)(3) on Unsolicited
Commercial Advertising is unconstitutional.

Moreover, I maintain my vote to dismiss the rest of the constitutional challenges against the other
provisions in Republic Act No. 10175 as raised in the consolidated petitions for not being justiciable
in the absence of an actual case or controversy.

MARVIC MARIO VICTOR F. LEONEN

Associate Justice
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-12592            March 8, 1918

THE UNITED STATES, plaintiff-appellee,

vs.
FELIPE BUSTOS, ET AL., defendants-appellants.

Kincaid and Perkins for appellants.

Acting Attorney-General Paredes, for appellee.

MALCOLM, J.:

This appeal presents the specific question of whether or not the defendants and appellants are guilty
of a libel of Roman Punsalan, justice of the peace of Macabebe and Masantol, Province of
Pampanga. The appeal also submits the larger question of the attitude which the judiciary should
take interpreting and enforcing the Libel Law in connection with the basic prerogatives of freedom of
speech and press, and of assembly and petition. For a better understanding, the facts in the present
appeal are the first narrated in the order of their occurrence, then certain suggestive aspects relative
to the rights of freedom of speech and press and of assembly and petition are interpolated, then the
facts are tested by these principles, and, finally, judgment is rendered.

First, the facts. In the latter part of 1915, numerous citizens of the Province of Pampanga
assembled, and prepared and signed a petition to the Executive Secretary through the law office of
Crossfield and O'Brien, and five individuals signed affidavits, charging Roman Punsalan, justice of
the peace of Macabebe and Masantol, Pampanga, with malfeasance in office and asking for his
removal. Crossfield and O'Brien submitted this petition and these affidavits with a complaint to the
Executive Secretary. The petition transmitted by these attorneys was signed by thirty-four citizens
apparently of considerable standing, including councilors and property owners (now the defendants),
and contained the statements set out in the information as libelous. Briefly stated the specific
charges against the justice of the peace were.

1. That Francisca Polintan, desiring to make complaint against Mariano de los Reyes, visited the
justice of the peace, who first told her that he would draw up complaint for P5; afterwards he said he
would take P3 which she paid; also kept her in the house for four days as a servant and took from
her two chickens and twelve "gandus;"

2. That Valentin Sunga being interested in a case regarding land which was on trial before the
justice of the peace, went to see the justice of the peace to ascertain the result of the trial, and was
told by the justice of the peace that if he wished to win he must give him P50. Not having this
amount, Sunga gave the justice nothing, and a few days later was informed that he had lost the
case. Returning again to the office of the justice of the peace in order to appeal, the justice told him
that he could still win if he would pay P50;
3. That Leoncio Quiambao, having filed a complaint for assault against four persons, on the day of
the trial the justice called him over to his house, where he secretly gave him (Quiambao) P30; and
the complaint was thereupon shelved.

The Executive Secretary referred the papers to the judge of first instance for the Seventh Judicial
District requesting investigation, proper action, and report. The justice of the peace was notified and
denied the charges. The judge of first instance found the first count not proved and counts 2 and 3
established. In view of this result, the judge, the Honorable Percy M. Moir, was of the opinion "that it
must be, and it is hereby, recommended to the Governor-General that the respondent be removed
from his position as justice of the peace of Macabebe and Masantol, Province of Pampanga, and it is
ordered that the proceedings had in this case be transmitted to the Executive Secretary."

Later the justice of the peace filled a motion for a new trial; the judge of first instance granted the
motion and reopened the hearing; documents were introduced, including a letter sent by the
municipal president and six councilors of Masantol, Pampanga, asserting that the justice of the
peace was the victim of prosecution, and that one Agustin Jaime, the auxiliary justice of the peace,
had instituted the charges for personal reasons; and the judge of first instance ordered a
suppression of the charges against Punsalan and acquitted him the same. Attorneys for
complainants thereupon appealed to the Governor-General, but whether the papers were forwarded
to the Governor-General as requested the record does not disclose.

Criminal action against the petitioners, now become the defendants, was instituted on October 12,
1916, by virtue of the following information:

That on or about the month of December, 1915, in the municipality of Macabebe, Pampanga,
P. I., the said accused, voluntarily, illegally, and criminally and with malicious intent to
prejudice and defame Mr. Roman Punsalan Serrano who was at said time and place justice
of the peace of Macabebe and Masantol of this province, wrote, signed, and published a
writing which was false, scandalous, malicious, defamatory, and libelous against the justice
of the peace Mr. Roman Punsalan Serrano, in which writing appear among other things the
following:

That the justice of the peace, Mr. Roman Punsalan Serrano, of this town of Macabebe, on
account of the conduct observed by him heretofore, a conduct highly improper of the office
which he holds, is found to be a public functionary who is absolutely unfair, eminently
immoral and dangerous to the community, and consequently unworthy of the office.

That this assertion of the undersigned is evidenced in a clear and positive manner by facts
so certain, so serious, and so denigrating which appear in the affidavits attached hereto, and
by other facts no less serious, but which the undersigned refrain from citing herein for the
sake of brevity and in order not to bother too much the attention of your Honor and due to
lack of sufficient proof to substantiate them.

That should the higher authorities allow the said justice of the peace of this town to continue
in his office, the protection of the rights and interests of its inhabitants will be illusory and
utopic; rights and interest solemnly guaranteed by the Philippine Bill of Rights, and justice in
this town will not be administered in accordance with law.

That on account of the wrongful discharge of his office and of his bad conducts as such
justice of the peace, previous to this time, some respectable citizens of this town of
Macabebe were compelled to present an administrative case against the said Roman
 Punsalan Serrano before the judge of first instance of Pampanga, in which case there were
made against him various charges which were true and certain and of different characters.

That after the said administrative case was over, the said justice of the peace, far from
charging his bad and despicable conduct, which has roused the indignation of this town of
Macabebe, subsequently performed the acts abovementioned, as stated in the affidavits
herewith attached, as if intending to mock at the people and to show his mistaken valor and
heroism.'

All of this has been written and published by the accused with deliberate purpose of
attacking the virtue, honor, and reputation of the justice of the peace, Mr. Roman Punsalan
Serrano, and thus exposing him to public hatred contempt, and ridicule. All contrary to law.

It should be noted that the information omits paragraphs of the petition mentioning the investigation
before the judge of first instance, the affidavits upon which based and concluding words, "To the
Executive Secretary, through the office of Crossfield and O'Brien."

The Honorable Percy M. Moir found all the defendants, with the exception of Felix Fernandez, Juan
S. Alfonso, Restituto Garcia, and Manuel Mallari, guilty and sentenced each of them to pay a fine of
P10 and one thirty-second part of the costs, or to suffer subsidiary imprisonment in case of
insolvency. New attorneys for the defense, coming into the case, after the handing down of the
decision, file on December 16, 1916, a motion for a new trial, the principal purpose of which was to
retire the objection interposed by the then counsel for the defendants to the admission of Exhibit A
consisting of the entire administrative proceedings. The trial court denied the motion. All the
defendants, except Melecio S. Sabado and Fortunato Macalino appealed making the following
assignments of error:

1. The court erred in overruling the motion of the convicted defendants for a new trial.

2. The court erred in refusing to permit the defendants to retire the objection in advertently
interposed by their counsel to the admission in evidence of the expediente administrativo out
of which the accusation in this case arose.

3. The court erred in sustaining the objection of the prosecution to the introduction in
evidence by the accused of the affidavits upon which the petition forming the basis of the
libelous charge was based.

4. The court erred in not holding that the alleged libelous statement was unqualifiedly
privileged.

5. The court erred in assuming and impliedly holding that the burden was on the defendants
to show that the alleged libelous statements were true and free from malice.

6. The court erred in not acquitting the defendants.

7. The evidence adduced fails to show the guilt of the defendants beyond a reasonable
doubt. This is especially true of all the defendants, except Felipe Bustos, Dionisio Mallari,
and Jose T. Reyes.

We have thus far taken it for granted that all the proceedings, administrative and judicial, were
properly before this court. As a matter of fact counsel for defendants in the lower court made an
improvident objection to the admission of the administrative proceedings on the ground that the
signatures were not identified and that the same was immaterial, which objection was partially
sustained by the trial court. Notwithstanding this curious situation by reason of which the attorney for
the defense attempted to destroy through his objection the very foundation for the justification of his
clients, we shall continue to consider all the proceedings as before us. Not indicating specifically the
reason for this action, let the following be stated: The administrative proceedings were repeatedly
mentioned during the trial. These proceedings were the basis of the accusation, the information, the
evidence, and the judgment rendered. The prosecution cannot be understood without knowledge of
anterior action. Nothing more unjust could be imagined than to pick out certain words which standing
by themselves and unexplained are libelous and then by shutting off all knowledge of facts which
would justify these words, to convict the accused. The records in question are attached to the rollo,
and either on the ground that the attorneys for the defense retired the objection to the introduction of
the administrative proceedings by the prosecution, or that a new trial should have been had because
under section 42 of the Code of Criminal Procedure "a case may be reopened on account of errors
at law committed at the trial," or because of the right of this court to call in such records as are
sufficiently incorporated into the complaint and are essential to a determination of the case, or finally,
because of our conceded right to take judicial notice of official action in administrative cases and of
judicial proceedings supplemental to the basis action, we examine the record as before us,
containing not alone the trial for libel, but the proceedings previous to that trial giving rise to it. To
this action, the Government can not explain for it was the prosecution which tried to incorporate
Exhibit A into the record.

With these facts pleading justification, before testing them by certain principles which make up the
law of libel and slander, we feel warranted in seizing the opportunity to intrude an introductory and
general discussion of freedom of speech and press and assembly and petition in the Philippine
Islands. We conceive that the time is ripe thus to clear up certain misapprehensions on the subject
and to place these basic rights in their proper light.

Turning to the pages of history, we state nothing new when we set down that freedom of speech as
cherished in democratic countries was unknown in the Philippine Islands before 1900. A prime
cause for revolt was consequently ready made. Jose Rizal in "Filipinas Despues de Cien Años" (The
Philippines a Century Hence, pages 62 et seq.) describing "the reforms sine quibus non," which the
Filipinos insist upon, said: "

The minister, . . . who wants his reforms to be reforms, must begin by declaring the press in
the Philippines free and by instituting Filipinos delegates.

The Filipino patriots in Spain, through the columns of "La Solidaridad" and by other means invariably
in exposing the wants of the Filipino people demanded "liberty of the press, of cults, and
associations." (See Mabini, La Revolucion Filipina.) The Malolos Constitution, the work of the
Revolutionary Congress, in its Bill of Rights, zealously guarded freedom of speech and press and
assembly and petition.

Mention is made of the foregoing data only to deduce the proposition that a reform so sacred to the
people of these Islands and won at so dear a cost, should now be protected and carried forward as
one would protect and preserve the covenant of liberty itself.

Next comes the period of American-Filipino cooperative effort. The Constitution of the United States
and the State constitutions guarantee to the right of freedom of speech and press and the right of
assembly and petition. We are therefore, not surprised to find President McKinley in that Magna
Charta of Philippine Liberty, the Instructions to the Second Philippine Commission, of April 7, 1900,
laying down the inviolable rule "That no law shall be passed abridging the freedom of speech or of
the press or of the rights of the people to peaceably assemble and petition the Government for a
redress of grievances."

The Philippine Bill, the Act of Congress of July 1, 1902, and the Jones Law, the Act of Congress of
August 29, 1916, in the nature of organic acts for the Philippines, continued this guaranty. The words
quoted are not unfamiliar to students of Constitutional Law, for they are the counterpart of the first
amendment to the Constitution of the United States, which the American people demanded before
giving their approval to the Constitution.

We mention the foregoing facts only to deduce the position never to be forgotten for an instant that
the guaranties mentioned are part and parcel of the Organic Law — of the Constitution — of the
Philippine Islands.

These paragraphs found in the Philippine Bill of Rights are not threadbare verbiage. The language
carries with all the applicable jurisprudence of great English and American Constitutional cases.
(Kepner vs. U. S. [1904], 195 U. S., 100; Serra vs. Mortiga [1907], 204 U. S., 470.) And what are
these principles? Volumes would inadequately answer. But included are the following:

The interest of society and the maintenance of good government demand a full discussion of public
affairs. Completely liberty to comment on the conduct of public men is a scalpel in the case of free
speech. The sharp incision of its probe relieves the abscesses of officialdom. Men in public life may
suffer under a hostile and an unjust accusation; the wound can be assuaged with the balm of a clear
conscience. A public officer must not be too thin-skinned with reference to comment upon his official
acts. Only thus can the intelligence and the dignity of the individual be exalted. Of course, criticism
does not authorize defamation. Nevertheless, as the individual is less than the State, so must
expected criticism be born for the common good. Rising superior to any official or set of officials, to
the Chief of Executive, to the Legislature, to the Judiciary — to any or all the agencies of
Government — public opinion should be the constant source of liberty and democracy. (See the well
considered cases of Wason vs. Walter, 4 L. R. 4 Q. B., 73; Seymour vs. Butterworth, 3F. and F.,
372; The Queen vs. Sir R. Carden, 5 Q. B. D., 1)

The guaranties of a free speech and a free press include the right to criticize judicial conduct. The
administration of the law is a matter of vital public concern. Whether the law is wisely or badly
enforced is, therefore, a fit subject for proper comment. If the people cannot criticize a justice of the
peace or a judge the same as any other public officer, public opinion will be effectively muzzled.
Attempted terrorization of public opinion on the part of the judiciary would be tyranny of the basest
sort. The sword of Damocles in the hands of a judge does not hang suspended over the individual
who dares to assert his prerogative as a citizen and to stand up bravely before any official. On the
contrary, it is a duty which every one owes to society or to the State to assist in the investigation of
any alleged misconduct. It is further the duty of all who know of any official dereliction on the part of
a magistrate or the wrongful act of any public officer to bring the facts to the notice of those whose
duty it is to inquire into and punish them. In the words of Mr. Justice Gayner, who contributed so
largely to the law of libel. "The people are not obliged to speak of the conduct of their officials in
whispers or with bated breath in a free government, but only in a despotism." (Howarth vs. Barlow
[1906], 113 App. Div., N. Y., 510.)

The right to assemble and petition is the necessary consequence of republican institutions and the
complement of the part of free speech. Assembly means a right on the part of citizens to meet
peaceably for consultation in respect to public affairs. Petition means that any person or group of
persons can apply, without fear of penalty, to the appropriate branch or office of the government for
a redress of grievances. The persons assembling and petitioning must, of course, assume
responsibility for the charges made.
Public policy, the welfare of society, and the orderly administration of government have demanded
protection for public opinion. The inevitable and incontestable result has been the development and
adoption of the doctrine of privilege.

The doctrine of privileged communications rests upon public policy, 'which looks to the free
and unfettered administration of justice, though, as an incidental result, it may in some
instances afford an immunity to the evil-disposed and malignant slanderer.' (Abbott vs.
National Bank of Commerce, Tacoma [1899], 175 U. S., 409, 411.)

Privilege is classified as either absolute or qualified. With the first, we are not concerned. As to
qualified privilege, it is as the words suggest a prima facie privilege which may be lost by proof of
malice. The rule is thus stated by Lord Campbell, C. J.

A communication made bona fide upon any subject-matter in which the party communicating

has an interest, or in reference to which has a duty, is privileged, if made to a person having
a corresponding interest or duty, although it contained criminatory matter which without this
privilege would be slanderous and actionable. (Harrison vs. Bush, 5 E. and B., 344; 1 Jur.[N.
S.], 846; 25 L. J. Q. B., 25; 3 W. R., 474; 85 E. C. L., 344.)

A pertinent illustration of the application of qualified privilege is a complaint made in good faith and
without malice in regard to the character or conduct of a public official when addressed to an officer
or a board having some interest or duty in the matter. Even when the statements are found to be
false, if there is probable cause for belief in their truthfulness and the charge is made in good faith,
the mantle of privilege may still cover the mistake of the individual. But the statements must be made
under an honest sense of duty; a self-seeking motive is destructive. Personal injury is not necessary.
All persons have an interest in the pure and efficient administration of justice and of public affairs.
The duty under which a party is privileged is sufficient if it is social or moral in its nature and this
person in good faith believes he is acting in pursuance thereof although in fact he is mistaken. The
privilege is not defeated by the mere fact that the communication is made in intemperate terms. A
further element of the law of privilege concerns the person to whom the complaint should be made.
The rule is that if a party applies to the wrong person through some natural and honest mistake as to
the respective functions of various officials such unintentional error will not take the case out of the
privilege.

In the usual case malice can be presumed from defamatory words. Privilege destroy that
presumption. The onus of proving malice then lies on the plaintiff. The plaintiff must bring home to
the defendant the existence of malice as the true motive of his conduct. Falsehood and the absence
of probable cause will amount to proof of malice. (See White vs. Nicholls [1845], 3 How., 266.)

A privileged communication should not be subjected to microscopic examination to discover grounds

of malice or falsity. Such excessive scrutiny would defeat the protection which the law throws over
privileged communications. The ultimate test is that of bona fides. (See White vs. Nicholls [1845], 3
How., 266; Bradley vs. Heath [1831], 12 Pick. [Mass.], 163; Kent vs. Bongartz [1885], 15 R. I., 72;
Street Foundations of Legal Liability, vol. 1, pp. 308, 309; Newell, Slander and Libel, various
citations; 25 Cyc. pages 385 et seq.)

Having ascertained the attitude which should be assumed relative to the basic rights of freedom of
speech and press and of assembly and petition, having emphasized the point that our Libel Law as a
statute must be construed with reference to the guaranties of our Organic Law, and having sketched
the doctrine of privilege, we are in a position to test the facts of this case with these principles.
It is true that the particular words set out in the information, if said of a private person, might well be
considered libelous per se. The charges might also under certain conceivable conditions convict one
of a libel of a government official. As a general rule words imputing to a judge or a justice of the
peace dishonesty or corruption or incapacity or misconduct touching him in his office are actionable.
But as suggested in the beginning we do not have present a simple case of direct and vicious
accusations published in the press, but of charges predicated on affidavits made to the proper
official and thus qualifiedly privileged. Express malice has not been proved by the prosecution.
Further, although the charges are probably not true as to the justice of the peace, they were believed
to be true by the petitioners. Good faith surrounded their action. Probable cause for them to think
that malfeasance or misfeasance in office existed is apparent. The ends and the motives of these
citizens— to secure the removal from office of a person thought to be venal — were justifiable. In no
way did they abuse the privilege. These respectable citizens did not eagerly seize on a frivolous
matter but on instances which not only seemed to them of a grave character, but which were
sufficient in an investigation by a judge of first instance to convince him of their seriousness. No
undue publicity was given to the petition. The manner of commenting on the conduct of the justice of
the peace was proper. And finally the charges and the petition were submitted through reputable
attorneys to the proper functionary, the Executive Secretary. In this connection it is sufficient to note
that justices of the peace are appointed by the Governor-General, that they may be removed by the
Governor-General upon the recommendation of a Judge of First Instance, or on the Governor-
General's own motion, and that at the time this action took place the Executive Bureau was the office
through which the Governor-General acted in such matter. (See Administrative Code of 1917, secs.
203 and 229, in connection with the cases of U. S. vs. Galesa [1915], 31 Phil., 365, and of Harrison
vs. Bush, 5 E. and B., 344, holding that where defendant was subject to removal by the sovereign, a
communication to the Secretary of State was privileged.)

The present facts are further essentially different from those established in other cases in which
private individuals have been convicted of libels of public officials. Malice, traduction, falsehood,
calumny, against the man and not the officer, have been the causes of the verdict of guilty. (See U.
S. vs. Senado [1909], 14 Phil., 338, 339; U. S. vs. Contreras [1912], 23 Phil., 513; U. S. vs. Montalvo
[1915], 29 Phil., 595.)

The Attorney-General bases his recommendation for confirmation on the case of the United States
vs. Julio Bustos ([1909], 13 Phil., 690). The Julio Bustos case, the Attorney-General says, is identical
with the Felipe Bustos case, with the exception that there has been more publicity in the present
instance and that the person to whom the charge was made had less jurisdiction than had the
Secretary of Justice in the Julio Bustos case. Publicity is immaterial if the charge against Punsalan is
in fact a privileged communication. Moreover, in the Julio Bustos case we find wild statements, with
no basis in fact, made against reputable members of the judiciary, "to persons who could not furnish
protection." Malicious and untrue communications are not privileged. A later case and one more
directly in point to which we invite especial attention is United States vs. Galeza ([1915], 31 Phil.,
365). (Note also Yancey vs. Commonwealth [1909], 122 So. W., 123.)

We find the defendants and appellants entitled to the protection of the rules concerning qualified
privilege, growing out of constitutional guaranties in our bill of rights. Instead of punishing citizens for
an honest endeavor to improve the public service, we should rather commend them for their good
citizenship. The defendants and appellants are acquitted with the costs de officio. So ordered.

Arellano, C.J., Johnson, Araullo, Street, and Fisher, JJ., concur.

Separate Opinions

CARSON, J., concurring:

I concur. I think it proper to observe, however, that in my opinion the Attorney-General is entirely
correct when he says that this case is substantially identical with the former "Bustos case (The
United States vs. Bustos, 13 Phil. Rep., 690). I believe that a careful reading of our decisions in
these cases is sufficient to demonstrate that fact. The truth is that the doctrine of the prevailing
opinion in the former Bustos case has long since been abandoned by this court; and in my opinion it
would make for the more efficient administration of the Libel Law in these Islands to say so, in so
many words. (Cf. U. S. vs. Sedano, [1909], 14 Phil. Rep., 338, 339; U. S. vs. Contreras [1912], 23
Phil. Rep., 513; U. S. vs. Montalvo [1915], 29 Phil. Rep., 595; and U. S. vs. Galeza [1915], 31 Phil.
Rep., 365.)
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-14078            March 7, 1919

RUBI, ET AL. (manguianes), plaintiffs,

vs.
THE PROVINCIAL BOARD OF MINDORO, defendant.

D. R. Williams & Filemon Sotto for plaintiff.

Office of the Solicitor-General Paredes for defendant.

MALCOLM, J.:

In one of the cases which denote a landmark in American Constitutional History

(Worcester vs. Georgia [1832], 6 Pet., 515), Chief Justice Marshall, the first luminary of American
jurisprudence, began his opinion (relating to the status of an Indian) with words which, with a slight
change in phraseology, can be made to introduce the present opinion — This cause, in every point
of view in which it can be placed, is of the deepest interest. The legislative power of state, the
controlling power of the constitution and laws, the rights if they have any, the political existence of a
people, the personal liberty of a citizen, are all involved in the subject now to be considered.

To imitate still further the opinion of the Chief Justice, we adopt his outline and proceed first, to
introduce the facts and the issues, next to give a history of the so called "non-Christians," next to
compare the status of the "non-Christians" with that of the American Indians, and, lastly, to resolve
the constitutional questions presented.

I. INTRODUCTION.

This is an application for habeas corpus in favor of Rubi and other Manguianes of the Province of
Mindoro. It is alleged that the Maguianes are being illegally deprived of their liberty by the provincial
officials of that province. Rubi and his companions are said to be held on the reservation established
at Tigbao, Mindoro, against their will, and one Dabalos is said to be held under the custody of the
provincial sheriff in the prison at Calapan for having run away form the reservation.

The return of the Solicitor-General alleges:

1. That on February 1, 1917, the provincial board of Mindoro adopted resolution No. 25
which is as follows:

The provincial governor, Hon. Juan Morente, Jr., presented the following resolution:

"Whereas several attempts and schemes have been made for the advancement of
the non-Christian people of Mindoro, which were all a failure,
 "Whereas it has been found out and proved that unless some other measure is taken
for the Mangyan work of this province, no successful result will be obtained toward
educating these people.

"Whereas it is deemed necessary to obliged them to live in one place in order to

make a permanent settlement,

"Whereas the provincial governor of any province in which non-Christian inhabitants

are found is authorized, when such a course is deemed necessary in the interest of
law and order, to direct such inhabitants to take up their habitation on sites on
unoccupied public lands to be selected by him and approved by the provincial board.

"Whereas the provincial governor is of the opinion that the sitio of Tigbao on Lake
Naujan is a place most convenient for the Mangyanes to live on, Now, therefore be it

"Resolved, that under section 2077 of the Administrative Code, 800 hectares of public land in
the sitio of Tigbao on Naujan Lake be selected as a site for the permanent settlement of
Mangyanes in Mindoro subject to the approval of the Honorable Secretary of the Interior, and

"Resolved further, That Mangyans may only solicit homesteads on this reservation providing
that said homestead applications are previously recommended by the provincial governor."

2. That said resolution No. 25 (series 1917) of the provincial board of Mindoro was approved
by the Secretary of the Interior of February 21, 1917.

3. That on December 4, 1917, the provincial governor of Mindoro issued executive order No.
2 which says:

"Whereas the provincial board, by Resolution No. 25, current series, has selected a
site in the sitio of Tigbao on Naujan Lake for the permanent settlement of Mangyanes
in Mindoro.

"Whereas said resolution has been duly approve by the Honorable, the Secretary of
the Interior, on February 21, 1917.

"Now, therefore, I, Juan Morente, jr., provincial governor of Mindoro, pursuant to the
provisions of section 2145 of the revised Administrative Code, do hereby direct that
all the Mangyans in the townships of Naujan and Pola and the Mangyans east of the
Baco River including those in the districts of Dulangan and Rubi's place in Calapan,
to take up their habitation on the site of Tigbao, Naujan Lake, not later than
December 31, 1917.

"Any Mangyan who shall refuse to comply with this order shall upon conviction be
imprisoned not exceed in sixty days, in accordance with section 2759 of the revised
Administrative Code."

4. That the resolution of the provincial board of Mindoro copied in paragraph 1 and the
executive order of the governor of the same province copied in paragraph 3, were necessary
measures for the protection of the Mangyanes of Mindoro as well as the protection of public
forests in which they roam, and to introduce civilized customs among them.
 5. That Rubi and those living in his rancheria have not fixed their dwelling within the
reservation of Tigbao and are liable to be punished in accordance with section 2759 of Act
No. 2711.

6. That the undersigned has not information that Doroteo Dabalos is being detained by the
sheriff of Mindoro but if he is so detained it must be by virtue of the provisions of articles Nos.
2145 and 2759 of Act No. 2711.

It thus appears that the provincial governor of Mindoro and the provincial board thereof directed the
Manguianes in question to take up their habitation in Tigbao, a site on the shore of Lake Naujan,
selected by the provincial governor and approved by the provincial board. The action was taken in
accordance with section 2145 of the Administrative Code of 1917, and was duly approved by the
Secretary of the Interior as required by said action. Petitioners, however, challenge the validity of this
section of the Administrative Code. This, therefore, becomes the paramount question which the
court is called upon the decide.

Section 2145 of the Administrative Code of 1917 reads as follows:

SEC. 2145. Establishment of non-Christina upon sites selected by provincial governor. —

With the prior approval of the Department Head, the provincial governor of any province in
which non-Christian inhabitants are found is authorized, when such a course is deemed
necessary in the interest of law and order, to direct such inhabitants to take up their
habitation on sites on unoccupied public lands to be selected by him an approved by the
provincial board.

In connection with the above-quoted provisions, there should be noted section 2759 of the same
Code, which read as follows:

SEC. 2759. Refusal of a non-Christian to take up appointed habitation. — Any non-Christian

who shall refuse to comply with the directions lawfully given by a provincial governor,
pursuant to section two thousand one hundred and forty-five of this Code, to take up
habitation upon a site designated by said governor shall upon conviction be imprisonment for
a period not exceeding sixty days.

The substance of what is now found in said section 2145 is not new to Philippine law. The
genealogical tree of this section, if we may be permitted to use such terminology, would read:
Section 2077, Administrative Code of 1916; section 62, Act No. 1397; section 2 of various special
provincial laws, notably of Act No. 547, specifically relating to the Manguianes; section 69, Act No.
387.

Section 2145 and its antecedent laws make use of the term "non-Christians." This word, as will later
be disclosed, is also found in varying forms in other laws of the Philippine Islands. In order to put the
phrase in its proper category, and in order to understand the policy of the Government of the
Philippine Islands with reference to the uncivilized elements of the Islands, it is well first of all to set
down a skeleton history of the attitude assumed by the authorities towards these "non-Christians,"
with particular regard for the legislation on the subject.

II. HISTORY.

A. BEFORE ACQUISITION OF THE PHILIPPINE BY THE UNITED STATES.

The most important of the laws of the Indies having reference to the subject at hand are compiled in
Book VI, Title III, in the following language.

LAW I.

The Emperor Charles and the Prince, the governor, at Cigales, on March 21, 1551. Philip II
at Toledo, on February 19, 1560. In the forest of Segovia on September 13, 1565. In the
Escorial on November 10, 1568. Ordinance 149 of the poblaciones of 1573. In San Lorenzo,
on May 20, 1578,

THAT THE "INDIOS" BE REDUCED INTO "POBLACIONES" COMMUNITIES).

In order that the indios may be instructed in the Sacred Catholic Faith and the evangelical
law, and in order that they may forget the blunders of their ancient rites and ceremonies to
the end that they may live in harmony and in a civilized manner, it has always been
endeavored, with great care and special attention, to use all the means most convenient to
the attainment of these purposes. To carry out this work with success, our Council of the
Indies and other religious persons met at various times; the prelates of new Spain
assembled by order of Emperor Charles V of glorious memory in the year one thousand five
hundred and forty-six — all of which meetings were actuated with a desire to serve God an
our Kingdom. At these meetings it was resolved that indios be made to live in communities,
and not to live in places divided and separated from one another by sierras and mountains,
wherein they are deprived of all spiritual and temporal benefits and wherein they cannot
profit from the aid of our ministers and from that which gives rise to those human necessities
which men are obliged to give one another. Having realized that convenience of this
resolution, our kings, our predecessors, by different orders, have entrusted and ordered the
viceroys, presidents, and governors to execute with great care and moderation the
concentration of the indios into reducciones; and to deal with their doctrine with such
forbearance and gentleness, without causing inconveniences, so that those who would not
presently settle and who would see the good treatment and the protection of those already in
settlements would, of their own accord, present themselves, and it is ordained that they be
not required to pay taxes more than what is ordered. Because the above has been executed
in the greater part of our Indies, we hereby order and decree that the same be complied with
in all the remaining parts of the Indies, and the encomederos shall entreat compliance
thereof in the manner and form prescribed by the laws of this title.

xxx           xxx           xxx

LAW VIII.

Philip II at the Pardo, on December 1, 1573. Philip III at Madrid, October 10, 1618.

THE "REDUCCTIONES" BE MADE IN ACCORDANCE WITH THE CONDITIONS OF THIS LAW.

The places wherein the pueblos and reducciones shall be formed should have the facilities

of waters. lands, and mountains, ingress and egress, husbandry and passageway of one
league long, wherein the indios can have their live stock that they may not be mixed with
those of the Spaniards.

LAW IX.
 Philip II at Toledo, on February 19, 1956.

THAT THE "INDIOS" IN "REDUCCIONES" BE NOT DEPRIVED OF THE LANDS PREVIOUSLY

HELD BY THEM.

With more good-will and promptness, the indios shall be concentrated in reducciones.

Provided they shall not be deprived of the lands and granaries which they may have in the
places left by them. We hereby order that no change shall be made in this respect, and that
they be allowed to retain the lands held by them previously so that they may cultivate them
and profit therefrom.

xxx           xxx           xxx

LAW XIII.

THE SAME AS ABOVE.

THAT THE "REDUCCIONES" BE NOT REMOVED WITHOUT ORDER OF THE KING, VICEROY,
OR COURT.

No governor, or magistrate, or alcalde mayor, or any other court, has the right to alter or to
remove the pueblos or the reducciones once constituted and founded, without our express
order or that of the viceroy, president, or the royal district court, provided, however, that
the encomenderos, priests, or indios request such a change or consent to it by offering or
giving information to that en. And, because these claims are often made for private interests
and not for those of the indios, we hereby order that this law be always complied with,
otherwise the change will be considered fraudulently obtained. The penalty of one thousand
pesos shall be imposed upon the judge or encomendero who should violate this law.

LAW XV.

Philip III at Madrid, on October 10, 1618.

THAT THERE BE MAYORS AND ALDERMEN IN THE "REDUCTIONES," WHO SHALL BE

"INDIOS."

We order that in each town and reduccion there be a mayor, who should be an indio of the
same reduccion; if there be more than eighty houses, there should be two mayors and two
aldermen, also indios; and, even if the town be a big one, there should, nevertheless, be
more than two mayors and four aldermen, If there be less than eighty indios but not less than
forty, there should be not more than one mayor and one alderman, who should annually
elect nine others, in the presence of the priests , as is the practice in town inhabited by
Spaniards and indios.

LAW XXI.

Philip II, in Madrid, On May 2, 1563, and on November 25, 1578. At Tomar, on May 8, 1581.
At Madrid, on January 10, 1589. Philip III, at Todesillas, on July 12, 1600. Philip IV, at
Madrid, on October 1 and December 17, 1646. For this law and the one following, see Law I,
Tit. 4, Book 7.
THAT IN THE TOWNS OF THE "INDIOS," THERE SHALL LIVE NO SPANIARDS, NEGROES,
"MESTIZOS," AND MULATTOES.

We hereby prohibit and forbid Spaniards, negroes, mulattores, or mestizos to live to live in
the reducciones and towns and towns of the indios, because it has been found that some
Spaniards who deal, trade, live, and associate with the indios are men of troublesome
nature, of dirty ways of living; robbers, gamblers, and vicious and useless men; and, to avoid
the wrongs done them, the indios would leave their towns and provinces; and the
negroes, mestizos, and mulattoes, besides maltreating them and utilizing their services,
contaminate them with their bad customs, idleness, and also some of their blunders and
vices which may corrupt and pervert the goal which we desire to reach with regard to their
salvation, increase, and tranquillity. We hereby order the imposition of grave penalties upon
the commission of the acts above-mentioned which should not be tolerated in the towns, and
that the viceroys, presidents, governors, and courts take great care in executing the law
within their powers and avail themselves of the cooperation of the ministers who are truly
honest. As regards the mestizos and Indian and Chinese half-breeds (zambaigos), who are
children of indias and born among them, and who are to inherit their houses and haciendas,
they all not be affected by this law, it appearing to be a harsh thing to separate them from
their parents. (Law of the Indies, vol. 2, pp. 228, 229, 230, 231.)

A clear exposition of the purposes of the Spanish government, in its efforts to improve the condition
of the less advanced inhabitants of the Islands by concentrating them in "reducciones," is found in
the Decree of the Governor-General of the Philippine Islands of January 14, 1881, reading as
follows:

It is a legal principle as well as a national right that every inhabitant of a territory recognized
as an integral part of a nation should respect and obey the laws in force therein; while, on
other hand, it is the duty to conscience and to humanity for all governments to civilize those
backward races that might exist in the nation, and which living in the obscurity of ignorance,
lack of all the nations which enable them to grasp the moral and material advantages that
may be acquired in those towns under the protection and vigilance afforded them by the
same laws.

It is equally highly depressive to our national honor to tolerate any longer the separation and
isolation of the non-Christian races from the social life of the civilized and Christian towns; to
allow any longer the commission of depredations, precisely in the Island of Luzon wherein is
located the seat of the representative of the Government of the, metropolis.

It is but just to admit the fact that all the governments have occupied themselves with this
most important question, and that much has been heretofore accomplished with the help and
self-denial of the missionary fathers who have even sacrificed their lives to the end that those
degenerate races might be brought to the principles of Christianity, but the means and the
preaching employed to allure them have been insufficient to complete the work undertaken.
Neither have the punishments imposed been sufficient in certain cases and in those which
have not been guarded against, thus giving and customs of isolation.

As it is impossible to consent to the continuation of such a lamentable state of things, taking

into account the prestige which the country demands and the inevitable duty which every
government has in enforcing respect and obedience to the national laws on the part of all
who reside within the territory under its control, I have proceeded in the premises by giving
the most careful study of this serious question which involves important interests for
civilization, from the moral and material as well as the political standpoints. After hearing the
illustrious opinions of all the local authorities, ecclesiastics, and missionaries of the provinces
of Northern Luzon, and also after finding the unanimous conformity of the meeting held with
the Archbishop of Manila, the Bishops of Jaro and Cebu, and the provincial prelates of the
orders of the Dominicans, Agustinians, Recoletos, Franciscans, and Jesuits as also of the
meeting of the Council of Authorities, held for the object so indicated, I have arrived at an
intimate conviction of the inevitable necessity of proceeding in a practical manner for the
submission of the said pagan and isolated races, as well as of the manner and the only form
of accomplishing such a task.

For the reasons above stated and for the purpose of carrying out these objects, I hereby
promulgate the following:

DECREE.

1. All the indian inhabitants (indios) of the Islands of Luzon are, from this date, to be
governed by the common law, save those exceptions prescribed in this decree which are
bases upon the differences of instructions, of the customs, and of the necessities of the
different pagan races which occupy a part of its territory.

2. The diverse rules which should be promulgated for each of these races — which may be
divided into three classes; one, which comprises those which live isolated and roaming about
without forming a town nor a home; another, made up of those subdued pagans who have
not as yet entered completely the social life; and the third, of those mountain and rebellious
pagans — shall be published in their respective dialects, and the officials, priests, and
missionaries of the provinces wherein they are found are hereby entrusted in the work of
having these races learn these rules. These rules shall have executive character, beginning
with the first day of next April, and, as to their compliance, they must be observed in the
manner prescribed below.

3. The provincial authorities in conjunction with the priests shall proceed, from now on, with
all the means which their zeal may suggest to them, to the taking of the census of the
inhabitants of the towns or settlement already subdued, and shall adopt the necessary
regulations for the appointment of local authorities, if there be none as yet; for the
construction of courts and schools, and for the opening or fixing up of means of
communication, endeavoring, as regards the administrative organization of the said towns or
settlements, that this be finished before the first day of next July, so that at the beginning of
the fiscal year they shall have the same rights and obligations which affect the remaining
towns of the archipelago, with the only exception that in the first two years they shall not be
obliged to render personal services other than those previously indicated.

4. So long as these subdued towns or settlements are located infertile lands appropriate for
cultivation, the inhabitants thereof shall not be obliged to move their dwelling-houses; and
only in case of absolute necessity shall a new residence be fixed for them, choosing for this
purpose the place most convenient for them and which prejudices the least their interest;
and, in either of these cases, an effort must be made to establish their homes with the reach
of the sound of the bell.

5. For the protection and defense of these new towns, there shall be established an armed
force composed precisely of native Christian, the organization and service of which shall be
determined in a regulations based upon that of the abolished Tercios de Policia (division of
the Guardia Civil).
6. The authorities shall see to it that the inhabitants of the new towns understand all the
rights and duties affecting them and the liberty which they have as to where and now they
shall till their lands and sell the products thereof, with the only exception of the tobacco which
shall be bought by the Hacienda at the same price and conditions allowed other producers,
and with the prohibition against these new towns as well as the others from engaging in
commerce of any other transaction with the rebellious indios, the violation of which shall be
punished with deportation.

7. In order to properly carry out this express prohibition, the limits of the territory of the
rebellious indios shall be fixed; and whoever should go beyond the said limits shall be
detained and assigned governmentally wherever convenient.

8. For the purpose of assisting in the conversion of the pagans into the fraternity of the
Catholic Church, all by this fact along be exempt for eight years from rendering personal
labor.

9. The authorities shall offer in the name of the State to the races not subdued (aetas and
mountains igorrots the following advantages in returns for their voluntary submission: to live
in towns; unity among their families; concession of good lands and the right to cultivate them
in the manner they wish and in the way them deem most productive; support during a year,
and clothes upon effecting submission; respect for their habits and customs in so far as the
same are not opposed to natural law; freedom to decide of their own accord as to whether
they want to be Christians or not; the establishment of missions and families of recognized
honesty who shall teach, direct, protect, and give them security and trust them; the purchase
or facility of the sale of their harvests; the exemption from contributions and tributes for ten
years and from the quintas (a kind of tax) for twenty years; and lastly, that those who are
governed by the local authorities as the ones who elect such officials under the direct charge
of the authorities of the province or district.

10. The races indicated in the preceding article, who voluntarily admit the advantages
offered, shall, in return, have the obligation of constituting their new towns, of constructing
their town hall, schools, and country roads which place them in communication with one
another and with the Christians; provided, the location of these towns be distant from their
actual residences, when the latter do not have the good conditions of location and
cultivations, and provided further the putting of families in a place so selected by them be
authorized in the towns already constituted.

11. The armed force shall proceed to the prosecution and punishment of the tribes, that,
disregarding the peace, protection, and advantages offered them, continue in their rebellious
attitude on the first of next April, committing from now on the crimes and vexations against
the Christian towns; and for the this purposes, the Captain General's Office shall proceed
with the organization of the divisions of the Army which, in conjunction with the rural guards
(cuadrilleros), shall have to enter the territory of such tribes. On the expiration of the term,
they shall destroy their dwelling-houses, labors, and implements, and confiscate their
products and cattle. Such a punishment shall necessarily be repeated twice a year, and for
this purpose the military headquarters shall immediately order a detachment of the military
staff to study the zones where such operations shall take place and everything conducive to
the successful accomplishment of the same.

12. The chiefs of provinces, priests, and missioners, local authorities, and other subordinates
to my authorities, local authorities, and other subordinates to may authority, civil as well as
 military authorities, shall give the most effective aid and cooperation to the said forces in all
that is within the attributes and the scope of the authority of each.

13. With respect to the reduccion of the pagan races found in some of the provinces in the
southern part of the Archipelago, which I intend to visit, the preceding provisions shall
conveniently be applied to them.

14. There shall be created, under my presidency as Governor-General, Vice-Royal Patron, a

council or permanent commission which shall attend to and decide all the questions relative
to the application of the foregoing regulations that may be brought to it for consultations by
the chiefs of provinces and priests and missionaries.

15. The secondary provisions which may be necessary, as a complement to the foregoing, in
brining about due compliance with this decree, shall be promulgated by the respective official
centers within their respective jurisdictions. (Gaceta de Manila, No. 15) (Diccionario de la
Administracion, vol. 7, pp. 128-134.)

B. AFTER ACQUISITON OF THE PHILIPPINES BY THE UNITED STATES.

Ever since the acquisition of the Philippine Islands by the United States, the question as to the best
method for dealing with the primitive inhabitants has been a perplexing one.

1. Organic law.

The first order of an organic character after the inauguration of the American Government in the
Philippines was President McKinley's Instructions to the Commission of April 7, 1900, later expressly
approved and ratified by section 1 of the Philippine Bill, the Act of Congress of July 1, 1902. Portions
of these instructions have remained undisturbed by subsequent congressional legislation. One
paragraph of particular interest should here be quoted, namely:

In dealing with the uncivilized tribes of the Islands, the Commission should adopt the same
course followed by Congress in permitting the tribes of our North American Indians to
maintain their tribal organization and government and under which many of these tribes are
now living in peace and contentment, surrounded by civilization to which they are unable or
unwilling to conform. Such tribal governments should, however, be subjected to wise and
firm regulation; and, without undue or petty interference, constant and active effort should be
exercised to prevent barbarous practices and introduce civilized customs.

Next comes the Philippine Bill, the Act of Congress of July 1, 1902, in the nature of an Organic Act
for the Philippines. The purpose of section 7 of the Philippine Bill was to provide for a legislative
body and, with this end in view, to name the prerequisites for the organization of the Philippine
Assembly. The Philippine Legislature, composed of the Philippine Commission and the Philippine
Assembly, was to have jurisdiction over the Christian portion of the Islands. The Philippine
Commission was to retain exclusive jurisdiction of that part of said Islands inhabited by Moros or
other non-Christian tribes.

The latest Act of Congress, nearest to a Constitution for the Philippines, is the Act of Congress of
August 29, 1916, commonly known as the Jones Law. This transferred the exclusive legislative
jurisdiction and authority theretofore exercised by the Philippine Commission, to the Philippine
Legislature (sec. 12). It divided the Philippine Islands into twelve senatorial districts, the twelfth
district to be composed of the Mountain Province, Baguio, Nueva Vizcaya, and the Department of
Mindanao and Sulu. The Governor-General of the Philippine Islands was authorized to appoint
senators and representatives for the territory which, at the time of the passage of the Jones Law,
was not represented in the Philippine Assembly, that is, for the twelfth district (sec. 16). The law
establish a bureau to be known as the "Bureau of non-Christian Tribes" which shall have general
supervision over the public affairs of the inhabitants which are represented in the Legislature by
appointed senators and representatives( sec. 22).

Philippine organic law may, therefore, be said to recognized a dividing line between the territory not
inhabited by Moros or other non-Christian tribes, and the territory which Moros or other non-Christian
tribes, and the territory which is inhabited by Moros or other non-Christian tribes.

2. Statute law.

Local governments in the Philippines have been provided for by various acts of the Philippine
Commission and Legislature. The most notable are Acts Nos. 48 and 49 concerning the Province of
Benguet and the Igorots; Act NO. 82, the Municipal Code; ;Act no. 83, the Provincial Government
Act; Act No. 183, the Character of the city of Manila; Act No. 7887, providing for the organization and
government of the Moro Province; Act No. 1396, the Special Provincial Government Act; Act No.
1397, the Township Government Act; Act No. 1667, relating to the organization of settlements; Act
No. 1963, the Baguio charger; and Act No. 2408, the Organic Act of the Department of Mindanao
and Sulu. The major portion of these laws have been carried forward into the Administrative Codes
of 1916 an d1917.

Of more particular interest are certain special laws concerning the government of the primitive
peoples. Beginning with Act No. 387, sections 68-71, enacted on April 9, 1902, by the United States
Philippine Commission, having reference to the Province of Nueva Vizcaya, Acts Nos. 4111, 422,
445, 500, 547, 548, 549, 550, 579, 753, 855, 1113, 1145, 4568, 1306 were enacted for the provinces
of Abra, Antique, Bataan, Ilocos Norte, Ilocos Sur, Isabela. Lepanto-Bontoc, Mindoro, Misamis,
Nueva Vizcaya, Pangasinan, Paragua (Palawan), Tarlac, Tayabas, and Zambales. As an example of
these laws, because referring to the Manguianes, we insert Act No. 547:

No. 547. — AN ACT PROVIDING FOR THE ESTABLISHMENT OF LOCAL CIVIL

GOVERNMENTS FOR THE MANGUIANES IN THE PROVINCE OF MINDORO.

By authority of the United States, be it enacted by the Philippine Commission, that:

SECTION 1. Whereas the Manguianes of the Provinces of Mindoro have not progressed
sufficiently in civilization to make it practicable to bring them under any form of municipal
government, the provincial governor is authorized, subject to the approval of the Secretary of
the Interior, in dealing with these Manguianes to appoint officers from among them, to fix
their designations and badges of office, and to prescribe their powers and duties: Provided,
That the powers and duties thus prescribed shall not be in excess of those conferred upon
township officers by Act Numbered Three hundred and eighty-seven entitled "An Act
providing for the establishment of local civil Governments in the townships and settlements
of Nueva Vizcaya."

SEC. 2. Subject to the approval of the Secretary of the Interior, the provincial governor is
further authorized, when he deems such a course necessary in the interest of law and order,
to direct such Manguianes to take up their habitation on sites on unoccupied public lands to
be selected by him and approved by the provincial board. Manguianes who refuse to comply
with such directions shall upon conviction be imprisonment for a period not exceeding sixty
days.
 SEC. 3. The constant aim of the governor shall be to aid the Manguianes of his province to
acquire the knowledge and experience necessary for successful local popular government,
and his supervision and control over them shall be exercised to this end, an to the end that
law and order and individual freedom shall be maintained.

SEC. 4. When in the opinion of the provincial board of Mindoro any settlement of
Manguianes has advanced sufficiently to make such a course practicable, it may be
organized under the provisions of sections one to sixty-seven, inclusive, of Act Numbered
three hundred and eighty-seven, as a township, and the geographical limits of such township
shall be fixed by the provincial board.

SEC. 5. The public good requiring the speedy enactment of this bill, the passage of the same
is hereby expedited in accordance with section two of 'An Act prescribing the order of
procedure by the Commission in the enactment of laws,' passed September twenty-sixth,
nineteen hundred.

SEC. 6. This Act shall take effect on its passage.

Enacted, December 4, 1902.

All of these special laws, with the exception of Act No. 1306, were repealed by Act No. 1396 and
1397. The last named Act incorporated and embodied the provisions in general language. In turn,
Act No. 1397 was repealed by the Administrative Code of 1916. The two Administrative Codes
retained the provisions in questions.

These different laws, if they of the non-Christian inhabitants of the Philippines and a settled and
consistent practice with reference to the methods to be followed for their advancement.

C. TERMINOLOGY.

The terms made use of by these laws, organic and statutory, are found in varying forms.

"Uncivilized tribes" is the denomination in President McKinley's instruction to the Commission.

The most commonly accepted usage has sanctioned the term "non-Christian tribes." These words
are to be found in section 7 of the Philippine Bill and in section 22 of the Jones Law. They are also to
be found in Act No. 253 of the Philippines Commission, establishing a Bureau of non-Christian
Tribes and in Act No. 2674 of the Philippine Legislature, carried forward into sections 701-705 of the
Administrative Code of 1917, reestablishing this Bureau. Among other laws which contain the
phrase, there can be mentioned Acts Nos. 127, 128, 387, 547, 548, 549, 550, 1397, 1639, and 2551.

"Non-Christian people," "non-Christian inhabitants," and "non-Christian Filipinos" have been the
favorite nomenclature, in lieu of the unpopular word "tribes," since the coming into being of a
Filipinized legislature. These terms can be found in sections 2076, 2077, 2390, 2394, Administrative
Code of 1916; sections 701-705, 2145, 2422, 2426, Administrative Code of 1917; and in Acts Nos.
2404, 2435, 2444, 2674 of the Philippine Legislatures, as well as in Act No. 1667 of the Philippine
Commission.

The Administrative Code specifically provides that the term "non-Christian" shall include
Mohammedans and pagans. (Sec. 2576, Administrative Code of 1917; sec. 2561, Administrative
Code of 1916, taken from Act No. 2408, sec. 3.)
 D. MEANING OF TERM "NON-CHRISTIAN."

If we were to follow the literal meaning of the word "non-Christian," it would of course result in giving
to it a religious signification. Obviously, Christian would be those who profess the Christian religion,
and non-Christians, would be those who do not profess the Christian religion. In partial corroboration
of this view, there could also be cited section 2576 of the last Administrative Code and certain well-
known authorities, as Zuñiga, "Estadismo de las Islas Filipinas," Professor Ferdinand Blumentritt,
"Philippine Tribes and Languages," and Dr. N. M. Saleeby, "The Origin of Malayan Filipinos." (See
Blair & Robertson, "The Philippine Islands," 1493-1898, vol. III, p. 300, note; Craig-Benitez,
"Philippine Progress prior to 1898," vol. I. p. 107.)

Not content with the apparent definition of the word, we shall investigate further to ascertain what is
its true meaning.

In one sense, the word can have a geographical signification. This is plainly to be seen by the
provisions of many laws. Thus, according to the Philippine Bill, the authority of the Philippine
Assembly was recognized in the "territory" of the Islands not inhabited by Moros or other non-
Christian tribes. Again, the Jones Law confers similar recognition in the authorization of the twelfth
senatorial district for the "territory not now represented in the Philippine Assembly." The Philippines
Legislature has, time and again, adopted acts making certain other acts applicable to that "part" of
the Philippine Islands inhabited by Moros or other non-Christian tribes.

Section 2145, is found in article XII of the Provincial Law of the Administrative Code. The first section
of this article, preceding section 2145, makes the provisions of the article applicable only in specially
organized provinces. The specially organized provinces are the Mountain Province, Nueva Vizcaya,
Mindoro, Batanes, and Palawan. These are the provinces to which the Philippine Legislature has
never seen fit to give all the powers of local self-government. They do not, however, exactly coincide
with the portion of the Philippines which is not granted popular representation. Nevertheless, it is still
a geographical description.

It is well-known that within the specially organized provinces, there live persons some of who are
Christians and some of whom are not Christians. In fact, the law specifically recognizes this. ( Sec.
2422, Administrative Code of 1917, etc.)

If the religious conception is not satisfactory, so against the geographical conception is likewise
inadquate. The reason it that the motive of the law relates not to a particular people, because of their
religion, or to a particular province because of its location, but the whole intent of the law is
predicated n the civilization or lack of civilization of the inhabitants.

At most, "non-Christian" is an awkward and unsatisfactory word. Apologetic words usually introduce
the term. "The so-called non-Christian" is a favorite expression. The Secretary of the Interior who for
so many years had these people under his jurisdiction, recognizing the difficulty of selecting an exact
designation, speaks of the "backward Philippine peoples, commonly known as the 'non-Christian
tribes."' (See Hearings before the Committee on the Philippines, United States Senate, Sixty-third
Congress, third session on H.R. 18459, An Act to declare the purpose of the People of the United
States as to the future political status of the Philippine Islands and to provide a more autonomous
government for the Islands, pp. 346, 351; letter of the Secretary of the Interior of June 30, 1906,
circulated by the Executive Secretary.)

The idea that the term "non-Christian" is intended to relate to degree of civilization, is substantiated
by reference to legislative, judicial, and executive authority.
The legislative intent is borne out by Acts Nos. 48, 253, 387, 1667, and 2674, and sections 701 et
seq, and sections 2422 et seq, of the Administrative Code of 1917. For instance, Act No. 253
charged the Bureau of non-Christian tribes to conduct "systematic investigations with reference to
non-Christian tribes . . . with special view to determining the most practicable means for bringing
about their advancement in civilization and material property prosperity."

As authority of a judicial nature is the decision of the Supreme Court in the case of United
States vs. Tubban [Kalinga] ([1915], 29, Phil., 434). The question here arose as to the effect of a
tribal marriage in connection with article 423 of the Penal code concerning the husband who
surprises his wife in the act of adultery. In discussing the point, the court makes use of the following
language:

. . . we are not advised of any provision of law which recognizes as legal a tribal marriage
of so-called non-Christians or members of uncivilized tribes, celebrated within that province
without compliance with the requisites prescribed by General Orders no. 68. . . . We hold
also that the fact that the accused is shown to be a member of an uncivilized tribe, of a low
order of intelligence, uncultured and uneducated, should be taken into consideration as a
second marked extenuating circumstance.

Of much more moment is the uniform construction of execution officials who have been called upon
to interpret and enforce the law. The official who, as a member of the Philippine Commission, drafted
much of the legislation relating to the so-called Christians and who had these people under his
authority, was the former Secretary of the Interior. Under date of June 30, 1906, this official
addressed a letter to all governor of provinces, organized under the Special Provincial Government
Act, a letter which later received recognition by the Governor-General and was circulated by the
Executive Secretary, reading as follows:

Sir: Within the past few months, the question has arisen as to whether people who were
originally non-Christian but have recently been baptized or who are children of persons who
have been recently baptized are, for the purposes of Act 1396 and 1397, to be considered
Christian or non-Christians.

It has been extremely difficult, in framing legislation for the tribes in these islands which are
not advanced far in civilization, to hit upon any suitable designation which will fit all cases.
The number of individual tribes is so great that it is almost out of the question to enumerate
all of them in an Act. It was finally decided to adopt the designation 'non-Christians' as the
one most satisfactory, but the real purpose of the Commission was not so much to legislate
for people having any particular religious belief as for those lacking sufficient advancement
so that they could, to their own advantage, be brought under the Provincial Government Act
and the Municipal Code.

The mere act of baptism does not, of course, in itself change the degree of civilization to
which the person baptized has attained at the time the act of baptism is performed. For
practical purposes, therefore, you will give the member of so-called "wild tribes" of your
province the benefit of the doubt even though they may recently have embraced Christianity.

The determining factor in deciding whether they are to be allowed to remain under the
jurisdiction of regularly organized municipalities or what form of government shall be afforded
to them should be the degree of civilization to which they have attained and you are
requested to govern yourself accordingly.
 I have discussed this matter with the Honorable, the Governor-General, who concurs in the
opinion above expressed and who will have the necessary instructions given to the
governors of the provinces organized under the Provincial Government Act. (Internal
Revenue Manual, p. 214.)

The present Secretary of the Interior, in a memorandum furnished a member of this court, has the
following to say on the subject:

As far as names are concerned the classification is indeed unfortunate, but while no other
better classification has as yet been made the present classification should be allowed to
stand . . . I believe the term carries the same meaning as the expressed in the letter of the
Secretary of the Interior (of June 30, 1906, herein quoted). It is indicative of the degree of
civilization rather than of religious denomination, for the hold that it is indicative of religious
denomination will make the law invalid as against that Constitutional guaranty of religious
freedom.

Another official who was concerned with the status of the non-Christians, was the Collector of
Internal Revenue. The question arose for ruling relatives to the cedula taxation of the Manobos and
the Aetas. Thereupon, the view of the Secretary of the Interior was requested on the point, who, by
return indorsement, agreed with the interpretation of the Collector of Internal Revenue. This
Construction of the Collector of Internal Revenue can be found in circular letter No. 188 of the
Bureau of Internal Revenue, dated June 11, 1907, reading as follows (Internal Revenue Manual, p.
214):

The internal revenue law exempts "members of non-Christian tribes" from the payment of
cedula taxes. The Collector of Internal Revenue has interpreted this provision of law to mean
not that persons who profess some form of Christian worship are alone subject to the cedula
tax, and that all other person are exempt; he has interpreted it to mean that all persons
preserving tribal relations with the so-called non-Christian tribes are exempt from the cedula
tax, and that all others, including Jews, Mohammedans, Confucians, Buddists, etc., are
subject to said tax so long as they live in cities or towns, or in the country in a civilized
condition. In other words, it is not so much a matter of a man's form of religious worship or
profession that decides whether or not he is subject to the cedula tax; it is more dependent
on whether he is living in a civilized manner or is associated with the mountain tribes, either
as a member thereof or as a recruit. So far, this question has not come up as to whether a
Christian, maintaining his religious belief, but throwing his lot and living with a non-Christian
tribe, would or would not be subject to the cedula tax. On one occasion a prominent Hebrew
of Manila claimed to this office that he was exempt from the cedula tax, inasmuch as he was
not a Christian. This Office, however, continued to collect cedula taxes from all the Jews,
East Indians, Arabs, Chinamen, etc., residing in Manila. Quite a large proportion of the
cedula taxes paid in this city are paid by men belonging to the nationalities mentioned.
Chinamen, Arabs and other s are quite widely scattered throughout the Islands, and a
condition similar to that which exist in Manila also exists in most of the large provincial towns.
Cedula taxes are therefore being collected by this Office in all parts of these Islands on the
broad ground that civilized people are subject to such taxes, and non-civilized people
preserving their tribal relations are not subject thereto.

(Sgd.) JNO. S. HORD,

Collector of Internal Revenue.
On September 17, 1910, the Collector of Internal Revenue addressed circular letter No. 327,
approved by the Secretary of Finance and Justice, to all provincial treasurers. This letter in part
reads:

In view of the many questions that have been raised by provincial treasurers regarding
cedula taxes due from members of non-Christian tribes when they come in from the hills for
the purposes of settling down and becoming members of the body politic of the Philippine
Islands, the following clarification of the laws governing such questions and digest of rulings
thereunder is hereby published for the information of all concerned:

Non-Christian inhabitants of the Philippine Islands are so classed, not by reason of the fact
that they do not profess Christianity, but because of their uncivilized mode of life and low
state of development. All inhabitants of the Philippine Islands classed as members of non-
Christian tribes may be divided into three classes in so far as the cedula tax law is concerned
...

Whenever any member of an non-Christian tribe leaves his wild and uncivilized mode of life,
severs whatever tribal relations he may have had and attaches himself civilized community,
belonging a member of the body politic, he thereby makes himself subject to precisely the
same law that governs the other members of that community and from and after the date
when he so attaches himself to the community the same cedula and other taxes are due
from him as from other members thereof. If he comes in after the expiration of the
delinquency period the same rule should apply to him as to persons arriving from foreign
countries or reaching the age of eighteen subsequent to the expiration of such period, and a
regular class A, D, F, or H cedula, as the case may be, should be furnished him without
penalty and without requiring him to pay the tax for former years.

In conclusion, it should be borne in mind that the prime factors in determining whether or not
a man is subject to the regular cedula tax is not the circumstance that he does or does not
profess Christianity, nor even his maintenance of or failure to maintain tribal relations with
some of the well known wild tribes, but his mode of life, degree of advancement in civilization
and connection or lack of connection with some civilized community. For this reason so
called "Remontados" and "Montescos" will be classed by this office as members of non-
Christian tribes in so far as the application of the Internal Revenue Law is concerned, since,
even though they belong to no well recognized tribe, their mode of life, degree of
advancement and so forth are practically the same as those of the Igorrots and members of
other recognized non-Christina tribes.

Very respectfully,

(Sgd.) ELLIS CROMWELL,

Collector of Internal Revenue,

Approved:
(Sgd.) GREGORIO ARANETA,
Secretary of Finance and Justice.

The two circular above quoted have since been repealed by Bureau of Internal Revenue Regulations
No. 1, promulgated by Venancio Concepcion, Acting Collector of Internal Revenue, and approved on
April 16, 1915, by Honorable Victorino Mapa, Secretary of Finance and Justice. Section 30 of the
regulations is practically a transcript of Circular Letter No. 327.
The subject has come before the Attorney-General for consideration. The Chief of Constabulary
request the opinion of the Attorney-General as to the status of a non-Christian who has been
baptized by a minister of the Gospel. The precise questions were these: "Does he remain non-
Christian or is he entitled to the privileges of a Christian? By purchasing intoxicating liquors, does he
commit an infraction of the law and does the person selling same lay himself liable under the
provision of Act No. 1639?" The opinion of Attorney-General Avanceña, after quoting the same
authorities hereinbefore set out, concludes:

In conformity with the above quoted constructions, it is probable that is probable that the
person in question remains a non-Christian, so that, in purchasing intoxicating liquors both
he and the person selling the same make themselves liable to prosecution under the
provisions of Act No. 1639. At least, I advise you that these should be the constructions
place upon the law until a court shall hold otherwise.

Solicitor-General Paredes in his brief in this case says:

With respect to the meaning which the phrase non-Christian inhabitants has in the provisions
of the Administrative code which we are studying, we submit that said phrase does not have
its natural meaning which would include all non-Christian inhabitants of the Islands, whether
Filipino or strangers, civilized or uncivilized, but simply refers to those uncivilized members of
the non-Christian tribes of the Philippines who, living without home or fixed residence, roam
in the mountains, beyond the reach of law and order . . .

The Philippine Commission in denominating in its laws that portion of the inhabitants of the
Philippines which live in tribes as non-Christian tribes, as distinguished from the common
Filipinos which carry on a social and civilized life, did not intended to establish a distinction
based on the religious beliefs of the individual, but, without dwelling on the difficulties which
later would be occasioned by the phrase, adopted the expression which the Spanish
legislation employed to designate the uncivilized portion of the inhabitants of the Philippines.

The phrase 'non-Christian inhabitants' used in the provisions of articles 2077 and 2741 of Act
No. 2657 (articles 2145 and 2759) should be understood as equivalent to members of
uncivilized tribes of the Philippines, not only because this is the evident intention of the law,
but because to give it its lateral meaning would make the law null and unconstitutional as
making distinctions base the religion of the individual.

The Official Census of 1903, in the portion written by no less an authority than De. David P. Barrows,
then "Chief of the Bureau of non-Christian Tribes," divides the population in the Christian or Civilized
Tribes, and non-Christian or Wild Tribes. (Census of the Philippine Islands [1903], vol. 1, pp. 411 et
seq). The present Director of the Census, Hon. Ignacio Villamor, writes that the classification likely to
be used in the Census now being taken is: "Filipinos and Primitive Filipinos." In a Pronouncing
Gazetteer and Geographical Dictionary of the Philippine Islands, prepared in the Bureau of Insular
Affairs, War Department, a sub-division under the title non-Christian tribes is, "Physical and Political
Characteristics of the non-Christian Tribes," which sufficiently shows that the terms refers to culture
and not to religion.

In resume, therefore, the Legislature and the Judiciary, inferentially, and different executive officials,
specifically, join in the proposition that the term "non-Christian" refers, not to religious belief, but, in a
way , to geographical area, and, more directly, to natives of the Philippine Islands of a law grade of
civilization, usually living in tribal relationship apart from settled communities.

E. THE MANGUIANES.
The so-called non-Christians are in various state approaching civilization. The Philippine Census of
1903 divided them into four classes. Of the third class, are the Manguianes (or Mangyans) of
Mindoro.

Of the derivation of the name "Manguian" Dr. T. H. Pardo de Tavera in his Etimilogia de los nombres
de Rozas de Filipinas, says:

In Tagalog, Bicol, and Visaya, Manguian signifies "savage," "mountainer," "pagan," "negro."
It may be that the use of this word is applicable to a great number of Filipinos, but
nevertheless it has been applied only to certain inhabitants of Mindoro. Even in primitive
times without doubt this name was given to those of that island who bear it to-day, but its
employed in three Filipino languages shows that the radical ngian had in all these languages
a sense to-day forgotten. In Pampango this ending still exists and signifies "ancient," from
which we can deduce that the name was applied to men considered to be the ancient
inhabitants, and that these men were pushed back into the interior by the modern invaders,
in whose language they were called the "ancients."

The Manguianes are very low in culture. They have considerable Negrito blood and have not
advanced beyond the Negritos in civilization. They are a peaceful, timid, primitive, semi-nomadic
people. They number approximately 15,000. The manguianes have shown no desire for community
life, and, as indicated in the preamble to Act No. 547, have not progressed sufficiently in civilization
to make it practicable to bring them under any form of municipal government. (See Census of the
Philippine (Islands [1903], vol. I, pp. 22, 23, 460.)

III. COMPARATIVE — THE AMERICAN INDIANS.

Reference was made in the Presidents' instructions to the Commission to the policy adopted by the
United States for the Indian Tribes. The methods followed by the Government of the Philippines
Islands in its dealings with the so-called non-Christian people is said, on argument, to be practically
identical with that followed by the United States Government in its dealings with the Indian tribes.
Valuable lessons, it is insisted, can be derived by an investigation of the American-Indian policy.

From the beginning of the United States, and even before, the Indians have been treated as "in a
state of pupilage." The recognized relation between the Government of the United States and the
Indians may be described as that of guardian and ward. It is for the Congress to determine when
and how the guardianship shall be terminated. The Indians are always subject to the plenary
authority of the United States.

Chief Justice Marshall in his opinion in Worcester vs. Georgia, hereinbefore mentioned, tells how the
Congress passed an Act in 1819 "for promoting those humane designs of civilizing the neighboring
Indians." After quoting the Act, the opinion goes on — "This act avowedly contemplates the
preservation of the Indian nations as an object sought by the United States, and proposes to effect
this object by civilizing and converting them from hunters into agriculturists."

A leading case which discusses the status of the Indians is that of the United States vs. Kagama
([1886], 118 U.S., 375). Reference is herein made to the clause of the United States Constitution
which gives Congress "power to regulate commerce with foreign nations, and among the several
States, and with the Indian tribes." The court then proceeds to indicate a brief history of the position
of the Indians in the United States (a more extended account of which can be found in Marshall's
opinion in Worcester vs. Georgia, supra), as follows:
 The relation of the Indian tribes living within the borders of the United States, both before
and since the Revolution, to the people of the United States, has always been an anomalous
one and of a complex character.

Following the policy of the European Governments in the discovery of American towards the
Indians who were found here, the colonies before the Revolution and the States and the
United States since, have recognized in the Indians a possessory right to the soil over which
they roamed and hunted and established occasional villages. But they asserted an ultimate
title in the land itself, by which the Indian tribes were forbidden to sell or transfer it to other
nations or peoples without the consent of this paramount authority. When a tribe wished to
dispose of its lands, or any part of it, or the State or the United States wished to purchase it,
a treaty with the tribe was the only mode in which this could be done. The United States
recognized no right in private persons, or in other nations, to make such a purchase by treaty
or otherwise. With the Indians themselves these relation are equally difficult to define. They
were, and always have been, regarded as having a semi-independent position when they
preserved their tribal relations; not as States, not as nation not a possessed of the fall
attributes of sovereignty, but as a separate people, with the power of regulating their internal
and social relations, and thus far not brought under the laws of the Union or of the State
within whose limits they resided.

The opinion then continues:

It seems to us that this (effect of the law) is within the competency of Congress. These Indian
tribes are the wards of the nation. The are communities dependent on the United States.
dependent largely for their daily food. Dependent for their political rights. They owe no
allegiance to the States, and receive from the no protection. Because of the local ill feeling,
the people of the States where they are found are often their deadliest enemies. From their
very weakness and helplessness, so largely due to the course of dealing of the Federal
Government with them and the treaties in which it has been promised, there arise the duty of
protection, and with it the power. This has always been recognized by the Executive and by
Congress, and by this court, whenever the question has arisen . . . The power of the General
Government over these remnants of race once powerful, now weak and diminished in
numbers, is necessary to their protection, as well as to the safety of those among whom they
dwell. it must exist in that government, because it never has existed anywhere else, because
the theater of its exercise is within the geographical limits of the United States, because it
has never been denied, and because it alone can enforce its laws on all the tribes.

In the later case of United States vs. Sandoval ([1913], 231 U.S., 28) the question to be considered
was whether the status of the Pueblo Indians and their lands was such that Congress could prohibit
the introduction of intoxicating liquor into those lands notwithstanding the admission of New Mexico
to statehood. The court looked to the reports of the different superintendent charged with guarding
their interests and founds that these Indians are dependent upon the fostering care and protection of
the government "like reservation Indians in general." Continuing, the court said "that during the
Spanish dominion, the Indians of the pueblos were treated as wards requiring special protection,
where subjected to restraints and official supervisions in the alienation of their property." And finally,
we not the following: "Not only does the Constitution expressly authorize Congress to regulate
commerce with the Indians tribes, but long-continued legislative and executive usage and an
unbroken current of judicial decisions have attributed to the United States as a superior and civilized
nation the power and the duty of exercising a fostering care and protection over all dependent Indian
communities within its borders, whether within its original territory or territory subsequently acquired,
and whether within or without the limits of a state."
With reference to laws affecting the Indians, it has been held that it is not within the power of the
courts to overrule the judgment of Congress. For very good reason, the subject has always been
deemed political in nature, not subject to the jurisdiction of the judicial department of the
government. (Matter of Heff [1905], 197 U.S., 488; U.S. vs. Celestine [1909], 215 U.S., 278;
U.S. vs. Sandoval, supra; Worcester vs. Georgia, supra; U.S. vs. Rogers [1846], 4 How., 567; the
Cherokee Tobacco [1871], 11 Wall, 616; Roff vs. Burney [1897], 168 U.S., 218; Thomas vs. Gay
[1898], 169 U.S.., 264; Lone Wolf vs. Hitchcock[1903], 187 U.S., 553; Wallace vs. Adams [1907],
204 U.S., 415; Conley vs. Bollinger [1910], 216 U.S., 84; Tiger vs. Western Invest. Co. [1911], 221
U.S., 286; U.S. vs. Lane [1913], 232 U.S.., 598; Cyr vs. Walker (1911], 29 Okla, 281; 35 L.R.A. [N.
S.], 795.) Whenever, therefore, the United States sets apart any public land as an Indian reservation,
it has full authority to pass such laws and authorize such measures as may be necessary to give to
the Indians thereon full protection in their persons and property. (U.S. vs. Thomas [1894], 151 U.S.,
577.)

All this borne out by long-continued legislative and executive usage, and an unbroken line of judicial
decisions.

The only case which is even remotely in point and which, if followed literally, might result in the
issuance of habeas corpus, is that of United States vs. Crook ([1879], Fed. Cas. No. 14891). This
was a hearing upon return to a writ of habeas corpus issued against Brigadier General George
Crook at the relation of Standing Bear and other Indians, formerly belonging to the Ponca Tribe of
Indians. The petition alleged in substance that the relators are Indians who have formerly belonged
to the Ponca tribe of Indians, now located in the Indian Territory; that they had some time previously
withdrawn from the tribe, and completely severed their tribal relations therewith, and had adopted
the general habits of the whites, and were then endeavoring to maintain themselves by their own
exertions, and without aid or assistance from the general government; that whilst they were thus
engaged, and without being guilty of violating any of the laws of the United States, they were
arrested and restrained of their liberty by order of the respondent, George Crook. The substance of
the return to the writ was that the relators are individual members of, and connected with, the Ponca
tribe of Indians; that they had fled or escaped form a reservation situated some place within the
limits of the Indian Territory — had departed therefrom without permission from the Government;
and, at the request of the Secretary of the Interior, the General of the Army had issued an order
which required the respondent to arrest and return the relators to their tribe in the Indian Territory,
and that, pursuant to the said order, he had caused the relators to be arrested on the Omaha Indian
Territory.

The first question was whether an Indian can test the validity of an illegal imprisonment by habeas
corpus. The second question, of much greater importance, related to the right of the Government to
arrest and hold the relators for a time, for the purpose of being returned to the Indian Territory from
which it was alleged the Indian escaped. In discussing this question, the court reviewed the policy
the Government had adopted in its dealing with the friendly tribe of Poncase. Then, continuing, the
court said: "Laws passed for the government of the Indian country, and for the purpose of regulating
trade and intercourse with the Indian tribes, confer upon certain officers of the Government almost
unlimited power over the persons who go upon the reservations without lawful authority . . . Whether
such an extensive discretionary power is wisely vested in the commissioner of Indian affairs or not ,
need not be questioned. It is enough to know that the power rightfully exists, and, where existing, the
exercise of the power must be upheld." The decision concluded as follows:

The reasoning advanced in support of my views, leads me to conclude:

1. that an Indian is a 'person' within the meaning of the laws of the United States, and has,
therefore, the right to sue out a writ of habeas corpus in a federal court, or before a federal
 judge, in all cases where he may be confined or in custody under color of authority of the
United States or where he is restrained of liberty in violation of the constitution or laws of the
United States.

2. That General George Crook, the respondent, being commander of the military department
of the Platte, has the custody of the relators, under color of authority of the United States,
and in violation of the laws therefore.

3. That n rightful authority exists for removing by force any of the relators to the Indian
Territory, as the respondent has been directed to do.

4. that the Indians possess the inherent right of expatriation, as well as the more fortunate
white race, and have the inalienable right to "life, liberty, and the pursuit of happiness," so
long as they obey the laws and do not trespass on forbidden ground. And,

5. Being restrained of liberty under color of authority of the United States, and in violation of
the laws thereof, the relators must be discharged from custody, and it is so ordered.

As far as the first point is concerned, the decision just quoted could be used as authority to
determine that Rubi, the Manguian petitioner, a Filipino, and a citizen of the Philippine Islands, is a
"person" within the meaning of the Habeas Corpus Act, and as such, entitled to sue out a writ in the
Philippine courts. (See also In re Race Horse [1895], 70 Fed., 598.) We so decide.

As to the second point the facts in the Standing Bear case an the Rubi case are not exactly identical.
But even admitting similarity of facts, yet it is known to all that Indian reservations do exist in the
United States, that Indians have been taken from different parts of the country and placed on these
reservation, without any previous consultation as to their own wishes, and that, when once so
located, they have been made to remain on the reservation for their own good and for the general
good of the country. If any lesson can be drawn form the Indian policy of the United States, it is that
the determination of this policy is for the legislative and executive branches of the government and
that when once so decided upon, the courts should not interfere to upset a carefully planned
governmental system. Perhaps, just as may forceful reasons exists for the segregation as existed for
the segregation of the different Indian tribes in the United States.

IV. CONSTITUTIONAL QUESTIONS.

A. DELEGATION OF LEGISLATIVE POWER.

The first constitutional objection which confronts us is that the Legislature could not delegate this
power to provincial authorities. In so attempting, it is contended, the Philippine Legislature has
abdicated its authority and avoided its full responsibility.

That the maxim of Constitutional Law forbidding the delegation of legislative power should be
zealously protected, we agree. An understanding of the rule will, however, disclose that it has not
bee violated in his instance.

The rule has nowhere been better stated than in the early Ohio case decided by Judge Ranney, and
since followed in a multitude of case, namely: "The true distinction therefore is between the
delegation of power to make the law, which necessarily involves a discretion as to what it shall be,
and conferring an authority or discretion as to its execution, to be exercised under and in pursuance
of the law. The first cannot be done; to the later no valid objection can be made." (Cincinnati, W. & Z.
R. Co. vs. Comm'rs. Clinton County [1852], 1 Ohio S.t, 88.) Discretion, as held by Chief Justice
Marshall in Wayman vs. Southard ([1825], 10 Wheat., 1) may be committed by the Legislature to an
executive department or official. The Legislature may make decisions of executive departments of
subordinate official thereof, to whom t has committed the execution of certain acts, final on questions
of fact. (U.S. vs. Kinkead [1918], 248 Fed., 141.) The growing tendency in the decision is to give
prominence to the "necessity" of the case.

Is not all this exactly what the Legislature has attempted to accomplish by the enactment of section
21454 of the Administrative Code? Has not the Legislature merely conferred upon the provincial
governor, with the approval of the provincial board and the Department Head, discretionary authority
as to the execution of the law? Is not this "necessary"?

The case of West vs. Hitchock, ([1906], 205 U.S., 80) was a petition for mandamus to require the
Secretary of the Interior to approve the selection and taking of one hundred and sixty acres by the
relator out of the lands ceded to the United States by the Wichita and affiliated bands of Indians.
Section 463 of the United States Revised Statutes provided: "The Commissioner of Indian Affairs
shall, under the direction of the Secretary of the Interior, and agreeably to such regulations as the
President may prescribe, have the management of all Indian affairs, and of all matters arising out to
the Indian relations." Justice Holmes said: "We should hesitate a good deal, especially in view of the
long established practice of the Department, before saying that this language was not broad enough
to warrant a regulation obviously made for the welfare of the rather helpless people concerned. The
power of Congress is not doubted. The Indians have been treated as wards of the nation. Some
such supervision was necessary, and has been exercised. In the absence of special provisions
naturally it would be exercised by the Indian Department." (See also as corroborative authority, it any
is needed, Union Bridge Co. vs. U.S. [1907], 204 U.S.., 364, reviewing the previous decisions of the
United States Supreme Court: U.S. vs. Lane [1914], 232 U.S., 598.)

There is another aspect of the question, which once accepted, is decisive. An exception to the
general rule. sanctioned by immemorial practice, permits the central legislative body to delegate
legislative powers to local authorities. The Philippine Legislature has here conferred authority upon
the Province of Mindoro, to be exercised by the provincial governor and the provincial board.

Who but the provincial governor and the provincial board, as the official representatives of the
province, are better qualified to judge "when such as course is deemed necessary in the interest of
law and order?" As officials charged with the administration of the province and the protection of its
inhabitants, who but they are better fitted to select sites which have the conditions most favorable for
improving the people who have the misfortune of being in a backward state?

Section 2145 of the Administrative Code of 1917 is not an unlawful delegation of legislative power by
the Philippine Legislature to provincial official and a department head.

B. RELIGIOUS DISCRIMINATION

The attorney de officio, for petitioners, in a truly remarkable brief, submitted on behalf of his
unknown clients, says that — "The statute is perfectly clear and unambiguous. In limpid English, and
in words as plain and unequivocal as language can express, it provides for the segregation of 'non-
Christians' and none other." The inevitable result, them, is that the law "constitutes an attempt by the
Legislature to discriminate between individuals because of their religious beliefs, and is,
consequently, unconstitutional."

Counsel's premise once being conceded, his arguments is answerable — the Legislature must be
understood to mean what it has plainly expressed; judicial construction is then excluded; religious
equality is demanded by the Organic Law; the statute has violated this constitutional guaranty, and
Q. E. D. is invalid. But, as hereinbefore stated, we do not feel free to discard the long continued
meaning given to a common expression, especially as classification of inhabitants according to
religious belief leads the court to what it should avoid, the nullification of legislative action. We hold
that the term "non-Christian" refers to natives of the Philippines Islands of a low grade of civilization,
and that section 2145 of the Administrative Code of 1917, does not discriminate between individuals
an account of religious differences.

C. LIBERTY; DUE PROCESS OF LAW; EQUAL PROTECTION OF THE LAWS.

The third constitutional argument is grounded on those portions of the President's instructions of to
the Commission, the Philippine Bill, and the Jones Law, providing "That no law shall be enacted in
said Islands which shall deprive any person of life, liberty, or property without due process of law, or
deny to any person therein the equal protection of the laws." This constitutional limitation is derived
from the Fourteenth Amendment to the United States Constitution — and these provisions, it has
been said "are universal in their application, to all persons within the territorial jurisdiction, without
regard to any differences of race, of color, or of nationality." (Yick Wo vs. Hopkins [1886], 118 U.S.,
356.) The protection afforded the individual is then as much for the non-Christian as for the
Christian.

The conception of civil liberty has been variously expressed thus:

Every man may claim the fullest liberty to exercise his faculties, compatible with the
possession of like liberty by every other. (Spencer, Social Statistics, p. 94.)

Liberty is the creature of law, essentially different from that authorized licentiousness that
trespasses on right. That authorized licentiousness that trespasses on right. It is a legal and
a refined idea, the offspring of high civilization, which the savage never understood, and
never can understand. Liberty exists in proportion to wholesome restraint; the more restraint
on others to keep off from us, the more liberty we have . . . that man is free who is protected
from injury. (II Webster's Works, p. 393.)

Liberty consists in the ability to do what one caught to desire and in not being forced to do
what one ought not do desire. (Montesque, spirit of the Laws.)

Even liberty itself, the greatest of all rights, is no unrestricted license to ac according to one's
own will. It is only freedom from restraint under conditions essential to the equal enjoyment
of the same right by others. (Field, J., in Crowley vs. Christensen [1890], 137 U.S., 86.)

Liberty does not import "an absolute right in each person to be, at all times and in all
circumstances, wholly freed from restraint. There are manifold restraints to which every
person is necessarily subject for the common good. On any other basis, organized society
could not exist with safety to its members. Society based on the rule that each one is a law
unto himself would soon be confronted with disorder and anarchy. Real liberty for all could
not exist under the operation of a principle which recognizes the right of each individual
person to use his own, whether in respect of his person or his property, regardless of the
injury that may be done to others . . . There is, of course, a sphere with which the individual
may asserts the supremacy of his own will, and rightfully dispute the authority of any human
government — especially of any free government existing under a written Constitution — to
interfere with the exercise of that will. But it is equally true that in very well-ordered society
charged with the duty of conserving the safety of its members, the rights of the individual in
respect of his liberty may at times, under the pressure of great dangers, be subjected to such
 restraint to be enforced by reasonable regulations, as the safety of the general public may
demand." (Harlan, J., In Jacobson vs. Massachusetts [1905] 197 U.S., 11.)

Liberty is freedom to do right and never wrong; it is ever guided by reason and the upright
and honorable conscience of the individual. (Apolinario Mabini.)

Civil Liberty may be said to mean that measure of freedom which may be enjoyed in a civilized
community, consistently with the peaceful enjoyment of like freedom in others. The right to Liberty
guaranteed by the Constitution includes the right to exist and the right to be free from arbitrary
personal restraint or servitude. The term cannot be dwarfed into mere freedom from physical
restraint of the person of the citizen, but is deemed to embrace the right of man to enjoy the faculties
with which he has been endowed by this Creator, subject only to such restraints as are necessary
for the common welfare. As enunciated in a long array of authorities including epoch-making
decisions of the United States Supreme Court, Liberty includes the right of the citizens to be free to
use his faculties in all lawful ways; to live an work where he will; to earn his livelihood by an lawful
calling; to pursue any avocations, an for that purpose. to enter into all contracts which may be
proper, necessary, and essential to his carrying out these purposes to a successful conclusion. The
chief elements of the guaranty are the right to contract, the right to choose one's employment, the
right to labor, and the right of locomotion.

In general, it may be said that Liberty means the opportunity to do those things which are ordinarily
done by free men. (There can be noted Cummings vs. Missouri [1866], 4 Wall, 277;
Wilkinson vs. Leland [1829], 2 Pet., 627; Williams vs. Fears [1900], 179 U.S., 274;
Allgeyer vs. Louisiana [1896], 165, U.S., 578; State vs. Kreutzberg [1902], 114 Wis., 530. See 6
R.C.L., 258, 261.)

One thought which runs through all these different conceptions of Liberty is plainly apparent. It is
this: "Liberty" as understood in democracies, is not license; it is "Liberty regulated by law." Implied in
the term is restraint by law for the good of the individual and for the greater good of the peace and
order of society and the general well-being. No man can do exactly as he pleases. Every man must
renounce unbridled license. The right of the individual is necessarily subject to reasonable restraint
by general law for the common good. Whenever and wherever the natural rights of citizen would, if
exercises without restraint, deprive other citizens of rights which are also and equally natural, such
assumed rights must yield to the regulation of law. The Liberty of the citizens may be restrained in
the interest of the public health, or of the public order and safety, or otherwise within the proper
scope of the police power. (See Hall vs. Geiger-Jones [1916], 242 U.S., 539; Hardie-Tynes
Manufacturing Co. vs. Cruz [1914], 189 Al., 66.)

None of the rights of the citizen can be taken away except by due process of law. Daniel Webster, in
the course of the argument in the Dartmouth College Case before the United States Supreme Court,
since a classic in forensic literature, said that the meaning of "due process of law" is, that "every
citizen shall hold his life, liberty, property, an immunities under the protection of the general rules
which govern society." To constitute "due process of law," as has been often held, a judicial
proceeding is not always necessary. In some instances, even a hearing and notice are not requisite
a rule which is especially true where much must be left to the discretion of the administrative officers
in applying a law to particular cases. (See McGehee, Due Process of Law, p. 371.) Neither is due
process a stationary and blind sentinel of liberty. "Any legal proceeding enforced by public authority,
whether sanctioned by age and customs, or newly devised in the discretion of the legislative power,
in furtherance of the public good, which regards and preserves these principles of liberty and justice,
must be held to be due process of law." (Hurtado vs. California [1883], 110, U.S., 516.) "Due process
of law" means simply . . . "first, that there shall be a law prescribed in harmony with the general
powers of the legislative department of the Government; second, that this law shall be reasonable in
its operation; third, that it shall be enforced according to the regular methods of procedure
prescribed; and fourth, that it shall be applicable alike to all the citizens of the state or to all of a
class." (U.S. vs. Ling Su Fan [1908], 10 Phil., 104, affirmed on appeal to the United States Supreme
Court. 1) "What is due process of law depends on circumstances. It varies with the subject-matter
and necessities of the situation." (Moyer vs. Peablody [1909], 212 U. S., 82.)

The pledge that no person shall be denied the equal protection of the laws is not infringed by a
statute which is applicable to all of a class. The classification must have a reasonable basis and
cannot be purely arbitrary in nature.

We break off with the foregoing statement, leaving the logical deductions to be made later on.

D. SLAVERY AND INVOLUNTARY SERVITUDE.

The fourth constitutional contention of petitioner relates to the Thirteen Amendment to the United
States Constitution particularly as found in those portions of Philippine Organic Law providing "That
slavery shall not exist in said Islands; nor shall involuntary servitude exist except as a punishment for
crime whereof the party shall have been duly convicted." It is quite possible that the Thirteenth
Amendment, since reaching to "any place subject to" the "jurisdiction" of the United States, has force
in the Philippine. However this may be, the Philippine Legislature has, by adoption, with necessary
modifications, of sections 268 to 271 inclusive of the United States Criminal Code, prescribed the
punishment for these crimes. Slavery and involuntary servitude, together wit their corollary,
peonage, all denote "a condition of enforced, compulsory service of one to another."
(Hodges vs. U.S. [1906], 203 U.S., 1.) The term of broadest scope is possibly involuntary servitude.
It has been applied to any servitude in fact involuntary, no matter under what form such servitude
may have been disguised. (Bailey vs. Alabama [1910], 219 U.S., 219.)

So much for an analysis of those constitutional provisions on which petitioners rely for their freedom.
Next must come a description of the police power under which the State must act if section 2145 is
to be held valid.

E. THE POLICE POWER.

Not attempting to phrase a definition of police power, all that it is necessary to note at this moment is
the farreaching scope of the power, that it has become almost possible to limit its weep, and that
among its purposes is the power to prescribe regulations to promote the health, peace, morals,
education, and good order of the people, and to legislate so as to increase the industries of the
State, develop its resources and add to is wealth and prosperity. (See Barbier vs. Connolly [1884],
113 U.S., 27.) What we are not interested in is the right of the government to restrain liberty by the
exercise of the police power.

"The police power of the State," one court has said, . . . "is a power coextensive with self-protection,
and is not inaptly termed the 'law of overruling necessity.' It may be said to be that inherent and
plenary power in the State which enables it to prohibit all things hurtful to the comfort, safety and
welfare of society." (Lake View vs. Rose Hill Cemetery Co. [1873], 70 Ill., 191.) Carried onward by
the current of legislation, the judiciary rarely attempt to dam the on rushing power of legislative
discretion, provided the purposes of the law do not go beyond the great principles that mean security
for the public welfare or do not arbitrarily interfere with the right of the individual.

The Government of the Philippine Islands has both on reason and authority the right to exercise the
sovereign police power in the promotion of the general welfare and the public interest. "There can be
not doubt that the exercise of the police power of the Philippine Government belongs to the
Legislature and that this power is limited only by the Acts of Congress and those fundamental
principles which lie at the foundation of all republican forms of government." (Churchill and
Tait vs. Rafferty [1915], 32 Phil., 580; U.S. vs. Pompeya [1915], 31 Phil., 245.)

With the foregoing approximation of the applicable basic principles before us, before finally deciding
whether any constitutional provision has indeed been violated by section 2145 of the Administrative
Code, we should endeavor to ascertain the intention of the Legislature in enacting this section. If
legally possible, such legislative intention should be effectuated.

F. LEGISLATIVE INTENT.

The preamble of the resolution of the provincial board of Mindoro which set apart the Tigbao
reservation, it will be remembered, assigned as reasons fort the action, the following: (1) The failure
of former attempts for the advancement of the non-Christian people of the province; and (2) the only
successfully method for educating the Manguianes was to oblige them to live in a permanent
settlement. The Solicitor-General adds the following; (3) The protection of the Manguianes; (4) the
protection of the public forests in which they roam; (5) the necessity of introducing civilized customs
among the Manguianes.

The present Secretary of the Interior says of the Tigbao reservation and of the motives for its
selection, the following:

To inform himself of the conditions of those Manguianes who were taken together to Tigbao,
the Secretary of the Interior on June 10 to 13, 1918, made a trip to the place. There he found
that the site selected is a good one; that creditable progress has been made in the clearing
of forests, construction of buildings, etc., that there appears to be encouraging reaction by
the boys to the work of the school the requirements of which they appear to meet with
enthusiastic interest after the first weeks which are necessarily a somewhat trying period for
children wholly unaccustomed to orderly behaviour and habit of life. He also gathered the
impression that the results obtained during the period of less than one year since the
beginning of the institution definitely justify its continuance and development.

Of course, there were many who were protesting against that segregation. Such was
naturally to be expected. But the Secretary of the Interior, upon his return to Manila, made
the following statement to the press:

"It is not deemed wise to abandon the present policy over those who prefer to live a
nomadic life and evade the influence of civilization. The Government will follow its
policy to organize them into political communities and to educate their children with
the object of making them useful citizens of this country. To permit them to live a
wayfaring life will ultimately result in a burden to the state and on account of their
ignorance, they will commit crimes and make depredation, or if not they will be
subject to involuntary servitude by those who may want to abuse them."

The Secretary of the Interior, who is the official charged with the supervision of all the non-Christian
people, has adopted as the polaris of his administration — "the advancement of the non-Christian
elements of our population to equality and unification with the highly civilized Christian inhabitants."
This is carried on by the adoption of the following measures:

(a) Pursuance of the closer settlement policy whereby people of seminomadic race are
induced to leave their wild habitat and settle in organized communities.
 (b) The extension of the public school system and the system of public health throughout the
regions inhabited by the non-Christian people.

(c) The extention of public works throughout the Mohammedan regions to facilitate their
development and the extention of government control.

(d) Construction of roads and trials between one place and another among non-Christians, to
promote social and commercial intercourse and maintain amicable relations among them
and with the Christian people.

(e) Pursuance of the development of natural economic resources, especially agriculture.

( f ) The encouragement of immigration into, and of the investment of private capital in, the
fertile regions of Mindanao and Sulu.

The Secretary adds:

To attain the end desired, work of a civilizing influence have been continued among the non-
Christian people. These people are being taught and guided to improve their living conditions
in order that they may fully appreciate the benefits of civilization. Those of them who are still
given to nomadic habits are being persuaded to abandon their wild habitat and settle in
organized settlements. They are being made to understand that it is the purpose of the
Government to organize them politically into fixed and per manent communities, thus
bringing them under the control of the Government, to aid them to live and work, protect
them from involuntary servitude and abuse, educate their children, and show them the
advantages of leading a civilized life with their civilized brothers. In short, they are being
impressed with the purposes and objectives of the Government of leading them to economic,
social, and political equality, and unification with the more highly civilized inhabitants of the
country. (See Report of the Department for 1917.)

The fundamental objective of governmental policy is to establish friendly relations with the so-called
non-Christians, and to promote their educational, agricultural, industrial, and economic development
and advancement in civilization. (Note Acts Nos. 2208, 2404, 2444.) Act No. 2674 in reestablishing
the Bureau of non-Christian Tribes, defines the aim of the Government towards the non-Christian
people in the following unequivocal terms:

It shall be the duty of the Bureau of non-Christian Tribes to continue the work for
advancement and liberty in favor of the region inhabited by non-Christian Filipinos and foster
by all adequate means and in a systematical, rapid, and complete manner the moral,
material, economic, social, and political development of those regions, always having in view
the aim of rendering permanent the mutual intelligence between, and complete fusion of, all
the Christian and non-Christian elements populating the provinces of the Archipelago. (Sec.
3.)

May the Manguianes not be considered, as are the Indians in the United States, proper wards of the
Filipino people? By the fostering care of a wise Government, may not these unfortunates advance in
the "habits and arts of civilization?" Would it be advisable for the courts to intrude upon a plan,
carefully formulated, and apparently working out for the ultimate good of these people?

In so far as the Manguianes themselves are concerned, the purpose of the Government is evident.
Here, we have on the Island of Mindoro, the Manguianes, leading a nomadic life, making
depredations on their more fortunate neighbors, uneducated in the ways of civilization, and doing
nothing for the advancement of the Philippine Islands. What the Government wished to do by
bringing than into a reservation was to gather together the children for educational purposes, and to
improve the health and morals — was in fine, to begin the process of civilization. this method was
termed in Spanish times, "bringing under the bells." The same idea adapted to the existing situation,
has been followed with reference to the Manguianes and other peoples of the same class, because
it required, if they are to be improved, that they be gathered together. On these few reservations
there live under restraint in some cases, and in other instances voluntarily, a few thousands of the
uncivilized people. Segregation really constitutes protection for the manguianes.

Theoretically, one may assert that all men are created free and equal. Practically, we know that the
axiom is not precisely accurate. The Manguianes, for instance, are not free, as civilized men are
free, and they are not the equals of their more fortunate brothers. True, indeed, they are citizens,
with many but not all the rights which citizenship implies. And true, indeed, they are Filipinos. But
just as surely, the Manguianes are citizens of a low degree of intelligence, and Filipinos who are a
drag upon the progress of the State.

In so far as the relation of the Manguianes to the State is concerned, the purposes of the Legislature
in enacting the law, and of the executive branch in enforcing it, are again plain. Settlers in Mindoro
must have their crops and persons protected from predatory men, or they will leave the country. It is
no argument to say that such crimes are punished by the Penal Code, because these penalties are
imposed after commission of the offense and not before. If immigrants are to be encouraged to
develop the resources of the great Islands of Mindoro, and its, as yet, unproductive regions, the
Government must be in a position to guarantee peace and order.

Waste lands do not produce wealth. Waste people do not advance the interest of the State. Illiteracy
and thriftlessness are not conducive to homogeneity. The State to protect itself from destruction
must prod on the laggard and the sluggard. The great law of overwhelming necessity is all
convincing.

To quote again from the instructive memorandum of the Secretary of the Interior:

Living a nomadic and a wayfaring life and evading the influence of civilization, they (the
manguianes) are engaged in the works of destruction — burning and destroying the forests
and making illegal caiñgins thereon. Not bringing any benefit to the State but instead injuring
and damaging its interests, what will ultimately become of these people with the sort of
liberty they wish to preserve and for which they are now fighting in court? They will ultimately
become a heavy burden to the State and on account of their ignorance they will commit
crimes and make depredations, or if not they will be subjected to involuntary servitude by
those who may want to abuse them.

There is no doubt in my mind that this people a right conception of liberty and does not
practice liberty in a rightful way. They understand liberty as the right to do anything they will
— going from one place to another in the mountains, burning and destroying forests and
making illegal caiñgins thereon.

Not knowing what true liberty is and not practising the same rightfully, how can they allege
that they are being deprived thereof without due process of law?

xxx           xxx           xxx

But does the Constitutional guaranty that 'no person shall be deprived of his liberty without
due process of law' apply to a class of persons who do not have a correct idea of what liberty
is and do not practise liberty in a rightful way?

To say that it does will mean to sanction and defend an erroneous idea of such class of
persons as to what liberty is. It will mean, in the case at bar, that the Government should not
adopt any measures looking to the welfare and advancement of the class of persons in
question. It will mean that this people should be let along in the mountains and in a
permanent state of savagery without even the remotest hope of coming to understand liberty
in its true and noble sense.

In dealing with the backward population, like the Manguianes, the Government has been
placed in the alternative of either letting them alone or guiding them in the path of civilization.
The latter measure was adopted as the one more in accord with humanity and with national
conscience.

xxx           xxx           xxx

The national legislation on the subject of non-Christian people has tended more and more
towards the education and civilization of such people and fitting them to be citizens. The
progress of those people under the tutelage of the Government is indeed encouraging and
the signs of the times point to a day which is not far distant when they will become useful
citizens. In the light of what has already been accomplished which has been winning the
gratitude of most of the backward people, shall we give up the noble work simply because a
certain element, believing that their personal interests would be injured by such a measure
has come forward and challenged the authority of the Government to lead this people in the
pat of civilization? Shall we, after expending sweat, treasure, and even blood only to redeem
this people from the claws of ignorance and superstition, now willingly retire because there
has been erroneously invoked in their favor that Constitutional guaranty that no person shall
be deprived of his liberty without due process of law? To allow them to successfully invoke
that Constitutional guaranty at this time will leave the Government without recourse to pursue
the works of civilizing them and making them useful citizens. They will thus left in a
permanent state of savagery and become a vulnerable point to attack by those who doubt,
nay challenge, the ability of the nation to deal with our backward brothers.

The manguianes in question have been directed to live together at Tigbao. There they are
being taught and guided to improve their living conditions. They are being made to
understand that they object of the government is to organize them politically into fixed and
permanent communities. They are being aided to live and work. Their children are being
educated in a school especially established for them. In short, everything is being done from
them in order that their advancement in civilization and material prosperity may be assured.
Certainly their living together in Tigbao does not make them slaves or put them in a condition
compelled to do services for another. They do not work for anybody but for themselves.
There is, therefore, no involuntary servitude.

But they are compelled to live there and prohibited from emigrating to some other places
under penalty of imprisonment. Attention in this connection is invited to the fact that this
people, living a nomadic and wayfaring life, do not have permanent individual property. They
move from one place to another as the conditions of living warrants, and the entire space
where they are roving about is the property of the nation, the greater part being lands of
public domain. Wandering from one place to another on the public lands, why can not the
government adopt a measure to concentrate them in a certain fixed place on the public
 lands, instead of permitting them to roam all over the entire territory? This measure is
necessary both in the interest of the public as owner of the lands about which they are roving
and for the proper accomplishment of the purposes and objectives of the government. For as
people accustomed to nomadic habit, they will always long to return to the mountains and
follow a wayfaring life, and unless a penalty is provinced for, you can not make them live
together and the noble intention of the Government of organizing them politically will come to
naught.

G. APPLICATION AND CONCLUSION.

Our exhaustive study should have left us in a position to answer specific objections and to reach a
general conclusion.

In the first place, it is argued that the citizen has the right, generally speaking, to go where he
pleases. Could be not, however, be kept away from certain localities ? To furnish an example from
the Indian legislation. The early Act of Congress of 1802 (2 U.S. Stat. at L., p. 141) Indian
reservation. Those citizens certainly did not possess absolute freedom of locomotion. Again the
same law provided for the apprehension of marauding Indians. Without any doubt, this law and other
similar were accepted and followed time and again without question.

It is said that, if we hold this section to be constitutional, we leave this weak and defenseless people
confined as in a prison at the mercy of unscrupulous official. What, it is asked, would be the remedy
of any oppressed Manguian? The answer would naturally be that the official into whose hands are
given the enforcement of the law would have little or not motive to oppress these people; on the
contrary, the presumption would all be that they would endeavor to carry out the purposes of the law
intelligently and patriotically. If, indeed, they did ill-treat any person thus confined, there always
exists the power of removal in the hands of superior officers, and the courts are always open for a
redress of grievances. When, however, only the validity of the law is generally challenged and no
particular case of oppression is called to the attention of the courts, it would seems that the Judiciary
should not unnecessarily hamper the Government in the accomplishment of its laudable purpose.

The question is above all one of sociology. How far, consistently with freedom, may the right and
liberties of the individual members of society be subordinated to the will of the Government? It is a
question which has assailed the very existence of government from the beginning of time. Now
purely an ethical or philosophical subject, nor now to be decided by force, it has been transferred to
the peaceful forum of the Judiciary. In resolving such an issue, the Judiciary must realize that the
very existence of government renders imperatives a power to restrain the individual to some extent,
dependent, of course, on the necessities of the class attempted to be benefited. As to the particular
degree to which the Legislature and the Executive can go in interfering with the rights of the citizen,
this is, and for a along time to come will be, impossible for the courts to determine.

The doctrines of laissez faire and of unrestricted freedom of the individual, as axioms of economics
and political theory, are of the past. The modern period has shown as widespread belief in the
amplest possible demonstration of governmental activity. The courts unfortunately have sometimes
seemed to trial after the other two branches of the government in this progressive march.

Considered, therefore, purely as an exercise of the police power, the courts cannot fairly say that the
Legislature has exceeded its rightful authority. it is, indeed, an unusual exercise of that power. But a
great malady requires an equally drastic remedy.

Further, one cannot hold that the liberty of the citizen is unduly interfered without when the degree of
civilization of the Manguianes is considered. They are restrained for their own good and the general
good of the Philippines. Nor can one say that due process of law has not been followed. To go back
to our definition of due process of law and equal protection of the law, there exists a law ; the law
seems to be reasonable; it is enforced according to the regular methods of procedure prescribed;
and it applies alike to all of a class.

As a point which has been left for the end of this decision and which, in case of doubt, would lead to
the determination that section 2145 is valid. it the attitude which the courts should assume towards
the settled policy of the Government. In a late decision with which we are in full accord,
Gambles vs. Vanderbilt University (200 Southwestern Reporter, 510) the Chief Justice of the
Supreme Court of Tennessee writes:

We can seen objection to the application of public policy as a ratio decidendi. Every really new
question that comes before the courts is, in the last analysis, determined on that theory, when not
determined by differentiation of the principle of a prior case or line of cases, or by the aid of
analogies furnished by such prior case. In balancing conflicting solutions, that one is perceived to tip
the scales which the court believes will best promote the public welfare in its probable operation as a
general rule or principle. But public policy is not a thing inflexible. No court is wise enough to forecast
its influence in all possible contingencies. Distinctions must be made from time to time as sound
reason and a true sense of justice may dictate."

Our attempt at giving a brief history of the Philippines with reference to the so-called non-Christians
has been in vain, if we fail to realize that a consistent governmental policy has been effective in the
Philippines from early days to the present. The idea to unify the people of the Philippines so that
they may approach the highest conception of nationality. If all are to be equal before the law, all
must be approximately equal in intelligence. If the Philippines is to be a rich and powerful country,
Mindoro must be populated, and its fertile regions must be developed. The public policy of the
Government of the Philippine Islands is shaped with a view to benefit the Filipino people as a whole.
The Manguianes, in order to fulfill this governmental policy, must be confined for a time, as we have
said, for their own good and the good of the country.

Most cautiously should the power of this court to overrule the judgment of the Philippine Legislature,
a coordinate branch, be exercised. The whole tendency of the best considered case is toward non-
interference on the part of the courts whenever political ideas are the moving consideration. Justice
Holmes, in one of the aphorisms for which he is justly famous, said that "constitutional law, like other
mortal contrivances, has to take some chances." (Blinn vs. Nelson [1911], 222 U.S., 1.) If in the final
decision of the many grave questions which this case presents, the courts must take "a chance," it
should be with a view to upholding the law, with a view to the effectuation of the general
governmental policy, and with a view to the court's performing its duty in no narrow and bigoted
sense, but with that broad conception which will make the courts as progressive and effective a force
as are the other departments of the Government.

We are of the opinion that action pursuant to section 2145 of the Administrative Code does not
deprive a person of his liberty without due process of law and does not deny to him the equal
protection of the laws, and that confinement in reservations in accordance with said section does not
constitute slavery and involuntary servitude. We are further of the opinion that section 2145 of the
Administrative Code is a legitimate exertion of the police power, somewhat analogous to the Indian
policy of the United States. Section 2145 of the Administrative Code of 1917 is constitutional.

Petitioners are not unlawfully imprisoned or restrained of their liberty. Habeas corpus can, therefore,
not issue. This is the true ruling of the court. Costs shall be taxes against petitioners. So ordered.

Arellano, C.J., Torres and Avanceña, JJ., concur.

Separate Opinions

CARSON, J., concurring:

I fully concur in the reasoning and the conclusions of Justice Malcolm as set forth in the prevailing,
opinion.

The words "non-Christian' have a clear, definite and well settled signification when used in the
Philippine statute-book as a descriptive adjective, applied to "tribes," "people," or "inhabitants,"
dwelling in more or less remote districts and provinces throughout the Islands.

Justice Malcolm, as I think, correctly finds that these words, as used in this connection in our statute-
book, denote the 'low grace of civilization" of the individuals included in the class to which they are
applied. To this I would add that the tests for the determination of the fact that an individual or tribes
is, or is not of the "non-Christian" are, and throughout the period of American occupation always
have been, "the mode of life, the degree of advancement in civilization, and connection or lack of
connection with some civilized community." (Cf. letter of Collector of Internal Revenue dated
September 17, 1910, and set out in the principal opinion.)

The legislative and administrative history of the Philippine Islands clearly discloses that the standard
of civilization to which a specific tribe must be found to have advanced, to justify its removal from the
class embraces with the descriptive term "non-Christian," as that term is used in the Philippine
statute-book, is that degree of civilization which results in a mode of life within the tribe, such that it
is feasible and practicable to extend to, and enforce upon its membership the general laws and
regulations, administrative, legislative, and judicial, which control the conduct of the admitted
civilized inhabitants of the Islands; a made of life, furthermore, which does not find expression in
tribal customs or practices which tend to brutalize or debauch the members of the tribe indulging in
such customs or practices, or to expose to loss or peril the lives or property of those who may be
brought in contact with members of the tribe.

So the standard of civilization to which any given number or group of inhabitants of particular
province in these Islands, or any individual member of such a group, must be found to have
advanced, in order to remove such group or individual from the class embraced within the statutory
description of "non-Christian," is that degree of civilization which would naturally and normally result
in the withdrawal by such persons of permanent allegiance or adherence to a "non-Christian" tribe,
had they at any time adhered to or maintained allegiance to such a tribe; and which would qualify
them whether they reside within or beyond the habitat of a "non-Christian" tribe, not only to maintain
a mode of life independent of a apart from that maintain by such tribe, but a mode of life as would
not be inimical to the lives or property or general welfare of the civilized inhabitants of the Islands
with whom they are brought in contact.

The contention that, in this particular case, and without challenging the validity of the statute, the writ
should issue because of the failure to give these petitioners, as well as the rest of the fifteen
thousand Manguianes affected by the reconcentration order, an opportunity to be heard before any
attempt was made to enforce it, begs the question and is, of course, tantamount to a contention that
there is no authority in law for the issuance of such an order.

If the fifteen thousand manguianes affected by the order complained of had attained that degree of
civilization which would have made it practicable to serve notice upon, and give an opportunity for a
real hearing, to all the members of the tribe affected by the order, it may well be doubted whether the
provincial board and the Secretary of the Interior would have been justified in its enforcement By
what proceeding known to the law, or to be specially adopted in a particular case, could the offices
of any province provide for a genuine hearing upon a proposal to issue a reconcentration order upon
a head-hunting tribe in the north of the Island of Luzon; or upon one of the nomadic tribes
whose habitat is in the mountain fastnesses of Mindanao, and whose individual members have no
fixed or known place of residence, or upon the fifteen thousand Manguianes roaming in the wilds of
Mindoro.

Of course, friendly headmen or chief might and, as a rule, should be consulted, after the practice in
the United States when tribes or groups of American Indians have been placed upon reservations;
but since non-Christian head men and chiefs in the Philippines have no lawful authority to bind their
acts or their consent, the objection based on lack of a hearing, would have the same force whether
the issuance of a reconcentration order was or was not preceded by a pow-wow of this kind.

The truth of the mater is that the power to provide for the issuance of such orders rests upon
analogous principles to those upon which the liberty and freedom or action of children and persons
of unsound minds is restrained, without consulting their wishes, but for their own good and the
general welfare. The power rests upon necessity, that "great master of all things," and is properly
exercised only where certain individuals or groups of individual are found to be of such a low grade
of civilization that their own wishes cannot be permitted to determine their mode of life or place of
residence.

The status of the non-Christian inhabitants of these Islands, and the special and necessarily paternal
attitude assume toward them by the Insular Government is well illustrated by the following provisions
found in the Administrative Code of 1917:

SEC. 705. Special duties and purposes of Bureau (of non-Christian tribes). — It shall be the
duty of the Bureau of non-Christian tribes to continue the work for advancement and liberty
in favor of the regions inhabited by non-Christian Filipinos and to foster by all adequate
means and in a systematic, rapid, and completely manner the moral, material, economic,
social and political development of those regions, always having in view the aim of rendering
permanent the mutual intelligence between and complete fusion of all the Christian and non-
Christian elements populating the provinces of the Archipelago.

SEC. 2116. Township and settlement fund. — There shall be maintained in the provincial
treasuries of the respective specially organized provinces a special fund to be known as the
township and settlement fund, which shall be available, exclusively, for expenditures for the
benefit of the townships and settlements of the province, and non-Christian inhabitants of the
province, upon approval of the Secretary of the Interior.

As I understand it, the case at bar does not raise any real question as to the jurisdiction of the courts
of these Islands in habeas corpus proceedings, to review the action of the administrative authorities
in the enforcement of reconcentration orders issued, under authority of section 2145 of the
Administrative Code, against a petitioner challenging the alleged fact that he is a "non-Christian" as
that term is used in the statute. I, therefore, express no opinion on that question at this time.

JOHNSON, J., dissenting:
I dissent. The petitioners were deprived of their liberty without a hearing. That fact is not denied. I
cannot give my consent to any act which deprives the humblest citizen of his just liberty without a
hearing, whether he be a Christian or non-Christian. All persons in the Philippine Islands are entitled
to a hearing, at least, before they are deprived of their liberty.

MOIR, J., dissenting:

I dissent.

I realize that a dissenting opinion carries little weight, but may sense of justice will not permit me to
let this decision go on record without expressing may strong dissent from the opinion of Justice
Malcolm, concurred in by a majority of the court. I shall not attempt to analyze the opinion or to go
into the question in detail. I shall simply state, as briefly as may be, the legal and human side of the
case as it presents itself to my mind.

The facts are that one Rubi and various other Manguianes in the Province of Mindoro were ordered
by the Provincial governor of Mindoro to remove their residence from their native habitat and to
establish themselves on a reservation at Tigbao in the Province of Mindoro and to remain there, or
be punished by imprisonment if they escaped. This reservation, as appears from the resolution of
the provincial board, extends over an area of 800 hectares of land, which is approximately 2,000
acres, on which about three hundred manguianes are confined. One of the Manguianes, Dabalos,
escaped from the reservation and was taken in hand by the provincial sheriff and placed in prision at
Calapan, solely because he escaped from the reservation. The Manguianes used out a writ
of habeas corpus in this court, alleging that they are deprived of their liberty in violation of law.

The Solicitor-General of the Philippine Islands makes return to the writ copied in the majority opinion
which states that the provincial governor of Mindoro with the prior approval of his act by the
Department Secretary ordered the placing of the petitioners and others on a reservation.

The manguianes, it is stated on page 694 of the majority opinion, "are very low in culture. They have
considerable Negrito blood and have not advanced beyond the Negritos in civilization. They are
peaceful, timid, primitive, seminomadic people. They number approximately 15,000 (?). The
manguianes have shown no desire for community life, and, as indicated in the preamble to Act No.
547, have no progressed sufficiently in civilization to make it practicable to bring them under any for
of municipal government."

It may be well to add that the last P.I. Census (1903) shows that the Island of Mindoro (not including
smaller islands which together make the Province of Mindoro) has an area of 3,851 square miles
and a populations of 28, 361 of which 7, 369 are wild or uncivilized tribes (Manguianes). This
appears to be the total Mangyan population of the province. The total population was less than
seven to the mile (Vol. 2, P.I. Census, pp. 30 and 407).

The Island is fertile, heavily wooded and well watered.

It has no savage population, but it is sparsely settled by Christian Filipinos along the coast and by
Manguianes.
The Manguianes roamed its mountains and valleys, fishing and hunting at will long before
Magallanes [Magellan] anchored his boats in the water of Cebu. They have made little or no
progress in the ways of civilization. "They are a peaceful, timid, primitive, seminomadic people,"
whom the Government of the Philippines Islands would bring under the beneficient influence of
civilization and progress.

The law provides for it in section 2145 of the Administrative Code, and for those who like Dadalos do
not take kindly to the ways provided for civilizing them section 2759 provides the punishment.

The attorney for the petitioners has raised various constitutional questions, but only the fundamental
one will be considered by me. It is that the sections of the Administrative Code, 2145 and 2759,
quoted in the majority opinion, are in violation of the first paragraph of section 3 of the Act of
Congress of August 29, 1916, which reads as follows:

That no law shall be enacted in said Islands which shall deprive any person of life, liberty or
property without due process of law, or deny to any person therein the equal protection of
the laws.

It is not necessary to argue that a Mangyan is one of the persons protected by that provision.

The Attorney-General argues that the treatment provided for the Manguianes is similar to that
accorded the Indians in the United States, and reference is made all through the court's decision to
the decisions of the United States Supreme Court with reference to the Indians. It is not considered
necessary to go into these cases for the simple reason that all the Indians nations in the United
States were considered as separate nations and all acts taken in regard to them were the result of
separate treaties made by the United States Government with the Indian nations, and, incompliance
with these treaties, reservations were set apart for them on which they lived and were protected form
intrusion and molestation by white men. Some these reservations were larger than the Islands of
Luzon, and they were not measured in hectares but in thousands of square miles.

The Manguianes are not a separate state. They have no treaty with the Government of the
Philippine Islands by which they have agreed to live within a certain district where they are accorded
exclusive rights. They are citizens of the Philippine Islands. Legally they are Filipinos. They are
entitled to all the rights and privileges of any other citizen of this country. And when the provincial
governor of the Province of Mindoro attempted to take them from their native habitat and to hold
them on the little reservation of about 800 hectares, he deprived them of their rights and their liberty
without due process of law, and they were denied the equal protection of the law.

The majority opinion says "they are restrained for their own good and the general good of the
Philippines."

They are to be made to accept the civilization of the more advanced Filipinos whether they want it or
not. They are backward and deficient in culture and must be moved from their homes, however
humble they may be and "bought under the bells" and made to stay on a reservation.

Are these petitioners charged with any crime? There is no mention in the return of the Solicitor-
General of the Philippine Islands of any crime having been committed by these "peacefully, timid,
primitive, semi-nomadic people."

A memorandum of the Secretary of the Interior of the Philippine Islands is copied in extenso in the
majority opinion, and from it I gather the nature of their offense which is that —
 Living a nomadic and wayfaring life and evading the influence of civilization, they (the
manguianes) are engaged in the works of destruction — burning and destroying the forests
and making illegal caiñgins thereon. No bringing any benefit to the State but, instead,
injuring and damaging its interests, what will ultimately become of those people with the sort
of liberty they wish to preserve and for which they are not fighting in court? They will
ultimately become a heavy burden to the State and, on account of their ignorance, they will
commit crimes and make depredations, or if not they will be subjected to involuntary
servitude by those who may want to abuse them.

There is no doubt in my mind that this people has not a right conception of liberty and does
not practice liberty in a rightful way. They understand liberty as the right to do anything they
will — going from one place to another in the mountains, burning and destroying forests and
making illegal caiñgins thereon.

Not knowing what true liberty is and not practising the same rightfully, how can they are
being deprived thereof without due process of law?

xxx           xxx           xxx

But does the constitutional guaranty that "no person shall be deprived of his liberty without
due process of law" apply to a class of persons who do not have a correct idea of what
liberty is and do not practise liberty in a rightful way?

To say that it does will mean to sanction and defend an erroneous idea of such class of
persons as to what liberty is. It will mean, in the case at bar, that the Government should not
adopt any measures looking to the welfare and advancement of the class of persons in
question. It will mean that this people be let alone in the mountains and in a permanent state
of savagery without even the remotest hope of coming to understand liberty in its true and
noble sense.

In dealing with the backward population, like the Manguianes, the Government has been
placed in the alternative of either letting them alone or guiding them in the path of civilization.
The latter measure was adopted as the one more in accord with humanity and with national
conscience.

xxx           xxx           xxx

The national legislation on the subject of non-Christian people has tended more and more
towards the education and civilization of such people and fitting them to be citizens.

There appear to be two intimations or charges in this memorandum; one is that the Manguianes
destroy the forest by making a caiñgin. What is a "caiñgin?" Simply this. These people move their
camp or place of abode frequently and when they do move to a new place, it is necessary to clear
the land in order to plant corn and camotes (sweet potatoes) and they cut down the smaller trees
and burn these around the larger ones, killing them, so that they can plant their crops. The fires
never spread in the tropical undergrowth of an island like Mindoro, but the trees within
the caiñgin are killed and crops are planted and harvested. This land may be abandoned later on —
due to superstition, to a lack of game in the neighborhood, to poor crops from exhausted fertility, or
to a natural desire to move on.
Granting that the Manguianes do make caiñgins or clear lands in spots and then abandon them for
the more fertile lands, which every man knows to be just over the hills, we cannot see that they are
committing such a great abuse as to justify incarcerating them on a small tract of land — for
incarceration it is and nothing less.

The second intimation or charge is that "they will become a heavy burden to the state and on
account of their ignorance they will commit crimes and make depredations, or if not they will be
subjected to involuntary servitude by those who want to abuse them." They have never been a
burden to the state and never will be. They have not committed crimes and, when they do, let the
law punish them." The authorities are anticipating too much from these "peaceful, timid, primitive,
semi-nomadic people." Their history does not demonstrate that we must expect them to commit
crimes and jail them to prevent the possibility. But the Secretary says "they will be subjected to
involuntary servitude by those want to abuse them." Are they more liable to be subjected to
involuntary servitude when left free to roam their native hills and gain a livelihood as they have been
accustomed to for hundreds of years, than they will be if closely confined on a narrow reservation
from which they may not escape without facing a term in jail? Is not more likely that they will be glad
to exchange their "freedom" on a small reservation for the great boon of binding themselves and
their children to the more fortunate Christian Filipinos who will feed them and clothe them in return of
their services.?

It think it not only probable but almost a certainty that they will be all be subjected to involuntary
personal servitude if their freedom is limited as it has been. How will they live? There may be
persons who are willing to lend them money with which to buy food on the promise that they will
work for them. And if they accept the loan and do not work for the lender we have another law on the
statute books, Act No. 2098, into whose noose they run their necks, and they may be fined not more
than two hundred pesos or imprisonment for not exceeding six months or both, and when the
sentence expires they must again go into debt or starve, and if they do not work will again go to jail,
and this maybe repeated till they are too old to work and are cast adrift.

The manguianes have committed no offenses and are charged with none. It does not appear they
were ever consulted about their reconcentration. It does not appear that they had any hearing or
were allowed to make any defense. It seems they were gathered here and there whenever found by
the authorities of the law and forcibly placed upon the reservation, because they are "non-Christian,"
and because the provincial governor ordered it. Let it be clear there is no discrimination because
of religion. The term "non-Christian" means one who is not a Christian Filipino, but it also means any
of the so-called "wild" or backward tribes of the Philippines. These non-Christian tribes are Moros,
Igorrotes, Bukidnons, Ifugaos, Manguianes and various others, about one millions souls all together.
Some of them, like the Moros, Tinguianes and Ifugaos, have made great progress in civilization. The
have beautiful fields reclaimed by hard labor — they have herds of cattle and horses and some few
of them are well educated. Some of the non-Christians, like the Aetas and the Negritos, are very low
in the scale of civilization, but they are one and all "non-Christians," as the term is used and
understood in law and in fact.

All of them, according to the court's opinion under the present law, may be taken from their homes
and herded on a reservation at the instance of the provincial governor, with the prior approval of the
department head. To state such a monstrous proposition is to show the wickedness and illegality of
the section of the law under which these people are restrained of their liberty. But it is argued that
there is no probability of the department head ever giving his approval to such a crime, but the fact
that he can do it and has done it in the present case in what makes the law unconstitutional. The
arbitrary and unrestricted power to do harm should be the measure by which a law's legality is
tested and not the probability of doing harm.
 It has been said that this is a government of laws and not of men; that there is no arbitrary
body of individuals; that the constitutional principles upon which our government and its
institutions rest do not leave room for the play and action of purely personal and arbitrary
power, but that all in authority are guided and limited by these provisions which the people
have, the through the organic law, declared shall be the measure and scope of all control
exercised over them. In particular the fourteenth amendment, and especially the equal
protection clause, thereof, forbids that the individual shall be subjected to any arbitrary
exercise of the powers of government; it was intended to prohibit, and does prohibit, any
arbitrary deprivation of life or liberty, or arbitrary spoliation of property.

As we have seen, a statute which makes a purely arbitrary or unreasonable classification, or

which singles out any particular individuals or class as the subject of hostile and
discriminating legislation, is clearly unconstitutional as being opposed to the fourteenth
amendment and especially to the equal protection clause thereof. This is a plain case, and
requires no further discussion. (Vol. 4, Encyclopedia of U.S. Supreme Court Reports, p.
366.)

When we consider the nature and the theory of our institutions of government, the principles
upon which they are supposed to rest, and review the history of their development, we are
constrained to conclude that they do not mean to leave room for the play and action of purely
personal and arbitrary power. Sovereignty itself is, of course, not subject to law, for its is the
author and source of law; but in our system, while sovereign powers are delegated to the
agencies of government, sovereignty itself remains with the people, by whom and for whom
all government exists and acts. And the law is the definition and limitation of power. It is,
indeed, quite true, that there must always be lodged somewhere, and in some person or
body, the authority of final decision; and, in many cases of mere administration the
responsibility is purely political, no appeal lying except to the ultimate tribunal of the public
judgment, exercised either in the pressure of opinion or by means of the suffrage. But the
fundamental rights to life, liberty, and the pursuit of happiness, considered as individual
possessions, are secured by those maxims of constitutional law which are the monuments
showing the victorious progress of the race in securing to men the blessings of civilization
under the reign of just and equal laws, so that, in the famous language of Massachusetts Bill
of Rights, the Government of Commonwealth "may be a government of law and not of men."
For the very idea that one man may be compelled to hold his life, or the means of living, or
any material right essential to the enjoyment of life, at the mere will of another, seems to be
intolerable in any country where freedom prevails, as being the essence of slavery itself.
(Yick Wo vs. Hopkins, 118 U.S., 374.)

It is said that the present law is an old Act being substance Act No. 547 of the Philippine
Commission. But it has never been brought before this court for determination of its constitutionality.
No matter how beneficient the motives of the lawmakers if the lawmakers if the law tends to deprive
any man of life, liberty, or property without due process law, it is void.

In may opinion the acts complained of which were taken in conformity with section 2145 of the
Administrative Code not only deprive these Manguianes of their liberty, without due process of law,
but will in all probability deprive them of their life, without due process of law. History teaches that to
take a semi-nomadic tribe from their native fastnesses and to transfer them to the narrow confines of
a reservation is to invite disease an suffering and death. From my long experience in the Islands, I
should say that it would be a crime of title less magnitude to take the Ifugaos from their mountain
homes where they have reclaimed a wilderness and made it a land of beauty and fruitfulness and to
transfer them to the more fertile, unoccupied, malaria infested valleys which they look down upon
from their fields — than it would be to order their decapitation en masse.
There can be no denial that the Ifugaos are "non-Christians," or "wild tribes" and are in exactly the
same category as the Manguianes. If the Manguianes may be so taken from their native habitat and
reconcentrated on a reservation — in effect an open air jail — then so may the Ifugaos, so may the
Tinguianes, who have made more progress than the Ifugaos, and so may the Moros.

There are "non-Christian" in nearly every province in the Philippine Islands. All of the thirty-nine
governors upon the prior approval of the head of the department, have the power under this law to
take the non-Christian inhabitants of their different provinces form their homes and put them on a
reservation for "their own good and the general good of the Philippines," and the court will grant
them no relief. These unfortunate citizens of the Philippine Islands would hold their liberty, and their
lives, may be, subject to the unregulated discretion of the provincial governor.

And who would be safe?

After the reservation is once established might not a provincial governor decide that some political
enemy was a non-Christian, and that he would be safer on the reservation. No matter what his
education and culture, he could have no trial, he could make no defense, the judge of the court
might be in a distant province and not within reach, and the provincial governor's fiat is final.

The case of the United States vs. Crook (Federal Cases 14891), cited in the majority opinion, should
be quoted at length. District Judge Dundy said:

During the fifteen years in which I have been engaged in administering the laws of my
country, I have never been called upon to hear or decide a case that appealed so strongly to
my sympathy as the one now under consideration. On the one side, we have a few of the
remnants of a once numerous and powerful, but now weak, insignificant, unlettered, and
generally despised race; and the other, we have the representative of one of the most
powerful, most enlightened, and most christianized nations of modern times. On the one
side, we have the representatives of this wasted race coming into this national tribunal of
ours, asking for justice and liberty to enable them to adopt our boasted civilization, and to
pursue the arts of peace, which have made us great and happy as a nation; on the other
side, we have this magnificent, if not magnanimous, government, resisting this application
with the determination of sending these people back to the country which is to them less
desirable perpetual imprisonment in their own native land. But I think it is creditable to the
heart and mind of the brave and distinguished officer who is made respondent herein to say
that he has no sort of sympathy in the business in which he is forced by his position to bear a
part so conspicuous; and, so far as I am individually concerned, I think it not improper to say
that, if the strongest possible sympathy could give the relators title to freedom, they would
have been restored to liberty the moment the arguments in their behalf were closed. no
examination or further thought would then have been necessary or expedient. But in a
country where liberty is regulated by law, something more satisfactory and enduring than
mere sympathy must furnish and constitute the rule and basis of judicial action. It follows that
this case must be examined and decided on principles of law, and that unless the relators
are entitled to their discharge under the constitution or laws of the United States, or some
treaty, they must be remanded to the custody of the officer who caused their arrest, to be
returned to the Indian Territory which they left without the consent of the government.

On the 8th of April, 1879, the relators Standing Bear and twenty-five others, during the
session of the court held at that time of Lincoln, presented their petition, duly verified, praying
for the allowance of a writ of habeas corpus and their final discharged from custody
thereunder.
The petition alleges, in substance, that the relators are Indians who have formerly belonged
to the Ponca tribe of Indians now located in the Indian Territory; that they had some time
previously withdrawn from the tribe, and completely severed their tribal relations therewith,
and had adopted the general habits of the whites, and were then endeavoring to maintain
themselves by their own exertions, and without aid or assistance from the general
government; that whilst they were thus engaged, and without being guilty of violating any of
the laws of the United States, they were arrested and restrained of their liberty by order of
the respondent, George Crook.

The writ was issued and served on the respondent on the 8th day of April, and, the distance
between the place where the writ was made returnable and the place where the relators
were confined being more than twenty miles, ten days were alloted in which to make return.

On the 18th of April the writ was returned, and the authority for the arrest and detention is
therein shown. The substance of the return to the writ, and the additional statement since
filed, is that the relators are individual members of, and connected with, the Ponca Tribe of
Indians; that they had fled or escaped from a reservation situated in some place within the
limits of the indian Territory — had departed therefrom without permission from the
government; and, at the request of the secretary of the interior, the general of the army had
issued an order which required the respondent to arrest and return the relators to their tribe
in the Indian Territory, and that, pursuant to the said order, he had caused the relators to be
arrested on the Omaha Indian reservation, and that they were in his custody for the purpose
of being returned to the Indian Territory.

It is claimed upon the one side, and denied upon the other, that the relators had withdrawn
and severed, for all time, their connection with the tribe to which they belonged; and upon
this point alone was there any testimony produced by either party hereto. The other matter
stated in the petition and the return to the writ are conceded to be true; so that the questions
to be determined are purely questions of law.

On the 8th of Mar, 1859, a treaty was made by the United States with the Ponca tribe of
Indians, by which a certain tract of country, north of the Niobrara river and west of the
Missouri, was set apart for the permanent home of the aid Indians, in which the government
agreed to protect them during their good behaviour. But just when or how, or why, or under
what circumstances, the Indians left their reservation in Dakota and went to the Indian
Territory does not appear.

xxx           xxx           xxx

A question of much greater importance remains for consideration, which, when determined,
will be decisive of this whole controversy. This relates to the right of the government to arrest
and hold the relators for a time, for the purpose of being returned to a point in the Indian
Territory from which it is alleged the Indians escaped. I am not vain enough to think that I can
do full justice to a question like the one under consideration. But, as the mater furnishes so
much valuable material for discussion, and so much food for reflection, I shall try to present it
as viewed from my own standpoint, without reference to consequences or criticisms, which,
though not specially invited, will be sure to follow.

xxx           xxx           xxx

On the 15th day of August, 1876, congress passed the general Indian appropriation bill, and
in it we find a provision authorizing the secretary of the interior to use $25,000 for the
 removal of the Poncas to the Indian Territory, and providing them a home therein, with
consent of the tribe. (19 Sta., 192.)

xxx           xxx           xxx

The Poncas lived upon their reservation in southern Dakota, and cultivated a portion of the
same, until two or three years ago, when they removed therefrom, but whether by force or
otherwise does not appear. At all event, we find a portion of them, including the relators,
located at some point in the Indian Territory. There, the testimony seems to show, is where
the trouble commenced. Standing Bear, the principal witness, states that out of five hundred
and eighty-one Indians who went from the reservation in Dakota to the Indian Territory, one
hundred and fifty-eight died within a year or so, and a great proportion of the others were
sick and disabled, caused, in a great measure, no doubt, from change of climate; and to
save himself and the survivors of his wasted family, and the feeble remnant of his little band
of followers, he determined to leave the Indian Territory and return to his old home, where, to
use his own language, "he might live and die in peace, and be buried with his fathers." He
also stated that he informed the agent of their final purpose to leave, never to return, and
that he and his followers had finally, fully, and forever severed his and their connection with
the Ponca tribe of Indians, and had resolved to disband as a tribe, or band of Indians, and to
cut loose from the government, go to work, become self-sustaining, and adopt the habits and
customs of a higher civilization. To accomplish what would seem to be a desirable and
laudable purpose, all who were able to do so went to work to earn a living. The Omaha
Indians, who speak the same language, and with whom many of the Poncas have long
continued to intermarry, gave them employment and ground to cultivate, so as to make them
self-sustaining. And it was when at the Omaha reservation, and when thus employed, that
they were arrested by order of the government, for the purpose of being taken back to the
Indian Territory. They claim to be unable to see the justice, or reason, or wisdom, or
necessity, of removing them by force from their own native plains and blood relations to a
far-off country, in which they can see little but new-made graves opening for their reception.
The land from which they fled in fear has no attractions for them. The love of home and
native land was strong enough in the minds of these people to induce them to brave every
peril to return and live and die where they had been reared. The bones of the dead son of
Standing Bear were not to repose in the land they hoped to be leaving forever, but were
carefully preserved and protected and formed a part of what was to them melancholy
procession homeward. Such instances of parental affections, and such love home and native
land, may be heathen in origin, but it seems to that they are not unlike Christian in principle.

And the court declared that the Indians were illegally held by authority of the United States and in
violation of their right to life, liberty, and the pursuit of happiness, and ordered their release from
custody.

This case is very similarly to the case of Standing Bear and others.

I think this Court should declare that section 2145 and 2759 of the Administrative Code of 1917 are
unconstitutional, null and void, and that the petitioners are illegally restrained of their liberty, and that
they have been denied the equal protection of the law, and order the respondents immediately to
liberate all of the petitioners.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 209287               July 1, 2014

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. 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, 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. SY JUCO 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 CAP A
CITY AS THE SENATE PRESIDENT OF THE PHILIPPINES, Respondents.

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

G.R. No. 209136

MANUELITO R. LUNA, Petitioner,
vs.
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 THE PRESIDENT, Respondents.

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

G.R. No. 209155

ATTY. JOSE MALV AR VILLEGAS, JR., Petitioner,

vs.
THE HONORABLE EXECUTIVE SECRETARY PAQUITO N. OCHOA, JR.; AND THE
SECRETARY OF BUDGET AND MANAGEMENT FLORENCIO B. ABAD, Respondents.
x-----------------------x

G.R. No. 209164

PHILIPPINE CONSTITUTION ASSOCIATION (PHILCONSA), REPRESENTED BY DEAN

FROILAN M. BACUNGAN, BENJAMIN E. DIOKNO AND LEONOR M. BRIONES, Petitioners,
vs.
DEPARTMENT OF BUDGET AND MANAGEMENT AND/OR HON. FLORENCIO B.
ABAD, Respondents.

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

G.R. No. 209260

INTEGRATED BAR OF THE PHILIPPINES (IBP), Petitioner,

vs.
SECRETARY FLORENCIO B. ABAD OF THE DEPARTMENT OF BUDGET AND MANAGEMENT
(DBM), Respondent.

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

G.R. No. 209442

GRECO ANTONIOUS BEDA B. BELGICA; BISHOP REUBEN MABANTE 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 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 DEPARTMENT OF FINANCE, REPRESENTED BY SECRETARY
CESAR V. PURISIMA; AND THE BUREAU OF TREASURY, REPRESENTED BY ROSALIA V. DE
LEON, Respondents.

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

G.R. No. 209517

CONFEDERATION FOR UNITY, RECOGNITION AND ADV AN CEMENT OF GOVERNMENT

EMPLOYEES (COURAGE), 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
(CUENHA); MANUEL BACLAGON, FOR HIMSELF AND AS PRESIDENT OF THE SOCIAL
WELFARE EMPLOYEES ASSOCIATION OF THE PHILIPPINES, DEPARTMENT OF SOCIAL
WELFARE AND DEVELOPMENT CENTRAL OFFICE (SWEAP-DSWD CO); ANTONIA
PASCUAL, FOR HERSELF AND AS NATIONAL PRESIDENT OF THE DEPARTMENT OF
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 MMDA
(KKKMMDA), Petitioners,
vs.
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 MANAGEMENT, Respondents.

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

G.R. No. 209569

VOLUNTEERS AGAINST CRIME AND CORRUPTION (VACC), REPRESENTED BY DANTE L.

JIMENEZ, Petitioner,
vs.
PAQUITO N. OCHOA, EXECUTIVE SECRETARY, AND FLORENCIO B. ABAD, SECRETARY OF
THE DEPARTMENT OF BUDGET AND MANAGEMENT, Respondents.

DECISION

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,  explaining
1

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) unprogrammed funds; (3)
2
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  that the DAP releases had been sourced from
3

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  appropriations that would lapse at the end of the year, unreleased appropriations of slow-
4

moving projects and discontinued projects per zero based budgeting findings;  and (2) the
5

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,  namely: (1) Section
6

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 (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"  – excited the Nation as
7

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),  on October 16, 2013; G.R. No.
8

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

(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 Packet  – containing seven memoranda issued by the DBM through Sec.
11

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 priority projects and expenditures of the Government);
 e. Memorandum for the President dated December 19, 2012 (Proposed Priority
Projects and Expenditures of the Government);

f. Memorandum for the President dated May 20, 2013 (Omnibus Authority to
Consolidate Savings/Unutilized Balances and their Realignment to Fund the
Quarterly Disbursement Acceleration Program); and

g. Memorandum for the President dated September 25, 2013 (Funding for the Task
Force Pablo Rehabilitation Plan).

(2) Second Evidence Packet  – consisting of 15 applications of the DAP, with their
12

corresponding Special Allotment Release Orders (SAROs) and appropriation covers;

(3) Third Evidence Packet  – containing a list and descriptions of 12 projects under the DAP;
13

(4) Fourth Evidence Packet  – identifying the DAP-related portions of the Annual Financial
14

Report (AFR) of the Commission on Audit for 2011 and 2012;

(5) Fifth Evidence Packet  – containing a letter of Department of Transportation and

15

Communications(DOTC) Sec. Joseph Abaya addressed to Sec. Abad recommending the

withdrawal of funds from his agency, inclusive of annexes; and

(6) Sixth Evidence Packet  – a print-out of the Solicitor General’s visual presentation for the
16

January 28, 2014 oral arguments.

On February 5, 2014,  the OSG forwarded the Seventh Evidence Packet,  which listed the sources
17 18

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).

RULING

I.

Procedural Issue:

a) The petitions under Rule 65 are proper remedies

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 is individually set forth hereunder, to wit:

G.R. No. 209135 (Syjuco) Certiorari, Prohibition and Mandamus

G.R. No. 209136 (Luna) Certiorariand Prohibition
G.R. No. 209155 (Villegas) Certiorariand Prohibition
G.R. No. 209164 (PHILCONSA) Certiorariand Prohibition
G.R. No. 209260 (IBP) Prohibition
G.R. No. 209287 (Araullo) Certiorariand Prohibition
G.R. No. 209442 (Belgica) Certiorari
G.R. No. 209517 (COURAGE) Certiorari and Prohibition
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;  that the petitioners lacked legal standing to sue
19

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;  and that even if the petitioners had suffered injury, there were
20

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 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.  However, only the Court is a constitutionally created court, the rest
25

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 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,  Justice Jose
28

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

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.  The Court expounded on the nature and function of the writ of
32

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.  An actual case or controversy, in the words of Belgica v. Executive Secretary Ochoa:
37 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 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."  The concept of legal standing, or locus standi, was particularly
43

discussed in De Castro v. Judicial and Bar Council,  where the Court said:
44

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.

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.  that 46

"[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.  Luna, the petitioner in G.R. No. 209136, cites his additional
48

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 remove the impediment to its addressing and resolving
the serious constitutional questions raised." 50
 II.
Substantive Issues

1.
Overview of the Budget System

An understanding of the Budget System of the Philippines will aid the Court in properly appreciating
and justly resolving the substantive issues.

a) Origin of the Budget System

The term "budget" originated from the Middle English word bouget that had derived from the Latin
word bulga (which means bag or purse). 51

In the Philippine setting, Commonwealth Act (CA) No. 246 (Budget Act) defined "budget" as the
financial program of the National Government for a designated fiscal year, consisting of the
statements of estimated receipts and expenditures for the fiscal year for which it was intended to be
effective based on the results of operations during the preceding fiscal years. The term was given a
different meaning under Republic Act No. 992 (Revised Budget 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.  For a forthright definition, budget
52

should simply be identified as the financial plan of the Government,  or "the master plan of
53

government." 54

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.  To protect the people,
55

the territory and sovereignty of the State, its government must perform vital functions that required
public expenditures. At the beginning, enormous public expenditures were spent for war activities,
preservation of peace and order, security, administration of justice, religion, and supply of limited
goods and services.  In order to finance those expenditures, the State raised revenues through
56

taxes and impositions.  Thus, budgeting became necessary to allocate public revenues for specific
57

government functions.  The State’s budgeting mechanism eventually developed through the years
58

with the growing functions of its government and changes in its market economy.

The Philippine Budget System has been greatly influenced by western public financial institutions.
This is because 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 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 democratic government, namely: (1) to
carry on all government activities under a comprehensive fiscal plan developed, authorized and
executed in accordance with the Constitution, prevailing statutes and the principles of sound public
management; and (2) to provide for the periodic review and disclosure of the budgetary status of the
Government in such detail so that persons entrusted by law with the responsibility as well as the
enlightened citizenry can determine the adequacy of the budget actions taken, authorized or
proposed, as well as the true financial position of the Government. 59

b) Evolution of the Philippine Budget System

The budget process in the Philippines evolved from the early years of the American Regime up to
the passage of the Jones Law in 1916. A Budget Office was created within the Department of
Finance by the Jones Law to 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

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.  EO No. 25,
61

issued by President 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.  CA No. 246,
62

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 framework of the Government’s budgeting
system,  with emphasis on the observance of a "balanced budget" to tie up proposed expenditures
63

with existing revenues.

CA No. 246 governed the budget process until the passage on June 4, 1954 of Republic Act (RA)
No. 992,whereby Congress introduced performance-budgeting to give importance to functions,
projects and activities in terms of expected results.  RA No. 992 also enhanced the role of the
64

Budget Commission as the fiscal arm of the Government. 65

The 1973 Constitution and various presidential decrees directed a series of budgetary reforms that
culminated in 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 Ministry of Budget was later renamed the Office of Budget and Management (OBM) under EO
No. 711. The OBM became the DBM pursuant to EO No. 292 effective on November 24, 1989.

c) The Philippine Budget Cycle 66

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 implementation of the budget during the budget year.

c.1.Budget Preparation 67

The budget preparation phase is commenced through the issuance of a Budget Call by the DBM.
The Budget Call contains budget parameters earlier set by the Development Budget Coordination
Committee (DBCC) as well as policy guidelines and procedures to aid government agencies in the
preparation and submission of their budget proposals. The Budget Call is of two kinds, namely: (1) a
National Budget Call, which is addressed to all agencies, including state universities and colleges;
and (2) a Corporate Budget Call, which is addressed to all government-owned and -controlled
corporations (GOCCs) and government financial institutions (GFIs).

Following the issuance of the Budget Call, the various departments and agencies submit their
respective Agency Budget Proposals to the DBM. To boost citizen participation, the current
administration has tasked the various 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 DBM in scheduled budget
hearings wherein the various departments and agencies are given the opportunity to defend their
budget proposals. DBM bureaus thereafter review the Agency Budget Proposals and come up with
recommendations for the Executive Review Board, comprised by the DBM Secretary and the DBM’s
senior officials. The discussions of the Executive Review Board cover the prioritization of programs
and their corresponding support vis-à-vis the priority agenda of the National Government, and their
implementation.
The DBM next consolidates the recommended agency budgets into the National Expenditure
Program (NEP)and a Budget of Expenditures and Sources of Financing (BESF). The NEP provides
the details of spending for each 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, especially those in line with the National
Government’s development plan. The Staffing Summary provides the staffing complement of each
department and agency, including the number of positions and amounts allocated.

The NEP and BESF are thereafter presented by the DBM and the DBCC to the President and the
Cabinet for further refinements or reprioritization. Once the NEP and the BESF are approved by the
President and the Cabinet, the DBM prepares the budget documents for submission to Congress.
The budget documents consist of: (1) the President’s Budget Message, through which the President
explains the policy framework and budget priorities; (2) the BESF, mandated by Section 22, Article
VII of the Constitution,  which contains the macroeconomic assumptions, public sector context,
68

breakdown of the expenditures and funding sources for the fiscal year and the two previous years;
and (3) the NEP.

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 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.  Current operating expenditures are the purchases of goods and services in
69

current consumption the benefit of which does not extend beyond the fiscal year.  The two70

components of current expenditures are those for personal services (PS), and those for
maintenance and other operating expenses(MOOE).

Public expenditures are also broadly grouped according to their functions into: (1) economic
development expenditures (i.e., expenditures on agriculture and natural resources, transportation
and communications, commerce and industry, and other economic development efforts);  (2) social71

services or social development expenditures (i.e., government outlay on education, public health and
medicare, labor and welfare and others);  (3) general government or general public services
72

expenditures (i.e., expenditures for the general government, legislative services, the administration
of justice, and for pensions and gratuities);  (4) national defense expenditures (i.e., sub-divided into
73

national security expenditures and expenditures for the maintenance of peace and order);  and (5) 74

public debt.75

Public expenditures may further be classified according to the nature of funds, i.e., general fund,
special fund or bond fund. 76

On the other hand, public revenues complement public expenditures and cover all income or
receipts of the government treasury used to support government expenditures. 77

Classical economist Adam Smith categorized public revenues based on two principal sources,
stating: "The revenue which must defray…the necessary expenses of government may be drawn
either, first from some fund which peculiarly belongs to the sovereign or commonwealth, and which
is independent of the revenue of the people, or, secondly, from the revenue of the people."  Adam 78

Smith’s classification relied on the two aspects of the nature of the State: first, the State as a juristic
person with an artificial personality, and, second, the State as a 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
sovereign." Under the second aspect, the State could collect by imposing charges on the revenues
of its subjects in the form of taxes.
79
 In the Philippines, public revenues are generally derived from the following sources, to wit: (1) tax
revenues(i.e., compulsory contributions to finance government activities); 80 (2) capital
revenues(i.e., proceeds from sales of 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 contributions and aids given to the
Government for its operation on specific purposes in the form of money and/or materials, and do not
require any monetary commitment on the part of the recipient);  (4) extraordinary income(i.e.,
82

repayment of loans and advances made by government corporations and local governments and the
receipts and shares in income of the Banko Sentral ng Pilipinas, and other receipts);  and (5) public
83

borrowings(i.e., proceeds of repayable obligations generally with interest from domestic and foreign
creditors of the Government in general, including the National Government and its political
subdivisions).84

More specifically, public revenues are classified as follows: 85

General Income Specific Income

1. Subsidy Income from National 1. Income Taxes
Government 2. Property Taxes
2. Subsidy from Central Office 3. Taxes on Goods and Services
3. Subsidy from Regional 4. Taxes on International Trade and
Office/Staff Bureaus Transactions
4. Income from Government 5. Other Taxes 6.Fines and Penalties-Tax Revenue
Services
7. Other Specific Income
5. Income from Government
Business Operations
6. Sales Revenue
7. Rent Income
8. Insurance Income
9. Dividend Income
10. Interest Income
11. Sale of Confiscated Goods and
Properties
12. Foreign Exchange (FOREX)
Gains
13. Miscellaneous Operating and
Service Income
14. Fines and Penalties-Government
Services and Business Operations
15. Income from Grants and
Donations

c.2. Budget Legislation 86

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.

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 to examine the PAPs of the departments and agencies.
Thereafter, the House of Representatives drafts the General Appropriations Bill (GAB). 87

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.  The President reviews the GAB, and prepares the Veto Message where budget items
90

are subjected to direct veto,  or are identified for conditional implementation.
91

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 passed by the Congress. 92

c.3. Budget Execution 93

With the GAA now in full force and effect, the next step is the implementation of the budget. The
Budget Execution Phase is primarily the function of the DBM, which is tasked to perform the
following procedures, namely: (1) to issue the programs and guidelines for the release of funds; (2)
to prepare an Allotment and Cash Release Program; (3) to release allotments; and (4) to issue
disbursement authorities.

The implementation of the GAA is directed by the guidelines issued by the DBM. Prior to this, the
various 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.

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),  or, individually, by SARO.
94 95
Armed with either the ABM or the SARO, agencies become authorized to incur obligations  on 96

behalf of the Government in order to implement their PAPs. Obligations may be incurred in various
ways, like hiring of personnel, entering into contracts for the supply of goods and services, and using
utilities.

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),  which issuance is based
97

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. Accountability 98

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).

2.

Nature of the DAP as a fiscal plan

a. DAP was a program designed to

promote economic growth

Policy is always a part of every budget and fiscal decision of any Administration.  The national
99

budget the Executive prepares and presents to Congress represents the Administration’s "blueprint
for public policy" and reflects the Government’s goals and strategies.  As such, the national budget
100

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.  Embodied in every national budget is government spending.
101 102

When he assumed office in the middle of 2010, President Aquino made efficiency and transparency
in 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 decelerated government project implementation and payment
schedules.  The World Bank observed that the Philippines’ economic growth could be reduced, and
103

potential growth could be weakened should the Government continue with its underspending and fail
to address the large deficiencies in infrastructure.  The economic situation prevailing in the middle
104
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 investing on high-
impact budgetary PAPs to be funded from the "savings" generated during the year as well as from
unprogrammed funds.  In that respect, the DAP was the product of "plain executive policy-making"
105

to stimulate the economy by way of accelerated spending.  The Administration would thereby
106

accelerate government spending by: (1) streamlining the implementation process through the
clustering of infrastructure projects of the Department of Public Works and Highways (DPWH) and
the Department of Education (DepEd),and (2) front loading PPP-related projects  due for
107

implementation in the following year. 108

Did the stimulus package work?

The March 2012 report of the World Bank,  released after the initial implementation of the DAP,
109

revealed that the DAP was partially successful. The disbursements under the DAP contributed 1.3
percentage points to GDP growth by the fourth quarter of 2011.  The continued implementation of
110

the DAP strengthened growth by 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.  The 112

Government, by spending on public infrastructure, would signify its commitment of ensuring

profitability for prospective investors.  The PAPs funded under the DAP were chosen for this reason
113

based on their: (1) multiplier impact on the economy and infrastructure development; (2) beneficial
effect on the poor; and (3) translation into disbursements.
114

b. History of the implementation of

the DAP, and sources of funds
under the DAP

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

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,  reads:
115

MEMORANDUM FOR THE PRESIDENT

xxxx

SUBJECT: FY 2011 PROPOSED DISBURSEMENT ACCELERATION PROGRAM (PROJECTS

AND SOURCES OF FUNDS)

DATE: OCTOBER 12, 2011

Mr. President, this is to formally confirm your approval of the Disbursement Acceleration Program
totaling ₱72.11 billion. We are already working with all the agencies concerned for the immediate
execution of the projects therein.
A. Fund Sources for the Acceleration Program

Amount
Action
Fund Sources (In million Description
Requested
Php)

FY 2011 30,000 Unreleased Personnel Declare as

Unreleased Services (PS) savings and
Personal appropriations which approve/
Services (PS) will lapse at the end of authorize its use
Appropriations FY 2011 but may be for the 2011
pooled as savings and Disbursement
realigned for priority Acceleration
programs that require Program
immediate funding

FY 2011 482 Unreleased  

Unreleased appropriations (slow
Appropriations moving projects and
programs for
discontinuance)

FY 2010 12,336 Supported by the GFI Approve and

Unprogrammed Dividends authorize its use
Fund for the 2011
Disbursement
Acceleration
Program

FY 2010 21,544 Unreleased With prior

Carryover appropriations (slow approval from
Appropriation moving projects and the President in
programs for November 2010
discontinuance) and to declare as
savings from Zero-based Budgeting savings and with
Initiative authority to use
for priority
projects

FY 2011 Budget 7,748 FY 2011 Agency For information

items for Budget items that can
realignment be realigned within the
agency to fund new fast
disbursing projects
DPWH-3.981 Billion
DA – 2.497 Billion
DOT – 1.000 Billion
DepEd – 270 Million

TOTAL 72.110    

B. Projects in the Disbursement Acceleration Program

(Descriptions of projects attached as Annex A)

GOCCs and GFIs

Agency/Project Allotment
(SARO and NCA Release) (in Million Php)

1. LRTA: Rehabilitation of LRT 1 and 2 1,868

2. NHA: 11,050

a. Resettlement of North Triangle residents to 450

Camarin A7
b. Housing for BFP/BJMP 500
c. On-site development for families living 10,000
along dangerous
d. Relocation sites for informal settlers 100
along Iloilo River and its tributaries

3. PHIL. HEART CENTER: Upgrading of 357

ageing physical plant and medical equipment

4. CREDIT INFO CORP: Establishment of 75

centralized credit information system

5. PIDS: purchase of land to relocate the PIDS 100

office and building construction

6. HGC: Equity infusion for credit insurance 400

and mortgage guaranty operations of HGC

7. PHIC: Obligations incurred (premium 1,496

subsidy for indigent families) in January-June
2010, booked for payment in Jul[y] – Dec
2010. The delay in payment is due to the
delay in the certification of the LGU
counterpart. Without it, the NG is obliged to
pay the full amount.

8. Philpost: Purchase of foreclosed property. 644

Payment of Mandatory Obligations, (GSIS,
PhilHealth, ECC), Franking Privilege

9. BSP: First equity infusion out of Php 40B 10,000

capitalization under the BSP Law

10. PCMC: Capital and Equipment Renovation 280

11. LCOP: 105

a. Pediatric Pulmonary Program
b. Bio-regenerative Technology Program 35
(Stem-Cell Research – subject to legal
70
review and presentation)

12. TIDCORP: NG Equity infusion 570

 TOTAL 26,945

NGAs/LGUs

Agency/Project Allotment
(SARO) Cash
(In Million Requirement
Php) (NCA)

13. DOF-BIR: NPSTAR

centralization of data    
processing and others (To be    
synchronized with GFMIS    
activities) 758 758

14. COA: IT infrastructure

program and hiring of    
additional litigational experts 144 144

15. DND-PAF: On Base Housing

Facilities and Communication    
Equipment 30 30

16. DA: 2,959 2,223

a. Irrigation, FMRs and
Integrated Community Based Multi-Species    
Hatchery and Aquasilvi    
Farming 1,629 1,629
b. Mindanao Rural
Development Project 919 183

c. NIA Agno River Integrated

Irrigation Project 411 411

17. DAR: 1,293 1,293

a. Agrarian Reform
Communities Project 2 1,293 132
b. Landowners Compensation 5,432

18. DBM: Conduct of National

Survey of    
Farmers/Fisherfolks/Ips 625 625

19. DOJ: Operating requirements

of 50 investigation agents and    
15 state attorneys 11 11

20. DOT: Preservation of the Cine

Corregidor Complex 25 25

21. OPAPP: Activities for Peace

Process (PAMANA- Project    
details: budget breakdown,    
implementation plan, and    
conditions on fund release    
attached as Annex B) 1,819 1,819

22. DOST 425 425

a. Establishment of National
Meterological and Climate    
Center 275 275
b. Enhancement of Doppler
Radar Network for National    
Weather Watch, Accurate    
Forecasting and Flood Early    
Warning 190 190

23. DOF-BOC: To settle the

principal obligations with    
PDIC consistent with the    
agreement with the CISS and    
SGS 2,800 2,800

24. OEO-FDCP: Establishment of

the National Film Archive and    
local cinematheques, and other    
local activities 20 20

25. DPWH: Various infrastructure

projects 5,500 5,500

26. DepEd/ERDT/DOST: Thin

Client Cloud Computing    
Project 270 270

27. DOH: Hiring of nurses and

midwives 294 294

28. TESDA: Training Program in

partnership with BPO industry    
and other sectors 1,100 1,100

29. DILG: Performance Challenge

Fund (People Empowered    
Community Driven    
Development with DSWD and    
NAPC) 250 50

30. ARMM: Comprehensive Peace

and Development Intervention 8,592 8,592

31. DOTC-MRT: Purchase of

additional MRT cars 4,500 -

32. LGU Support Fund 6,500 6,500

33. Various Other Local Projects 6,500 6,500

34. Development Assistance to the

 Province of Quezon 750 750

TOTAL 45,165 44,000

C. Summary

  Fund Sources
Identified for Allotments Cash
Approval for Release Requirements for
(In Million Release in FY
Php) 2011

Total 72,110 72,110 70,895

GOCCs 26,895 26,895

NGAs/LGUs 45,165 44,000

For His Excellency’s Consideration

(Sgd.) FLORENCIO B. ABAD

[/] APPROVED

[ ] DISAPPROVED

(Sgd.) H.E. BENIGNO S. AQUINO, III

OCT 12, 2011

The memorandum of October 12, 2011 was followed by another memorandum for the President
dated December 12, 2011  requesting omnibus authority to consolidate the savings and unutilized
116

balances for fiscal year 2011. Pertinent portions of the memorandum of December 12, 2011 read:

MEMORANDUM FOR THE PRESIDENT

xxxx

SUBJECT: Omnibus Authority to Consolidate Savings/Unutilized Balances and its Realignment

DATE: December 12, 2011

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 expenditures.

In addition, Mr. President, this measure will allow us to undertake projects even if their
implementation carries over to 2012 without necessarily impacting on our budget deficit cap next
year.
 BACKGROUND

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 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,  September 4,
117

2012,  December 19, 2012,  May 20, 2013,  and September 25, 2013.  The President apparently
118 119 120 121

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),  reproduced herein as follows:
123

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

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);

• 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

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."  As pointed out in Gonzales v. Raquiza:  ‘"In a strict
124 125

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.  He could adopt a plan like the DAP for the purpose. He could pool
127

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.  In particular, the power to transfer funds can
128

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.

Congress has traditionally allowed much flexibility to the President in allocating funds pursuant to the
GAAs,  particularly when the funds are grouped to form lump sum accounts.  It is assumed that the
129 130

agencies of the Government enjoy more flexibility when the GAAs provide broader appropriation
items.  This flexibility comes in the form of policies that the Executive may adopt during the budget
131

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,  Prof. Louis Fisher, an American constitutional scholar whose
132

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,  viz:
133

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.  Act No. 1902 (An Act authorizing
134

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,  was the first enabling
135

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.  Its Committee on the Budget and Appropriation
137

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.  The clear intention
138

of the Convention was to further restrict, not to liberalize, the power to transfer
appropriations.  Thus, the Committee on the Budget and Appropriation initially considered setting
139

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."  But two members of the Committee
140

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 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:

(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.  The petitioners posit that there
146

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.  They stress that NBC No. 541, by allowing the withdrawn funds to be reissued to
147

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…"

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.  The Executive is expected to faithfully implement the PAPs for which Congress allocated
149

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:

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"  "to fund priority and/or fast-moving
151

programs/projects."  But the fact that the withdrawn allotments could be "[r]eissued for the original
152

programs and projects of the agencies/OUs concerned, from which the allotments were
withdrawn"  supported the conclusion that the PAPs had not yet been finally discontinued or
153

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 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).

The petitioners assert that no law had authorized the withdrawal and transfer of unobligated
allotments and the 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 case of "unmanageable national government budget
deficit" under the GAAs,  thus violating the provisions of the GAAs of 2011, 2012 and 2013
157

prohibiting the retention or deduction of allotments.

158

In contrast, the respondents emphasize that NBC No. 541 adopted a spending, not saving, policy as
a last-ditch 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 to spend funds for political or ideological reasons; and that the
withdrawal of allotments under NBC No. 541 was made pursuant to Section 38, Chapter 5, Book VI
of the Administrative Code, by which the President was granted the authority to suspend or
otherwise stop further expenditure of funds allotted to any agency whenever in his judgment the
public interest so required.

The assertions of the petitioners are upheld. The withdrawal and transfer of unobligated allotments
and the pooling of unreleased appropriations were invalid for being bereft of legal support.
Nonetheless, such withdrawal of unobligated allotments and the retention of appropriated funds
cannot be considered as impoundment.

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

159

the President, for whatever reason, to spend funds made available by Congress. It is the failure to
spend or obligate budget authority of any type." Impoundment under the GAA is understood to mean
the retention or deduction of appropriations. The 2011 GAA authorized impoundment only in case of
unmanageable National Government budget deficit, to wit:

Section 66. Prohibition Against Impoundment of Appropriations. No appropriations authorized under

this Act shall be impounded through retention or deduction, unless in accordance with the rules and
regulations to be issued by the DBM: PROVIDED, That all the funds appropriated for the purposes,
programs, projects and activities 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.

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.

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 2012 and 2013 GAAs contained similar provisions.

The withdrawal of unobligated allotments under the DAP should not be regarded as impoundment
because it entailed only the transfer of funds, not the retention or deduction of appropriations.

Nor could Section 68 of the 2011 GAA (and the similar provisions of the 2012 and 2013 GAAs) be
applicable. They uniformly stated:

Section 68. Prohibition Against Retention/Deduction of Allotment. Fund releases from appropriations
provided in this Act shall be transmitted intact or in full to the office or agency concerned. No
retention or deduction as reserves or overhead shall be made, except as authorized by law, or upon
direction of the President of the Philippines. The COA shall ensure compliance with this provision to
the extent that sub-allotments by agencies to their subordinate offices are in conformity with the
release documents issued by the DBM.

The provision obviously pertained to the retention or deduction of allotments upon their release from
the DBM, which was a different matter altogether. The Court should not expand the meaning of the
provision by applying it to the withdrawal of allotments.

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:

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.

Moreover, the DBM did not suspend or stop further expenditures in accordance with Section 38,
supra, but instead transferred the funds to other PAPs.

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.  This was the mandate of
1âwphi1

Section 28, Chapter IV, Book VI of the Administrative Code, to wit:

Section 28. Reversion of Unexpended Balances of Appropriations, Continuing Appropriations.-

Unexpended balances of appropriations authorized in the General Appropriation Act shall revert to
the unappropriated surplus 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 spent or reverted: provided, further, that
continuing appropriations for current operating expenditures may be 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
realized by an agency during given year to meet non-recurring expenditures in a subsequent year.

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.
The Executive could not circumvent this provision by declaring unreleased appropriations and
unobligated allotments as savings prior to the end of the fiscal year.

b.3. Third Requisite – No funds from

savings could be transferred under
the DAP to augment deficient items
not provided in the GAA

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 size, amount, or degree. 160

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 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 appropriations otherwise authorized in this Act.

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:

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

Of this amount ₱82.5 billion were released in 2011 and ₱54.8 billion in 2012.  Sec. Abad has
162

reported that 9% of the total DAP releases were applied to the PAPs identified by the legislators. 163

The petitioners disagree, however, and insist that the DAP supported the following PAPs that had
not been covered with appropriations in the respective GAAs, namely:

(i) ₱1.5 billion for the Cordillera People’s Liberation Army;

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

(iii) ₱700 million for assistance to Quezon Province; 164

(iv) ₱50 million to ₱100 (million) each to certain senators; 165

(v) ₱10 billion for the relocation of families living along dangerous zones under the National
Housing Authority;

(vi) ₱10 billion and ₱20 billion equity infusion under the Bangko Sentral;
 (vii) ₱5.4 billion landowners’ compensation under the Department of Agrarian Reform;

(viii) ₱8.6 billion for the ARMM comprehensive peace and development program;

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

(x) ₱5 billion for crucial projects like tourism road construction under the Department of
Tourism and the Department of Public Works and Highways;

(xi) ₱1.8 billion for the DAR-DPWH Tulay ng Pangulo;

(xii) ₱1.96 billion for the DOH-DPWH rehabilitation of regional health units; and

(xiii) ₱4 billion for the DepEd-PPP school infrastructure projects. 166

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.  In support of its argument,
167

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

Upon careful review of the documents contained in the seven evidence packets, we conclude that
the "savings" pooled under the DAP were allocated to PAPs that were not covered by any
appropriations in the pertinent GAAs.

For example, the SARO issued on December 22, 2011 for the highly vaunted Disaster Risk,
Exposure, Assessment and Mitigation (DREAM) project under the Department of Science and
Technology (DOST) covered the amount of ₱1.6 Billion,  broken down as follows:
169

APPROPRIATION PARTICULARS AMOUNT

CODE AUTHORIZED

A.03.a.01.a Generation of new knowledge and technologies

and research capability building in priority areas
identified as strategic to National Development
Personnel Services
Maintenance and Other Operating Expenses P 43,504,024
Capital Outlays 1,164,517,589
391,978,387
P 1,600,000,000

the pertinent provision of the 2011 GAA (R.A. No. 10147) showed that Congress had appropriated
only ₱537,910,000 for MOOE, but nothing for personnel services and capital outlays, to wit:

Personnel Maintenance Capital TOTAL

Services and Other Outlays
Operating
Expenditures
III. Operations
 a. Funding Assistance to 177,406,000 1,887,365,000 49,090,000 2,113,861,000
Science
and Technology Activities
1. Central Office 1,554,238,000 1,554,238,000
a. Generation of new
knowledge and
technologies and
research
capability building in
priority areas identified as
strategic to National
Development 537,910,000 537,910,000

Aside from this transfer under the DAP to the DREAM project exceeding by almost 300% the
appropriation by Congress for the program Generation of new knowledge and technologies and
research capability building in priority areas identified as strategic to National Development, the
Executive allotted funds for personnel services 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 2011 GAA. 170

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 fund the PAP. The consequence was that any PAP requiring
expenditure that did not receive any appropriation 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.

In relation to the December 22, 2011 SARO issued to the Philippine Council for Industry, Energy and
Emerging Technology Research and Development (DOST-PCIEETRD)  for Establishment of the
171

Advanced Failure Analysis Laboratory, which reads:

APPROPRIATION PARTICULARS AMOUNT

CODE AUTHORIZED
Development, integration and coordination of the
National Research System for Industry, Energy and
A.02.a
Emerging Technology and Related Fields
Capital Outlays P 300,000,000

the appropriation code and the particulars appearing in the SARO did not correspond to the program
specified in the GAA, whose particulars were Research and Management Services(inclusive of the
following activities: (1) Technological and Economic Assessment for Industry, Energy and Utilities;
(2) Dissemination of Science and Technology Information; and (3) Management of PCIERD
Information System for Industry, Energy and Utilities. 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 broad program
description of Research and Management Services– as appearing in the SARO, it would
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.

In defending the disbursements, however, the OSG contends that the Executive enjoyed sound
discretion in implementing the budget given the generality in the language and the broad policy
objectives identified under the GAAs;  and that the President enjoyed unlimited authority to spend
172

the initial appropriations under his authority to declare and utilize savings,  and in keeping with his
173

duty to faithfully execute the laws.

Although the OSG rightly contends that the Executive was authorized to spend in line with its
mandate to 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 from Congress. Verily, the power to spend the
public wealth resided in Congress, not in the Executive.  Moreover, leaving the spending power of
174

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.  Its power of
176

the purse is touted as the very foundation of its institutional strength,  and underpins "all other
177

legislative decisions and regulating the balance of influence between the legislative and executive
branches of government."  Such enormous power encompasses the capacity to generate money for
178

the Government, to appropriate public funds, and to spend the money.  Pertinently, when it
179

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.  For this purpose, appropriation involves two governing principles, namely: (1) "a
180

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."  To conform with the governing
181

principles, the Executive cannot circumvent the prohibition by Congress of an expenditure for a PAP
by resorting to either public or private funds.  Nor could the Executive transfer appropriated funds
182

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:

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:

Well, as the Constitution provides, the prohibition we felt was on the transfer of appropriations, Your
Honor. 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…(interrupted)

JUSTICE BERSAMIN:

So your position as Secretary of Budget is that you could do that?

SECRETARY ABAD:

In an extreme instances because…(interrupted)

JUSTICE BERSAMIN:

No, no, in all instances, extreme or not extreme, you could do that, that’s your feeling.

SECRETARY ABAD:

Well, in that particular situation when the request was made by the Commission and the House of
Representatives, we felt that we needed to respond because we felt…(interrupted). 183

The records show, indeed, that funds amounting to ₱143,700,000.00 and ₱250,000,000.00 were
transferred under the DAP respectively to the COA  and the House of Representatives.  Those
184 185

transfers of funds, which constituted cross-border augmentations for being from the Executive to the
COA and the House of Representatives, are graphed as follows: 186

AMOUNT
DATE (In thousand pesos)
OFFICE PURPOSE
RELEASED Reserve Releases
Imposed
Commission on IT Infrastructure Program and 11/11/11   143,700
Audit hiring of additional litigation
experts
Congress – Completion of the construction of 07/23/12 207,034 250,000
House of the Legislative Library and (Savings of HOR)
Representative Archives Building/Congressional
s e-library

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…"  This was 187

another instance of a cross-border augmentation.

The respondents justified all the cross-border transfers thusly:

99. The Constitution does not prevent the President from transferring savings of his department to
another 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 cannot dictate how they shall be applied by that
department whose fiscal autonomy is guaranteed by the Constitution. 188

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 "augmentation," viz:

HONORABLE MENDOZA:

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 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 purpose was to augment a deficient item
in another department of the government or agency of the 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 need of public funds. The
President is there 24 hours a day, 7 days a week. He’s in charge of the whole operation although six
or seven heads of government offices are given the power to augment. Only the President stationed
there and in effect in-charge and has the responsibility for the failure of any part of the government.
You have 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

JUSTICE LEONEN:

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 hearing of your argument?

HONORABLE MENDOZA:

That’s our submission, if Your Honor, please.

JUSTICE LEONEN:

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:

There is no particular provision or statutory provision for that matter, if Your Honor please. It is drawn
from the fact that the Executive is the executive in-charge of the success of the government.

JUSTICE LEONEN:
So, the residual powers labelled in Marcos v. Manglapus would be the basis for this theory of the
government?

HONORABLE MENDOZA:

Yes, if Your Honor, please.

JUSTICE LEONEN:

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 supplemental budgets?

HONORABLE MENDOZA:

If there is time to do that, I would say yes.

JUSTICE LEONEN:

So, the theory of aid rather than augmentation applies in extra-ordinary situation?

HONORABLE MENDOZA:

Very extra-ordinary situations.

JUSTICE LEONEN:

But Counsel, this would be new doctrine, in case?

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.

4.
Sourcing the DAP from unprogrammed
funds despite the original revenue targets
not having been exceeded was invalid

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.

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 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.

The petitioners point out that a condition for the release of the unprogrammed funds was that the
revenue collections must exceed revenue targets; and that the release of the unprogrammed funds
was illegal because such condition was not met. 191

The respondents disagree, holding that the release and use of the unprogrammed funds under the
DAP were in 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 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 perfected loan
agreements for foreign-assisted projects.  This view of the DBM was adopted by all the respondents
192

in their Consolidated Comment. 193

The BESFs for 2011, 2012 and 2013 uniformly defined "unprogrammed appropriations" as
appropriations that provided standby authority to incur additional agency obligations for priority PAPs
when revenue collections exceeded targets, and when additional foreign funds are
generated.  Contrary to the DBM’s averment that there were three instances when unprogrammed
194

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 warrant the
release of the unprogrammed funds. Hence, even if the revenues not considered in the BESFs were
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 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
Interest on NG Deposits
Interest on Advances to Government Corporations
Income from Investments

Interest on Bond Holdings

Guarantee Fee
Gain on Foreign Exchange
NG Income Collected by BTr

Dividends on Stocks
NG Share from Airport Terminal Fee
NG Share from PAGCOR Income
NG Share from MIAA Profit

Privatization
Foreign Grants

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,  they
195

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:

This is to certify that under the Budget for Expenditures and Sources of Financing for 2011, the
programmed income from dividends from shares of stock in government-owned and controlled
corporations is 5.5 billion.

This is to certify further that based on the records of the Bureau of Treasury, the National
Government has recorded dividend income amounting to ₱23.8 billion as of 31 January 2011. 196
For 2012, the OSG submitted the certification dated April 26, 2012 issued by National Treasurer
Roberto B. Tan, viz:

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:

This is to certify that the actual dividend collections remitted to the National Government for the
period January to May 2013 amounted to ₱12.438 billion compared to the full year program of
₱10.0  billion for 2013.
198

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

The certifications reflected that by collecting dividends amounting to ₱23.8 billion in 2011, ₱19.419
billion in 2012, and ₱12.438 billion in 2013 the BTr had exceeded only the ₱5.5 billion in target
revenues in the form of dividends from stocks in each of 2011 and 2012, and only the ₱10 billion in
target revenues in the form of dividends from stocks in 2013.

However, the requirement that revenue collections exceed the original revenue targets was to be
construed in light of the purpose for which the unprogrammed funds were incorporated in the GAAs
as standby appropriations to support additional expenditures for certain priority PAPs should the
revenue collections exceed 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 the PAPs should new or additional
revenue sources be realized during the year.  Given the tenor of the certifications, the
200

unprogrammed funds were thus not yet supported by the corresponding resources. 201

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

We cannot, therefore, subscribe to the respondents’ view.

5.
Equal protection, checks and balances,
and public accountability challenges

The DAP is further challenged as violative of the Equal Protection Clause, the system of checks and
balances, and the principle of public accountability.
With respect to the challenge against the DAP under the Equal Protection Clause,  Luna argues
203

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.

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,  because the legislators relinquished the power of appropriation to the
204

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 discharge the basic burden of proving that the
constitutional infirmities actually existed.  Simply put, guesswork and speculation cannot overcome
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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.  However, the generality of the rule makes us ponder whether rigidly applying the
206

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.  But its use must be subjected to great scrutiny and circumspection, and it
208

cannot be invoked to validate an unconstitutional law or executive act, but is resorted to only as a
matter of equity and fair play.  It applies only to cases where extraordinary circumstances exist, and
209

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 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,  the Court likewise
211

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.  The DAP itself, as a policy, transcended a merely administrative
1avvphi1

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.

As already mentioned, the implementation of the DAP resulted into the use of savings pooled by the
Executive to finance the PAPs that were not covered in the GAA, or that did not have proper
appropriation covers, as well as to augment items pertaining to other departments of the
Government in clear violation of the Constitution. To 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 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. 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.

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
212

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.

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.

LUCAS P. BERSAMIN
Associate Justice

WE CONCUR:

MARIA LOURDES P. A. SERENO

Chief Justice

I join the Concurring and Dissenting

See Dissenting Opinion
Opinion of J. Del Castillo
ANTONIO T. CARPIO
PRESBITERO J. VELASCO, JR.
Associate Justice
Associate Justice

No part: See: Separate Opinion

TERSITA J. LEONARDO-DE CASTRO ARTURO D. BRION
Associate Justice Associate Justice

Pls. see separate concurring and

DIOSDADO M. PERALTA dissenting opinion
Associate Justice MARIANO C. DEL CASTILLO
Associate Justice

MARTIN S. VILLARAMA, JR. JOSE PORTUGAL PEREZ

Associate Justice Associate Justice

JOSE CATRAL MENDOZA BIENVENIDO L. REYES

 Associate Justice Associate Justice

Pls. see Separate Concurring Opinion See separate concurring opinion

ESTELA M. PERLAS-BERNABE MARVIC MARIO VICTOR F. LEONEN
Associate Justice Associate Justice

CERTIFICATION

I certify that the conclusions in the above Decision had been reached in consultation before the
cases were assigned to the writer of the opinion of the court.

MARIA LOURDES P. A. SERENO

Chief Justice

SEPARATE OPINION

CARPIO, J.:

These consolidated special civil actions for certiorari and prohibition  filed by petitioners as taxpayers
1

and Filipino citizens challenge the constitutionality of the Disbursement Acceleration Program (DAP)
implemented by the President, through the Department of Budget and Management (DBM), which
issued National Budget Circular No. 541 (NBC 541) dated 18 July 2012.

Petitioners assail the constitutionality of the DAP, as well as NBC 541, mainly on the following
grounds: (1) there is no law passed for the creation of the DAP, contrary to Section 29, Article VI of
the Constitution; and (2) the realignment of funds which are not savings, the augmentation of non-
existing items in the General Appropriations Act (GAA), and the transfer of appropriations from the
Executive branch to the Legislative branch and constitutional bodies all violate Section 25(5), Article
VI of the Constitution.

On the other hand, respondents, represented by the Office of the Solicitor General (OSG), argue
that no law is required for the creation of the DAP, which is a fund management system, and the
DAP is a constitutional exercise of the President’s power to augment or realign.

Petitioners have standing to sue. The well-settled rule is that taxpayers, like petitioners here, have
the standing to assail the illegal or unconstitutional disbursement of public funds.  Citizens, like
2

petitioners here, also have standing to sue on matters of transcendental importance to the public
which must be decided early,  like the transfer of appropriations from one branch of government to
3

another or to the constitutional bodies, since such transfer may impair the finely crafted system of
checks-and balances enshrined in the Constitution.

The DBM admits that under the DAP the total actual disbursements are as follows:

Table 3. (Figures in Thousand Pesos) 4

DAP DISBURSEMENTS AMOUNT

10-Oct-11 67,722,280
21-Dec-11 11,004,157
 27-Jun-12 21,564,587
05-Sep-12 2,731,080
21-Dec-12 33,082,603
17-Jun-13 4,658,215
26-Sep-13 8,489,600
TOTAL 149,252,523

Under NBC 541, the sources of DAP funds are as follows:

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. (Boldfacing supplied)

In its Consolidated Comment,  the OSG declared that another source of DAP funds is the
5

Unprogrammed Fund in the GAAs, which the DBM claimed can be tapped when government has
windfall revenue collections, e.g., dividends from government-owned and controlled corporations
and proceeds from the sale of government assets. 6

I.
Presidential power to augment or realign

The OSG justifies the disbursements under DAP as an exercise of the President’s power to augment
or realign under the Constitution. The OSG has represented that the President approved the DAP
disbursements and NBC 541.  Section 25(5), Article VI of the Constitution provides:
7

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. (Boldfacing supplied)

Section 25(5) prohibits the transfer of funds appropriated in the general appropriations law for one
branch of government to another branch, or for one branch to other constitutional bodies, and vice
versa. However, "savings" from appropriations for a branch or constitutional body may be transferred
to another item of appropriation within the same branch or constitutional body, as set forth in the
second clause of the same Section 25(5).

In Nazareth v. Villar,  this Court stated:

8
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 augment any item in the
GAA for their respective offices from the savings in other items of their respective appropriations. x x
x.

Section 25(5) mandates that no law shall be passed authorizing any transfer of appropriations.
However, there can be, when authorized by law, augmentation of existing items in the GAA from
savings in other items in the GAA within the same branch or constitutional body. This power to
augment or realign is lodged in the President with respect to the Executive branch, the Senate
President for the Senate, the Speaker for the House of Representatives, the Chief Justice for the
Judiciary, and the Heads of the constitutional bodies for their respective entities. The 2011, 2012
and 2013 GAAs all have provisions authorizing the President, the Senate President, the House
Speaker, the Chief Justice and the Heads of the constitutional bodies to realign savings within their
respective entities.

Section 25(5) expressly states that what can be realigned are "savings" from an item in the GAA. To
repeat, only savings can be realigned. Unless there are savings, there can be no realignment.

Savings can augment any existing item in the GAA, provided such item is in the "respective
appropriations" of the same branch or constitutional body. As defined in Section 60, Section 54, and
Section 53 of the General Provisions of the 2011, 2012 and 2013 GAAs, respectively, "augmentation
implies the existence x x x 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 x x
x."

In Demetria v. Alba,  this Court construed an identical provision in the 1973 Constitution:  The
9 10

prohibition to transfer an appropriation for one item to another was explicit and categorical under the
1973 Constitution. However, to afford the heads of the different branches of the government and
those of the constitutional commissions considerable flexibility in the use of public funds and
resources, the Constitution allowed the enactment of a law authorizing the transfer of funds for the
purpose of augmenting an item from savings in another item in the appropriation of the government
branch or constitutional body concerned. The leeway granted was thus limited. The purpose and
conditions for which funds may be transferred were specified, i.e. transfer may be allowed for the
purpose of augmenting an item and such transfer may be made only if there are savings from
another item in the appropriation of the government branch or constitutional body. (Boldfacing and
italicization supplied)

In Sanchez v. Commission on Audit,  this Court stressed the twin requisites for a valid transfer of
11

appropriation, namely, (1) the existence of savings and (2) the existence in the appropriations law of
the item, project or activity to be augmented from savings, thus:

Clearly, there are two essential requisites in order that a transfer of appropriation with the
corresponding funds may legally be effected. First, there must be savings in the programmed
appropriation of the transferring agency. Second, there must be an existing item, project or activity
with an appropriation in the receiving agency to which the savings will be transferred.
Actual savings is a sine qua non to a valid transfer of funds from one government agency to another.
The word "actual" denotes that something is real or substantial, or exists presently in fact as
opposed to something which is merely theoretical, possible, potential or hypothetical. (Boldfacing
supplied)

In Nazareth v. Villar,  this Court reiterated the requisites for a valid transfer of appropriation as
12

mandated in Section 25(5), Article VI of the Constitution, thus:

Under these provisions, the authority granted to the President was subject to two essential requisites
in order that a transfer of appropriation from the agency’s savings would be validly effected. The first
required that there must be savings from the authorized appropriation of the agency. The second
demanded that there must be an existing item, project, activity, purpose or object of expenditure with
an appropriation to which the savings would be transferred for augmentation purposes only.
(Boldfacing supplied)

Section 25(5), Article VI of the Constitution likewise mandates that savings from one branch, like the
Executive, cannot be transferred to another branch, like the Legislature or Judiciary, or to a
constitutional body, and vice versa. In fact, funds appropriated for the Executive branch, whether
savings or not, cannot be transferred to the Legislature or Judiciary, or to the constitutional bodies,
and vice versa. Hence, funds from the Executive branch, whether savings or not, cannot be
transferred to the Commission on Elections, the House of Representatives, or the Commission on
Audit.

In Pichay v. Office of the Deputy Executive Secretary,  this Court declared that the President is
13

constitutionally authorized to augment any item in the GAA appropriated for the Executive branch
using savings from other items of appropriations for the Executive branch, thus:

x x x [To] x x x enable the President to run the affairs of the executive department, he is likewise
given constitutional authority to augment any item in the General Appropriations Law using the
savings in other items of the appropriation for his office. In fact, he is explicitly allowed by law to
transfer any fund appropriated for the different departments, bureaus, offices and agencies of the
Executive Department which is 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. (Boldfacing supplied)

In PHILCONSA v. Enriquez,  this Court emphasized that only the President is authorized to use
14

savings to augment items for the Executive branch, thus:

Under Section 25(5) no law shall be passed authorizing any transfer of appropriations, and under
Section 29(1), no money shall be paid out of the Treasury except in pursuance of an appropriation
made by law. While Section 25(5) allows as an exception the realignment of savings to augment
items in the general appropriations law for the executive branch, such right must and can be
exercised only by the President pursuant to a specific law. (Boldfacing supplied)

II.
Definition and Sources of Savings

One of the requisites for a valid transfer of appropriations under Section 25(5), Article VI of the
Constitution is that there must be savings from the appropriations of the same branch or
constitutional body. For the President to exercise his realignment power, there must first be savings
from other items in the GAA appropriated to the departments, bureaus and offices of the Executive
branch, and such savings can be realigned only to existing items of appropriations within the
Executive branch.

When do funds for an item in the GAA become "savings"? Section 60, Section 54, and Section 53 of
the 2011, 2012, and 2013 GAAs,  respectively, uniformly define the term "savings" as follows:
15

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.
(Boldfacing supplied)

The same definition of "savings" is also found in the GAAs from 2003 to 2010. Prior to 2010, the
definition of savings in the GAAs did not contain item (iii) above.

As clearly defined in the 2011, 2012 and 2013 GAAs, savings must be portions or balances from any
programmed appropriation "free from any obligation or encumbrance", which means there is no
contract obligating payment out of such portions or balances of the appropriation. Otherwise, if there
is already a contract obligating payment out of such portions or balances, the funds are not free from
any obligation, and thus can not constitute savings.

Section 60, Section 54, and Section 53 of the General Provisions of the 2011, 2012 and 2013 GAAs,
respectively, contemplate three sources of savings. First, there can be savings when there are funds
still available after completion of the work, activity or project, which means there are excess funds
remaining after the work, activity or project is completed. There can also be savings when there is
final discontinuance of the work, activity or project, which means there are funds remaining after the
work, activity, or project was started but finally discontinued before completion. To illustrate, a
bridge, half-way completed, is destroyed by floods or earthquake, and thus finally discontinued
because the remaining funds are not sufficient to rebuild and complete the bridge. Here, the funds
are obligated but the remaining funds are de-obligated upon final discontinuance of the project. On
the other hand, abandonment means the work, activity or project can no longer be started because
of lack of time to obligate the funds, resulting in the physical impossibility to obligate the funds. This
happens when a month or two before the end of the fiscal year, there is no more time to conduct a
public bidding to obligate the funds. Here, the funds are not, and can no longer be, obligated and
thus will constitute savings. Final discontinuance or abandonment excludes suspension or temporary
stoppage of the work, activity, or project.

Second, there can be savings when there is unpaid compensation and related costs pertaining to
vacant positions. Third, there can be savings from cost-cutting measures adopted by government
agencies.

Section 38, Chapter 5, Book VI of the Administrative Code of 1987  authorizes the President,
16

whenever in his judgment public interest requires, "to suspend or otherwise stop further expenditure
of funds allotted for any agency, or any other expenditure authorized in the GAA." For example, if
there are reported anomalies in the construction of a bridge, the President can order the suspension
of expenditures of funds until an investigation is completed. This is only a temporary, and not a final,
discontinuance of the work and thus the funds remain obligated. Section 38 does not speak of
savings or realignment. Section 38 does not refer to work, activity, or project that is finally
discontinued, which is required for the existence of savings. Section 38 refers only to suspension of
expenditure of funds, not final discontinuance of work, activity or project. Under Section 38, the
funds remain obligated and thus cannot constitute savings.

Funds which are temporarily not spent under Section 38 are not savings that can be realigned by the
President. Only funds that qualify as savings under Section 60, Section 54, and Section 53 of the
2011, 2012 and 2013 GAAs, respectively, can be realigned. If the work, activity or program is merely
suspended, there are no savings because there is no final discontinuance of the work, activity or
project. If the work, activity or project is only suspended, the funds remain obligated. If the President
"stops further expenditure of funds," it means that the work, activity or project has already started
and the funds have already been obligated. Any discontinuance must be final before the unused
funds are de-obligated to constitute savings that can be realigned.

To repeat, funds pertaining to work, activity or project merely suspended or temporarily discontinued
by the President are not savings. Only funds remaining after the work, activity or project has been
finally discontinued or abandoned will constitute savings that can be realigned by the President to
augment existing items in the appropriations for the Executive branch.

III.
The DAP, NBC 541 and Other Executive Issuances Related to DAP

A. Unobligated Allotments are not Savings.

In the present cases, the DAP and NBC 541 directed the "withdrawal of unobligated allotments of
agencies with low level of obligations as of June 30, 2012."The funds withdrawn are then used to
augment or fund "priority and/or fast moving programs/projects of the national government."

NBC 541 states:

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.

xxxx

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. (Boldfacing
supplied)

Except for MOOE for previous months, unobligated allotments of agencies with low levels of
obligations are not savings that can be realigned by the President to fund priority projects of the
government. In the middle of the fiscal year, unobligated appropriations, other than MOOE for
previous months, do not automatically become savings for the reason alone that the agency has a
low level of obligations. As of 30 June of a fiscal year, there are still six months left to obligate the
funds. Six months are more than enough time to conduct public bidding to obligate the funds. As of
30 June 2012, there could have been no final abandonment of any work, activity or project because
there was still ample time to obligate the funds.

However, if the funds are not yet obligated by the end of November, and the item involves a
construction project, then it may be physically impossible to obligate the funds because a public
bidding will take at least a month. In such a case, there can be a final abandonment of the work,
activity or project.

In the case of appropriations for MOOE, the same are deemed divided into twelve monthly
allocations. Excess or unused MOOE appropriations for the month, other than Mandatory
Expenditures and Expenditures for Business-type Activities, are deemed savings after the end of the
month because there is a physical impossibility to obligate and spend such funds as MOOE for a
period that has already lapsed. Such excess or unused MOOE can be realigned by the President to
augment any existing item of appropriation for the Executive branch. MOOE for future months are
not savings and cannot be realigned.

The OSG claims that the DAP, which is used "to fund priority and/or fast moving programs/projects
of the national government," is an exercise of the President’s power to realign savings. However,
except for MOOE for previous months, the DAP funds used for realignment under NBC 541 do not
qualify as savings under Section 60,Section 54 and Section 53 of the General Provisions of the
2011, 2012, and 2013 GAAs, respectively. Unobligated allotments for Capital Outlay, as well as
MOOE for July to December 2012, of agencies with low level of obligations as of 30 June 2012 are
definitely not savings. The low level of obligations by agencies as of 30 June 2012 is not one of the
conditions for the existence of savings under the General Provisions of the 2011, 2012, and 2013
GAAs. To repeat, unobligated allotments withdrawn under NBC 541, except for excess or unused
MOOE from January to June 2012, do not constitute savings and cannot be realigned by the
President. The withdrawal of such unobligated allotments of agencies with low level of obligations as
of 30 June 2012 for purposes of realignment violates Section 25(5), Article VI of the Constitution.
Thus, such withdrawal and realignment of funds under NBC 541 are unconstitutional.

The OSG’s contention that the President may discontinue or abandon a project as early as the third
month of the fiscal year under Section 38, Chapter 5, Book VI of the Administrative Code is clearly
misplaced. Section 38 refers only to suspension or stoppage of expenditure of obligated funds, and
not to final discontinuance or abandonment of work, activity or project.

Under NBC 541, appropriations for Capital Outlays are sources of DAP funds. However, the
withdrawal of unobligated allotments for Capital Outlays as of 30 June 2012 violates the General
Provisions of the 2011 and 2012 GAAs.

Section 65 of the General Provisions of the 2011 GAA provides:

Sec. 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. (Boldfacing supplied)

The same provision was substantially reproduced in the 2012 GAA, as follows:
Sec. 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. (Boldfacing supplied)

The life span of Capital Outlays under the 2011 and 2012 GAAs is two years. This two-year life span
is prescribed by law and cannot be shortened by the President, unless the appropriations qualify as
"savings" under the GAA. Capital Outlay can be obligated anytime during the two-year period,
provided there is sufficient time to conduct a public bidding. Capital Outlay cannot be declared as
savings unless there is no more time for such public bidding to obligate the allotment. MOOE,
however, can qualify as savings once the appropriations for the month are deemed abandoned by
the lapse of the month without the appropriations being fully spent. The only exceptions are (1)
Mandatory Expenditures which under the GAA can be declared as savings only in the last quarter of
the fiscal year; and (2) Expenditures for Business-type Activities, which under the GAA cannot be
realigned.  The MOOE is deemed divided into twelve monthly allocations. The lapse of the month
17

without the allocation for that month being fully spent is an abandonment of the allocation, qualifying
the unspent allocations as savings.

Appropriations for future MOOE cannot be declared as savings. However, NBC 541 allows the
withdrawal and realignment of unobligated allotments for MOOE and Capital Outlays as of 30 June
2012. NBC 541 cannot validly declare Capital Outlays as savings in the middle of the fiscal year,
long before the end of the two-year period when such funds can still be obligated. This two-year
period applies to unused or excess MOOE of previous months in that such unused or excess MOOE
can be realigned within the two-year period. However, the declaration of savings and realignment of
MOOE for July to December 2012 is contrary to the GAA and the Constitution since MOOE
appropriations for a future period are not savings. Thus, the realignment under the DAP of
unobligated Capital Outlays as of 30 June 2012, as well as the realignment of MOOE allocated for
the second semester of the fiscal year, violates Section 25(5), Article VI of the Constitution, and is
thus unconstitutional.

B. Unlawful release of the Unprogrammed Fund

One of the sources of the DAP is the Unprogrammed Fund under the GAA. The provisions on the
Unprogrammed Fund under the 2011, 2012 and 2013 GAAs state:

2011 GAA (Article XLV):

Special Provision(s)

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 x x x. (Boldfacing supplied)

2012 GAA (Article XLVI)

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 x x x. (Boldfacing supplied)
2013 GAA (Article XLV)

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 collections arising from
sources not considered in the aforesaid original revenue targets, as certified by the Btr. x x x.
(Boldfacing supplied)

It is clear from these provisions that as a condition for the release of the Unprogrammed Fund, the
revenue collections, as certified by the National Treasurer, must exceed the original revenue targets
submitted by the President to Congress. During the Oral Arguments on 28 January 2014, the OSG
assured the Court that the revenue collections exceeded the original revenue targets for fiscal years
2011, 2012 and 2013. I required the Solicitor General to submit to the Court a certified true copy of
the certifications by the Bureau of Treasury that the revenue collections exceeded the original
revenue targets for 2011, 2012 and 2013. The transcript of the Oral Arguments showed the following
exchange:

JUSTICE CARPIO:

Counsel, you stated in your comment that one of the sources of DAP is the Unprogrammed Fund, is
that correct?

SOLGEN JARDELEZA:

Yes, Your Honor.

JUSTICE CARPIO:

Now x x x the Unprogrammed Fund can be used only if the revenue collections exceed the original
revenue targets as certified by the Bureau of Treasury, correct?

SOLGEN JARDELEZA:

Yes, Your Honor.

JUSTICE CARPIO:

In other words, the Bureau of Treasury certified to DBM that the revenue collections exceeded the
original revenue target, correct?

SOLGEN JARDELEZA:

Yes , Your Honor.

JUSTICE CARPIO:

Can you please submit to the Court a certified true copy of the Certification by the Bureau of
Treasury for 2011, 2012 and 2013?

SOLGEN JARDELEZA:
We will, Your Honor.

JUSTICE CARPIO:

Because as far as I know, I may be wrong, we have never collected more than the revenue target.
Our collections have always fallen short of the original revenue target. The GAA says "original"
because they were trying to move this target by reducing it. x x x I do not know of an instance where
our government collected more than the original revenue target. But anyway, please submit that
certificate.

SOLGEN JARDELEZA:

We will, Your Honor.  (Boldfacing supplied)

18

In a Resolution dated 28 January 2014, the Court directed the OSG to submit the certifications by
the Bureau of Treasury in accordance with the undertaking of the Solicitor General during the Oral
Arguments.

On 14 February 2014, the OSG submitted its Compliance attaching the following certifications:

1. Certification dated 11 February 2014 signed by Rosalia V. De Leon, Treasurer of the Philippines.
It states:

This is to certify that based on the records of the Bureau of Treasury, the amounts indicated in the
attached Certification of the Department of Finance dated 04 March 2011 pertaining to the
programmed dividend income from shares of stocks in government-owned or controlled corporations
for 2011 and to the recorded dividend income as of 31 January 2011 are accurate.

This Certification is issued this 11th day of February 2014.

This is to certify that under the Budget for Expenditures and Sources of Financing for 2011, the
programmed income from dividends from shares of stock in government-owned and controlled
corporations is ₱5.5 billion.

This is to certify further that based on the records of the Bureau of Treasury, the National
Government has recorded dividend income amounting of ₱23.8 billion as of 31 January 2011.

3. Certification dated 26 April 2012 signed by Roberto B. Tan, Treasurer of the Philippines. It states:

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.

4. Certification dated 3 July 2013 signed by Rosalia V. De Leon, Treasurer of the Philippines which
states:

This is to certify that the actual dividend collections remitted to the National Government for the
period January to May 2013 amounted to ₱12.438 billion compared to the full year program of ₱10.0
billion for 2013.
Moreover, the National Government accounted for the sale of right to build and operate the NAIA
expressway amounting to ₱11.0 billion in June 2013.

The certifications submitted by the OSG are not compliant with the Court’s directive. The
certifications do not state that the revenue collections exceeded the original revenue targets as
submitted by the President to Congress. Except for the ₱11 billion NAIA expressway revenue, the
certifications refer solely to dividend collections, and programmed (target) dividends, and not to
excess revenue collections as against revenue targets. Programmed dividends from government-
owned or controlled corporations constitute only a portion of the original revenue targets, and
dividend collections from government-owned or controlled corporations constitute only a portion of
the total revenue collections. The Revenue Program by source of the government is divided into
"Tax Revenues" and "Non-Tax Revenues." Dividends from government-owned and controlled
corporations constitute only one of the items in "Non-Tax Revenues."  Non-Tax Revenues consist of
19

all income collected by the Bureau of Treasury, privatization proceeds and foreign grants. The bulk
of these revenues comes from the BTr’s income, which consists among others of dividends on
stocks and the interest on the national government’s deposits. Non-Tax Revenues include all
windfall income. Any income not falling under Tax Revenues necessarily falls under Non-Tax
Revenues. For 2011, the total programmed (target) Tax and Non-Tax Revenues of the government
was ₱1.359 trillion, for 2012 ₱1.560 trillion, and for 2013 ₱1.780 trillion.20

Clearly, the DBM has failed to show that the express condition in the 2011, 2012 and 2013 GAAs for
the use of the Unprogrammed Fund has been met. Thus, disbursements from the Unprogrammed
Fund in 2011, 2012, and 2013 under the DAP and NBC 541 were in violation of the law.

At any rate, dividends from government-owned or controlled corporations are not savings but
revenues, like tax collections, that go directly to the National Treasury in accordance with Section
44, Chapter 5, Book VI of the Administrative Code of 1987, which states:

SEC. 44. Accrual of Income to Unappropriated Surplus of the General Fund. -Unless otherwise
specifically provided by law, all income accruing to the departments, offices and agencies by virtue
of the provisions of existing laws, orders and regulations shall be deposited in the National Treasury
or in the duly authorized depository of the Government and shall accrue to the unappropriated
surplus of the General Fund of the Government: Provided, That amounts received in trust and from
business type activities of government may be separately recorded and disbursed in accordance
with such rules and regulations as may be determined by the Permanent Committee created under
this Act.

Dividends form part of the unappropriated surplus of the General Fund of the Government and they
cannot be spent unless there is an appropriations law. The same rule applies to windfall revenue
collections which also form part of the unappropriated General Fund. Proceeds from sales of
government assets are not savings but revenues that also go directly to the National Treasury.
Savings can only come from the three sources expressly specified in Section 60, Section 54 and
Section 53 of the General Provisions of the 2011, 2012, and 2013 GAAs, respectively.

Besides, by definition savings can never come from the Unprogrammed Fund since the term
"savings" is defined under the GAAs as "portions or balances of any programmed appropriation."
The Unprogrammed Fund can only be used for the specific purpose prescribed in the GAAs, and
only if the revenue collections exceed the original revenue targets for the fiscal year.

Section 3 of the General Provisions of the 2011, 2012 and 2013 GAAs uniformly provide that all
fees, charges, assessments, and other receipts or revenues collected by departments, bureaus,
offices or agencies in the exercise of their functions shall be deposited with the National Treasury as
income of the General Fund in accordance with the provisions of the Administrative Code and
Section 65 of Presidential Decree No. 1445.  Such income are not savings as understood and
21

defined in the GAAs.

To repeat, dividend collections of government-owned and controlled corporations do not qualify as

savings as defined in Section 60, Section 54, and Section 53 of the General Provisions of the 2011,
2012, and 2013 GAAs, respectively. Dividend collections are revenues that go directly to the
National Treasury. The Unprogrammed Fund under the 2011, 2012, and 2013 GAAs can only be
released when revenue collections exceed the original revenue targets. The DBM miserably failed to
show any excess revenue collections during the period the DAP was implemented. Therefore, in
violation of the GAAs, the Executive used the Unprogrammed Fund without complying with the
express condition for its use – that revenue collections of the government exceed the original
revenue target, as certified by the Bureau of Treasury. In other words, the use of the Unprogrammed
Fund under the DAP is unlawful, and hence, void. 22

C. DAP violates the constitutional prohibition on "cross-border" transfers.

Section 25(5), Article VI of the Constitution mandates that savings from one government branch
cannot be transferred to another branch, and vice versa. This constitutional prohibition on cross-
border transfers is clear: the President, the Senate President, the Speaker of the House of
Representatives, the Chief Justice, and the Heads of constitutional bodies are only authorized to
augment any item in the general appropriations law for their respective offices from savings in other
items of their respective appropriations.

Contrary to Section 25(5), Article VI of the Constitution, there were instances of cross-border
transfers under the DAP. In the interpellation by Justice Bersamin during the Oral Arguments,
Budget Secretary Florencio Abad expressly admitted the existence of cross-border transfers of
funds, thus:

JUSTICE BERSAMIN:

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 yet 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 requirement. 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.  (Boldfacing supplied)
23

Attached to DBM Secretary Abad’s Memorandum for the President, dated 12 October 2011, is a
Project List for FY 2011 DAP. The last item on the list, item no. 22, is for PDAF augmentation in the
amount of ₱6.5 billion, also listed as various other local projects.  The relevant portion of the Project
24

List attached to the Memorandum for the President dated 12 October 2011, which the President
approved on the same date, reads:

PROJECT LIST: FY 2011 DISBURSEMENT ACCELERATION PLAN

Agency Amount (in Million Php) Details

xxxx    
22. PDAF 6,500 For augmentation
(Various other local
projects)

The Memorandum for the President dated 12 December 2011 also stated that savings that
correspond to completed or discontinued projects may be pooled, among others, to augment
deficiencies under the Special Purpose Funds, e.g., PDAF, Calamity Fund, and Contingent
Fund.  The same provision to augment deficiencies under the Special Purpose Funds, including
25

PDAF, was included in the Memorandum for the President dated 25 June 2012. 26

The Special Provisions on the PDAF in the 2013 GAA allowed "the Individual House member and
individual Senator to identify the project to be funded and implemented, which identification is made
after the enactment into law of the GAA."  In addition, Special Provision No. 4 allowed the
27

realignment of funds, and not savings, conditioned on the concurrence of the individual legislator to
the request for realignment. In the landmark case of Belgica v. Executive Secretary,  the Court
28

struck down these Special Provisions on the PDAF primarily for violating the principle of separation
of powers.

Clearly, the transfer of DAP funds, in the amount of ₱6.5 billion, to augment the unconstitutional
PDAF is also unconstitutional because it is an augmentation of an unconstitutional appropriation.

The OSG contends that "[t]he Constitution does not prevent the President from transferring savings
of his department to another department upon the latter’s request, provided it is the recipient
department that uses such funds to augment its own appropriation." The OSG further submits that
"[i]n relation to the DAP, the President made available to the Commission on Audit, House of
Representatives, and the Commission on Elections the savings of his department upon their request
for funds, but it was those institutions that applied such savings to augment items in their respective
appropriations."  Thus, the OSG expressly admits that the Executive transferred appropriations for
29
the Executive branch to the COA, the House of Representatives and the COMELEC but justifies
such transfers to the recipients’ request for funds to augment items in the recipients’ respective
appropriations.

The OSG’s arguments are obviously untenable. Nowhere in the language of the Constitution is such
a misplaced interpretation allowed. Section 25(5), Article VI of the Constitution does not distinguish
whether the recipient entity requested or did not request additional funds from the Executive branch
to augment items in the recipient entity’s appropriations. The Constitution clearly prohibits the
President from transferring appropriations of the Executive branch to other branches of government
or to constitutional bodies for whatever reason. Congress cannot even enact a law allowing such
transfers." The fundamental policy of the Constitution is against transfer of appropriations even by
law, since this ‘juggling’ of funds is often a rich source of unbridled patronage, abuse and
interminable corruption."  Moreover, the "cross-border" transfer of appropriations to constitutional
30

bodies impairs the independence of the constitutional bodies.

IV.
No Presidential power of impoundment

The GAA is a law and the President is sworn to uphold and faithfully implement the law. If Congress
in the GAA directs the expenditure of public funds for a specific purpose, the President has no power
to cancel, prevent or permanently stop such expenditure once the GAA becomes a law. What the
President can do is to veto that specific item in the GAA. But once the President approves the GAA
or allows it to lapse into law, the President can no longer veto or cancel any item in the GAA or
impound the disbursement of funds authorized to be spent in the GAA.

Section 38, Chapter V, Book VI of the Administrative Code of 1987 allows the President "to suspend
or otherwise stop further expenditure" of appropriated funds but this must be for a legitimate
purpose, like when there are anomalies in the implementation of a project or in the disbursement of
funds. Section 38 cannot be read to authorize the President to permanently stop so as to cancel the
implementation of a project in the GAA because the President has no power to amend the law, and
the GAA is a law. Section 38 cannot also be read to authorize the President to impound the
disbursement of funds for projects approved in the GAA because the President has no power to
impound funds approved by Congress.

The President can suspend or stop further expenditure of appropriated funds only after the
appropriated funds have become obligated, that is, a contract has been signed for the
implementation of the project. The reason for the suspension or stoppage must be legitimate, as
when there are anomalies. The President has the Executive power to see to it that the GAA is
faithfully implemented, without anomalies. However, despite the order to suspend or stop further
expenditure of funds the appropriated funds remain obligated until the contract is rescinded. As long
as the appropriated funds are still obligated, the funds cannot constitute savings because "savings"
as defined in the GAA, must come from appropriations that are "free from any obligation or
encumbrance."

Section 38 cannot be used by the President to stop permanently the expenditure of unobligated
appropriated funds because that would amount to a Presidential power to impound funds
appropriated in the GAA. The President has no power to impound unobligated funds in the GAA for
two reasons: first, the GAA once it becomes law cannot be amended by the President and an
impoundment of unobligated funds is an amendment of the GAA since it reverses the will of
Congress; second, the Constitution gives the President the power to prevent unsound appropriations
by Congress only through his line item veto power, which he can exercise only when the GAA is
submitted to him by Congress for approval.
Once the President approves the GAA or allows it to lapse into law, he himself is bound by it. There
is no presidential power of impoundment in the Constitution and this Court cannot create one. Any
ordinary legislation giving the President the power to impound unobligated appropriations is
unconstitutional. The power to impound unobligated appropriations in the GAA, coupled with the
power to realign such funds to any project, whether existing or not in the GAA, is not only a
usurpation of the power of the purse of Congress and a violation of the constitutional separation of
powers, but also a substantial re-writing of the 1987 Constitution.

Under the present Constitution, if the President vetoes an item of appropriation in the GAA,
Congress may override such veto by an extraordinary two-thirds vote of each chamber of Congress.
However, if this Court allows the President to impound the funds appropriated by Congress under a
law, then the constitutional power of Congress to override the President’s veto becomes inutile and
meaningless. This is a substantial and drastic revision of the constitutional check-and-balance finely
crafted in the Constitution.

Professor Laurence H. Tribe, in his classic textbook American Constitutional Law, explains why
there is no constitutional power of impoundment by the President under the U.S. Federal
Constitution:

The federal courts have traditionally rejected the argument that the President possesses inherent
power to impound funds and thus halt congressionally authorized expenditures. The Supreme Court
issued its first major pronouncement on the constitutional basis of executive impoundment in Kendall
v. United States ex rel. Stokes. There, in order to resolve a contract dispute, Congress ordered the
Postmaster General to pay a claimant whatever amount an outside arbitrator should decide was the
appropriate settlement. Presented with a decision by the arbitrator in a case arising out of a claim for
services rendered to the United States in carrying the mails, President Jackson’s Postmaster
General ignored the congressional mandate and paid, instead, a smaller amount that he deemed the
proper settlement. The Supreme Court held that a writ of mandamus could issue directing the
Postmaster General to comply with the congressional directive. In reaching this conclusion, the
Court held that the President, and thus those under his supervision, did not possess inherent
authority, whether implied by the Faithful Execution Clause or otherwise, to impound funds that
Congress had ordered to be spent:" To contend that the obligation imposed on the President to see
the laws faithfully executed, implies a power to forbid their execution, is a novel construction of the
constitution, and entirely inadmissible."

Any other conclusion would have been hard to square with the care the Framers took to limit the
scope and operation of the veto power, and quite impossible to reconcile with the fact that the
Framers assured Congress the power to override any veto by a two-thirds vote in each House. For
presidential impoundments to halt a program would, of course, be tantamount to a veto that no
majority in Congress could override. To quote Chief Justice Rehnquist, speaking in his former
capacity as Assistant Attorney General in 1969: "With respect to the suggestion that the President
has a constitutional power to decline to spend appropriated funds, we must conclude that existence
of such a broad power is supported by neither reason nor precedent. ... It is in our view extremely
difficult to formulate a constitutional theory to justify a refusal by the President to comply with a
Congressional directive to spend. It may be agreed that the spending of money is inherently an
executive function, but the execution of any law is, by definition, an executive function, and it seems
an anomalous proposition that because the Executive branch is bound to execute the laws, it is free
to decline to execute them."  (Citations omitted; emphasis supplied)
31

In the United States, the Federal Constitution allows the U.S. President to only veto an entire
appropriations bill but not line item appropriations in the bill. Thus, U.S. Presidents seldom veto an
appropriations bill even if the bill contains specific appropriations they deem unsound. To stop the
disbursement of appropriated funds they deem unsound, U.S. Presidents have attempted to assert
an implied or inherent Presidential power to impound funds appropriated by Congress. The U.S.
Supreme Court, starting from the 1838 case of Kendall v. United States ex rel. Stokes, has
consistently rejected any attempt by U.S. Presidents to assert an implied presidential power to
impound appropriated funds. In the 1975 case of Train v. City of New York,  the U.S. Supreme Court
32

again rejected the notion that the U.S. President has the power to impound funds appropriated by
Congress because such power would frustrate the will of Congress. This rationale applies with
greater force under the Philippine Constitution, which expressly empowers the President to exercise
line item veto of congressional appropriations. Under our Constitutional scheme, the President’s line
item veto is the checking mechanism to unsound congressional appropriations, not any implied
power of impoundment which certainly does not exist in the Constitution.

In PHILCONSA v. Enriquez,  decided on 19 August 1994, the Court explained the alleged opposing
33

views in the United States on the U.S. President’s power to impound appropriated funds by citing a
1973 Georgetown Law Journal article  and a 1973Yale Law Journal article.  These law journal
34 35

articles were obviously already obsolete because on 18 February 1975the United States Supreme
Court issued its decision in Train v. City of New York. Worse, PHILCONSA failed to mention the
1838 U.S. Supreme Court case of Kendall v. United States ex rel. Stokes cited by Prof. Tribe in his
textbook. In U.S. Federal constitutional jurisprudence, it is well-settled that the U.S. President has no
implied or inherent power to impound funds appropriated by Congress. In any event, the issue of
impoundment was not decisive in PHILCONSA since the Court based its decision on another legal
ground.

This Court must be clear and categorical. Under the U.S. Federal Constitution as well as in our
Constitutions, whether the 1935, 1973 or the present 1987 Constitution, there is no implied or
inherent Presidential power to impound funds appropriated by Congress. Otherwise, our present
1987 Constitution will become a mangled mess.

Section 38 cannot be invoked by the President to create "savings" by ordering the permanent
stoppage of disbursement of appropriated funds, whether obligated or not. If the appropriated funds
are already obligated, then the stoppage of disbursements of funds does not create any savings
because the funds remain obligated until the contract is rescinded. If the appropriated funds are
unobligated, such permanent stoppage amounts to an impoundment of appropriated funds which is
unconstitutional. The authority of the President to suspend or stop the disbursement of appropriated
funds under Section 38 can refer only to obligated funds; otherwise, Section 38 will be patently
unconstitutional because it will constitute a power by the President to impound appropriated funds.

Moreover, the OSG and the DBM maintain that the President, in implementing the DAP and NBC
541, "never impounded" funds. In fact, the OSG does not claim that the President exercised the
power of impoundment precisely because it is contrary to the purpose of NBC 541, which was
intended "to accelerate spending" and push economic growth. During the Oral Arguments, Solicitor
General Jardeleza stated:

SOLGEN JARDELEZA:

But the facts, Your Honor, showed the president never impounded, impoundment is inconsistent with
the policy of spend it or use it.

JUSTICE ABAD:

Yeah, well anyway...

SOLGEN JARDELEZA:

So, there is no impoundment, Your Honor, in fact, the marching orders is spend, spend, spend. And
that was achieved towards the middle of 2012. There was only DAP because there was slippage,
2010, 2011, and that’s what were saying the diminishing amount, Your Honor. 36

Therefore, it is grave error to construe that the DAP is an exercise of the President’s power to
impound under Section 38, Chapter VI, Book VI of the Administrative Code of 1987. The OSG and
DBM do not interpret Section 38 as granting the President the power to impound. The essence of
impoundment is not to spend. The essence of DAP is to "spend, spend, spend," in the words of the
Solicitor General.

V.
The applicability of the doctrine of operative fact

An unconstitutional act confers no rights, imposes no duties, and affords no protection.  An37

unconstitutional act is inoperative as if it has not been passed at all.  The exception to this rule is the
38

doctrine of operative fact. Under this doctrine, the law or administrative issuance is recognized as
unconstitutional but the effects of the unconstitutional law or administrative issuance, prior to its
declaration of nullity, may be left undisturbed as a matter of equity and fair play. 39

As a rule of equity, the doctrine of operative fact can be invoked only by those who relied in good
faith on the law or the administrative issuance, prior to its declaration of nullity. Those who acted in
bad faith or with gross negligence cannot invoke the doctrine. Likewise, those directly responsible for
an illegal or unconstitutional act cannot invoke the doctrine. He who comes to equity must come with
clean hands,  and he who seeks equity must do equity.  Only those who merely relied in good faith
40 41

on the illegal or unconstitutional act, without any direct participation in the commission of the illegal
or unconstitutional act, can invoke the doctrine.

Moreover, the doctrine of operative fact is applicable only if nullifying the effects of the
unconstitutional law or administrative issuance will result in injustice or serious prejudice to the
public or innocent third parties. To illustrate, if DAP funds were used to build school houses without
anomalies other than the fact that DAP funds were used, the contract could no longer be rescinded
for to do so would prejudice the innocent contractor who built the school houses in good faith.
However, if DAP funds were used to augment the PDAF of members of Congress whose identified
projects were in fact non-existent or anomalously implemented, the doctrine of operative fact would
not apply.

VI.
Conclusion

The Disbursement Acceleration Program has a noble end – "to fast track public spending and push
economic growth." The DAP would fund "high-impact budgetary programs and projects." However,
the road to unconstitutionality is often paved with ostensibly good intentions. Under NBC 541, the
President pooled funds which do not qualify as savings, and hence, the pooled funds could not
validly be realigned. The unobligated allotments of agencies with low-level of obligations as of 30
June 2012 are certainly not savings as defined in the GAAs, with the exception of MOOE from
January to June 2012, excluding Mandatory Expenditures and Expenditures for Business-type
Activities. The realignment of these funds to augment items in the GAAs patently contravenes
Section 25(5), Article VI of the Constitution. Thus, such realignment under the DAP, NBC 541 and
other Executive issuances related to DAP is clearly unconstitutional.
The DAP also violates the prohibition on cross-border transfers enshrined in Section 25(5), Article VI
of the Constitution. No less than the DBM Secretary has admitted that the Executive transferred
funds to the COA and the House of Representatives.  The OSG has also expressly admitted in its
42

Memorandum of 10 March 2014 that the Executive transferred appropriations to the COA, the House
of Representatives and the COMELEC.  The Executive transferred DAP funds to augment the
43

PDAF, or the unconstitutional Congressional Pork Barrel, making the augmentation also
unconstitutional.

The Unprogrammed Fund was released despite the clear requirement in the 2011, 2012 and 2013
GAAs that the Unprogrammed Fund can be used only if the revenue collections exceed the original
revenue targets as certified by the National Treasurer, a condition that was never met for fiscal years
2011, 2012 and 2013.

The GAA is a law enacted by Congress. The most important legislation that Congress enacts every
year is the GAA. Congress exercises the power of the purse when it enacts the GAA. The power of
the purse is a constitutional power lodged solely in Congress, and is a vital part of the checks-and-
balances enshrined in the Constitution. Under the GAA, Congress appropriates specific amounts for
specified purposes, and the President spends such amounts in accordance with the authorization
made by Congress in the GAA.

Under the DAP and NBC 541, the President disregards the specific appropriations in the GAA and
treats the GAA as the President’s self-created all-purpose fund, which the President can spend as
he chooses without regard to the specific purposes for which the appropriations are made in the
GAA. In the middle of the fiscal year of the GAA, the President under the DAP and NBC 541 can
declare all MOOE for future months (except Mandatory Expenditures and Expenditures for
Business-type Activities), as well as all unobligated Capital Outlays, as savings and realign such
savings to what he deems are priority projects, whether or not such projects have existing
appropriations in the GAA. In short, the President under the DAP and NBC 541 usurps the power of
the purse of Congress, making Congress inutile and a surplusage. It is surprising that the majority in
the Senate and in the House of Representatives support the DAP and NBC 541 when these
Executive acts actually castrate the power of the purse of Congress. This Court cannot allow a
castration of a vital part of the checks-and-balances enshrined in the Constitution, even if the branch
adversely affected suicidally consents to it. The solemn duty of this Court is to uphold the
Constitution and to strike down the DAP and NBC 541.

ACCORDINGLY, I vote to declare the following acts and practices under the Disbursement
Acceleration Program and the National Budget Circular No. 541 dated 18 July 2012
UNCONSTITUTIONAL for violating Section 25(5), Article VI of the Constitution:

1 Transfers of appropriations from the Executive to the Legislature, the Commission on

Elections and the Commission on Audit;

2. Disbursements of unobligated allotments for MOOE as savings and their realignment to

other items in the GAAs, where the MOOE that are the sources of savings are appropriations
for months still to lapse;

3. Disbursements of unobligated allotments for Capital Outlay as savings and their

realignment to other items in the GAA, prior to the last two months of the fiscal year if the
period to obligate is one year, or prior to the last two months of the second year if the period
to obligate is two years; and
 4. Disbursements of unobligated allotments as savings and their realignment to items or
projects not found in the GAA.

In addition, the use of the Unprogrammed Fund without the certification by the National Treasurer
that the revenue collections for the fiscal year exceeded the revenue target for that year is declared
VOID for being contrary to the express condition for the use of the Unprogrammed Fund under the
GAAs.

ANTONIO T. CARPIO
Associate Justice

SEPARATE OPINION

BRION, J.:

Preliminary Statement

I submit this Concurring and Dissenting Opinion to reflect my views on the constitutionality of the
Disbursement Acceleration Program (DAP) and its implementing budget circular, National Budget
Circular No. 541 (NBC 541).

The Court will recall that following the lead of J. Antonio Carpio, I submitted my original Separate
Opinion in April 2014 during the Court’s Baguio session after the promised ponencia was not issued.
This move, to be sure, was an unusual one, as Members of the Court, in the usual course, wait for
the ponencia or the Member-in-Charge’s report before expressing their views through their separate
opinions. Two reasons, however, compelled me to act as I did.

First, the Court failed to meaning fully consider the petitioners’ prayer for a temporary restraining
order (TRO);  delay intervened until it was too late to consider whether we would or would not issue
1

a TRO. Based on this experience, I wanted to avoid any further deferment in resolving this case on
the merits as the Court, under the circumstances,  had already been in delay. I surmise that J.
2

Carpio was in a similar frame of mind when he issued his own original Opinion.

Second, I felt that we should no longer dilly-dally as, together with the closely-related Priority
Development Assistance Fund (PDAF) case,  the present DAP case is a part of the country’s biggest
3

scandal and, on its own, is a precedent-setting case with profound impact on the nation.

Because of what the PDAF involved, namely, the amount (approximately ₱10 Billion), the
personalities(the members of Congress at the highest levels) and the circumstances(perceived
betrayal of public trust in a national situation of unchecked poverty and natural calamity), it caused
"public outrage" and "emergent public distrust"(to use the words of J. Mariano del Castillo in his
Separate Opinion).

The present DAP case, for its part, involves circumstances that are similar to the PDAF and much
more: it involves funds amounting to almost ₱150 Billion or almost 15 times the PDAF
case;  entanglement with the unconstitutional PDAF; personalities at the very highest level in both
4

the Executive and the Legislative Departments of government; and demonstrated lack of respect for
public funds, institutions, and the Constitution. This case, in my view, is the biggest since I came to
the Court in terms of these factors alone.
Separate from these circumstances, many other principles underlying our Republic are at stake and
we, as a nation, cannot and should not be perceived to be weak or hesitant in supporting these
principles. Among them are the regime of the rule of law where we cannot afford to fail; our
constitutional system of checks and balances and of the separation of powers that indicate the
health of constitutionalism and democracy in our country; the stability of our government in light of
the possible effect that our ruling, either way, will have on the institutions and officials involved; and
the moral values and the people’s level of trust that we cannot allow to disintegrate.

Under these circumstances, I felt that before any massive dissatisfaction and unrest among the
populace could set in, the Court should act lest its name also be dragged into the scandal. To state
the obvious, the Judiciary’s complicity – whether by delay or perceptions of mishandling, cover up,
whitewash or unacceptable ruling – could already entail a perception of failure of government,
constitutionalism and democracy because of the involvement of the three great branches of
government. The people’s inevitable question could then be: who else is there to trust?

Thus, this Court should be as thorough as possible in the handling of this case, making sure that, at
the very least, both the reality and perception of its integrity would be intact. Towards this end, we
should thoroughly exhaust the discussion of all the issues before us – both express and implied – to
ensure the maximum in transparency, lucidity and logic.

This spirit was apparently the reason why the member-in-charge, J. Lucas Bersamin, suffered delay
in the issuance of his ponencia. To his credit, his Opinion, when it was issued, turned out to be
thorough and comprehensive (although I disagree with some of the points he made).

As defined by J. Bersamin, based on the pleadings and without objection from the parties, the issues
before the Court are quoted below. 5

Issues

Under the Advisory issued on November 14, 2013, the presentations of the parties during the oral
arguments were to be limited to the following issues, 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 issued 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. 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
Constitution.

Separately from these, J. Bersamin dwelt on and discussed in his ponencia the applicability of the
doctrine of operative fact after recognizing that the parties had been fully heard on this point. The
inclusion of this issue, in my view, was a very good call on J. Bersamin’s part as a discussion of the
potential consequences of our ruling cannot be left out without risking the charge that we have been
less than thorough and have made an incomplete decision.

My Positions

In this Concurring and Dissenting Opinion, I CONCUR with the conclusions of J. Bersamin to the
extent discussed below and add my voice to the Separate Concurring Opinion of J. Carpio, that the
DAP is unconstitutional.

Specifically, I hold that:

a) the Court has jurisdiction to hear and decide the petitions under its expanded power of
judicial review, as provided under Section 1, Article VIII of the Constitution and as explained
below;

b) the DAP violates the principles of checks and balances and the separation of powers that
the 1987 Constitution integrates into the budgetary process;
 c) the DAP violates the constitutional prohibitions against the transfer of appropriations and
against the transfer of funds from one branch of the government to another, both under
Section 25(5) of Article VI of the Constitution; and

d) the DAP violates the special conditions for the release of the Unprogrammed Fund.

Thus, to me, the DAP is unconstitutional in more ways than one.

Further, I generally agree with the ponente’s conclusion regarding the applicability of the operative
fact doctrine, subject to the details discussed below in this Opinion.

A Brief Background

The Court, as has been mentioned, ruled on the constitutionality of the PDAF and found the system
to be unconstitutional for its disregard and violation of the constitutional separation of powers and
the check and balance principles. These constitutional transgressions resulted from the irregularities
and anomalies that attended the PDAF implementation.

But even before the Court could rule on the constitutionality of the PDAF, the controversy that it
generated had spilled into and had created renewed demands for accountability in yet another
governmental action – the DAP that, until then, had been unknown. The DAP’s existence was
unwittingly disclosed to the public when a senator, charged with anomalies regarding his PDAF,
attempted to clear his name through a privilege speech. 6

In response, the government (through the Department of Budget and Management [DBM]),
responded by issuing press releases  and other public communications, explaining how the DAP
7

worked and how it had been beneficial to the Filipino nation. No less than President Aquino, Jr.
himself went on television to defend the DAP.  These efforts, however, proved insufficient and did
8

not prevent the public’s distrust (heretofore directed against the PDAF) from creeping into the DAP. 9

The DAP, like the PDAF, involved the implementation of the national budget but focused largely on
how the Executive implemented the General Appropriations Act (GAA). As in the PDAF, the charges
involved the unconstitutional intrusion by one branch of government (the Executive) into the
exclusive prerogatives of another (the Legislative) in the budgetary process.

The present petitioners charge that the DAP was used as the means to allow the Executive to
intrude into the legislative budgetary process, thereby subverting and rendering useless the
appropriations Congress made under the GAA. In short, through the DAP, the Executive effectively
exercised the power of appropriation exclusively reserved by the Constitution to Congress.

I recall at this point that we ruled in Belgica v. Executive Secretary  that the PDAF system was
10

unconstitutional because of the legislative intrusion into the Executive’s implementation of the PDAF
– a violation of the principles of separation of powers and checks and balances.

The DAP, in parallel with the PDAF but going the other way, allegedly allowed the Executive to
disregard the GAA so that the latter could determine the projects, activities and plans (PAPs) where
national funds would be deployed and spent, creating thereby a budget independently determined by
the Executive within the congressionally determined budget.

If true, the two systems – the PDAF and the DAP – effectively allowed the two branches of
government to unconstitutionally share in their respective exclusive prerogatives in the formulation
and implementation of the national budget, contrary to the checks and balances and accountability
system envisioned by the Constitution. This overarching sharing system facilitated – if preliminary
congressional and news reports are to be believed – the funneling of funds into the pockets of
politicians and unscrupulous private individuals in a widespread and systemic corruption of the
country’s budgetary process.

Notably, this combined application of the PDAF and DAP systems – according to news reports and
the privilege speech of one Senator  – enabled the Executive to secure the votes for the conviction
11

of former Chief Justice Renato Corona and the filing of impeachment charges against former
Ombudsman Merceditas Gutierrez. Another senator also spoke in his own privilege speech on what
transpired while the impeachment case against the former Chief Justice was before the
Senate.  Interestingly, both senators were recipients of PDAF funds over and above the usual PDAF
12

allocation,  and both now stand criminally charged in relation with the implementation of PDAF
13

funds. A third senator, who had not spoken at all about the impeachment, likewise received
additional PDAF funds and also stands similarly charged. 14

What is truly frightening in all these series of events is that the illegalities – based on congressional
investigations  and the initial charges recently brought by the Ombudsman  – appeared to have
15 16

been pervasively practiced; thus, they caught in their webs a significant number of senators and
congressmen. All these appeared, based on the evidence presented before this Court, to have been
made possible through the action of no less than the highest levels of the Executive. 17

Thus, what appears to be involved is not a one-time and one-shot act of corruption by one or a few
government officials, but by a host of public officials whose functions and interdependent moves
supported their respective private and individual nefarious objectives.

In these lights and if only to clear the air and ensure that the government maintains the people’s
trust, the Court must now decisively exercise its duty to protect and defend the Constitution, if need
be, to declare the unconstitutionality of the DAP in the same decisive manner we declared the PDAF
system unconstitutional. To shirk from this responsibility is to consent to the perversion of our
republican way of life.

At its worst, the continuation of the present systems, if true, can lead to the concentration of power in
the Executive, as the national budget would in effect be its sole prerogative. This surrender of the
Legislative’s power of the purse to the Executive affects not only the budgetary process and
accountability, but injures the legislative power itself, as the funds to finance legislation crafted by
Congress would be subject to the sole will of the Executive Branch. In no time, intrusion into the
Judiciary cannot but follow through intimidation and perversion of values. We have had a similar
incident of this type in our history and we ought, by this time, to have learned our lessons. As one
philosopher cautioned, those who do not remember the past are condemned to repeat it. 18

While we have the duty to pass upon the validity of the DAP, we must, at the same time, do so fully
aware of the consequences of our decision. As I have said, the highest stakes are involved for the
country.

If indeed the DAP is constitutional as the government claims, we must immediately and decisively
say so to clear the presently muddled constitutional air; to foster the stability of our government; and
to significantly contribute to shoring up our people’s trust and the nation’s moral values. Our ruling, if
it is fair and arrived at with integrity, would help achieve these objectives.

On the other hand, if the DAP is unconstitutional, then we should unequivocally so declare as we did
in the PDAF case, but we should do this with an eye on consciously protecting our institutions,
whether they be executive, legislative or judicial; we cannot aim to destroy or weaken, or impose the
superiority that the Constitution did not grant us. Our aim should be to maintain the balance intended
by our Constitution, the guiding instrument that must at all times reign supreme.

These balancing and strengthening acts, of course, cannot come at the sacrifice of the public
accountability that our Constitution has enshrined;  institutions are irreplaceable but public officials
19

are not and should go and fall if they must. This is the type of action that will enhance transparency
and public accountability. That those who erred must suffer is a consequence that evildoers should
have foreseen even before they undertook their illegal and unconstitutional act.

For ease of presentation, this Concurring and Dissenting Opinion shall proceed under the following
structure:

A. Factual Antecedents

1. The DAP and its origins

a. The Memoranda from DBM Secretary Florencio Abad to the President

B. Preliminary Matters

1. The Court’s expanded power of judicial review

2. Prima facie showing of grave abuse of discretion

a. The lack of audit findings does not negate grave abuse of discretion

3. Transcendental importance of the issues presented by the petitions

4. Justiciability and Political Questions

5. The Court’s boundary-keeping role in times of political upheaval

C. Substantive Matters

1. The DAP violates the principles of checks and balances and the separation of
powers that the 1987 Constitution integrated in the budgetary process

a. The principle of separation of powers and checks and balances in the

budgetary process

b. How the DAP violates these principles

2. The DAP violates the prohibition against the transfer of appropriations

a. the power to augment is a very narrow exception to the general prohibition

against the transfer of appropriations

b. the need for actual savings before the power to augment may be exercised
 c. savings cannot be used to fund programs and projects not appropriated by
Congress

d. additional limitations imposed by Congress under the GAA

i. definition of savings

ii. two-year period within which appropriations for Capital Outlay and
Maintenance and other Operating Expense (MOOE) may be spent

iii. general prohibition against impoundment of releases

e. the sources of DAP funds cannot qualify as savings

i. unobligated allotments

i.1 final discontinuance or abandonment

i.2 use of section 38 as justification

f. the DAP violates the prohibition against impoundment

g. qualifications to the President’s flexibilities in budget execution

h. the DAP, in funding items not found in the GAA, violated the Constitution

3. The DAP violates the special conditions for the release of the
Unprogrammed Fund in the 2011 and 2012 GAAs

4. The operative fact doctrine: concept, limits and application to the DAP’s
unconstitutionality.

A. Factual Antecedents

1. The DAP and its origins

On September 28, 2013, Secretary Abad released an official statement, through the DBM website,
explaining that the amounts released to Senators on top of their regular PDAF allocations towards
the end of 2012 were part of a fund he called the DAP.  He claimed that these releases were, in fact,
20

not the "first time that releases from DAP were made to fund project requests from legislators"
because the DAP had been in existence since the latter part of 2011.

In the course of hearing these petitions, the respondents submitted "evidence packets" explaining
how the DAP came into existence and how it operated. We can thus authoritatively and with
sufficient factual bases discuss these points.

a. The Memoranda from

Secretary Abad to the President
In a Memorandum dated October 12, 2011,  Secretary Abad sought and secured a formal
21

confirmation of the President’s approval of the DAP for a total of ₱72.11 Billion.  He identified the
22

DAP’s fund sources and their description as:

1. FY 2011 Unreleased Personal Services (PS) Appropriations – Unreleased [PS]

appropriations which will lapse at the end of FY 2011

2. FY 2011 Unreleased Appropriations - Unreleased appropriations (slow moving projects

and programs for discontinuance)

3. FY 2010 Unprogrammed Fund-Supported by the dividends of GFIs

4. FY 2010 Carryover Appropriation - Unreleased appropriations (slow moving projects and

programs for discontinuance) and savings from Zero-based budgeting initiative

5. FY 2011 Budget items for realignment - FY 2011 Agency Budget items that can be
realigned within agency to fund new fast disbursing projects: DPWH, DA, DOTC, DepEd. 23

Among the DAP-funded projects for National Government Agencies (NGA) were: (i) the Commission
on Audit’s (COA’s) Infrastructure Program and the hiring of additional litigation experts; and (ii)
various other local projects. In the "Project List: FY 2011 Disbursement Acceleration Plan," the two
listed projects were described as follows:

Agency Amount Details

(in
million)
xxx xxx xxx
2. Commission 144 Capacity Building Program of the COA. The Capacity Building
on Audit Program of the COA shall include the hiring of litigation experts,
(COA) consultants and investigators and the development of its IT
Infrastructure Program
xxx xxx xxx
22. PDAF 6,500 For Augmentation
(Various other
local

projects)
     

The President approved these requests. 24

Subsequently, Secretary Abad sent to the President another Memorandum dated December 12,
2011,  requesting for omnibus authority to consolidate savings/unutilized balances in fiscal year (FY)
25

2011 corresponding to completed or discontinued projects and their realignment. The DBM stated
that the savings out of the 2011 GAA were to be pooled for the following purposes:

1.1 to provide for new activities which have not been anticipated during the preparation of
the budget;
 1.2 to augment additional requirements of on-going priority projects

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[underscoring supplied]

In yet another Memorandum dated June 25, 2012,  Secretary Abad asked the President for the
26

grant of authority: (i) to consolidate savings/unutilized balances in FY 2012 corresponding to unfilled

positions and completed or discontinued projects; and (ii) for the withdrawal and pooling of the
available and unobligated balances, for both continuing and current allotments, of national
government agencies as of June 30, 2012.

The DBM stated that the savings out of the 2012 GAA corresponding to unfilled positions and to
completed or discontinued projects were to be pooled for the following purposes:

1.1 to augment additional requirements of on-going priority projects

1.2 to provide for deficiencies under the Special Purpose Funds, e.g., PDAF, Calamity Fund,
Contingent Fund

1.3 to cover for the modifications of the original allotment class allocation as a result of on-
going priority projects and implementation of new activities[.] [underscoring and emphases
supplied]

Among the "priority projects" identified was the construction of the Legislative Library and Archive
Building/Congressional E-Library with the House of Representative as the identified agency. This
was described as:

Construction of the Legislative Library and Archive Building/Congressional E-Library

This request from House Speaker Feliciano Belmonte, Jr. for the release of ₱250M shall cover the
completion of the construction of the Legislative Library and Archives Building at the Batasan
Pambansa Complex. This construction project was approved in 2009 at an estimated cost of ₱320M.
Of this amount, ₱70M shall be funded from the budget of HOR and ₱250M from the 2009 DPWH
budget.

The initial phase of the construction work (₱67.7M) was completed in May 29, 2010. Recently, COA
recommended that completion of the remaining works be undertaken to prevent deterioration of
materials used in the initial work. The Lump-sum for the Construction of Public Biddings under the
DPWH budget where the request could be charged cannot accommodate the ₱250M requirement. It
is recommended that this be charged against available savings. [emphases supplied]

On June 27, 2012, the President also approved this request. 27

Consistent with these memoranda, on July 8, 2012, the DBM issued National Budget Circular (NBC)
No. 541, entitled "Adoption of Operational Efficiency Measure – Withdrawal of Agencies’ Unobligated
Allotments as of June 30, 2012."
Per the President’s "directive" dated June 27, 2012, NBC No. 541 authorized Secretary Abad to
withdraw the unobligated allotments of agencies that had low level of obligations as of June 30,
2012. These unobligated allotments under NBC No. 541 referred to two kinds of allotments: one is
the continuing allotment that is charged against the GAA for FY 2011, and the other is the current
allotment that is charged against the GAA of FY 2012. 28

Based on the earlier memoranda and NBC No. 541, the DAP funds were sourced from: (i) "savings"
generated by the government, as well as (ii) the Unprogrammed Fund. The savings were sourced
from:

1. Unreleased appropriations for unfilled positions which will lapse at the end of the year;

2. Available balances from completed or discontinued projects;

3. Unreleased appropriations of slow moving projects and discontinued projects; and

4. Withdrawn unobligated allotments which have earlier been released to NGA. 29

In a May 20, 2013 Memorandum,  the DBM stated that it had identified savings out of the 2011 GAA
30

which could be pooled for the following purposes:

5.1 to augment additional requirements of on-going priority projects and other spending
priorities;

5.2 to provide for deficiencies under the Special Purpose Funds, e.g., PDAF, Calamity Fund,
Contingent Fund;

5.3 to cover for the modifications of the original allotment class allocation as a result of on-
going priority projects and implementation of new activities(e.g., increase/decrease in PS,
MOOE, and CO). [underscoring and emphases supplied]

According to the DBM, with the one-year validity of appropriations in the 2013 GAA, the DBM had to
ensure the maximum use of the available allotment.

Accordingly, 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. The allotments to
be withdrawn would 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 President likewise granted this request.
31

Based on these antecedents, the petitioners uniformly claim that the DAP is unconstitutional for
violating Section 25, paragraph 5  and Section 29, paragraph 1, Article VI,  as well as Section 17,
32 33

Article VII  of the 1987 Constitution.

34

Discussions

B. Preliminary Matters

The challenges against the DAP’s constitutionality were filed with the Court through petitions for
certiorari and prohibition under Rule 65 of the Rules of Court. These are the modes of review that
have been traditionally used by litigants to directly invoke the Court’s power of judicial review.
Given these cited modes, it was not surprising that part of the respondents’ procedural counter-
arguments focused on the non-fulfillment of all the conditions that a Rule 65 petition requires. The
remainder, on the other hand, focused on the petitioners’ alleged failure to present a case for grave
abuse of discretion against the respondents.

These opposing positions opportunely provide me the chance to reiterate the fresh approach I first
developed in my Separate Opinion in Imbong v. Executive Secretary  to clarify the Court’s
35

approaches in giving due course to and reviewing constitutional cases.

As I explained in Imbong, the Court under the 1987 Constitution possesses three powers:

(1) the traditional justiciable cases involving actual disputes and controversies based purely
on demandable and enforceable rights;

(2) the traditional justiciable cases as understood in (1), but additionally involving
jurisdictional and constitutional issues;

(3) pure constitutional disputes attended by grave abuse of discretion in the process involved
or in their result/s.

The present petitions allege that grave abuse of discretion and violations of the Constitution
attended the DAP, from the perspectives of both its creation and terms, and its sourcing and use of
funds. In these lights, the exercise of our expanded power of judicial review falls within the third kind
above, i.e., the duty to determine whether there has been grave abuse of discretion on the part of
any governmental body (in this case, by the Executive)to ensure that the boundaries drawn by the
Constitution have been and are respected and maintained.

That Rule 65 of the Rules of Court has been expressly cited, to my mind, is not a hindrance to our
present review as the allegations of the petitions and the remedies sought, not their titles, determine
our jurisdiction in the exercise of the power of judicial review.

1. The Court’s expanded power of judicial review

In contrast with previous constitutions, the 1987 Constitution substantially fleshed out the meaning of
"judicial power," not only by confirming the meaning of the term as understood by jurisprudence up
to that time, but by going beyond the accepted jurisprudential meaning of the term.

Section 1, Article VIII of the 1987 Constitution reads:

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. (italics, emphases and underscore supplied)

Under these terms, the present Constitution not only integrates the traditional definition of judicial
power, but introduces as well a completely new power and duty to the Judiciary under the last
phrase — "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."
This addition was apparently in response to the Judiciary’s past experience of invoking the political
question doctrine to avoid cases that had political dimensions but were otherwise justiciable. The
addition responded as well to the societal disquiet that resulted from these past judicial rulings.

Under the expanded judicial power, justiciability expressly and textually depends only on the
presence or absence of grave abuse of discretion, as distinguished from a situation where the issue
of constitutional validity is raised within a "traditionally" justiciable case which demands that the
requirement of actual controversy based on specific legal rights must exist. Notably, even if the
requirements under the traditional definition of judicial power are applied, these requisites are
complied with once grave abuse of discretion is prima facie shown to have taken place. The
presence or absence of grave abuse of discretion is the justiciable issue to be resolved.

Necessarily, a matter is ripe for adjudication under the expanded judicial power if the assailed law or
rule is already in effect. If something had already been accomplished or performed by the Legislative
and/or the Executive, and the petitioner sufficiently alleges the existence of an immediate or
threatened injury to itself as a result of the challenged action, then the controversy cannot but
already be ripe for adjudication. 36

In the expanded judicial power, any citizen of the Philippines to whom the assailed law or rule is
shown to apply necessarily has locus standi since a constitutional violation constitutes an affront or
injury to the affected citizens of the country. If at all, a less stringent requirement of locus standi only
needs to be shown to differentiate a justiciable case of this type from the pure or mere opinion that
courts cannot render.

The traditional rules on hierarchy of courts and transcendental importance, far from being grounds
for the dismissal of the petition raising the question of unconstitutionality, are necessarily reduced to
rules relating to the level of court that should handle the controversy, as directed by the Supreme
Court.

Thus, all courts have the power of expanded judicial review, but only when a petition involves a
matter of transcendental importance should it be directly filed before this Court. Otherwise, the Court
may either dismiss the petition or remand it to the appropriate lower court, based on its consideration
of the urgency, importance, or the evidentiary requirements of the case.

In other words, petitions – in order to successfully invoke the Court’s power of expanded judicial
review – must satisfy two essential requisites: first, they must demonstrate a prima facie showing of
grave abuse of discretion on the part of the governmental body’s actions; and second, they must
prove that they relate to matters of transcendental importance to the nation.

The first requirement establishes the need for the Court’s exercise of expanded judicial review
powers; the second requirement justifies direct recourse to the Court and a relaxation of standing
requirements.

The present petitions clearly satisfy these requisites as explained below.

2. Prima facie showing of grave abuse of discretion

The respondents posit that the petitioners’ allegations miserably failed to make a case of grave
abuse of discretion considering the "insufficiency and uncertainty of the facts" alleged as they are
mostly based on newspaper clippings and media reports.  Given the innumerable allotments and
37

disbursements, they argue that the petitioners are required to establish with sufficient clarity the
kinds of allotments and disbursements complained of in the petitions. On this basis, the respondents
question the presence of an actual case or controversy in the petitions.

I cannot agree with the respondents’ positions.

I note that aside from newspaper clippings showing the antecedents surrounding the DAP, the
petitions are filled with quotations from the respondents themselves, either through press releases to
the general public or as published in government websites.  In fact, the petitions – quoting the press
38

release published in the respondents’ website – enumerated disbursements released through the
DAP;  it also included admissions from no less than Secretary Abad regarding the use of funds from
39

the DAP to fund projects identified by legislators on top of their regular PDAF allocations.
40

Additionally, the respondents, in the course of the oral arguments, submitted details of the programs
funded by the DAP,  and admitted in Court that the funding of Congress’ e-library and certain
41

projects in the COA came from the DAP.  They likewise stated in their submitted memorandum that
42

the President "made available" to the Commission on Elections (COMELEC) the "savings" of his
department upon request for funds. 43

The mechanics by which funds were pooled together to create and fund the DAP are also evident
from the statements published in the DBM website,  as well as in national budget circulars and
44

approved memoranda implementing the DAP. The respondents also submitted a memo showing the
President’s approval of the DAP’s creation.

All of these cumulatively and sufficiently lead to a prima facie case of grave abuse of discretion by
the Executive in the handling of public funds. In other words, these admitted pieces of evidence,
taken together, support the petitioners’ allegations and establish sufficient basic premises for the
Court’s action on the merits. While the Court, unlike the trial courts, does not conduct proceedings to
receive evidence, it must recognize as established the facts admitted or undisputedly represented by
the parties themselves.

First, the existence of the DAP itself, the justification for its creation, the respondent’s legal
characterization of the source of DAP funds (i.e., unobligated allotments and unreleased
appropriations for slow moving projects) and the various purposes for which the DAP funds would be
used (i.e., for PDAF augmentation and for "aiding" other branches of government and other
constitutional bodies) are clearly and indisputably shown.

Second, the respondents’ undisputed realignment of funds from one point to another inevitably
raised questions that, as discussed above, are ripe for constitutional scrutiny.
45

The established prima facie case means that without considering any contradicting evidence, the
allegations, admissions, official statements and documentary evidence before the Court sufficiently
show the existence of grave abuse of discretion. This situation, to my mind, is patent from the
allegations in the petitions, read with the cited admissions and those obtained through the oral
arguments, particularly (1)on how savings had been generated and their uses; and (2)on the transfer
of funds budgeted for the Executive to the Legislative, the COA, and the COMELEC.

a. The lack of audit findings does not negate grave abuse of discretion

The respondents additionally deny the existence of an actual case because the COA has yet to
render its audit findings to determine whether the DAP-funded projects identified in the petitions are
lawful or not, thus showing that the petitions may be premature.
I do not find this contention persuasive.

The issue of criminal, civil or administrative liability, determined on the basis, among others, of the
COA’s findings, does not and cannot preempt the issue of constitutionality. In fact, the Court’s
finding of unconstitutionality inevitably leads to the determination of the possibility of the commission
of infractions that can give rise to different liabilities. The Court’s findings too should be material in
the appropriate proceedings where the liabilities arising from grave constitutional violations are
properly determined.

The prima facie case, as established and shown in these proceedings, is sufficient to resolve the
issue of whether the Executive committed grave abuse of discretion in creating and implementing
the DAP. In other words, the absence of any COA finding on the validity of the disbursements under
the DAP cannot render the present petitions premature.

To avoid any confusion, let me restate and clarify my view that while the COA can rule on the legality
or regularity of an item of expense, it cannot rule on the constitutionality of the measure that made
the expenditure possible. This issue remains for the courts, not for the COA, to decide upon.

On the same reasoning, the invocation of the presumption of constitutionality of legislative and
executive acts immediately loses its appeal when it is considered that the presumption is never
meant to shield government officials from challenges against their official actions (or from
liability)where the violation of the Constitution is otherwise clear and unequivocal.

3. Transcendental importance of the issues presented by the petitions

The petitions likewise establish the second requirement of transcendental importance.

While the concept of transcendental importance has no doctrinal definition, former Supreme Court
Justice Florentino P. Feliciano came up with the following determinants whose degree of presence
or absence can guide the courts in determining whether a case is one of transcendental importance:
(1) the character of the funds or other assets involved in the case; (2)the presence of a clear case of
disregard of a constitutional or statutory prohibition by the public respondent agency or
instrumentality of the government; and (3)the lack of any other party with a more direct and specific
interest in raising the questions being raised.46

I submit that these determinants are all present in the cases before us.

For one, the Executive’s undisputed creation and implementation of the DAP, which involves billions
of taxpayers’ money (and which potentially involves billions more unless halted), satisfy the first
determinant. To point out a present obvious reality, the Executive is even now engaged in a "shame"
campaign to prod people to pay their taxes. If taxes will continue to be faithfully paid, now and in the
future, it is of transcendental importance for the people to know how their tax money is spent or
misspent, and to be informed as well that they have this right.

For another, the petitioners’ serious allegations of constitutional violation by the Executive — in
transferring appropriations despite the nonexistence of savings and the respondents’ commission of
grave abuse of discretion in disregarding the limitations of allowable transfer of appropriations under
Section 25(5), Article VI of the Constitution as admitted by the respondents themselves — satisfy the
second determinant. Based on the admissions made alone, the incidents of constitutional violations
are clear, patent and of utmost gravity; they affect the very nature of our republican system of
government.
Lastly, given the intrinsic nature of the petitions as taxpayers’ suits (to prevent wastage and
misapplication of funds by an unconstitutional executive act), there can really be no other party with
a more direct and specific interest in raising the issue of constitutionality than the petitioners, suing
as taxpayers and invoking a public right.

Over and above these determinants, the transcendental importance of these present cases lies in
the complementary relation of their presented issues with those raised in the PDAF which the Court
squarely ruled upon in the recent case of Belgica v. Executive Secretary. 47

In Belgica, the Court declared the statutorily-created pork barrel system to be unconstitutional for
violating the core doctrine of separation of powers. The Court ruled that the legislator’s post-
enactment participation in the areas of project identification, fund release and fund realignment or
role in the implementation or enforcement of the GAAs are beyond Congress’ oversight function, and
are therefore unconstitutional. The Court pertinently ruled:

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. 48

In this light, the statement of the COA Chairperson during the oral arguments is particularly
illuminating:

Justice Bersamin: Alright, the next question Chairperson is this, do you remember if your office has
in [sic] pass an audit any activity or any transfer of funds under the DAP?
Chairperson Pulido Tan: Under this particular administration, if I may say, Sir…

Justice Bersamin: DAP only, its existence came only in the last quarter of 2011, 541 was released
only in the middle of 2012, so it is as recent as that, I do not talk about the previous administration.
Chairperson Pulido Tan: Your Honor, if I may, because from the way we have looked at it so far, it is
really nothing new. It’s only called DAP now but in the past, the past administration has been doing
this kind of using funds and appropriated appropriations.  In the past, we would account for them
1âwphi1

under what we call, what was called then "Reserved Controlled Account" ang tawag po dun, after a
while and then eventually it became a very generic Pooled Savings Programs. In 2011 that was
when it was called the "DAP" but the mechanism, Your Honor, is essentially the same, the items of
funds or appropriations being put together practically the same and… we saw that happening even
as far back as 2006. There were other releases because that was how it was [sic] been even in the
past, Your Honor, and its [sic] only been called DAP now in 2011… it has been happening in the
past, yes, we passed them on audit, as in the same way that we also disallowed some in audit. And
that is what is going to be the course of event also in the present, Your Honor. 49

The Court should find it significant that it was the COA Chairperson herself who spoke in this quoted
transcript of the proceedings. Her statement lends credence to the respondents’ claim that NBC No.
541 is not really the "face of the DAP." NBC No. 541 only formalized what the Executive had been
doing even prior to its issuance.

To point out the obvious, if a "practice" similar to the mechanism under the DAP already existed and
was being observed by the Executive in the execution of the enacted budget — in the same manner
that the PDAF was also a "practice" during the execution stage of a GAA and which was simply
embodied in the GAA provisions— then there is every reason for the Court to squarely rule on the
constitutionality of the Executive’s action in light of the seriousness of the allegations of constitutional
violations in the petitions.

In fact, the nature and amounts of the public funds involved are more than enough to sound alarm
bells to this Court if we are to maintain fealty to our role as the guardian of the Constitution.

Secretary Abad’s official, public and unrefuted statement that part of the releases of DAP funds in
2012was "based entirely on letters of request submitted to us by the Senators" should neither
escape the Court’s attention nor should the Court gloss over it. From the very start, his statement
cast a much darker cloud on the validity of the DAP in light of our pronouncement in Belgica 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
xxx

xxxx

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.50

This ruling effectively emphasizes that the transcendental importance of these cases alone renders it
obligatory for this Court to allow the direct invocation of its expanded judicial review powers and the
relaxation of the strict application of procedural requirements.

4. Justiciability and Political Questions

Justiciability refers to the fitness or propriety of undertaking the judicial review of particular matters or
cases; it describes the character of issues that are inherently susceptible of being decided on
grounds recognized by law. 51

In contradistinction, political questions refer to those that, 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 legislative or executive branch of the government; it is concerned with issues
dependent upon the wisdom, and not the legality of a particular measure.  Where the issues so
52

posed are political, the Court normally cannot assume jurisdiction under the doctrine of separation of
powers except where the court finds that there are constitutionally-imposed limits on the exercise of
the powers conferred on a political branch of the government. 53

In these cases, the petitioners have strongly shown the textual limits to the Executive’s power over
the implementation of the GAA, particularly in the handling and management of funds. Far from
bordering on political questions, the challenges raised in the present petitions against the
constitutionality of the DAP are actually anchored on specific constitutional and statutory provisions
governing the realignment or transfer of funds.
The increase of government expenditures is a macroeconomic tool that is at the disposal of the
country’s policy-makers to stimulate the country’s economy and improve economic growth. From this
perspective, constitutional provisions touching on economic matters are understandably broadly
worded to accommodate competing needs and to give policy-makers (and even the Court) the
necessary flexibility to decide policy questions or disputes on a case-to-case basis.

A broad formulation and interpretation of this guiding principle, however, cannot be used to override
plain and clear provisions of the Constitution (and relevant laws) that are in place under the wide
umbrella of the rule of law. While the three goals of the economy under Section 1, Article XIII of the
1987 Constitution - as a legal translation of the Executive’s economic justification for the DAP – are
addressed to the political branches of the government, sole reliance on these objectives would
ignore the constitutional limitations applicable to the means for achieving them. These legal
limitations are precisely at the core of the issues presented to us in these challenges to the
constitutionality of the DAP’s creation and implementation; the issues before us are legal ones, not
economic or political.

For this reason, I have brushed aside as beyond our authority to consider and rule upon the views in
other Opinions justifying the issuance of the DAP for largely economic practicality reasons.

5. The Court’s boundary-keeping role in times of political upheaval

As a final note on the procedural aspects, I believe that the present case provides us with an
excellent opportunity to revisit our role as boundary-keeper, a role assigned to us to ensure that the
limits set by the Constitution between and among the different branches of government are
observed.

As early as Angara v. Electoral Commission,  this Court has identified itself as the mediator in
54

demarcating the constitutional limits in the exercise of power by each branch of government. We
then observed that these constitutional boundaries tend to be forgotten or marred in times of societal
disquiet or political excitement, and it is the Court’s role to clarify and reinforce the proper allocation
of powers so that the different branches of government would not act outside their respective
spheres of influence.

We clarified that although we may, in effect, nullify governmental actions abhorrent to the
Constitution, we do not undertake this role because of "judicial supremacy" but because this duty
has been assigned to us by the Constitution.

Time and again, we have looked back to our Angara ruling when cases of national interest reach the
Court, and have used its guiding principles to determine whether or not to act on the cases before
us.

Since Angara, things have changed because of developments in our political history. Since then, the
Court has been granted expanded jurisdiction to determine not only the traditional justiciable
controversies that led to Angara, but also the existence of grave abuse of discretion by any agency
or instrumentality of the government. Thus, our jurisdiction has been expanded to the extent of the
new grant, in the process affecting the traditional justiciability requirements developed since Angara.

The principles in Angara, to be sure, still carry a lot of truth and relevance, but these principles now
have to be adjusted to make way for the expanded jurisdiction that this landmark ruling did not
contemplate.
We still are the mediators between competing claims for authority but the 1987 Constitution has
taken it one step further: we now also determine the presence or absence of grave abuse of
discretion on the part of any government agency or instrumentality, regardless of the presence of
political questions that may have come with the controversy. This expansion necessarily gives rise to
a host of questions: does our constitutional duty end with the determination of the presence or
absence of grave abuse of discretion and the decision on the constitutional status of a challenged
governmental action? To what extent can we, acting within our judicial power and the power of
judicial review, clarify the consequences of our decision?

Recent jurisprudence shows that we have been providing guidance to the bench and the bar, to
clarify the application of the law and of our decisions to future situations not squarely covered by the
presented facts and issues, but which may possibly arise again because of the complexity and
character of the issues involved. We have set guidelines, for instance, on how to apply our ruling in
Atong Paglaum v. Comelec  on the requirements to qualify as a partylist under the partylist system.
55

As well, we provided guidelines in Republic v. CA and Molina  on how to interpret and apply Article
56

36 of the Family Code.

It is in these lights that I favorably view the Court’s resolve to clarify the application of the operative
fact doctrine to the issue of the DAP’s constitutionality and the potential consequences under a
ruling of unconstitutionality. It is in this spirit that I discuss these topics below.

C. Substantive Matters

1. The DAP violates the principles of

checks and balances and the separation of
powers that the 1987 Constitution
integrated in the budgetary process

a. The principles of separation of

powers and checks and
balances in the budgetary
process

The recent Belgica ruling gave this Court the opportunity to discuss and deliberate on the principle of
separation of powers as applied in the budgetary process. We there held that the post-enactment
measures in the PDAF allowed senators and members of the House of Representatives to wield and
encroach on the item veto power of the President.

In so doing, we likewise discussed the budgetary process embodied in the Constitution, as well as
the delineation of the roles each branch of government plays in the formulation, enactment, and
implementation of the national budget, and in the accountability for its proper handling.

As I explained in my Concurring and Dissenting Opinion in Belgica, the budgetary process —

painstakingly detailed in the 1987 Constitution—embodies the general principle of separation of
powers and checks and balances under which the Legislative, the Executive, and the Judiciary
operate. It also provides the specific limitations on what the Executive and Legislature can and
cannot do to ensure that neither branch of government steps beyond its own area and into another’s
constitutionally-assigned role; any intrusive step violates the separation of powers and the checks
and balances on which our republican system of government is founded.

In the context of the enactment and implementation of the national budget, the legislature has been
assigned the power of the purse– it determines the taxes necessary to fund government activities,
the programs where these public funds shall be spent, as well as the amount of funding under which
each program shall operate. On the other hand, the Executive is given the duty to ensure that the
laws that Congress enacted are followed and fully enforced. The roles of these two branches of
government are reflected in the provisions governing their operations. These roles also serve as the
limit of their inherent plenary powers.

The 1987 Constitution, recognizing the importance of the national budget, provided not only the
general framework for its enactment, implementation and accountability; it also set forth specific
limits in the exercise of the respective powers by the Executive and the Legislative, all the time
clearly separating them so that they would not overstep into each other’s pre-assigned domain.

Thus, Congress is granted the power of appropriations under the framework provided in the
Constitution, while the Executive is granted the power to implement the programs funded by these
appropriations, also based on the same constitutional framework. It is in this manner that the
separation of powers principle operates in the budgetary process.

Under the complementary principle of checks and balances, as applied to the budget process, both
the Executive and the Legislative play constitutionally-defined roles.

At the budget preparation and proposal stage, the Executive is given the initiative; it starts the
budgetary process by submitting to Congress, within 30 days from the opening of every regular
session, a budget  of expenditures and sources of financing that becomes the basis for the general
57

appropriations bill. This budget contains the appropriations recommended by the President for the
operation of the government. 58

While the President undertakes the planning and recommendation, the Constitution requires him to
comply with the form, content and manner of its preparation as prescribed by law.  The Constitution
59

relents to the President’s judgment in preparing the budget by prohibiting Congress from increasing
the budget recommended by the Executive for the next fiscal year.

But while Congress is so limited, to it is given – as the body directly representing the people - the
authority to ultimately determine the country’s policy and spending priorities, both in terms of the
public purpose that an item of expenditure seeks to achieve and the extent of the amount it sees fit
to achieve that purpose. To carry out this intent, the Constitution mandates that no money shall be
paid out of the treasury except in pursuance of an appropriation  made by law.  Also, the
60 61

Constitution prohibits the transfer of appropriations, with specified exceptions, in order to ensure that
the power of appropriation remains exclusively with Congress. 62

Aside from the prohibition on the transfer of appropriations, the Constitution also requires that the
procedure in approving appropriations for Congress shall strictly follow the procedure for approving
appropriations for other departments and agencies. Section 25(3), Article VII of the Constitution
seeks to ensure that while Congress is given the power of appropriation, it must undergo the same
process before its budget is approved. 63

Once Congress has spoken through the passage of the general appropriations bill based on the
budget submitted by the President, the Constitution authorizes the President to exercise some
degree of control over an appropriation legislation by allowing him to exercise an item-veto
power.  As a counter-balance, Congress may override the President’s veto by a vote of 2/3 of all its
64

members. 65

Upon passage of the general appropriations bill into law (either by presidential approval or inaction
allowing the bill to lapse into a law), none of the three branches of government and the constitutional
bodies can thwart congressional budgetary will by crossing constitutional boundaries through the
transfer of appropriations or funds across departmental borders. This is the added precautionary
measure thrown in to secure the painstakingly designed check-and-balance mechanisms.

In the end, what appears clear from all the carefully-designed plan is that the Legislative and the
Executive check and counter-check one another, so that no one branch achieves predominance in
the operations of the government. The Constitution, in effect, holds the vision that all these
measures shall result in balanced governance, to the benefit of the governed, with enough flexibility
to respond and adjust to the myriad situations that may transpire in the course of governance (such
as the provision allowing the transfer of appropriations within very narrow constitutionally-defined
limits).

Beyond the internal flexibility measures, the Constitution also provides for an external measure,
specifically, the authority of the President to call Congress to special session at any time,  and his
66

authority to certify a bill (including a special budget bill) for immediate enactment to meet a public
calamity or emergency. 67

By these measures, the Constitution envisions governance to be effective and responsive, even in
times of calamities and emergencies, while maintaining the carefully-designed separation and
checking principles integrated in the budgetary process. These measures, of course, cannot wholly
address stresses brought about by human frailties such as inefficiencies and malicious designs,
which are management functions for the Executive to handle within the defined parameters of the
constitutional structure.

b. How the DAP violates these principles

Under this carefully laid-out constitutional system, the DAP violates the principles of separation of
powers and checks and balances on two (2) counts: first, by pooling funds that cannot at all be
classified as savings; and second, by using these funds to finance projects outside the Executive or
for projects with no appropriation cover. The details behind these transgressions and their
constitutional status are further discussed below.

These violations – in direct violation of the "no transfer" proviso of Section 25(5) of Article VI of the
Constitution – had the effect of allowing the Executive to encroach on the domain of Congress in the
budgetary process. By facilitating the use of funds not classified as savings to finance items other
than for which they have been appropriated, the DAP in effect allowed the President to circumvent
the constitutional budgetary process and to veto items of the GAA without subjecting them to the 2/3
overriding veto that Congress is empowered to exercise.

Additionally, this practice allows the creation of a budget within a budget: the use of funds not
otherwise classifiable as savings disregards the items for which these funds had been appropriated,
and allows their use for items for which they had not been appropriated.

Worse, the violation becomes even graver when, as the oral arguments and admissions later
showed, the funds provided to finance appropriations in the Executive Department had been used
for projects in the Legislature and other constitutional bodies. In short, the violation allowed the
constitutionally-prohibited transfer of funds across constitutional boundaries.

Through these violations of the express terms of Section 25(5), Article VI of the 1987 Constitution,
the DAP directly contravened the principles of separation of powers and checks and balances that
the Constitution built into the budgetary process.
2. The DAP violates the prohibition
against the transfer of appropriations
a. the power to augment is a very
narrow exception to the
general prohibition against the
transfer of appropriations

Section 25(5), Article VI of the 1987 Constitution prohibits the enactment of any law authorizing the
transfer of appropriations:

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. [italics, emphasis and underscore ours]

This general prohibition against the transfer of funds is related to, and supports, the constitutional
rule that "No money shall be paid out of the Treasury except in pursuance of an appropriation made
by law."  Public funds cannot be used for projects and programs other than what they have been
68

intended for, as expressed in appropriations made by law. Likewise, appropriated funds cannot,
through transfers, be withheld from the use for which they have been intended.

These two provisions, in tandem, seek to ensure that the power of appropriation remains with the
Legislature. Under the doctrine of separation of powers, the power of appropriation falls within the
domain of the legislative branch of government: what item/s of expenditure will be given priority in a
limited budget and for what amount/s, and the public purposes they seek to serve, are matters within
the discretion of the representatives of the people to determine.

But recognizing that unforeseeable events may transpire in the actual implementation of the budget,
the Constitution allowed a narrow exception to Article VI, Section 25(5)’s general prohibition: it
allowed a transfer of funds allocated for a particular appropriation, once these have become savings,
to augment items in other appropriations within the same branch of government.

To ensure that this exception does not become the rule, the Constitution provided a catch: a transfer
of appropriations may only be exercised if Congress authorizes it by law. The authority to legislate
an exception, however, is not a plenary; it must be exercised within the parameters and conditions
set by the Constitution itself, as follows:

First, the transfer may be allowed only when appropriations have become savings;

Second, the transfer may be exercised only by specific public officials (i.e., by 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);

Third, these savings may only be used to augment and only existing items in the GAA can be
augmented; and

Fourth, these items must be found within each branch of government’s respective appropriations.

Viewed in this manner, it at once becomes clear that the authority to transfer funds that Congress
may grant by law, can only be a very narrow exception to the general prohibition against the transfer
of funds; all the requisites must fall in place before any transfer of funds allotted in the GAA may be
made.

Significantly, this reading of how the requisites for the application of Section 25(5) and the treatment
of its exception is not at all new to the Court as we have previously ruled on this point in Nazareth v.
Villar.  We then said:
69

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 augment any 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.

b. the need for "actual savings"

before the power to augment
may be exercised

In several cases, the Court ruled that actual savings must exist before the power to augment, under
the exception in Section 25, Article VI of the Constitution, may be exercised.

In Demetria v. Alba,  the Court struck down paragraph 1, Section 44 of Presidential Decree No.
70

1177 (that allowed the President to "transfer any fund" appropriated for the Executive Department
under the GAA "to any program, project or activity of any department, bureau, or office included in
the General Appropriations Act") as unconstitutional for directly colliding with the constitutional
prohibition on the transfer of an appropriation from one item to another.
The Court ruled that this provision authorizes an "[i]ndiscriminate transfer [of] funds xxx 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"  in violation of Section 16(5), Article VIII of the 1973 Constitution
71

(presently Section 25(5), Article VI of the 1987 Constitution).

In Demetria, the Court noted that the leeway granted to public officers in using funds allotted for
appropriations to augment other items in the GAA is limited since Section 16(5), Article VIII of the
1973 Constitution (likewise adopted in toto in the 1987 Constitution) has specified the purpose and
conditions for the transfer of appropriations. A transfer may be made only if there are savings from
another item in the appropriation of the government branch or constitutional body.

We reiterated this ruling in Sanchez v. Commission of Audit,  further emphasizing that "[a]ctual
72

savings is a sine qua non to a valid transfer of funds from one government agency to another." 73

Thus, two essential requisites must be present for a transfer of appropriation to be validly carried
out. First, there must be savings in the programmed appropriation of the transferring agency.
Second, there must be an existing item, project or activity with an appropriation in the receiving
agency to which the savings will be transferred.

c. savings cannot be used to fund

programs and projects not
appropriated for by Congress

Neither can savings be used to fund programs and projects not appropriated for by Congress.

In Sanchez v. Commission on Audit,  we noted that the illegality of the transfer of funds from the
74

Department of Interior and Local Government (DILG) to the Office of the President stems not only
from the lack of actual savings, but from the lack of an appropriation that authorizes the use of funds
for the "ad hoc task force" to which the funds were transferred.

We reiterated this ruling in Nazareth v. Villar  where we upheld the COA’s decision to disapprove the
75

use of the Department of Science and Technology’s (DOST’s) savings to fund its employees’
benefits under the Magna Carta for Scientists, Engineers, Researchers, and other Science and
Technology Personnel in Government. We said that although the source of funds, i.e., the DOST
savings, was legal, its use to fund benefits for which no appropriation had been provided in the
GAAs in the years they were released, violated Sections 29 and 25(5), Article 29 of the 1987
Constitution.

Thus, savings cannot be used to augment non-existent items in the GAA. Where there are no
appropriations for capital outlay in a specific agency or program, for example, savings cannot be
used to buy capital equipment for that program. Neither can savings be used to fund the hiring of
personnel, where a program’s appropriation does not specify an item for personnel services.

d. additional limitations imposed

by Congress under the GAA

Aside from the limitations for exercising the power to augment under the 1987 Constitution,
Congress also provided even stricter and tighter limitations before a transfer of appropriations may
take place in the GAAs for FYs 2010, 2011 and 2012. These congressional limitations are as
follows:
i. definition of savings

The GAAs of 2010, 2011 and 2012 all have identical provisions on the definition of savings and
augmentation; on the terms under which their use may be prioritized; and on how they may be used.
Section 61 of the 2010 GAA, Section 60 of the 2011 GAA and Section 54 of the 2012 GAA all
similarly provided that:

Meaning of Savings xxx. 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.

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 appropriations otherwise authorized in this Act.

These provisions effectively limit the Executive’s exercise of the power to augment, as they strictly
define when funds may be considered as savings and when funds may be used to augment other
items in the GAA. From these provisions, the existence of "savings" required the concurrence of the
following statutory requirements:

1. That there be a programmed appropriation.

2. That there be an unexpended amount (available balance) from this programmed

appropriation.

3. That the available balance be due to, or must arise from, any of the following:

a. A work, activity or purpose under a programmed appropriation is completed, finally

discontinued or abandoned OR

b. The unpaid compensation and related costs pertaining to vacant positions and
leaves of absence without pay; OR

c. The implementation of measures that resulted in improved systems and

efficiencies, enabling agencies to meet and deliver the required or planned targets,
programs, and services at a lesser cost.

4. That the available balance be unobligated or unencumbered.

When the Executive decides to finally discontinue or abandon a project or activity under a
programmed appropriation, the Executive must necessarily stop the expenditure and thereby reduce
or retain the funds. The available balance from a project that is completed, finally discontinued or
abandoned, by clear definition of law, becomes "savings" that may be used to augment a deficient
item of appropriation in the GAA.

ii. two-year period within

which appropriations for
Capital Outlay and
MOOE may be spent

Aside from specifying the terms under which funds may be considered savings, Congress also deem
edit appropriate to extend the period of validity of the appropriations in the GAA. To ensure that
funds are spent as appropriated, the GAAs of FYs 2010, 2011 and 2012 provided that MOOE and
capital outlays shall be available for release and obligation for a period extending one FY after the
end of the year in which these items were appropriated. 76

Thus, funds appropriated for the capital outlays and MOOE in FY 2010 were allowed to be allotted,
obligated and released until FY 2011; funds for FY 2011 until FY 2012; and funds for FY 2012 until
FY 2013. The extended period was in recognition of the exigencies that could occur in implementing
an appropriation. In effect, these provisions qualified the definition of savings, as they extended the
period within which a program or project could be completed, discontinued or abandoned. They also
further limited the instances when funds could be used to augment other items in the GAA.

Notably, the provisions effectively granted the Executive flexibility in implementing the GAA, and also
ensured that public funds shall be spent as appropriated. They were valid policy decisions that
Congress made and, hence, must be fully respected.

iii. general prohibition

against impoundment
of releases

Lastly, in addition to limiting when funds may be used to augment other items in the GAA, Congress
also prohibited the deduction and retention of their release. Sections 64 and 65 of the GAAs of 2010,
2011 and 2012 provided that:

Sec. 64. Prohibition Against Impoundment of Appropriations. No appropriations authorized under

this Act shall be impounded through retention or deduction, unless in accordance with the rules and
regulations to be issued by the DBM: PROVIDED, That all the funds appropriated for the purposes,
programs, projects, and activities 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.

Sec. 65. 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. 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 BESF 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.
Read together, these provisions clearly set out Congress’ intent that the appropriations in the GAA
could be released and used only as programmed. This is the general rule. As an exception, the
President was given the power to retain or reduce appropriations only in case of an unmanageable
National Government budget deficit. A very narrow exception has to prevail in reading these
provisions as the general rule came from the command of the Constitution itself.

The Constitution expressly provides that no money shall be paid out of the Treasury except in
pursuance of an appropriation made by law. As an authorization to the Executive, the constitutional
provision actually serves as a legislative check on the disbursing power of the Executive.  It carries
77

into effect the rule that the President has no inherent authority to countermand what Congress has
decreed since the Executive’s constitutional duty is to ensure the faithful execution of the
laws.  Impounding appropriations is an action contrary to the President’s duty to ensure that all laws
78

are faithfully executed. As appropriations in the GAA are part of a law, the President is duty bound to
implement them; any suspension or deduction of these appropriations amounted to a refusal to
execute the provisions of a law.

The GAA, however, in consideration of unforeseeable circumstances that might render the
implementation of all of its appropriations impracticable or impossible, authorized the President to
impound appropriations in cases of an unmanageable national budget deficit.

Impoundment refers to the refusal by the President, for whatever reason, to spend funds made
available by Congress. It is the failure to spend or obligate budgetary authority of any type.  The
79

President may conceivably impound appropriated funds in order to avoid wastage of public funds
without ignoring legislative will (routine impoundments) or because he disagrees with congressional
policy (policy impoundments).

In the United States (as well as in the Philippines), presidential impoundment does not enjoy any
express or implied constitutional support.  Thus, unless supported by the appropriating act itself, the
80

impoundment of appropriated funds by the Executive is improper. On the other hand, if a statute
providing for a specific appropriation for the expenditure of the designated funds is non-mandatory,
the President does not exceed his or her statutory authority by withholding a portion of the
appropriated funds. 81

In the Philippines, the only instance when retention and reduction of appropriation is allowed is in the
case of reserves. This exception is based on Section 37, Chapter 5, Book VI of the Administrative
Code of 1987 which, by it terms, is not strictly an impoundment provision.

Section 37. Creation of Appropriation Reserves.- The Secretary may establish reserves against
appropriations to provide for contingencies and emergencies which may arise later in the calendar
year and which would otherwise require deficiency appropriations.

The establishment of appropriation reserves shall not necessarily mean that such portion of the
appropriation will not be made available for expenditure. Should conditions change during the fiscal
year justifying the use of the reserve, necessary adjudgments may be made by the Secretary when
requested by the department, official or agency concerned.

Under this provision, retention or deduction may be made from appropriations by creating reserves
for contingency and emergency purposes to be determined by the DBM Secretary, which reserves
must still be spent within the GAA’s FY. Otherwise, they shall revert back to the General Fund and
would be unavailable for expenditure unless covered by a subsequent legislative enactment. 82
e. the sources of DAP funds
cannot qualify as savings

i. unobligated allotments

As I earlier emphasized, funds allotted for particular appropriations may only be used to augment
other items in the GAA when there are actual savings. The DAP, by pooling funds together to fast-
track priority projects of the government, violated this critical requirement as the sources of DAP
funds cannot qualify as savings.

In pooling together "unobligated allotments"  to augment other items in the GAA, the DAP used
83

funds that had already been allotted but had yet to be obligated or spent for its intended purpose. I
fully agree with J. Carpio that these funds cannot be considered as savings, as well as in the
distinction he made on when appropriations for CO and MOOE may be considered as savings.

NBC No. 541 states that it shall cover the withdrawal of unobligated allotments as of June 30,
2012of all national government agencies 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[.]

This withdrawal is contrary to the intent and language of Section 61 of the 2011 GAA, and Section
65  which extends the availability of an appropriation up to the next year, i.e., FY 2012.  The two
84 85

provisions, read together, provide a guide on when an appropriation for an MOOE and a CO may
exactly be considered as savings. Section 61 enumerates instances when funding for an
appropriation may be discontinued or abandoned, while Section 65 provides the deadline up to when
an appropriation under the 2011 GAA may be spent.

Thus, under Section 65 of the 2011 GAA, appropriations for CO and MOOE may be released and
spent until the end of FY 2012. Funding for CO and MOOE appropriations, in the meantime, may be
discontinued or abandoned during its two year lifespan for any of the reasons enumerated in Section
61. Appropriations for CO and MOOE may be stopped when the PAPs they fund get completed,
finally discontinued, or abandoned, and the excess funds left, if any, will be considered as savings.

Applying these concepts to the MOOE and CO leads us to the distinctions Justice Carpio set in his
Separate Concurring Opinion. By its very nature, appropriations for the MOOE lapse monthly, and
thus any fund allotted for the month left unused qualifies as savings, with two exceptions: (1) MOOE
which under the GAA can be declared as savings only in the last quarter of the FY and (2)
expenditures for Business-type activities, which under the GAA cannot be realigned.

Funds appropriated for CO, on the other hand, cannot be declared as savings unless the PAP it
finances gets completed, finally discontinued or abandoned, and there are excess funds allotted for
the PAP. Neither can it be declared as savings unless there is no more time for public bidding to
obligate the allotment within its two-year period of availability.

Thus, NBC 541 cannot validly declare CO as savings in the middle of the FY, long before the end of
the two-year period when such funds could still be obligated. And while MOOE for FY 2012 from
January to June 2012 may be considered savings, the MOOE for a future period does not qualify as
such.
In this light, NBC No. 541 fostered a constitutional illegality: the premature withdrawal of unobligated
allotments pertaining to capital outlays and MOOE as of June 30, 2012 under the presidential
directive clearly amounted to a presidential amendment of the 2011 GAA and a unilateral veto of an
item of the GAA without giving Congress the opportunity to override the veto as prescribed by
Section 27, Article VI of the Constitution.
86

i.1 final discontinuance or abandonment

I likewise agree with J. Carpio’s characterization of the final discontinuance, on one hand, and the
abandonment, on the other hand, that would result in savings. The GAA itself provides an illustration
of the impossibility or non-feasibility of a project that justified its discontinuance or abandonment:

Sec. 61. Realignment/Relocation of Capital Outlays. The amount appropriated in this Act for
acquisition, construction, replacement, rehabilitation and completion of various Capital Outlays may
be realigned/relocated in cases of imbalanced allocation of projects within the district, duplication of
projects, overlapping of funding source and similar cases: PROVIDED, That such
realignment/relocation of Capital Outlays shall be done only upon prior consultation with the
representative of the legislative district concerned.

Unless the respondents, however, can actually show that the reallocation of unobligated allotments
pertaining to capital outlays was made with prior consultation with the legislative district
representative concerned under the terms of above-quoted Section 61, they cannot claim any
legitimate basis to come under its terms.

i.2 use of Section 38 as justification

I likewise find the respondents’ invocation of Section 38, Chapter 5, Book VI of the Administrative
Code to justify the withdrawal and pooling of unobligated allotments and unreleased appropriations
for slow moving projects to be misplaced. This provision reads:

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.

Since the actual execution of the budget could meet unforeseen contingencies, this provision
delegated to the President the power to suspend or otherwise stop further expenditure of allotted
funds based on a broad legislative standard of public interest.

By its clear terms, the authority granted is to stop or suspend the expenditure of allotted funds.
Funds are only considered allotted when the DBM has authorized an agency to incur obligation for
specified amounts contained in an appropriation law.  Unlike an appropriation which is made by the
87

legislative, an allotment is an executive authorization to the different departments, bureaus, offices

and agencies that obligations may now be incurred. Allotment is part of the President’s power to
execute an appropriations law and it is this power that he can suspend or reverse, not the will of
Congress expressed through the appropriations law.

Thus, the President cannot exercise the power to suspend or stop expenditure under Section 38
towards appropriations, as funds for it have yet to be released and allotted. Neither can the
President use Section 38 to justify the withdrawal of unobligated allotments under the terms of NBC
541 and its treatment as savings.

Section 38 authorizes the President to either suspend or stop an expenditure. Suspension of

expenditures connotes a temporary executive action, while the stoppage of funds requires finality,
and must comply with the GAA provision on savings. NBC 541 cannot be deemed a suspension of
expenditure under Section 38. Suspension involves a temporary stoppage while the pooling of
unobligated allotments under the DAP was intended to create savings, which involves the final
discontinuance or abandonment of PAPs. Neither can the withdrawal of unobligated allotments be
justified under the authority to stop expenditures in Section 38, as NBC 541 provides that these
allotments can still be reissued. That the withdrawn allotments can be reissued back to the "original
program or project from which it was withdrawn" only means that the original program or project has
not really been "completed or abandoned" so as to qualify the funds therefor as "savings."

In other words, Section 38 authorizes the suspension or stoppage of expenditures; it does not allow
the President to stop an expenditure, use it as savings to augment another item, and then change
his mind and re-issue it back to the original program. Once a program is finally discontinued or
abandoned, its funding is stopped permanently. Suspended expenditures, on the other hand, cannot
be used as savings to augment other items, as savings connote finality.

f. the DAP violates the prohibition against impoundment

To restate, Section 38 of the Administrative Code covers stoppage or suspension of expenditure of

allotted funds. This provision cannot be used as basis to justify the withdrawal and pooling of
unreleased appropriations  for slow-moving projects.
88

The Executive does not have any power to impound appropriations (where otherwise appropriable)
except on the basis of an unmanageable budget deficit or as reserve for purposes of meeting
contingencies and emergencies. None of these exceptions, however, were ever invoked as a
justification for the withdrawal of unreleased appropriations for slow moving projects. As the records
show, these appropriations were withdrawn simply on the basis of the pace of the project as a slow-
moving project. This executive action does not only directly contravene the GAA that the President is
supposed to implement; more importantly, it is a presidential action that the Constitution does not
allow.

Some members of the Court argue that no impoundment took place because the DAP was enforced
to facilitate spending, and not to prevent it. It must be noted, however, that the funds used to spend
on DAP projects were funds impounded from other projects. In order to increase funding on the
projects it funded, the DAP had to create savings that would be used to finance these increases. The
process by which DAP created these savings involved the impoundment of unreleased
appropriations for slow-moving projects. As I have earlier explained, impoundment refers to the
refusal by the President, for whatever reason, to spend funds for appropriations made by Congress.
Through the DAP, funds that were meant to finance appropriations for slow-moving projects were
not released, allotted and spent for the appropriations they were meant to cover. They were
impounded. That these funds were used to finance other appropriations is inconsequential, as the
impoundment had already taken place. Thus, in so far as unreleased appropriations for slow-moving
programs are concerned, these had been impounded, in violation of the clear prohibition against it in
the GAA.

g. Qualifications to the President’s flexibility in budget execution

The ponencia, in characterizing the Executive’s actions in formulating the DAP, pointed out that (1)
the DAP is within the President’s power and prerogative to formulate and implement; and (2) the
President should be given proper flexibility in budget execution. If the DAP had been within the
President’s authority to formulate and implement, and is within the flexibility given to the Executive in
budget execution, then how come a majority of this Court is inclined to believe it to be
unconstitutional?

To answer this query, allow me to clarify the scope and context of the Executive’s prerogative in
budget execution. Flexibility in the budget execution means implementing the provisions of the GAA
and exercising the discretion this entails within the limits provided by the GAA and the Constitution. It
does not mean a wholesale authority to choose which appropriations should get funding, which
appropriations should have less or more, and which should have none at all. Allowing the President
this kind of prerogative robs Congress of its power of the purse, because whatever changes it may
make in the budget legislation phase would still be subject to changes by the President in budget
implementation.

The framers of our Constitution, as well as Congress, however, recognized that there could be
unforeseen instances that would make it unreasonable to implement all the items found in the GAA.
Thus, the Constitution provided for the power of augmentation as an exception to the general
prohibition against transfers of appropriation.

Congress, on the other hand, allowed the President under the Administrative Code to temporarily
suspend or stop the expenditure of funds, subject to certain conditions. Congress also saw it fit to
authorize the President to impound unreleased appropriations in the GAA of 2011 and 2012, but
subject to strict conditions.

These are flexibilities given to the President by the Constitution and by Congress, and which had
been over-extended through the DAP. To reiterate, the DAP exceeded these flexibilities because it
did not comply with the requisites necessary before both the power of augmentation and the power
of impoundment can be lawfully exercised.

With respect to these two prerogatives, a distinction should be made between (1)the transfer of
funds from one purpose (project/program/activity) to another where both purposes are covered by
the same item of expenditure authorized in the GAA, and (2)the transfer of funds from one purpose
to another where the other purpose is already covered by a different item of expenditure authorized
in the GAA.

With the first, no constitutional objection can be raised. Given that the government, more often than
not, operates on a budget deficit than on a budget surplus, the President has the inherent power to
create a policy system that would govern the spending priority of the Executive in implementing the
appropriations law.

The respondents correctly assert that this power is rooted on the constitutional authority of the
President to faithfully execute the laws, among them, the GAA which is a budgetary statute. Since
both purposes fall within the same item of expenditure authorized by law, then from the constitutional
perspective, no transfer of appropriation is really made.

However, with the second, the general rule against transfer of appropriation applies. While the
President concededly has policy-making power in the exercise of his function of law implementation,
his policymaking power does not exist independently of the policies laid down in the law itself
(however broad they may be) that the President is tasked to execute. Much less can the President’s
power exist outside of the limitations of the fundamental law that he is sworn to protect and
defend.  Since the transfer of funds is for a purpose no longer within the coverage of the original
89

item of appropriation, this transfer clearly constitutes a transfer of appropriation beyond the
constitutional limitation.

In sum, while the President has flexibility in pushing for priority programs and crafting policies that he
may deem fit and necessary, the DAP exceeded and over-extended what the President can
legitimately undertake. Specifically, several sources of funding used to facilitate the DAP, as well as
the programs that the DAP funded, went beyond the allowed flexibility given to the President in
budget execution.

That the DAP resulted in economic advances for the Philippines does not validate its component
actions that over-stepped the flexibilities allowed in budget execution, as the ends can never justify
the illegal means. Worthy of note, too, is that the Court is not a competent authority for economic
speculations, as these are matters best left to economists and pundits – many of whom are never in
unison and cannot be considered as the sole authority for economic conclusions. We are, after all, a
court of law bound to make its decisions based on legal considerations, albeit, admittedly, these
decisions have societal outcomes, including consequences to the economy.

h. the DAP, in funding items not found in the GAA, violated the Constitution

I agree with the ponencia’s conclusion that the DAP, in funding items that are not in the GAA,
violated the Constitution. The ponencia’s exhaustive review of the evidence packets submitted by
the OSG shows that some of the projects and programs that the DAP funded had no appropriation.

Thus, the ponencia correctly observed that the DAP funded items which had no appropriation cover,
to wit: (i) personnel services and capital outlay under the DOST’s Disaster Risk, Exposure,
Assessment and Mitigation (DREAM) project; (ii) capital outlay for the COA’s "IT Infrastructure
Program and hiring of additional litigation experts";  (iii) capital outlay for the Philippine Air Force’s
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"On-Base Housing Facilities and Communications Equipment";  and (iv) capital outlay for the
91

Department of Finance’s "IT Infrastructure Maintenance Project."

For instance, the DAP facilitated funding for the DOST’s DREAM project through an appropriation
under the DOST central office, i.e., its appropriation for "Generation of new knowledge and
technologies and research capability building in priority areas identified as strategic to National
Development." The appropriation for the DREAM had no item for Capital Outlay and Personnel
Services; Congress provided only ₱537,910,000.00 for MOOE. The DAP, in contravention of the
constitutional rules on transfer, funded a non-existing item of the appropriation by adding
₱43,504,024.00 for Personnel Services and ₱391,978,387.00 for Capital Outlay.

Following the doctrine established in Nazareth, the items for Personnel Services and capital outlays
under the DREAM project were illegal transfers and use of public funds. Since Congress did not
provide anything for personnel services and capital outlays under the appropriation "Generation of
new knowledge and technologies and research capability building in priority areas identified as
strategic to National Development," then these cannot be funded in the guise of a valid transfer of
savings and augmentation of appropriations.

The same argument applies to the DAP’s funding of capital outlay for the COA’s appropriation for "IT
Infrastructure Program and hiring of additional litigation experts,"  capital outlay for the Department
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of Finance’s "IT Infrastructure Maintenance Project"  and capital outlay for the Philippine Air Force’s
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"On-Base Housing Facilities and Communication Equipment."  None of the appropriations which
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fund these projects had an item for capital outlay, and yet, the DAP introduced funding for capital
outlay in these projects.
Since these expenditures were not given congressional appropriation, the transfer of funds under the
DAP to fund these items cannot be justified even under the exception to the general prohibition
under Section 25(5), Article VI of the 1987 Constitution.

For emphasis, for the power of augmentation to be validly exercised, the item to be augmented must
be an item that has an appropriation under the GAA; if the item funded under the DAP through
savings did not receive any funding from Congress under the GAA, the Executive cannot provide
funding; it may not countermand legislative will by "augmenting" an item that is not existing and
therefore can never be "deficient."

3. The DAP violates the special conditions

for the release of the Unprogrammed
Fund in the 2011 and 2012 GAAs

I agree with the ponencia and Justice Carpio’s arguments that the DAP facilitated the unlawful
release of the Unprogrammed Fund in the 2011 and 2012 GAAs. As an aside, allow me to cite the
legislative history of the provision limiting the release of the Unprogrammed Fund only when original
revenue targets have been exceeded to support their conclusion.

The Unprogrammed Fund in both the 2011 and the 2012 GAAs requires as a condition sine qua non
for its release that the revenue collections exceed the original revenue targets for that year. This
requirement had been worded in an exactly the same phraseology in Special Provision No. 1 in the
2011 GAA and in Special Provision No. 1 in the 2012 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, xxx

Both Special Provisions in the 2011 and 2012 GAAs contain, also in the same language, a proviso
authorizing the use of collections arising from sources not considered in the original revenue targets,
viz.:

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: xxx

Both the ponente and Justice Carpio conclude that this proviso allows the use of sources not
considered in the original revenue targets, but only if the first condition, i.e., the original targets
having been exceeded, was first complied with. Justice Del Castillo, on the other hand, contends
that the proviso was meant to act as an exception to the general rule, and that windfall revenue may
be used to cover appropriations in the Unprogrammed Fund even if the original targets had not been
exceeded.

The proviso allowing the use of sources not considered in the original revenue targets to cover
releases from the Unprogrammed Fund was not intended to prevail over the general provision
requiring that revenue collections first exceed the original revenue targets. In the interpretation of
statutes, that which implements the entire statute should be applied, as against an interpretation that
would render some of its portions ineffectual.  Neither should a proviso be given an interpretation
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that renders the general phrase it qualifies entirely inutile. If we are to follow Justice Del Castillo’s
argument that Special Provision No. 1 allows the use of collections arising from sources not
considered in the original revenue targets even without these targets first being met and exceeded,
then the very restrictive language allowing the release of the Unprogrammed Fund only when
collections exceed original revenue targets would be rendered useless.
This concern was manifested in the President’s Veto Message in 2009, when the release of
Unprogrammed Fund was first conditioned upon exceeding the original revenue targets and
accompanied by the proviso allowing for the use of sources not considered in the original targets:

Congress revised the first sentence of this special provision so that the release of funds appropriated
under the Unprogrammed Fund shall be made only when the revenue collections for the entire year
exceed the original revenue targets. Allow me to emphasize, however, that reference to revenue
collections for the entire year under this special provision pertain only to regular income sources or
those covered by the same set of assumptions used in setting the computation of revenue targets for
the year as reflected in the BESF. It should not, therefore, include new sources of income not
considered nor identified in the original revenue projections. Neither should it cover sources of
income not contemplated under the original assumptions used in setting the revenue targets. 96

Thus, as it was first intended and implemented, the special provision requiring that the
Unprogrammed Fund be released only when original revenue targets had been met, and sources
not considered in the original revenue targets shall not even be included in determining whether the
original revenue targets had been exceeded. It follows, then, that the only time the sources of
revenue not considered in the original revenue targets may be used is when the original revenue
targets had been exceeded.

Otherwise, there is no point in excluding sources not considered in the original revenue targets to
determine whether revenue collections had exceeded these targets, when a proviso would
subsequently allow the use of outside sources even without the targets first being met.

Verily, had it been the intention of Congress to allow the use of sources of funds not considered in
the original revenue targets even if the latter had not been met, then it could have stated it in a
language clearly pointing towards that intent, as some members of the House of Representatives
attempted to do in House Bill No. 5116, viz.:

Section 1. Appropriation of Funds. The following sums, or so much as thereof as may be necessary,
are hereby appropriated out of any funds in the National Treasury of the Philippines not otherwise
appropriated, for the operation of the Government of the Republic of the Philippines from January
one to December thirty-one, two thousand nine, except where otherwise specifically provided herein:
(General Observation: President’s Veto Message, March 12, 2009, page 1269, RA No. 9524). 97

House Bill No. 5116 was an attempt by several members of the House of Representatives to
override the President’s interpretation and implementation of Special Provision No. 1 in the 2009
GAA. That this attempt had not succeeded, and that the implementation of the Special Provision No.
1 in the 2009 continued as the Executive construed it to be meant that the latter’s interpretation of
this Special Provision was the true interpretation of Congress. This interpretation was carried into the
language of Special Provision No. 1 when it was re-enacted in the subsequent years, including the
GAAs of 2011 and 2012; thus, it should be the interpretation that should prevail in this case.

4. The operative fact doctrine:

concept, limits, and application to the
DAP’s unconstitutionality.

I generally agree with J. Bersamin’s conclusion on the operative fact doctrine and, for greater clarity,
discuss its application below for the Court’s consideration and understanding. I dwell most
particularly on the concept of the doctrine and the element of "good faith" that, under the doctrine,
assumes a specialized meaning.
To appreciate the circumstances or situations when the doctrine of operative fact may be applied, I
find it useful to review its development in jurisprudence.

a. The Doctrine: Roots and Concept

The doctrine of operative fact is American in origin, and was discussed in the 1940 case of Chicot
County Drainage Dist. v. Baxter State Bank et al.: 98

The effect of a determination of unconstitutionality must be taken with qualifications. The actual
existence of a statute, prior to such a determination, 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. Questions of rights claimed to have become vested, of status, of prior determinations
deemed to have finality and acted upon accordingly, of public policy in the light of the nature both of
the statute and of its previous application, demand examination. These questions are among the
most difficult of those which have engaged the attention of courts x x x and it is manifest from
numerous decisions that an all-inclusive statement of a principle of absolute retroactive invalidity
cannot be justified. [emphasis supplied]

The doctrine was a departure from the old and long established rule (known as the void ab initio
doctrine) that an "unconstitutional act is not a law; it confers no rights; it imposes no duties; it affords
no protection; it creates no office; it is, in legal contemplation, as inoperative as though it had never
been passed."  By shifting from retroactivity to prospectivity, the US courts took a pragmatic and
99

realistic approach in assessing the effects of a declaration of unconstitutionality of a statute. 100

Incorporation of the doctrine into our legal system came in the 1950s when, in several cases,  the 101

Court considered the effects of the declaration of unconstitutionality of the Moratorium laws on
contracts and obligations.

Despite the invalidity of the Moratorium laws, the Court recognized that they interrupted the running
of the period of prescription while they were in effect; creditors who were unable to institute their
claims during the suspension were, thus, accorded relief.

In Fernandez v. Cuerva & Co.,  a 1967 case, the Court ruled that the invalidation of a statute
102

conferring jurisdiction to an executive department over claims for unpaid salaries should not
prejudice an employee who had previously instituted a claim with the department. The filing of his
claim, albeit with a department later found to be without jurisdiction, nonetheless tolled the running of
the prescriptive period, and the nullification of the statute did not revive it.

In the 1969 case of Municipality of Malabang, Lanao del Sur v. Benito,  the Court affirmed the
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"dissolution" of the Municipality of Balabagan, which was created pursuant to an unconstitutional

statute.

Despite the municipality’s dissolution, the Court assuaged fears that the acts done in the exercise of
the municipality’s corporate powers would also be voided by referring to the Chicot County case and
acknowledging that the municipality’s acts were done relying on the validity of the statute; prior to its
dissolution, its exercise of corporate powers produced effects.

Perhaps the most cited case on the application of the operative fact doctrine is the 1971 case of
Serrano de Agbayani v. Philippine National Bank.  As in the earlier Moratorium cases, Serrano
104
involved the effect of the declaration of the unconstitutionality of the Moratorium law on claims of
prescription of actions for collections of debts and foreclosures of mortgages. Speaking for the
Court, Justice Fernando explained the rationale for the doctrine:

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."  (emphases supplied)
105

Planters Products, Inc. v. Fertiphil Corporation  further explained this rationale, as follows:
106

The doctrine of operative fact, as an exception to the general rule, only applies as a matter of equity
and fair play. It nullifies the effects of an unconstitutional law by recognizing that the existence of a
statute prior to a determination of unconstitutionality is an operative fact and may have
consequences which cannot always be ignored. The past cannot always be erased by a new judicial
declaration.

The doctrine is applicable when a declaration of unconstitutionality will impose an undue burden on
those who have relied on the invalid law. [emphasis ours]

But as we also ruled in this same case, the operative fact doctrine does not always apply and is not
a necessary consequence of every declaration of constitutional invalidity. It can only be invoked in
situations where the nullification of the effects of what used to be a valid law would result in inequity
and injustice. Where no such resulting effects would ensue, the general rule that an unconstitutional
law is totally ineffective should apply.

Additionally, the strictest kind of scrutiny should be accorded to those who may claim the benefit of
the operative fact doctrine as it draws no direct strength or reliance from an express provision of the
Constitution and should not be applied in case of doubt or conflict with a constitutional or statutory
provision.

In these cited cases, the Court, beyond the consideration of prejudice to the parties, also considered
reliance in good faith on the unconstitutional laws prior to their declaration of unconstitutionality. The
"reliance" requirement underscored the rule that the doctrine is applied only as a matter of equity, in
the interest of fair play, and as a practical reality. The doctrine limits the retroactive application of the
law’s nullification to recognize that prior to its nullification, it was a legal reality that governed past
acts or omissions. "Whatever was done while the legislative or the executive act was in operation
should be duly recognized and presumed to be valid in all respects"  so as not to impose an undue
107

burden on those who have relied on the invalid law. The question in every case is whether parties
who reasonably relied in good faith on the old rule prior to its invalidation have acquired interests
that justify restricting the retroactive application of a new rule because to declare otherwise would
cause hardship and unfairness on those parties.  Good faith becomes a necessity as he who comes
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to court must come with clean hands. 109

Essentially, the concept of the doctrine is effect-focused, i.e., whether the effect/s of a party’s
reliance on the invalidated law are compelling enough to exempt him or her from the retroactive
application of the new law. The Court never looked far back enough to address the cause of the
invalidity, for which reason we find nothing in our jurisprudence that extended the operative fact
doctrine to validate the invalidated law itself or to absolve its proponents.

b. Application

Given the jurisprudential meaning of the operative fact doctrine, a first consideration to be made
under the circumstances of this case is the application of the doctrine: (1) to the programs, works
and projects the DAP funded in relying on its validity; (2) to the officials who undertook the programs,
works and projects; and (3) to the public officials responsible for the establishment and
implementation of the DAP.

With respect to the programs, works and projects, I fully agree with J. Bersamin that the DAP-funded
programs, works and projects can no longer be undone; practicality and equity demand that they be
left alone as they were undertaken relying on the validity of the DAP funds at the time these
programs, works and projects were undertaken.

The persons and officials, on the other hand, who merely received or utilized the budgetary funds in
the regular course and without knowledge of the DAP’s invalidity, would suffer prejudice if the
invalidity of the DAP would affect them. Thus, they should not incur any liability for utilizing DAP
funds, unless they committed criminal acts in the course of their actions other than the use of the
funds in good faith.

The doctrine, on the other hand, cannot simply and generally be extended to the officials who never
relied on the DAP’s validity and who are merely linked to the DAP because they were its authors and
implementors. A case in point is the case of the DBM Secretary who formulated and sought the
approval of NBC No. 541 and who, as author, cannot be said to have relied on it in the course of its
operation. Since he did not rely on the DAP, no occasion exists to apply the operative fact doctrine
to him and there is no reason to consider his "good or bad faith" under this doctrine.

This conclusion should apply to all others whose only link to the DAP is as its authors, implementors
or proponents. If these parties, for their own reasons, would claim the benefit of the doctrine, then
the burden is on them to prove that they fall under the coverage of the doctrine. As claimants
seeking protection, they must actively show their good faith reliance; good faith cannot rise on its
own and self-levitate from a law or measure that has fallen due to its unconstitutionality. Upon failure
to discharge the burden, then the general rule should apply – the DAP is a void measure which is
deemed never to have existed at all.

The good faith under this doctrine should be distinguished from the good faith considered from the
perspective of liability. It will be recalled from our above finding that the respondents, through grave
abuse of discretion, committed a constitutional violation by withdrawing funds that are not
considered savings, pooling them together, and using them to finance projects outside of the
Executive branch and to support even the PDAF allocations of legislators.
When transgressions such as these occur, the possibility for liability for the transgressions
committed inevitably arises. It is a basic rule under the law on public officers that public
accountability potentially imposes a three-fold liability – criminal, civil and administrative – against a
public officer. A ruling of this kind can only come from a tribunal with direct or original jurisdiction
over the issue of liability and where the good or bad faith in the performance of duty is a material
issue. This Court is not that kind of tribunal in these proceedings as we merely decide the question
of the DAP’s constitutionality. If we rule beyond pure constitutionality at all, it is only to expound on
the question of the consequences of our declaration of unconstitutionality, in the manner that we do
when we define the application of the operative fact doctrine. Hence, any ruling we make implying
the existence of the presumption of good faith or negating it, is only for the purpose of the question
before us – the constitutionality of the DAP and other related issuances.

To go back to the case of Secretary Abad as an example, we cannot make any finding on good faith
or bad faith from the perspective of the operative fact doctrine since, as author and implementor, he
did not rely in good faith on the DAP.

Neither can we make any pronouncement on his criminal, civil or administrative liability, i.e., based
on his performance of duty, since we do not have the jurisdiction to make this kind of ruling and we
cannot do so without violating his due process rights. In the same manner, given our findings in this
case, we should not identify this Court with a ruling that seemingly clears the respondents from
liabilities for the transgressions we found in the DBM Secretary’s performance of duties when the
evidence before us, at the very least, shows that his actions negate the presumption of good faith
that he would otherwise enjoy in an assessment of his performance of duty.

To be specific about this disclaimer, aside from the many admissions outlined elsewhere in the
Opinion, there are indicators showing that the DBM Secretary might have established the DAP
knowingly aware that it is tainted with unconstitutionality.

Consider, for example, that during the oral arguments, the DBM Secretary admitted that he has an
extensive knowledge of both the legal and practical operations of the budget, as the transcript of my
questioning of the DBM Secretary shows. 110

The exchange, to my mind, negates any claim by the respondent DBM Secretary that he did not
know the legal implications of what he was doing. As a lawyer and with at least 12 years of
experience behind him as a congressman who was even the Chairman of the House Appropriations
Committee, it is inconceivable that he did not know the illegality or unconstitutionality that tainted his
brainchild. Consider, too, in this regard that all appropriation, revenue and tariff bills emanate from
the Lower House  so that the Chair of the Appropriations Committee cannot but be very
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knowledgeable about the budget, its processes and technicalities. In fact, the Secretary likewise
knows budgeting from the other end, i.e., from the user end as the DBM Secretary.

Armed with all these knowledge, it is not hard to believe that he can run circles around the budget
and its processes, and did, in fact, purposely use this knowledge for the administration’s objective of
gathering the very sizeable funds collected under the DAP.

J. Carpio, for his part, in one of the exchanges in this Court’s consideration of the present case, had
occasion to cite examples of why Secretary Abad could not have been in good faith.  With J.
112

Carpio’s permission, I cite the following instances he cited:

1) The Court has already developed jurisprudence on savings and the power to realign. The
DBM cannot feign ignorance of these rulings since it was a respondent in these cases. Thus,
it implemented the DAP knowing full well that it contradicts jurisprudence.
 2) The DBM was not candid with this Court when it claimed that the Bureau of Treasury had
certified that revenue collections for the FYs 2011, 2012 and 2013 exceeded original
revenue targets. On the contrary, it failed to present evidence establishing this claim.

J. Bersamin likewise had his share of showing that the respondent DBM Secretary knew of the
constitutional provisions that the DAP was violating. This came out during his questioning of the
DBM Secretary on cross-border transfers during the oral arguments when the DBM Secretary
admitted knowing the transfers made to the COA and the House of Representatives despite his
awareness of the restrictions under Section 29(1) and Section 25(5), Article VI of the 1987
Constitution.113

In these lights, we should take the utmost care in what we declare as it can have far reaching
effects. Worse for this Court, any advocacy or mention of presumption of good faith may be
characterized as an undue and undeserved deference to the Executive, implying that the rule of law,
separation of powers, and checks and balances may have been compromised in this country. This
impression, to be sure, will not help the reputation of this Court or the stability of our country.

To be very clear about our positions, we can only apply the operative fact doctrine to the programs,
projects and works that can no longer he undone and where the beneficiaries relied in good faith on
the validity of the DAP.

The authors, proponents and implementors of DAP are not among those who can seek coverage
under the doctrine; their link to the DAP was merely to establish and implement the terms that we
now find unconstitutional.

The matter of their good faith in the performance of duty (or its absence) and their liability therefor, if
any, can be made only by the proper tribunals, not by this Court in the present case.

Based on these premises, I concur that the DAP is unconstitutional and should be struck down. I
likewise concur in the application of the Operative Fact Doctrine, as I have explained above and
adopted by the ponencia.

ARTURO D. BRION
Associate Justice

CONCURRING AND DISSENTING

DEL CASTILLO, J.:

The present case comes before us at the heels of immense public outrage that followed the
discovery of alleged abuses of the Priority Development Assistance Fund (PDAF) committed by
certain legislators involving billions of pesos in public funds. In the seminal case of Belgica v. Ochoa,
Jr.,  the Court declared as unconstitutional, in an unprecedented all-encompassing tenor, the PDAF
1

and its precursors as well as all issuances and practices, past and present, appurtenant thereto, for
violating the principles of separation of powers and non-delegability of legislative power as well as
the constitutional provisions on the prescribed procedure of presentment of the budget, presidential
veto, public accountability and local autonomy. The declaration of unconstitutionality elicited the
jubilation of a grateful nation.

While the various investigations relative to the PDAF scandal were taking place, public outrage re-
emerged after a legislator alleged that the President utilized the then little known Disbursement
Acceleration Program (DAP), which was perceived by the public to be another specie of the PDAF,
involving comparably large amounts of public funds, to favor certain legislators.

Thus, petitioners come to this Court seeking to have the DAP likewise declared as unconstitutional.

Amidst the emergent public distrust on the alleged irregular utilization of huge amounts of public
funds, the Court is called upon to determine the constitutional and statutory validity of the DAP. As in
the PDAF case, we must fulfill this solemn duty guided by a singular purpose or consideration: to
defend and uphold the Constitution.

This case affords us the opportunity to look into the nature and scope of Article VI, Section 25(5) of
the Constitution relative to the power of 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 bodies (hereinafter "heads of offices") to use savings to augment the appropriations of
their respective offices. Though the subject constitutional provision seems plain enough, our
interpretation and application thereof relative to the DAP has far reaching consequences on (1) the
limits of this power to augment various budgets in order to prevent the abuse and misuse thereof,
and (2) the capability of the three co-equal branches of the government and the constitutional bodies
to use such power as a tool to promote the general welfare. The proper matrix, then, in determining
the constitutional validity of the power to augment, as exercised by the President through the DAP,
must of necessity involve the balancing of these State interests in (1) the prevention of abuse or
misuse of this power, and (2) the promotion of the general welfare through the use of this power.

With due respect, I find that the theories thus far expressed relative to this case have not adequately
and accurately taken into consideration these paramount State interests. Such theories, if adopted
by the Court, will affect not only the present administration but future administrations as well. They
have serious implications on the very workability of our system of government. It is no exaggeration
to say that our decision today will critically determine the capacity or ability of the government to
fulfill its core mandate to promote the general welfare of our people.

This case must be decided beyond the prevailing climate of public distrust on the expenditure of
huge public funds generated by the PDAF scandal. It must be decided based on the Constitution,
not public opinion. It must be decided based on reason, not fear or passion. It must, ultimately, be
decided based on faith in the moral strength, courage and resolve of our people and nation.

I first discuss the relevant constitutional provisions and principles as well as the statutes
implementing them before assessing the constitutional and statutory validity of the DAP.

Nature, scope and rationale of Article

VI, Section 25(5) of the Constitution

Article VI, Section 25(5) of the Constitution provides:

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 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 subject constitutional provision prohibits the transfer of appropriations. Congress cannot pass a
law authorizing such transfer. However, it is allowed to enact a law to authorize the heads of offices
to transfer savings from one item to another provided that the items fall within the appropriations of
the same office: the President relative to the Executive Department, the Senate President with
respect to the Senate, the Speaker relative to the House of Representatives, the Chief Justice with
respect to the Judicial Department, and the heads of the constitutional bodies relative to their
respective offices. The purpose of the subject constitutional provision is to afford considerable
flexibility to the heads of offices in the use of public funds and resources.  For a transfer of savings to
2

be valid under Article VI, Section 25(5), four (4) requisites must concur: (1) there must be a law
authorizing the heads of offices to transfer savings for augmentation purposes, (2) there must be
savings from an item/s in the appropriations of the office, (3) there must be an item requiring
augmentation in the appropriations of the office, and (4) the transfer of savings should be from one
item to another of the appropriations within the same office.

While the members of the Constitutional Commission did not extensively discuss or debate the
salient points of the subject constitutional provision, the deliberations do reveal its rationale which is
crucial to the just disposition of this case:

MR. NOLLEDO. I have two more questions, Madam President, if the sponsor does not mind. The
first question refers to Section 22, subsection 5, page 12 of the committee report about the provision
that "No law shall be passed authorizing any transfer of appropriations." This provision was set forth
in the 1973 Constitution, inspired by the illegal fund transfer of ₱26.2 million that Senator Padilla was
talking about yesterday which was made by President Marcos in order to benefit the Members of the
Lower House so that his pet bills would find smooth sailing. I am concerned about the discretionary
funds being given to the President every year under the budget. Do we have any provision setting
forth some guidelines for the President in using these discretionary funds? I understand Mr. Marcos
abused this authority. He would transfer a fund from one item to another in the guise of using it to
suppress insurgency. What does the sponsor say about this?

MR. DAVIDE. If Mr. Marcos was able to do that, it was precisely because of the general
appropriations measure allowing the President to transfer funds. And even under P.D.No. 1177
where the President was also given that authority, technically speaking, the provision of the
proposed draft would necessarily prevent that. Mr. Marcos was able to do it because of the decrees
which he promulgated, but the Committee would welcome any proposal at the proper time to totally
prevent abuse in the disbursements of discretionary funds of the President. 3

In another vein, the deliberations of the Constitutional Commission clarified the extent of this power
to augment:

MR. SARMIENTO. I have one last question. Section 25, paragraph (5) authorizes the Chief Justice
of the Supreme Court, the Speaker of the House of Representatives, the President, the President of
the Senate to augment any item in the General Appropriations Law. Do we have a limit in terms of
percentage as to how much they should augment any item in the General Appropriations Law?

MR. AZCUNA. The limit is not in percentage but "from savings." So it is only to the extent of their
savings.4

Two observations may be made on the above.

First, the principal motivation for the inclusion of the subject provision in the Constitution was to
prevent the President from consolidating power by transferring appropriations to the other branches
of government and constitutional bodies in exchange for undue or unwarranted favors from the
latter. Thus, the subject provision is an integral component of the system of checks and balances
under our plan of government. It should be noted though, based on the broad language of the
subject provision, that the check is not only on the President, even though the bulk of the budget is
necessarily appropriated to the Executive Department, because the other branches and
constitutional bodies can very well commit the afore-described transgression although to a much
lesser degree.

Second, the deliberations of the Constitutional Commission on the limits of the power to augment
portray the considerable latitude or leeway given the heads of offices in exercising the power to
augment. The framers saw it fit not to set a limit based on percentage but on the amount of savings
of a particular office, thus, affording heads of offices sufficient flexibility in exercising their power to
augment.

Equally important, though not directly discussed in the deliberations of the Constitutional
Commission, it is fairly evident from the wording of the subject provision that the power to augment
is intended to prevent wastage or under utilization of public funds. In particular, it prevents savings
from remaining idle when there are other important projects or programs within an office which suffer
from deficient appropriations upon their implementation or evaluation. Thus, by providing for the
power to augment, the Constitution espouses a policy of effective and efficient use of public funds to
promote the common good.

In sum, the power to augment under Article VI, Section 25(5) of the Constitution serves two principal
purposes: (1) negatively, as an integral component of the system of checks and balances under our
plan of government, and (2) positively, as a fiscal management tool for the effective and efficient use
of public funds to promote the common good. For these reasons, as preliminarily intimated, the just
resolution of this case hinges on the balancing of two paramount State interests: (1) the prevention
of abuse or misuse of the power to augment, and (2) the promotion of the general welfare through
the power to augment.

I now proceed to discuss the statutes implementing Article VI, Section 25(5) of the Constitution.

Authority to augment

As earlier noted, Article VI, Section 25(5) of the Constitution states that the power to augment must
be authorized "by law." Thus, it has become standard practice to include in the annual general
appropriations act (GAA) a provision granting the power to augment to the heads of offices. As
pertinent to this case, the 2011, 2012 and 2013 GAAs provide, respectively—

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. 5

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. 6

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 the respective appropriations to augment actual deficiencies incurred for the current year in any
item of their respective appropriations.
7

I do not subscribe to the view that the above-quoted grant of authority to augment under the 2011
and 2012 GAAs contravenes the subject constitutional provision. The reason given for this view is
that the subject provisions in the 2011 and 2012 GAAs effectively allows the augmentation of any
item in the GAA, including those that do not belong to the items of the appropriations of the office
from which the savings were generated.

The subject GAAs are duly enacted laws which enjoy the presumption of constitutionality. Thus, they
are to be construed, if possible, to avoid a declaration of unconstitutionality. The rule of long
standing is that, as between two possible constructions, one obviating a finding of unconstitutionality
and the other leading to such a result, the former is to be preferred.  In the case at bar, the 2011 and
8

2012 GAAs can be so reasonably interpreted by construing the phrase "of their respective
appropriations" as qualifying the phrase "to augment any item in this Act." Under this construction,
the authority to augment is, thus, limited to items within the appropriations of the office from which
the savings were generated. Hence, no constitutional infirmity obtains.

Definition of savings and augmentation

The Constitution does not define "savings" and "augmentation" and, thus, the power to define the
nature and scope thereof resides in Congress under the doctrine of necessary implication. To
elaborate, the power of the purse or to make appropriations is vested in Congress. In the exercise of
the power to augment, the definition of "savings" and "augmentation" will necessarily impact the
appropriations made by Congress because the power to augment effectively allows the transfer of a
portion of or even the whole appropriation made in one item in the GAA to another item within the
same office provided that the definitions of "savings" and "augmentation" are met. Thus, the integrity
of the power to make appropriations vested in Congress can only be preserved if the power to define
"savings" and "augmentation" is in Congress as well. Of course, the power to define "savings" and
"augmentation" cannot be exercised in contravention of the tenor of Article VI, Section 25(5) so as to
effectively defeat the objectives of the aforesaid constitutional provision. In the case at bar,
petitioners do not question the validity of the definitions of "savings" and "augmentation" relative to
the 2011, 2012 and 2013 GAAs.

The definition of "savings" and "augmentation" is uniform for the 2011, 2012 and 2013 GAAs, to wit:

[S]avings refer to portions or balances of any programmed appropriation in this Act 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;(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.

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 appropriations otherwise authorized by this Act.  (Emphasis supplied)
9

Pertinent to this case is the first type of "savings" involving portions or balances of any programmed
appropriation in the GAA that is free from any obligation or encumbrances and which are still
available after the completion or final discontinuance or abandonment of the work, activity or
purpose for which the appropriation is authorized. Thus, for "savings" of this type to arise the
following requisites must be met:

1. The appropriation  must be a programmed  appropriation in the GAA;

10 11

2. The appropriation must be free from any obligation or encumbrances;

3. The appropriation must still be available after the completion or final discontinuance or
abandonment of the work, activity or purpose for which the appropriation is authorized.

The portion or balance of the appropriation, when the above requisites are met, thus, constitutes the
first type of "savings."

On the other hand, for "augmentation" to be valid, in accordance with the Article VI, Section 25(5) in
relation to the relevant GAA provision thereon, the following requisites must concur:

1. The program, activity, or project to be augmented by savings must be a program, activity,

or project in the GAA;

2. The program, activity, or project to be augmented by savings must refer to a program,

activity, or project within or under the same office from which the savings were generated;

3. Upon implementation or subsequent evaluation of needed resources, the appropriation of

the program, activity, or project to be augmented by savings must be shown to be deficient.

Notably, the law permits augmentation even before the program, activity, or project is implemented
if, through subsequent evaluation of needed resources, the appropriation for such program, activity,
or project is determined to be deficient.

The power to finally discontinue or

abandon the work, activity or purpose
for which the appropriation is
authorized.

As pertinent to this case, the third requisite of the first type of "savings" in the GAA deserves further
elaboration. Note that the law contemplates, among others, the final discontinuance or abandonment
of the work, activity or purpose for which the appropriation is authorized. Implicit in this provision is
the recognition of the possibility that the work, activity or purpose may be finally discontinued or
abandoned. The law, however, does not state (1) who possesses the power to finally discontinue or
abandon the work, activity or purpose, (2) how such power shall be exercised, and (3) when or
under what circumstances such power shall or may be exercised.

Under the doctrine of necessary implication, it is reasonable to presume that the power to finally
discontinue or abandon the work, activity or purpose is vested in the person given the duty to
implement the appropriation (i.e., the heads of offices), like the President with respect to the budget
of the Executive Department.

As to the manner it shall be exercised, the silence of the law, as presently worded, allows the
exercise of such power to be express or implied. Since there appears to be no particular form or
procedure to be followed in giving notice that such power has been exercised, the Court must look
into the particular circumstances of a case which tend to show, whether expressly or impliedly, that
the work, activity or purpose has been finally abandoned or discontinued in determining whether the
first type of "savings" arose in a given case.

This lack of form, procedure or notice requirement is, concededly, a weak point of this law because
(1) it creates ambiguity when a work, activity or purpose has been finally discontinued or abandoned,
and (2) it prevents interested parties from looking into the government’s justification in finally
discontinuing or abandoning a work, activity or purpose. Indubitably, it opens the doors to abuse of
the power to finally discontinue or abandon which may lead to the generation of illegal "savings." Be
that as it may, the Court cannot remedy the perceived weakness of the law in this regard for this
properly belongs to Congress to remedy or correct. The particular circumstances of a case must,
thus, be looked into in order to determine if, indeed, the power to finally discontinue or abandon the
work, activity or purpose was validly effected.

Anent the conditions as to when or under what circumstances a work, activity or purpose in the GAA
may or shall be finally discontinued or abandoned, again, the law does not clearly spell out these
conditions, which is, again, a weak point of this law. The parties to this case have failed to identify
such conditions and the GAAs themselves, in their other provisions, do not appear to specify these
conditions. Nonetheless, the power to finally discontinue or abandon the work, activity or purpose
recognized in the definition of "savings" in the GAAs cannot be exercised with unbridled discretion
because it would constitute an undue delegation of legislative powers; it would allow the person
possessing such power to determine whether the appropriation will be implemented or not. Again,
the law enjoys the presumption of constitutionality and it must, therefore, be construed, if possible, in
such a way as to avoid a declaration of nullity.

Consequently, considering that the GAA (1) is the implementing legislation of the constitutional
provisions on the enactment of the national budget under Article VI, and (2) is governed by Book VI
("National Government Budgeting") of the Administrative Code, there is no obstacle to locating the
standards that will guide the exercise of the power to finally discontinue or abandon the work, activity
or purpose in the Constitution and Administrative Code.  As previously discussed, the implicit public
12

policy enunciated under the power to augment in Article VI, Section 25(5) of the Constitution is the
effective and efficient use of public funds for the promotion of the common good. The same policy is
expressly articulated in Book VI, Chapter 5 ("Budget Execution"), Section 3 of the Administrative
Code:

SECTION 3. Declaration of Policy. — It is hereby declared the policy of the State to formulate and
implement a National Budget that is an instrument of national development, reflective of national
objectives, strategies and plans. The budget shall be supportive of and consistent with the socio-
economic development plan and shall be oriented towards the achievement of explicit objectives and
expected results, to ensure that funds are utilized and operations are conducted effectively,
economically and efficiently. The national budget shall be formulated within the context of a
regionalized government structure and of the totality of revenues and other receipts, expenditures
and borrowings of all levels of government and of government-owned or controlled corporations. The
budget shall likewise be prepared within the context of the national long-term plan and of a long-term
budget program. (Emphasis supplied)

Prescinding from the above, the power to finally discontinue or abandon the work, activity or
purpose, before savings may arise, should, thus, be circumscribed by the standards of effectivity,
efficiency and economy in the utilization of public funds. For example, if a work, activity or purpose is
found to be tainted with anomalies, the head of office can order the final discontinuance of the work,
activity or purpose because public funds are being fraudulently dissipated contrary to the standard of
effectivity in the utilization of public funds.
The power of the President to suspend or
otherwise stop further expenditure of
funds under Book VI, Chapter V, Section
38 of the Administrative Code.

The power to finally discontinue or abandon the work, activity or purpose for which the appropriation
is authorized in the GAA should be related to the power of the President to suspend or otherwise
stop further expenditure of funds, relative to the appropriations of the Executive Department, under
Book VI, Chapter V, Section 38 (hereinafter "Section 38") of the Administrative Code:

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
13

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. (Emphasis supplied)

Section 38 contemplates two different situations: (1) to suspend expenditure, and (2) to otherwise
stop further expenditure.

"Suspend" means "to cause to stop temporarily; to set aside or make temporarily inoperative; to
defer to a later time on specified conditions;"  "to stop temporarily; to discontinue or to cause to be
14

intermitted or interrupted."
15

On the other hand, "stop" means "to cause to give up or change a course of action; to keep from
carrying out a proposed action";  "to bring or come to an end."
16 17

While "suspending" also connotes "stopping," the former does not mean that a course of action is to
end completely since to suspend is to stop with an expectation or purpose of resumption. On the
other hand, "stop" when used as a verb means "to bring or come to an end." Thus, "stopping" brings
an activity to its complete termination.

As a general rule, in construing words and phrases used in a statute and in the absence of a
contrary intention, they should be given their plain, ordinary and common usage meaning. They
should be understood in their natural, ordinary, commonly-accepted and most obvious signification
because words are presumed to have been used by the legislature in their ordinary and common
use and acceptation. 18

That the two phrases are found in the same sentence further bears out the logical conclusion that
they do not refer to the same thing. Otherwise, one of the said phrases would be rendered
meaningless and a mere surplus age or redundant. This could not have been the intention of the
legislature.
19

Hence, as used in the first phrase in Section 38, "to suspend" expenditure means to temporarily stop
the same with the intention to resume once the reason for the suspension is resolved or the
conditions for the resumption are met. On the other hand, "to otherwise stop further expenditure," as
used in the second phrase in Section 38, means to stop expenditure without any intention of
resuming, or simply stated, to terminate it completely, finally, permanently or definitively.

Consequently, if the President orders the stoppage of further expenditure of funds, pursuant to the
second phrase in Section 38, the work, activity or purpose is completely, finally, permanently or
definitively put to an end or terminated because there is no intention to resume and thus, no further
work or activity can be done without the needed funds. The net effect is that the work, activity or
purpose is finally discontinued or abandoned. In other words, through the power to permanently stop
expenditure, pursuant to the second phrase of Section 38, the President is effectively given the
power to finally discontinue or abandon a work, activity or purpose under a broader  standard of
20

"public interest." When the President exercises this power thusly, the first type of "savings" in the
GAA, as previously discussed, is necessarily generated.

Moreover, Section 38 states in broad and categorical terms that the power of the President to
suspend (i.e., temporary stoppage) or to otherwise stop further expenditure (i.e., permanent
stoppage) refers to "funds allotted for any agency, or any other expenditure authorized in the
General Appropriations Act, x x x."  Book VI, Chapter 5, Section 2(2) of the Administrative Code
21

defines "allotment" as follows:

SECTION 2. Definition of Terms. — When used in this Book:

xxxx

(2) "Allotment" refers to an authorization issued by the Department of Budget to an agency, which
allows it to incur obligations for specified amounts contained in a legislative appropriation. (Emphasis
supplied)

When read in relation to the above definition of "allotment," the phrase "funds allotted" in Section 38,
therefore, refers to both unobligated andobligated allotments for, precisely, an unobligated allotment
refers to an authorization to incur obligations issued by the Department of Budget and Management
(DBM). The law says "to suspend or otherwise stop further expenditure of funds allotted for any
agency" without qualification, and not" "to suspend or otherwise stop further expenditure of obligated
allotments for any agency." The power of the President to suspend or to permanently stop
expenditure in Section 38 is, thus, broad enough to cover both unobligated and obligated allotments.

A contrary interpretation will lead to absurdity. This would mean that the President can only
permanently stop an expenditure via Section 38 if it involves an obligated allotment. But, in a case
where anomalies have been uncovered or where the accomplishment of the project has become
impossible, and the allotment for the project is partly unobligated and partly obligated (as is the usual
practice of releasing the funds in tranches for long-termprojects), the logical course of action would
be to stop the expenditure relative to both unobligated and obligated allotments in order to protect
public interest. Thus, the unobligated allotment may be withdrawn while the obligated allotment may
be de-obligated. But, if the President can only permanently stop an expenditure via Section 38 if it
involves an obligated allotment, then in this scenario, the President would have to first obligate the
unobligated allotment (e.g.,conduct public biddings) and then order the now obligated allotments to
be de-obligated in view of the anomalies that attended the project or the impossibility of its
accomplishment. The law could not have intended such an absurdity.

Moreover, there is, again, nothing in Section 38 that requires that the project has already begun
before the President may permanently order the stoppage of expenditure. To illustrate, if reliable
information reaches the President that anomalies will attend the execution of an item in the GAA or
that the project is no longer feasible, then it makes no sense to prevent the President from
permanently stopping the expenditure, by withdrawing the unobligated allotments, precisely to
prevent the commencement of the project. The government need not wait for it to suffer actual injury
before it takes action to protect public interest nor should it waste public funds in pursuing a project
that has become impossible to accomplish. In both instances, Section 38 empowers the President to
withdraw the unobligated allotments and thereby permanently stop expenditure thereon in
furtherance of public interest.

To recapitulate, that the project has already been started or the allotted funds has already been
obligated is not a pre-condition for the President to be able to order the permanent stoppage of
expenditure, through the withdrawal of the unobligated allotment, pursuant to the second phrase of
Section 38. Under Section 38, the President can order the permanent stoppage of expenditure
relative to both an unobligated and obligated allotment, if public interest so requires. Once the
President orders the permanent stoppage of expenditure, the logical and necessary consequence is
that the project is finally discontinued and abandoned. Hence, savings is generated under the GAA
provision on final discontinuance and abandonment of the work, activity or purpose to the extent of
the unused portion or balance of the appropriation.

I, therefore, do not subscribe to the view that: (1) Section 38 only refers to the suspension of
expenditures, (2) Section 38 does not authorize the withdrawal of unobligated allotments, (3) Section
38 only refers to obligated allotments, and (4) Section 38 only refers to a project that has already
begun.

Was the withdrawal of the unobligated

allotments from slow-moving projects,
under Section 5 of NBC 541, equivalent
to the final discontinuance or
abandonment of these slow-moving
projects which gave rise to "savings"
under the GAA?

This brings us to the first pivotal issue in this case: was the withdrawal of the unobligated allotments,
under Section 5 of National Budget Circular No. 541 (NBC 541), equivalent to the final
discontinuance or abandonment of the covered slow-moving projects which gave rise to "savings"
under the GAA?

As previously discussed, the GAA is silent as to the manner or prescribed form when a work, activity
or purpose is deemed to have been finally discontinued or abandoned for purposes of determining
whether "savings" validly arose. Thus, the exercise of such power may be express or implied.

In the case at bar, NBC 541 does not categorically state that the withdrawal of the unobligated
allotments from slow-moving projects will result to the final discontinuance or abandonment of the
work, activity or purpose. However, because executive actions enjoy presumptive validity, NBC 541
should be interpreted in a way that, if possible, will avoid a declaration of nullity. The Court may
reasonably conceive any set of facts which may sustain its validity. 22

Here, I find that the mechanism adopted under NBC 541 may be viewed wholistically in order to
partially uphold its constitutionality or validity.

The relevant provisions of NBC 541 state:

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[that the] 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).

xxxx

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. (Emphasis in the original)

When NBC 541 states that the released but unobligated allotments of projects as of June 30, 2012
shall be immediately considered for withdrawal, this may be reasonably taken to mean that the
Executive Department has made an initial determination that a project is slow-moving. Upon
evaluation of the reports and consultation with the concerned departments/agencies by the DBM, as
per Section 5.5 of NBC 541 quoted above, the withdrawn unobligated allotments may, among
others, thereafter be reissued to the same project as per Section 5.7.1. As a result, when the
withdrawn allotments are reissued or ploughed back to the same project, this may be reasonably
interpreted to mean that the Executive Department has made a final determination that the project is
not slow-moving and, thus, should not be discontinued in order to spur economic growth.

Because of the broad language of Section 5.7 of NBC 541, the amount of withdrawn allotments that
may be reissued or ploughed back to the same project may be: (1) zero, (2) the same amount as the
unobligated allotment previously withdrawn in that project,(3) more than the amount of the
unobligated allotment previously withdrawn in that project, and (4) less than the amount of the
unobligated allotment previously withdrawn in that project.

In scenario (1), where no withdrawn unobligated allotments are reissued or ploughed back to the
project, this may be construed as an implied exercise of the power to finally discontinue or abandon
a work, activity or purpose because the withdrawal had the effect of permanently preventing the
completion thereof. Resultantly, there arose "savings" from the discontinuance or abandonment of
these slow-moving projects to the extent of the withdrawn unobligated allotments therefrom. Thus,
the withdrawn unobligated allotments from these slow-moving projects, as afore-described, maybe
validly treated as "savings" under the pertinent provisions of the GAA.
In scenario (2), where the same amount as the unobligated allotment previously withdrawn from the
project is reissued or ploughed back to the same project, no constitutional or statutory breach is
apparent because the project is merely continued with its original allotment intact.

In scenario (3), two possible cases may arise. If the withdrawn allotments were merely transferred to
another project within the same item or another item within the Executive Department, without
exceeding the appropriation set by Congress for that item, then no constitutional or statutory breach
occurs because the funds are merely realigned. However, if the withdrawn allotments were
transferred to another project within the same item or in another item within the Executive
Department, the result of which is to exceed the appropriation set by Congress for that item, then an
augmentation effectively occurs. Thus, its validity would depend on whether the augmentation
complied with the constitutional and statutory requisites on "savings" and "augmentation," as
previously discussed. Here, absent actual proof showing non-compliance with such requisites, it
would be premature to make such a declaration. In scenario (4), a constitutional and statutory
breach would be present. If the withdrawn unobligated allotment for a particular project is partially
reissued or ploughed back to the same project, then the project is not actually finally discontinued or
abandoned. And if the project is not actually finally discontinued or abandoned, then no "savings"
can validly be generated pursuant to the GAA definition of "savings." However, in scenario (4), the
project now suffers from a reduction of its original allotment which, under NBC 541,is treated and
used as "savings." This cannot be validly done for it would contravene the definition of "savings"
under the GAA and, thus, circumvent the constitutional power of appropriation vested in Congress.
As a result, in scenario (4), any use of the portion of the withdrawn unobligated allotment, not
reissued or ploughed back to the same project, as "savings" to augment other items in the
appropriations of the Executive Department would be unconstitutional and illegal.

Hence, I find that Sections 5.4, 5.5 and 5.7 of NBC 541 are unconstitutional insofar as they (1)
allowed the withdrawal of unobligated allotments from slow moving projects, which were not finally
discontinued or abandoned, and (2) authorized the use of such withdrawn unobligated allotments as
"savings." In other words, these sections are void insofar as they permit scenario (4) to take place.

It should be noted, however, that whether there were actual instances when scenario (4) occurred
involve factual matters not properly litigated in this case. Thus, I reserve judgment on the
constitutionality of the actual implementation of NBC 541 should a proper case be filed. The limited
finding, for now, is that the wording of Sections 5.4, 5.5 and 5.7 of NBC 541 is partially
unconstitutional insofar as it permits: (1) the withdrawal of unobligated allotments from slow moving
projects, which were not finally discontinued or abandoned, and (2) authorizes the use of such
withdrawn unobligated allotments as "savings."

Did the President validly order the final

discontinuance or abandonment of the
subject slow-moving projects pursuant to
his power to permanently stop
expenditure under Section 38 of the
Administrative Code?

When the President ordered the withdrawal of the unobligated allotments of slow-moving projects,
under Section 5 of NBC 541, pursuant to his power to permanently stop expenditure under the
second phrase of Section 38 of the Administrative Code, he made a categorical determination that
the continued expenditure on such slow-moving projects is inimical to public interest.

This brings us to the second pivotal issue in this case: did the President validly order the final
discontinuance or abandonment of the subject slow-moving projects pursuant to his power to
permanently stop expenditure under Section 38 of the Administrative Code? Or, more to the point,
did he comply with the "public interest" standard in Section 38 when he ordered the permanent
stoppage of expenditure on the subject slow-moving projects?

I answer in the affirmative.

The challenged act enjoys the presumption of constitutionality. The burden of proof rests on
petitioners to show that the permanent stoppage of expenditure on slow-moving projects does not
meet the "public interest" standard under Section 38.

Petitioners failed to carry this burden. They did not clearly and convincingly show that the DAP was
a mere subterfuge by the government to frustrate the legislative will as expressed in the GAA; or that
the finally discontinued slow-moving projects were not actually slow-moving and that the
discontinuance thereof was motivated by malice or ill-will; or that no actual and legitimate public
interest was served by the DAP; or some other proof clearly showing that the requisites for the
exercise of the power to stop expenditure in Section 38 were not complied with or the exercise of the
power under Section 38 was done with grave abuse of discretion.

It is undisputed that, at the time the DAP was put in place, our nation was facing serious economic
woes due to considerable government under spending. The President, thus, sought to speed up
government spending through the DAP by, among others, permanently discontinuing slow-moving
projects and transferring the savings generated therefrom to fast-moving, high impact priority
projects. It is, again, undisputed that the DAP achieved its purpose and significantly contributed to
economic growth. Thus, on its face, and absent clear and convincing proof that the DAP did not
serve public interest or was pursued with grave abuse of discretion, the Court must sustain the
validity of the President’s actions.

It should also be noted that, as manifested by the Solicitor General and not disputed by petitioners,
the DAP has been discontinued in the last quarter of 2013,  after the causes of the low level of
23

spending or under spending of the government, specifically, the systemic problems in the
implementation of projects by the concerned government agencies were presumably addressed. It,
thus, appears that the DAP was instituted to meet an economic exigency which, after being fully
addressed, resulted in the discontinuance thereof. This is significant because it demonstrates that
the DAP was a temporary measure. It negates the existence of an unjustifiable permanent or
continuing pattern or policy of discontinuing slow-moving projects in order to pursue fast-moving
projects under the GAA which, if left unabated, would effectively defeat the legislative will as
expressed in the GAA. At the very least, the move by the Executive Department to solve the
systemic problems in the implementation of its projects shows good faith in seeking to abide by the
appropriations set by Congress in the GAA. This provides added reason to uphold the determination
by the President that public interest temporarily necessitated the implementation of the DAP.

This is not to say, however, that the alleged abuse or misuse of the DAP funds should be condoned
by the Court. If indeed such anomalies attended the implementation of the DAP, then the proper
recourse is to prosecute the offenders with the full force of the law. However, the present case
involves only the constitutional and statutory validity of the DAP, specifically, NBC 541 which was
partly used to generate the savings utilized under the DAP. Insofar as this limited issue is
concerned, the Court must stay within the clear meaning and import of Section 38 which allows the
President to permanently stop expenditures, when public interest so requires.

Concededly, the "public interest" standard is broad enough to include cases when anomalies have
been uncovered in the implementation of a project or when the accomplishment of a project has
become impossible. However, there may be other cases, not now foreseeable, which may fall within
the ambit of this standard, as is the case here where the exigencies of spurring economic growth
prompted the Executive Department to finally discontinue slow-moving projects. Verily, in all
instances that the power to suspend or to permanently stop expenditure under Section 38 is
exercised by the President, the "public interest" standard must be met and, any challenge thereto,
will have to be decided on a case-to-case basis, as was done here. As previously noted, petitioners
have failed to prove that the final discontinuance of slow-moving projects and the transfer of savings
generated therefrom to high-impact, fast-moving projects in order to spur economic growth did not
serve public interest or was done with grave abuse of discretion. On the contrary, it is not disputed
that the DAP significantly contributed to economic growth and achieved its purpose during the
limited time it was put in place.

Hence, I find that the President validly exercised his power to permanently stop expenditure under
Section 38 in relation to NBC 541,absent sufficient proof to the contrary.

The power to permanently stop further

expenditure under Section 38 and,
hence, finally discontinue or abandon a
work, activity or purpose vis-à-vis the
two-year availability for release of
appropriations under the GAA.

I do not subscribe to the view that the provisions  in the GAAs giving the appropriations on
24

Maintenance and Other Operating Expenses (MOOE) and Capital Outlays (CO) a life-span of two
years prohibit the President from withdrawing the unobligated allotments covering such items.

The availability for release of the appropriations for the MOOE and CO for a period of two years
simply means that the work or activity may be pursued within the aforesaid period. It does not follow
that the aforesaid provision prevents the President from finally discontinuing or abandoning such
work, activity or purpose, through the exercise of the power to permanently stop further expenditure,
if public interest so requires, under the second phrase of Section 38 of the Administrative Code.

It should be emphasized that Section 38 requires that the power of the President to suspend or to
permanently stop expenditure must be expressly abrogated by a specific provision in the GAA in
order to prevent the President from stopping a specific expenditure:

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. (Emphasis supplied)

This is the clear import and meaning of the phrase "except as otherwise provided in the General
Appropriations Act." Plainly, there is nothing in the afore-quoted GAA provision on the availability for
release of the appropriations for the MOOE and CO for a period of two years which expressly
provides that the President cannot exercise the power to suspend or to permanently stop
expenditure under Section 38 relative to such items.

That the funds should be made available for two years does not mean that the expenditure cannot
be permanently stopped prior to the lapse of this period, if public interest so requires. For if this was
the intention, the legislature should have so stated in more clear and categorical terms given the
proviso(i.e., "except as otherwise provided in the General Appropriations Act") in Section 38 which
requires that the power to suspend or to permanently stop expenditure must be expressly abrogated
by a provision in the GAA. In other words, we cannot imply from the wording of the GAA provision,
on the availability for release of appropriations for the MOOE and CO for a period of two years, that
the power of the President under Section 38 to suspend or to permanently stop expenditure is
specifically withheld. A more express and clear provision must so provide. The legislature must be
presumed to know the wording of the proviso in Section 38 which requires an express abrogation of
such power.

It should also be noted that the power to suspend or to permanently stop expenditure under Section
38 is not qualified by any timeframe for good reason. Fraud or other exceptional circumstances or
exigencies are no respecters of time; they can happen in the early period of the implementation of
the GAA which may justify the exercise of the President’s power to suspend or to permanently stop
expenditure under Section 38. As a result, such power can be exercised at any time even a few
days, weeks or months from the enactment of the GAA, when public interest so requires. Otherwise,
this means that the release of the funds and the implementation of the MOOE and CO must continue
until the lapse of the two-year period even if, for example, prior thereto, grave anomalies have
already been uncovered relative to the execution of these items or their execution have become
impossible.

An illustration may better highlight the point. Suppose Congress appropriates funds to build a bridge
between island A and island B in the Philippine archipelago. A few days before the start of the
project, when no portion of the allotment has yet to be obligated, the water level rises due to global
warming. As a result, islands A and B are completely submerged. If the two-year period is not
qualified by Section 38, then the President cannot order the permanent stoppage of the expenditure,
through the withdrawal of the unobligated allotment relative to this project, until after the lapse of the
two-year period. Rather, the President must continue to make available and authorize the release of
the funds for this project despite the impossibility of its accomplishment. Again, the law could not
have intended such an absurdity.

In sum, the GAA provision on the availability for release and obligation of the appropriations relative
to the MOOE and CO for a period of two years is not a ground to declare the DAP invalid because
the power of the President to permanently stop expenditure under Section 38 is not expressly
abrogated by this provision. Hence, the President’s order to withdraw the unobligated allotments of
slow-moving projects, pursuant to NBC 541 in conjunction with Section 38, did not violate the
aforesaid GAA provision considering that, as previously discussed, the power to permanently stop
expenditure was validly exercised in furtherance of public interest, absent sufficient proof to the
contrary.

The power to permanently stop

expenditure under Section 38 and the
prohibition on impoundment under
Sections 64 and 65 of the GAA

To my mind, the crucial issue in this case is the relationship between the power to permanently stop
expenditure under the second phrase of Section 38 of the Administrative Code vis-à-vis the
prohibition on impoundment under Sections 64 (hereinafter "Section 64") and 65 of the 2012 GAA.

For convenience, I reproduce Section 38 below:

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. (Emphasis supplied)

While Sections 64 and 65 of the 2012 GAA provide:

Section 64. Prohibition Against Impoundment of Appropriations. No appropriations authorized under

this Act shall be impounded through retention or deduction unless in accordance with the rules and
regulations to be issued by the DBM: PROVIDED, That all the funds appropriated for the purposes,
programs, projects, and activities 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.

Section 65. Unmanageable National 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. x x x (Emphasis supplied)

In American legal literature, impoundment has been defined "as action, or inaction, by the President
or other offices of U.S. Government, that precludes the obligation or expenditure of budget authority
by Congress."  In Philippine Constitution Association v. Enriquez,  we had occasion to expound on
25 26

this subject:

This is the first case before this Court where the power of the President to impound is put in issue.
Impoundment refers to a refusal by the President, for whatever reason, to spend funds made
available by Congress. It is the failure to spend or obligate budget authority of any type (Notes:
Impoundment of Funds, 86 Harvard Law Review 1505 [1973]).

Those who deny to the President the power to impound argue that once Congress has set aside the
fund for a specific purpose in an appropriations act, it becomes mandatory on the part of the
President to implement the project and to spend the money appropriated therefor. The President has
no discretion on the matter, for the Constitution imposes on him the duty to faithfully execute the
laws.

In refusing or deferring the implementation of an appropriation item, the President in effect exercises
a veto power that is not expressly granted by the Constitution. As a matter of fact, the Constitution
does not say anything about impounding. The source of the Executive authority must be found
elsewhere.

Proponents of impoundment have invoked at least three principal sources of the authority of the
President. Foremost is the authority to impound given to him either expressly or impliedly by
Congress. Second is the executive power drawn from the President’s role as Commander-in-Chief.
Third is the Faithful Execution Clause which ironically is the same [provision] invoked by petitioners
herein.

The proponents insist that a faithful execution of the laws requires that the President desist from
implementing the law if doing so would prejudice public interest. An example given is when through
efficient and prudent management of a project, substantial savings are made. In such a case, it is
sheer folly to expect the President to spend the entire amount budgeted in the law (Notes:
Presidential Impoundment Constitutional Theories and Political Realities, 61 Georgetown Law
Journal 1295 [1973]; Notes Protecting the Fisc: Executive Impoundment and Congressional Power,
82 Yale Law Journal 1686 [1973]).
We do not find anything in the language used in the challenged Special Provision that would imply
that Congress intended to deny to the President the right to defer or reduce the spending, much less
to deactivate 11,000 CAFGU members all at once in 1994. But even if such is the intention, the
appropriation law is not the proper vehicle for such purpose. Such intention must be embodied and
manifested in another law considering that it abrades the powers of the Commander-in-Chief and
there are existing laws on the creation of the CAFGU's to be amended. Again we state: a provision
in an appropriations act cannot be used to repeal or amend other laws, in this case, P.D. No. 1597
and R.A. No. 6758. 27

The problem may be propounded in this manner.

As earlier noted, under Section 38, the President’s power to permanently stop expenditure, if public
interest so requires, is qualified by the phrase "[e]xcept as otherwise provided in the General
Appropriations Act." Thus, if the GAA expressly provides that the power to permanently stop
expenditure under Section 38 is withheld, the President is prohibited from exercising such power.
The question then arises as to whether Section 64 falls within the ambit of the phrase "[e]xcept as
otherwise provided in the General Appropriations Act."

The question is novel and not an easy one.

Section 64 indirectly defines "impoundment" as retention or deduction of appropriations.

"Impoundment" in the GAA may, thus, be defined as the refusal or failure to wholly (i.e., retention of
appropriations) or partially (i.e., deduction of appropriations) spend funds appropriated by Congress.
But note the all-encompassing tenor of Section 64 referring as it does to the prohibition on
impoundment of all appropriations under the GAA, specifically, the appropriations to the three great
branches of government and the constitutional bodies.

It may be observed that the term" impoundment" is broad enough to include the power of the
President to permanently stop expenditure, relative to the appropriations of the Executive
Department, if public interest so requires, under Section 38. The reason is that the permanent
stoppage of expenditure under Section 38 effectively results in the retention or deduction of
appropriations, as the case may be. Thus, a broad construction of the prohibition on impoundment
will lead to the conclusion that Section 64 has rendered Section 38 wholly inoperative. If that be the
case, there arises the more difficult question of whether the President has an inherent power of
impoundment and whether he can be deprived of such power by statutory command. In Philippine
Constitution Association, as afore-quoted, although the issue of impoundment was not decisive
therein, the Court had occasion to outline the opposing views on this subject.

After much reflection, it is my considered view that, for the moment, as our laws are so worded,
there is no imperative need to settle the question on whether the President has an inherent power of
impoundment and whether he can be deprived of such power by statutory fiat for the following
reasons:

First, it is a settled rule of statutory construction that implied repeals are not favored. Note that
Section 64, in prohibiting impoundment of appropriations, made reference to Section 33(3) of the
Administrative Code in its final sentence. The legislature must be presumed to have been aware of
Section 38 in the Administrative Code so much so that if the prohibition on impoundment in Section
64 was intended to render Section 38 wholly inoperative, then the law should have so stated in
clearer terms. But it did not.

Second, because implied repeals are not favored, courts shall endeavor to harmonize two
apparently conflicting laws, if possible, so as not to render one wholly inoperative.
In the case at bar, Sections 64 and 38 can be harmonized for two reasons.

First, the scope of Section 64 and Section 38 substantially differs. Section 64 covers all
appropriations relative to the three great branches of government and the constitutional bodies while
Section 38 refers only to the appropriations of the Executive Department. In other words, Section 64
is broader in scope while Section 38 has limited applicability. As a consequence, under Section 64,
the President cannot impound the appropriations of the whole government bureaucracy and must
authorize the release of all allotments therefor unless there is an unmanageable national
government budget deficit as per Section 65. Once all allotments have been released, however,
there arises the power of the President under Section 38 to suspend or to permanently stop
expenditure, if public interest so requires, relative to the appropriations in the GAA of the Executive
Department.

And second, as afore-quoted, "impoundment" is defined in Philippine Constitution Association as the

"refusal by the President, for whatever reason, to spend funds made available by Congress."  We28

must reasonably presume that the legislature was aware of, and intended this meaning when it used
such term in Section 64. In contrast, Section 38 provides a clear standard for the exercise of the
power of the President to permanently stop expenditure to be valid, that is, when public interest so
requires. It, thus, precludes the President from exercising such power arbitrarily, capriciously and
whimsically, or with grave abuse of discretion. Hence, Section 38 may be read as an exception to
Section 64.

The practical effects or results of the above construction may be re-stated and summarized as
follows:

1. The President is prohibited from impounding appropriations, through retention or

deduction, pursuant to Section 64 unless there is an unmanageable national government
budget deficit as defined in Section 65. Consequently, the President must authorize the
release orders of allotments of all appropriations in the GAA relative to the three great
branches of government and the constitutional bodies. 29

2. However, once the allotments have been released, the President possesses the power to
suspend or to permanently stop expenditure, relative to the appropriations of the Executive
Department, if public interest so requires, pursuant to Section 38 of the Administrative Code.

3. The power to suspend or to permanently stop expenditure, under Section 38, must comply
with the public interest standard, that is, there must be a sufficiently compelling public
interest that would justify such suspension or permanent stoppage of expenditure.

4. Because the President’s determination of the existence of public interest justifying such
suspension or permanent stoppage of expenditure enjoys the presumption of
constitutionality, the burden of proof is on the challenger to show that the public interest
standard has not been met. If brought before the courts, compliance with the public interest
standard will, thus, have to be decided on a case-to-case basis.

As a necessary consequence of the above, the power to permanently stop expenditure under
Section 38 is not rendered inoperative by Section 64. Hence, the actions taken by the President,
pursuant to Section 38 in relation to NBC 541, as previously discussed, are valid notwithstanding the
prohibition on impoundment under Section 64.

Section 38, insofar as it allows the

President to permanently stop
expenditures, is a valid legislative grant
of the power of impoundment to the
President.

As previously noted, Section 38, insofar as it allows the President to permanently stop expenditures,
may be treated as an effective grant of the power of impoundment by the legislature because the
permanent stoppage of expenditure effectively results in the retention or deduction of appropriations,
as the case may be. However, its nature and scope is limited in that: (1) it only covers the
appropriations of the Executive Department, and (2) it is circumscribed by the "public interest"
standard, thus, precluding an unbridled exercise of such power.

Assuming arguendo that the President has no inherent or implied power of impoundment under the
Constitution, Section 38 is valid and constitutional because it constitutes an express legislative grant
of the power of impoundment. Indeed, in Kendall v. United States,  the U.S. Supreme Court
30

categorically ruled that the President cannot countermand the act of Congress directing the payment
of claims owed to a private corporation. In so ruling, it found that the President has no inherent or
implied power to forbid the execution of laws. However, Kendall did not involve a statutory grant of
the power of impoundment. It is important to note that while there is no inherent or implied power of
impoundment granted to the President in American constitutional law, there exist express legislative
grants of such power in the aforesaid jurisdiction.

A helpful overview of the meaning of impoundment and its history in U.S. jurisdiction is quoted
below: Impoundment

An action taken by the president in which he or she proposes not to spend all or part of a sum of
money appropriated by Congress.

The current rules and procedures for impoundment were created by the Congressional Budget and
Impoundment Control Act of 1974 (2 U.S.C.A. § 601 et seq.), which was passed to reform the
congressional budget process and to resolve conflicts between Congress and President RICHARD
M.NIXON concerning the power of the Executive Branch to impound funds appropriated by
Congress. Past presidents, beginning with Thomas Jefferson, had impounded funds at various times
for various reasons, without instigating any significant conflict between the executive and the
legislative branches. At times, such as when the original purpose for the money no longer existed or
when money could be saved through more efficient operations, Congress simply acquiesced to the
president's wishes. At other times, Congress or the designated recipient of the impounded funds
challenged the president's action, and the parties negotiated until a political settlement was reached.

Changes During the Nixon Administration

The history of accepting or resolving impoundments broke down during the Nixon administration for
several reasons. First, President Nixon impounded much greater sums than had previous
presidents, proposing to hold back between 17 and 20 percent of controllable expenditures between
1969 and 1972. Second, Nixon used impoundments to try to fight policy initiatives that he disagreed
with, attempting to terminate entire programs by impounding their appropriations. Third, Nixon
claimed that as president, he had the constitutional right to impound funds appropriated by
Congress, thus threatening Congress's greatest political strength: its power over the purse. Nixon
claimed, "The Constitutional right of the President of the United States to impound funds, and that is
not to spend money, when the spending of money would mean either increasing prices or increasing
taxes for all the people—that right is absolutely clear."
In the face of Nixon's claim to impoundment authority and his refusal to release appropriated funds,
Congress in 1974 passed the Congressional Budget and Impoundment Control Act, which reformed
the congressional budget process and established rules and procedures for presidential
impoundment. In general, the provisions of the act were designed to curtail the power of the
president in the budget process, which had been steadily growing throughout the twentieth
century.  (Emphasis supplied)
31

The conditions and procedure through which the President may impound appropriations under the
Impoundment Control Act in U.S. jurisdiction are described as follows:

§ 44 Impoundment Control Act

Congress enacted the Congressional Budget and Impoundment Control Act of 1974. Under the Act,
whenever the President determines that all or part of any budget authority will not be required to
carry out the full objectives or scope of programs for which it is provided, or that such budget
authority should be rescinded for fiscal policy or other reasons, or whenever all or part of budget
authority provided for only one fiscal year is to be reserved from obligation for such fiscal year, the
President is required to send a special message to both houses of Congress, and any amount of
budget authority proposed to be rescinded or that is to be reserved will be made available for
obligation unless, within 45 days, the Congress has completed action on a rescission bill rescinding
all or part of the amount proposed to be rescinded or that is to be reserved. Funds made available
for obligation under such procedure may not be proposed for rescission again. The contents of the
special message are set forth in the statute.

The Impoundment Control Act of 1974 further provides that the President, the Director of the Office
or Management and Budget, the head of any department or agency of the Government, or any
officer or employee of the United States may propose a deferral of any budget authority provided for
a specific purpose or project by transmitting a special message to Congress. Deferrals are
permissible only to: (1) provide for contingencies; (2) achieve savings made possible by or through
changes in requirements or greater efficiency of operations; or (3) as specifically provided by law.
Moreover, the provisions on deferrals are inapplicable to any budget authority proposed to be
rescinded or that is to be reserved as set forth in a special message.

If fund budget authority that is required to be made available for obligation is not made available, the
Comptroller General is authorized to bring a civil action to require such budget authority to be made
available for obligation. However, no such action may be brought until the expiration of 25 days of
continuous session of Congress following the date on which an explanatory statement by the
Comptroller General of the circumstances giving rise to the contemplated action has been filed with
Congress. 32

As can be seen, it is well within the powers of Congress to grant to the President the power of
impoundment. The reason for this is not difficult to discern. If Congress possesses the power of
appropriation, then it can set the conditions under which the President may alter or modify these
appropriations subject to guidelines or limitations that Congress itself deems necessary and
expedient. Admittedly, the legislative grant of the power of impoundment in U.S. jurisdiction is more
sophisticated and contains strict guidelines in order to prevent the President from abusing such
power. However, the point remains that Congress may grant the President the power of
impoundment.

For these reasons, I find that Section 38 is an express legislative grant of such power. And the Court
cannot deny the President of that power. Whether this legislative grant of the power of impoundment
under Section 38 is, however, wise or prudent is an altogether different matter. The remedy lies with
Congress to repeal or amend Section 38 in order to set more stringent safeguards and guidelines. I
will return to this important point later.

But, as it now stands, Section 38 is a valid grant of such power because, as already discussed, it
complies with the sufficiency of standard test. For we have long ruled that "public interest" is a
sufficient standard, when read in relation to the goals on effectivity, efficiency and economy in the
execution of the budget under the Administrative Code, thus, precluding a finding of undue
delegation of legislative powers.  Further, as previously and extensively discussed, Section 38 can
33

be harmonized with Section 64 in that Section 38 is an exception to the general prohibition on the
power of the President to impound appropriations under Section 64. Consequently, even if we
concede that the President has no inherent or implied power of impoundment under the Constitution,
he possesses that power by virtue of Section 38 which is an express legislative grant of the power of
impoundment.

The power to finally discontinue or

abandon a work, activity or purpose in
the GAA vis-à-vis Section 38

At this juncture, I find it necessary to further discuss the power to finally discontinue or abandon a
work, activity or purpose in the GAA in relation to Section 38. Recall that the GAA definition of
"savings" partly provides—

[S]avings refer to portions or balances of any programmed appropriation in this Act 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; x x x

However, the GAA does not expressly state under what conditions or standards the power to finally
discontinue or abandon a work, activity or purpose may be validly exercised. As I previously
observed, because of the silence of the GAA on this point, the standards may be found elsewhere
such as the Constitution and Administrative Code which expressly set the standards of effectivity,
efficiency and economy in the execution of the national budget. Additionally, I agree with Justice
Leonen that the "irregular, unnecessary, excessive, extravagant or unconscionable" standards under
the Constitution  and pertinent laws may be resorted to in delimiting this power to finally discontinue
34

or abandon a work, activity or purpose authorized under the GAA.

It should be noted, however, that the power to finally discontinue or abandon a work, activity or
purpose implicitly granted and recognized under the GAA’s definition of "savings" is independent
and separate from the power of the President to permanently stop expenditures under Section 38 of
the Administrative Code. As I previously noted, the power to finally discontinue or abandon a work,
activity or purpose under the GAA may be exercised by all heads of offices, and not the President
alone.

Why is this significant?

Because even if we were to concede that the President could not have validly ordered the
permanent stoppage of expenditure on slow-moving projects under Section 38 in relation to NBC
541, he would still possess this power under his power to finally discontinue or abandon a work,
activity or purpose under the GAA. The lack of specific standards in the GAA and the resort to the
broad standards of "effectivity, efficiency and economy" as well as the "irregular, unnecessary,
excessive, extravagant or unconscionable" standards, as aforementioned, in the Constitution and
pertinent laws permit this result. In particular, the ineffective and inefficient use of funds on slow-
moving projects would easily satisfy the aforementioned standards. From this perspective, the GAA
itself has provided for a limited grant of the power of impoundment through the power to finally
discontinue or abandon the work, activity or purpose.

The above, again, demonstrates the weaknesses of our current laws in lacking proper procedures
and safeguards in the exercise of the power to finally discontinue or abandon a work, activity or
purpose implicitly granted and recognized in the GAA, thus, opening the doors to the abuse and
misuse of such power.

The enormous powers of the President

to: (a) permanently stop expenditures
under Section 38 and (b) to finally
discontinue or abandon a work, activity
or purpose under the GAA definition of
"savings."

The ramifications of the positions taken thus far in this case are wide- ranging because they
incalculably affect the powers and prerogatives of the presidency. The net effect of the views
expressed in this case is to effectively deny to the President (1) the power to permanently stop
expenditure, when public interest so requires, under Section 38, and (2) the power to finally
discontinue or abandon a work, activity or purpose implicitly granted and recognized in the GAA. I
have taken the contrary position. With these powers, in the hands of an able and just President,
much good can be accomplished. But, in the hands of a weak or corrupt President, much damage
can be wrought. Truly, we are adjudicating here, to a large extent, the very capability of the
President, as chief implementer of the national budget, to effectively chart our nation’s destiny.

The underlying rationale of the view I take in this case is not an original one. I fall back on an age-old
axiom of constitutional law: a law cannot be declared invalid nor can a constitutional provision be
rendered inoperative because of the possibility or fear of its abuse. We do not possess that power.
For us to rule based on the possibility or fear of abuse will result in judicial tyranny because virtually
all constitutional and statutory provisions conferring powers upon agents of the State can be abused.
In the timeless words of Justice Laurel, "[t]he possibility of abuse is not an argument against the
concession of the power as there is no power that is not susceptible of abuse." 35

The remedy is and has always been constant unwavering vigilance. The remedy is and has always
been to prosecute instances when the power has been abused with the full force of the law. The
remedy is and has always been to put in place sufficient safeguards, through remedial legislation
and the proper exercise of the legislative oversight powers, to prevent the abuse and misuse of
these powers while giving the holder of the power sufficient flexibility in pursuing the common good.

The task does not belong to the courts alone. It resides in the criminal justice system. It resides in
Congress and the other governmental bodies (like the Commission on Audit) under our system of
checks and balances. And, ultimately, it resides in the moral strength, courage and resolve of our
people and nation. That alone can stop abuse of power. Not deprivation or curtailment of powers,
out of fear or passion in these turbulent times in the life of our nation, that the laws specifically grant
to the President and which serve a legitimate and vital State interest; powers that are an essential
and integral component of the design of our government in order for it to respond to various
exigencies in the pursuit of the common good.

It is noteworthy that there have been legislative efforts to redefine "savings" in the GAA. The view
has been expressed that the prevailing definition of "savings" in the GAA is highly susceptible to
abuse.  In this regard, information is the key, information on, among others, how funds are spent,
36

how savings are generated, what projects are suspended or permanently stopped, what projects are
benefitted by augmentations, the extent of such augmentations, and, most of all, the valid
justifications for such actions on the part of the government. The remedy lies largely with the
legislature, through its oversight functions and through remedial legislation, in making the details of,
and the justifications for all governmental actions and transactions more transparent and accessible
to the people. In fine, information is the light that will scatter the darkness where abuse of power
interminably lurks and thrives. Further, as previously noted, there is an urgent necessity to set the
proper procedures and safeguards in the exercise of the power to finally discontinue or abandon a
work, activity or purpose implicitly granted and recognized under the GAA’s definition of "savings."

Anent Section 38, the model followed in U.S. jurisdiction provides meaningful and useful guidance
on how the vast power to impound allotted funds granted to the President under Section 38 can be
adequately limited while giving him the flexibility to pursue the common good. We would do well to
study and learn from their experience. Indubitably, there is an imperative need to provide greater or
stricter safeguards and guidelines on how or under what conditions or limitations the vast power
granted to the President under Section 38 is to be exercised. The remedy, again, lies with the
legislature in achieving the delicate balance of preventing the abuse and misuse of the power under
Section 38 while allowing the President to pursue the common good.

The question of whether the power has been abused is entirely separate and distinct from the
question as to whether the power exists. An affirmative answer to the first gives rise to
administrative, civil and/or criminal liabilities. To the second, we need only look at our Constitution
and laws for the answer. Here, as already stated, the power is clearly and unequivocally conferred
on the President who must exercise it, not with an unbridled discretion, but as circumscribed by the
standard of public interest.

In the case at bar, it is not disputed that the power was exercised to serve or pursue an important
and legitimate State interest albeit temporary in nature, i.e., the urgent necessity to spur economic
growth for the promotion of the general welfare. That it achieved this purpose is also not in dispute.
And while there have been claims that part of the DAP funds were fraudulently misused or abused,
such claims, if true, necessitate that the government prosecutes the offenders with the full force of
the law. But, certainly, they preclude the Court from depriving the President of the power to
permanently stop expenditures, when public interest so requires, until and unless Section 38 is
amended or repealed. Our solemn duty is to defend and uphold the Constitution. We cannot
arrogate unto ourselves the power to repeal or amend Section 38 for this properly belongs to the
legislature. We must stay the course of constitutional supremacy. That is our sacred trust.

On the use of unreleased appropriations

under the DAP

NBC 541, which was the source of savings under the DAP, categorically refers to unobligated
allotments of programmed appropriations as the sources of the savings generated therefrom:

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. (Emphasis in the
original; underline supplied)

Thus, under NBC 541, the "savings" component of the DAP was not sourced from "unreleased
appropriations," in its strict and technical sense, but from unobligated allotments which were already
released to the various departments or agencies. The implementing executive issuance, NBC 541, is
clear and categorical, unobligated allotments (and not unreleased appropriations) were the sources
of the "savings" component of the DAP. Consequently, it does not contravene the definition of
savings under the pertinent provisions of the GAA for, precisely, an unobligated allotment is an
appropriation that is "free from any obligation or encumbrances."

Further, to reiterate, the withdrawal of unobligated allotments in the present case should not be
taken in isolation of the reason for its withdrawal. The withdrawal was brought about by the
determination of the President that the continued implementation of slow-moving projects, under
NBC 541, is inimical to public interest because it significantly dampened economic growth. It is,
therefore, inaccurate to state that the subject unobligated allotments were indiscriminately declared
as savings considering that there was a legitimate State interest involved in ordering their withdrawal
and the burden of proof was on petitioners to show that such State interest failed to comply with the
"public interest" standard in Section 38. Again, petitioners failed to carry this onus. With the
permanent stoppage of expenditure on these slowing projects and, hence, their final discontinuance
or abandonment, savings were generated pursuant to the definition of "savings" in the GAA.

On the augmentation of project, activity

or program (PAP) not covered by any
appropriations in the pertinent GAAs

Preliminarily, the view has been expressed that the DAP was used to authorize the augmentations of
items in the GAA many times over their original appropriations. While the magnitude of these
supposed augmentations are, indeed, considerable, it must be recalled that Article VI, Section
25(5)of the Constitution purposely did not set a limit, in terms of percentage, on the power to
augment of the heads of offices:

MR. SARMIENTO. I have one last question. Section 25, paragraph (5) authorizes the Chief Justice
of the Supreme Court, the Speaker of the House of Representatives, the President, the President of
the Senate to augment any item in the General Appropriations Law. Do we have a limit in terms of
percentage as to how much they should augment any item in the General Appropriations Law?

MR. AZCUNA. The limit is not in percentage but "from savings." So it is only to the extent of their
savings.37

Consequently, even if Congress appropriated only one peso for a particular PAP in the
appropriations of the Executive Department, and the Executive Department, thereafter, generated
savings in the amount of ₱1B, it is, theoretically, possible to augment the aforesaid one peso PAP
appropriation with ₱1B. The intent to give considerable leeway to the heads of offices in the exercise
of their power to augment allows this result.

Verily, the sheer magnitude of the augmentation, without more, is not a ground to declare it
unconstitutional. For it is possible that the huge augmentations were legitimately necessitated by the
prevailing conditions at the time of the budget execution. On the other hand, it is also possible that
the aforesaid augmentations may have breached constitutional limitations. But, in order to establish
this, the burden of proof is on the challenger to show that the huge augmentations were done with
grave abuse of discretion, such as where it was merely a veiled attempt to defeat the legislative will
as expressed in the GAA, or where there was no real or actual deficiency in the original
appropriation, or where the augmentation was motivated by malice, ill will or to obtain illicit political
concessions. Here, none of the petitioners have proved grave abuse of discretion nor have the
beneficiaries of these augmentations been properly impleaded in order for the Court to determine
the justifications for these augmentations, and thereafter, rule on the presence or absence of grave
abuse of discretion.

The Court cannot speculate or surmise, by the sheer magnitude of the augmentations, that a
constitutional breach occurred. Clear and convincing proof must be presented to nullify the
challenged executive actions because they are presumptively valid. Concededly, it is difficult to
mount such a challenge based on grave abuse of discretion, but it is not impossible. It will depend
primarily on the particular circumstances of a case, hence, as previously noted, the necessity of
remedial legislation making access to information readily available to the people relative to the
justifications on the exercise of the power to augment.

Further, assuming that the power to augment has become prone to abuse, because it is limited only
by the extent of actual savings, then the remedy is a constitutional amendment; or remedial
legislation subjecting the power to augment to strict conditions or guidelines as well as strict real
time monitoring. Yet, it cannot be discounted that limiting the power to augment, based on, say, a set
percentage, would unduly restrict the effectivity of this fiscal management tool. As can be seen,
these issues go into the wisdom of the subject constitutional provision which is not proper for judicial
review. As it stands, the substantial augmentations in this case, without more, cannot be declared
unconstitutional absent a clear showing of grave abuse of discretion for the necessity of such
augmentations are presumed to have been legitimate and bona fide.

In the main, with respect to the PAPs which were allegedly not covered by any appropriation under
the pertinent GAA, I find that such finding is premature on due process grounds. In particular, it
appears that the Solicitor General was not given an opportunity to be heard relative to the alleged
lack of appropriation cover of the DOST’s DREAM project and the augmentation to the DOST-
PCIEETRD because these were culled from the entries in the evidence packets submitted by the
Solicitor General to the Court in the course of the oral arguments of this case. I find that the proper
procedure is to contest the entries in the evidence packets in a proper case filed for that purpose
where the government is given an opportunity to be heard.

Also, with respect to the augmentations relative to the DOST-PCIEETRD, aside from prematurity on
due process grounds as afore-discussed, I note that the GAA purposely describes items, in certain
instances, in general or broad language. Thus, a new activity may be subsumed in an item, like
"Research and Management Services," for as long as it is reasonably connected to such item.
Again, whether this was the case here is something that should be litigated, if the parties are so
minded, in a proper case, in order to give the DOST an opportunity to be heard.

On cross-border transfer of savings

The Solicitor General admits  that the President made available to the Commission on Audit
38

(COA),House of Representatives and Commission on Elections (Comelec) a portion of the savings

of the Executive Department in order to address certain exigencies, to wit:

1. The COA requested for funds to implement an infrastructure program and to strengthen its
regulatory capabilities;

2. The House of Representatives requested for funds to complete the construction of its e-
library in order to prevent the deterioration of the work already done on the aforesaid project;
and

3. The Comelec requested for funds to augment its budget for the purchase of the Precinct
Count Optical Scan (PCOS) machines for the May 2013 elections to avert a return to the
manual counting system.

The Solicitor General presents an interesting argument to justify these cross-border transfers. He
claims that the power to augment, under Article VI, Section 25(5) of the Constitution, merely
prohibits unilateral inter-departmental transfer of savings. In the above cases, the other department
or constitutional commission requested for the funds, thus, they are not covered by this constitutional
prohibition. Moreover, once the funds were given, the President had no say as to how the funds
were going to be used.

The theory is novel but untenable.

Article VI, Section 25(5) clearly prohibits cross-border transfer of savings regardless of whether the
recipient office requested for the funds. For if we uphold the Solicitor General’s theory, nothing will
prevent the other heads of offices from subsequently flooding the Executive Department with
requests for additional funds. This would spawn the evil that the subject constitutional provision
precisely seeks to prevent because it would make the other offices beholden to the Executive
Department in view of the funds they received. It would, thus, undermine the principle of separation
of powers and the system of checks and balances under our plan of government.

The Solicitor General further argues that the aforesaid transfers were rare and far between, and,
more importantly, they were necessitated by exigent circumstances. Thus, it would have been
impracticable to wait for Congress to pass a supplemental budget to address the aforesaid
exigencies. I disagree for the following reasons.

First, Article VI, Section 25(5) is clear, categorical and absolute. It admits of no exception. The lack
of means and time to pass a supplemental budget is not an exception to the rule prohibiting the
cross-border transfer of savings from one branch or constitutional body to another branch or
constitutional body. (Parenthetically, it was not even clearly demonstrated that it was impracticable
to pass a supplemental budget or that the reasons for not resorting to the passage of a supplemental
budget to address the aforesaid exigencies was not due to the fault or negligence of the concerned
government agencies.)

Second, the Court cannot allow a relaxation of the rule in Article VI, Section 25(5) on the pretext of
extreme urgency and/or exigency for this would invite intermittent violations of this rule, which is
intended to preserve and protect the integrity and independence of the three great branches of
government as well as the constitutional bodies. The constitutional value at stake is one of a high
order that cannot and should not be perfunctorily disregarded.
Third, the power to make appropriations is constitutionally vested in Congress; the Executive
Department cannot usurp or circumvent this power by transferring its savings to another branch or
constitutional body. It must follow the procedure laid down in the Constitution for the passage of a
supplemental budget if it so desires to aid or help another branch or constitutional body which is in
dire need of funds. The assumption is that Congress will see for itself the extreme urgency and
necessity of passing such a supplemental budget and there is no reason to assume that Congress
will not swiftly and decisively act, if the circumstances warrant.

Fourth, even if we assume that grave consequences would have befallen our people and nation had
the aforesaid cross-border transfers of savings not been undertaken because a supplemental budget
would not have been timely passed to address such exigencies, still, this would not justify the
relaxation of the rule under Article VI, Section 25(5). The possibility of not being able to pass a
supplemental budget to timely and adequately address certain exigencies is one of the unavoidable
risks or costs of this mechanism adopted under our plan of government. If grave consequences
should befall our people and nation as a result thereof, the people themselves must hold our
government officials accountable for the failure to timely pass a supplemental budget, if done with
malice or negligence, should such be the case. The ballot and/or the filing of administrative, civil or
criminal cases are the constitutionally designed remedies in such a case.

In the final analysis, until and unless the absolute prohibition on cross border transfer of savings in
our Constitution is amended, we must follow its letter, and any deviation therefrom must necessarily
suffer from the vice of unconstitutionality. For these reasons, I find that the three aforesaid transfers
of savings are unconstitutional.

On the Unprogrammed Fund

I do not subscribe to the view that there was an unlawful release of the Unprogrammed Fund
through the DAP. The reason given for this view is that the government was not able to show that
revenue collections exceeded the original revenue targets submitted by the President to Congress
relative to the 2011, 2012 and 2013 GAAs.

I find that the resolution of the issue, as to whether the release of the Unprogrammed Fund under
the DAP is unlawful, is premature.

The Unprogrammed Fund provisions under the 2011, 2012 and 2013 GAAs, respectively, state:

2011 GAA (Article XLV):

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 (Article XLVI)

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: 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.

2013 GAA (Article XLV)

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 collections arising from
sources not considered in the original revenue targets, 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. (Emphasis supplied)

As may be gleaned from the afore-quoted provisions, in the 2011 GAA, there are three provisos, to
wit:

1. 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,

2. 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,

3. 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. 39

In the 2012 GAA, there are two provisos, to wit:

1. 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:

2. 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.

And, in the 2013 GAA, there is one proviso, to wit:

 1. 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.

These provisos should be reasonably construed as exceptions to the general rule that revenue
collections should exceed the original revenue targets because of the plain meaning of the word
"provided" and the tenor of the wording of these provisos. Further, in both the 2011 and 2012 GAA
provisions, the phrase "may be used to cover releases from appropriations in this Fund" in the first
proviso is essentially of the same meaning as the phrase "shall be sufficient basis for the issuance of
a SARO covering the loan proceeds" in the second proviso because, precisely, the SARO is the
authority to incur obligations. In other words, both phrases pertain to the authorization to release
funds under the Unprogrammed Fund when the conditions therein are met even if revenue
collections do not exceed the original revenue targets.

I now discuss the above provisos in greater detail.

The first proviso, found in both the 2011 and 2012 GAAs, states that "collections arising from
sources not considered in the aforesaid original revenue targets may be used to cover releases from
appropriations in this Fund."  As previously discussed, a reasonable interpretation of this proviso
40

signifies that, even if the revenue collections do not exceed the original revenue targets, funds from
the Unprogrammed Fund can still be released to the extent of the collections from sources not
considered in the original revenue targets. Why does the law permit this exception?

The national budget follows a matching process: revenue targets are matched with the proposed
expenditure level. Revenue targets are the expected level of revenue collections for a given year.
These targets are made based on previously identified and expected sources of revenues like taxes,
fees or charges to be collected by the government. By providing for this proviso, the law recognizes
that revenues may be generated from sources not considered in the original budget preparation and
planning. These revenues from unexpected sources then become the funding for the items under
the Unprogrammed Fund.

But why does the law not require that these revenues from unexpected sources be first used for the
programmed appropriations if the circumstances warrant (such as when there is a budget deficit)?

The rationale seems to be that Congress expects the Executive Department to meet the needed
revenue, based on the identified sources of the original revenue targets, in order to fund its
programmed appropriations for the given year so much so that revenues from unexpected sources
are not to be used for programmed appropriations and are, instead, reserved for items under the
Unprogrammed Fund. If the Executive Department fails to achieve the original revenue targets for
that year from expected sources, then it suffers the consequences by having inadequate funds to
fully implement the programmed appropriations. In other words, the proviso is a disincentive to the
Executive Department to rely on revenues from unexpected sources to fund its programmed
appropriations. Verily, the Court cannot look into the wisdom of this system; it can only interpret and
apply what it clearly provides. It may be noted though that in the 2013 GAA, the subject proviso has
been omitted altogether, perhaps, in recognition of the possible ill effects of this proviso be cause it
effectively allows the release of the Unprogrammed Fund even if there is a budget deficit (i.e., when
revenue collections do not exceed the original revenue targets).

I now turn to the next proviso, found in the 2011, 2012 and 2013 GAAs, which states 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." This
proviso, again, permits the release of funds from the Unprogrammed Fund, to the extent of the loan
proceeds, even if the revenue collections do not exceed the original revenue targets. Why does the
law allow this exception?

One conceivable basis is that the loans may specifically provide, as a condition thereto, that the
proceeds thereof will be used to fund items under the Unprogrammed Fund categorized as foreign-
assisted projects. Again, the wisdom of this proviso is beyond judicial review.

The last proviso, found only in the 2011 GAA, states 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." Here, again, is
another exception to the general rule that funds from the Unprogrammed Fund can only be released
if revenue collections exceed the original revenue targets. Whether these conditions were met and
whether funds from the Unprogrammed Fund were released pursuant thereto are matters that were
not squarely and specifically litigated in this case.

Based on the foregoing, it is erroneous and premature to rule that the Executive Department made
unlawful releases from the Unprogrammed Fund of the 2011, 2012 and 2013 GAAs merely because
the DBM was unable to submit a certification that the revenue collections exceeded the original
revenue targets for these years considering that the funds so released may have been authorized
under the afore-discussed provisosor exception clauses of the respective GAAs.

It may also be noted that the 2013 GAA states—2013 (Article XLV)

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 collections arising from
sources not considered in the original revenue targets, 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. (Emphasis supplied)

Under the 2013 GAA, the condition, therefore, which will trigger the release of the funds from the
Unprogrammed Fund, as a general rule, is that the revenue collections, including collections arising
from sources not considered in the original revenue targets, exceed the original revenue targets, and
not revenue collections exceed the original revenue targets.

In view of the foregoing, a becoming respect to a co-equal branch of government should prompt us
to defer judgment on this issue for at least three reasons:

First, as afore-discussed, funds from the Unprogrammed Fund can be lawfully released even if
revenue collections do not exceed the original revenue targets provided they fall within the
applicable provisos or exception clauses in the relevant GAAs. Hence, the failure of the DBM to
submit certifications, as directed by the Court, showing that revenue collections exceed the original
revenue targets relative to the 2011, 2012 and 2013 GAAs does not conclusively demonstrate that
there were unlawful releases from the Unprogrammed Fund.

Second, while the Solicitor General did not submit the certifications showing that revenue collections
exceed the original revenue targets relative to the 2011, 2012 and 2013 GAAs, he did submit
certifications showing that, for various periods in 2011 to 2013, the actual dividend income received
by the National Government exceeded the programmed dividend income as well as income from the
sale of the right to build and operate the NAIA expressway.  However, the Solicitor General did not
41

explain why these certifications justify the release of funds under the Unprogrammed Fund.

Be that as it may, the certifications imply or seem to suggest that the Executive Department is
invoking the proviso "That collections arising from sources not considered in the aforesaid original
revenue targets may be used to cover releases from appropriations in this Fund" to justify the
release of funds under the Unprogrammed Fund considering that these dividend incomes and
income from the aforesaid sale of the right to build and operate are in excess or outside the scope of
the programmed dividends or revenues. However, I find it premature to make a ruling to uphold this
proposition.

It is not sufficient to establish that these revenues are in excess or outside the scope of the
programmed dividends or revenues but rather, it must be shown that these collections arose from
sources not considered in the original revenue targets. It must first be established what sources
were considered in the original revenue targets and what sources were not before we can determine
whether these collections fall within the subject proviso. These pre-conditions have not been duly
established in a proper case where factual litigation is permitted.

Thus, while I find that the failure of the DBM to submit the aforesaid certifications, showing that
revenue collections exceed the original revenue targets relative to the 2011, 2012 and 2013 GAAs,
does not conclusively demonstrate that there were unlawful releases from the Unprogrammed Fund,
I equally find that the certifications submitted by the Solicitor General to be inadequate to rule that
the releases from the Unprogrammed Fund were lawful.

Third, and more important and decisive, much of the difficulty in resolving this issue, as already
apparent from the previous points, arose from the unusual way this issue was litigated before us.
Whether the Executive Department can validly invoke the general rule or exceptions to the release
of funds under the Unprogrammed Fund necessarily involves factual matters that were attempted to
be litigated before this Court in the course of the oral arguments of this case. This is improper not
only because this Court is not a trier of facts but also because petitioners were effectively prevented
from controverting the authenticity and veracity of the documentary evidence submitted by the
Solicitor General. It would not have mattered if the facts in dispute were admitted, like the afore-
discussed cross-border transfers of savings, but on this particular issue on the Unprogrammed
Fund, the facts remain in dispute and inadequate to establish that the general rule and exceptions
were not complied with. Consequently, it is improper for us to resolve this issue, in this manner,
considering that: (1) the issue is highly factual which should first be brought before the proper court
or tribunal, (2) the factual matters have not been adequately established by both parties in order for
the Court to properly rule thereon, and (3) the indispensable parties, such as the Bureau of Treasury
and other government bodies or agencies, which are the custodians and generators of the requisite
information, were not impleaded hereto, hence, the authenticity and veracity of the factual data
needed to resolve this issue were not properly established. Due process requirements should not be
lightly brushed aside for they are essential to a fair and just resolution of this issue. We cannot run
roughshod over fundamental rights.

Thus, I find that the subject issue, as to whether the releases of funds from the Unprogrammed Fund
relative to the relevant GAAs were unlawful, is not yet ripe for adjudication. The proper recourse, if
the circumstances so warrant, is to establish that the afore-discussed general rule and exceptions
were not met insofar as the releases from the Unprogrammed Fund in the 2011, 2012 and 2013
GAAs, respectively, are concerned. This should be done in a proper case where all indispensable
parties are properly impleaded. There should be no obstacle to the acquisition of the requisite
information upon the filing of the proper case pursuant to the constitutional right to information.
In another vein, I do not subscribe to the view that the DAP utilized the Unprogrammed Fund as a
source of "savings."

First, the Executive Department did not claim that the funds released from the Unprogrammed Fund
are "savings." What it stated is that the funds released from the Unprogrammed Fund were one of
the sources of funds under the DAP. In this regard, the DBM website states—

C. Sourcing of Funds for DAP

1. How were funds sourced?

Funds used for programs and projects identified through DAP were sourced from savings generated
by the government, the reallocation of which is subject to the approval of the President; as well as
the Unprogrammed Fund that can be tapped when government has windfall revenue collections,
e.g., unexpected remittance of dividends from the GOCCs and Government Financial Institutions
(GFIs), sale of government assets.  (Emphasis supplied)
42

As can be seen, the Unprogrammed Fund was treated as a separate and distinct source of funds
from "savings." Thus, the Executive Department can make use of such funds as part of the DAP for
as long as their release complied with the afore-discussed general rule or exceptions and, as
previously discussed, it has not been conclusively shown that the afore-discussed requisites were
not complied with.

Second, the Solicitor General maintains that all funds released under the DAP have a corresponding
appropriation cover. In other words, they were released pursuant to a legitimate work, activity or
purpose for which they were authorized. For their part, petitioners failed to prove that funds from the
Unprogrammed Fund were released to finance projects that did not fall under the specific items on
the GAA provision on the Unprogrammed Fund. Absent proof to the contrary, the presumption that
the funds from the Unprogrammed Fund were released by virtue of a specific item therein must, in
the meantime, prevail in consonance with the presumptive validity of executive actions.

For these reasons, I find that there is no basis, as of yet, to rule that the Unprogrammed Fund was
unlawfully released.

On Section 5.7.3 of NBC 541

Section 5.7.3 of NBC 541 provides:

5.7 The withdrawn allotments may be:

xxxx

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. (Emphasis in the original)

Petitioners argue that the phrase "not considered" allows the Executive Department to transfer the
withdrawn allotments to non-existent programs and projects in the 2012 GAA.

The Solicitor General counters that the subject phrase has technical underpinnings familiar to the
intended audience (i.e., budget bureaucrats) of the subject Circular and assures this Court that the
phrase is not intended to refer to non-existent programs and projects in the 2012 GAA. He further
argues that the phrase "to fund priority programs and projects not considered in the 2012 budget but
expected to be started or implemented during the current year" means "to fund priority programs and
projects not considered priority in the 2012 budget but expected to be started or implemented during
the current year." Hence, the subject phrase suffers from no constitutional infirmity.

I disagree with the Solicitor General.

Evidently, the Court cannot accept such an argument. If the meaning of a phrase would be made to
depend on the meaning in the minds of the intended audience of a challenged issuance, then
virtually no issuance can be declared unconstitutional since every party will argue that, in their
minds, the language of the challenged issuance conforms to the Constitution. Naturally, the Court
can only look into the plain meaning of the word/s of a challenged issuance. If the words in the
subject phrase truly partake of a technical meaning that obviates constitutional infirmity, then
respondents should have pointed the Court to such relevant custom, practice or usage with which
the subject phrase should be understood rather than arguing based on a generalized claim that in
the minds of the intended audience of the subject Circular, the subject phrase pertains to items
existing in the relevant GAA.

The argument that the phrase "to fund priority programs and projects not considered in the 2012
budget" should be understood as "to fund priority programs and projects not considered priority in
the 2012 budget" is, likewise, untenable. Because if this was the intended meaning, then the subject
Circular should have simply so stated. But, as it stands, the meaning of "not considered" is
equivalent to "not included" and is, therefore, void because it allows the augmentation, through
savings, of programs and projects not found in the relevant GAA. This clearly contravenes Article VI,
Section 29(1) of the Constitution and Section 54 of the 2012 GAA, to wit:

Section 29. (1) No money shall be paid out of the Treasury except in pursuance of an appropriation
made by law.

Section 54. 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 appropriations otherwise authorized by this Act. (Emphasis supplied)

Of course, the Solicitor General impliedly argues that, despite the defective wording of Section 5.7.3
of NBC 541, no non-existent program or project was ever funded through the DAP. Whether that
claim is true necessarily involves factual matters that are not proper for adjudication before this
Court. In any event, petitioners may bring suit at the proper time and place should they establish that
non-existent programs or projects were funded through the DAP by virtue of Section 5.7.3 of NBC
541.

On the applicability of the operative fact doctrine

I find that the operative fact doctrine is applicable to this case for the following reasons:

First, it must be recalled that, based on the preceding disquisitions, I do not find the DAP to be
wholly unconstitutional, and limit my finding of unconstitutionality to (1) Sections 5.4, 5.5 and 5.7 of
NBC 541, insofar as it authorized the withdrawal of unobligated allotments from slow-moving
projects that were not finally discontinued or abandoned, (2) Section 5.7.3 of NBC 541, insofar as it
authorized the augmentation of appropriations not found in the 2012 GAA, and (3) the three afore-
discussed cross-border transfers of savings. Hence, my discussion on the applicability of operative
fact doctrine is limited to the effects of the declaration of unconstitutionality relative to the above
enumerated.

Second, indeed, the general rule is that an unconstitutional executive or legislative act is void and
inoperative; conferring no rights, imposing no duties, and affording no protection. As an exception to
this rule, the doctrine of operative fact recognizes that the existence of an executive or legislative
act, prior to a determination of its unconstitutionality, is an operative fact and may have
consequences that cannot always be ignored.  In other words, under this doctrine, the challenged
43

executive or legislative act remains unconstitutional, but its effects may be left undisturbed as a
matter of equity and fair play. It is applicable when a declaration of unconstitutionality will impose an
undue burden on those who have relied in good faith on the invalid executive or legislative act. 44

As a rule of equity, good faith and bad faith are of necessity relevant in determining the applicability
of this doctrine. Thus, in one case, the Court did not apply the doctrine relative to a party who
benefitted from the unconstitutional executive act because the party acted in bad faith.  The good
45

faith orbad faith of the beneficiary of the unconstitutional executive act was the one held to be
decisive.  The reason, of course, is that, as previously stated, the doctrine seeks to protect the
46

interests of those who relied in good faith on the invalid executive or legislative act. Consequently,
the point of inquiry should be the good faith or bad faith of those who benefitted from the afore-
discussed unconstitutional acts. Third, as earlier discussed, the declaration of unconstitutionality
relative to Sections 5.4, 5.5, and 5.7 as well as Section 5.7.3 of NBC 541 was premised on their
defective wording. Hence, absent proof of a slow-moving project that was not finally discontinued or
abandoned but whose unobligated allotments were partially withdrawn, or a program or project
augmented through savings which did not exist in the relevant GAA, the discussion on the
applicability of the operative fact doctrine relative thereto is premature.

Fourth, this leaves us with the question as to the applicability of the doctrine relative to the aforesaid
cross-border transfers of savings. Here, the point of inquiry, as earlier noted, must be the good faith
or bad faith of the beneficiaries of the unconstitutional executive act, specifically, the House of
Representatives, COA and Comelec. In the case at bar, there is no evidence clearly showing that
these entities acted in bad faith in requesting funds from the Executive Department which were part
of the latter’s savings or that they received the aforesaid funds knowing that these funds came from
an unconstitutional or illegal source. The lack of proof of bad faith is understandable because this
issue was never squarely raised and litigated in this case as it developed only during the oral
arguments of this case. Thus, as to these entities, the presumption of good faith and regularity in the
performance of official duties must, in the meantime, prevail. Further, it cannot be doubted that an
undue burden will be imposed on these entities which have relied in good faith on the aforesaid
invalid transfers of savings, if the operative fact doctrine is not made to apply thereto.

Given these considerations, I find that the operative fact doctrine applies to the aforesaid cross-
border transfers of savings. Hence, the effects of the unconstitutional cross-border transfers of
savings can no longer be undone. It is hoped, however, that no constitutional breach of this tenor will
occur in the future given the clear and categorical ruling of the Court on the unconstitutionality of
cross-border transfer of savings.

Because of the various views expressed relative to the impact of the operative fact doctrine on the
potential administrative, civil and/or criminal liability of those involved in the implementation of the
DAP, I additionally state that any discussion or ruling on the aforesaid liability of the persons who
authorized and the persons who received the funds from the aforementioned unconstitutional cross-
border transfers of savings, is premature. The doctrine of operative fact is limited to the effects of the
declaration of unconstitutionality on the executive or legislative act that is declared unconstitutional.
Thus, it is improper for this Court to discuss or rule on matters not squarely at issue or decisive in
this case which affect or may affect their alleged liabilities without giving them an opportunity to be
heard and to raise such defenses that the law allows them in a proper case where their liabilities are
properly at issue. Due process is the bedrock principle of our democracy. Again, we cannot run
roughshod over fundamental rights.

Conclusion

I now summarize my findings by discussing the constitutional and statutory requisites for "savings"
and "augmentation" as applied to the DAP.

As stated earlier, for "savings" to arise, the following requisites must concur:

1. The appropriation must be a programmed appropriation in the GAA;

2. The appropriation must be free from any obligation or encumbrances;

3. The appropriation must still be available after the completion or final discontinuance or
abandonment of the work, activity or purpose for which the appropriation is authorized.

Relative to the DAP, these requisites were generally met because:

1. The DAP, as partially implemented by NBC 541, covers only programmed appropriations;

2. The covered appropriations refer specifically to unobligated allotments;

3. The President made a categorical determination to permanently stop the expenditure on

slow-moving projects through the withdrawal of their unobligated allotments which resulted in
the final discontinuance or abandonment thereof. The slow manner of spending on such
projects was found to be inimical to public interest in view of the vital need at the time to spur
economic growth through faster government spending. Thus, the power was validly
exercised pursuant to Section 38 absent clear and convincing proof to the contrary. With the
final discontinuance or abandonment of such projects, there remained a balance of the
appropriation equivalent to the amount of the unobligated allotments which may be validly
considered as savings.

As an exception to the above, I find that, because of the broad language of NBC 541, Section 5.4,
5.5 and 5.7 thereof are void insofar as they (1) allowed the withdrawal of unobligated allotments from
slow-moving projects which were not finally discontinued or abandoned, and (2) authorized the use
of such withdrawn unobligated allotments as "savings."

On the other hand, for "augmentation" to be valid, the following requisites must be satisfied:

1. The program, activity, or project to be augmented by savings must be a program, activity,

or project in the GAA;

2. The program, activity, or project to be augmented by savings must refer to a program,

activity, or project within or under the same office from which the savings were generated;
 3. Upon implementation or subsequent evaluation of needed resources, the appropriation of
the program, activity, or project to be augmented by savings must be shown to be deficient.

As applied to the DAP, these requisites were, again, generally met:

1. The DAP, as partially implemented by NBC 541, augmented projects within the GAA;

2. It augmented projects within the appropriations of the Executive Department;

3. The acts of the Executive Department enjoy presumptive constitutionality. Section 5.5 of
NBC 541 mandates the evaluation of reports of, and consultations with the concerned
departments/agencies by the DBM to determine which projects are slow-moving and fast-
moving. The DBM enjoys the presumption of regularity in the performance of its official
duties. Thus, it may be reasonably presumed that, in the process, the determination of which
fast-moving projects required augmentation was also made. Petitioners did not prove
otherwise.

As exceptions to the above, I find that: (1) the admitted cross-border transfers of savings from the
Executive Department, on the one hand, to the Commission on Audit, House of Representatives and
Commission on Elections, respectively, on the other, are void for violating the second requisite, and
(2) the phrase "to fund priority programs and projects not considered in the 2012 budget but
expected to be started or implemented during the current year" in Section 5.7.3 of NBC 541 is void
for violating the first requisite.

In sum, I vote to limit the declaration of unconstitutionality to the afore-discussed for the following
reasons:

First, I am of the view that the Court should not make a broad and sweeping declaration of
unconstitutionality relative to acts or practices that were not actually proven in this case. Hence, I
limit the declaration of unconstitutionality to the three admitted cross-border transfers of savings. To
rule otherwise would transgress the actual case and controversy requirement necessary to validly
exercise the power of judicial review.

Second, I find it improper to declare the DAP unconstitutional without specifying the provisions of the
implementing issuances which transgressed the Constitution. The acts or practices declared
unconstitutional by the majority relative to the DAP are a restatement of existing constitutional and
statutory provisions on the power to augment and the definition of savings. These do not identify the
provisions in the implementing issuances of the DAP which allegedly violated the Constitution and
pertinent laws. Again, it transgresses the actual case and controversy requirement.

Third, I do not subscribe to the view of the majority relative to the interpretation and application of
Section 38 of the Administrative Code, and the GAA provisions on savings, impoundment, the two-
year availability for release of appropriations and the unprogrammed fund, for reasons already
extensively discussed. While I find the wording of these laws to be highly susceptible to abuse and
even unwise and imprudent, the Court has no recourse but to interpret and apply them based on
their plain meaning, and not to accord them an interpretation that lead to absurd results or render
them inoperative.

Last, I find that the remedy in this case is not solely judicial but largely legislative in that imperative
reforms are needed in, among others, the limits of Section 38, the definition of "savings," the
transparency of the exercise of the power to augment, the safeguards and limitations on this power,
and so on. How this is to be done belongs to Congress which must balance the State interests in
curbing abuse vis-à-vis flexibility in fiscal management.

Ultimately, however, the remedy resides in the people: to press for needed reforms in the laws that
currently govern the enactment and execution of the national budget and to be vigilant in the
prosecution of those who may have fraudulently abused or misused public funds. In fine, I am of the
considered view that the abuse or misuse of the power to augment will persist if the needed reforms
in the subject laws are not promptly instituted. Hence, the necessity of calling upon the moral
strength, courage and resolve of our people and nation to address these weaknesses in our laws
which have, to a large extent, precipitated the present controversy.

ACCORDINGLY, I vote to PARTIALLY GRANT the petitions:

The Disbursement Acceleration Program is PARTIALLY UNCONSTITUTIONAL:

1. Sections 5.4, 5.5 and 5.7 of National Budget Circular No. 541 are VOID insofar as they (1)
allowed the withdrawal of unobligated allotments from slow-moving projects which were not
finally discontinued or abandoned, and (2) authorized the use of such withdrawn unobligated
allotments as "savings" for violating the definition of "savings" under the 2011, 2012 and
2013 general appropriations acts.

2. The admitted cross-border transfers of savings from the Executive Department, on the one
hand, to the Commission on Audit, House of Representatives and Commission on Elections,
respectively, on the other, are VOID for violating Article VI, Section 25(5) of the Constitution.

3. The phrase "to fund priority programs and projects not considered in the 2012 budget but
expected to be started or implemented during the current year'' in Section 5.7.3 of National
Budget Circular No. 541 is VOID for contravening Article VI, Section 29(1) of the Constitution
and Section 54 of the 2012 General Appropriations Act.

MARIANO C. DEL CASTILLO

Associate Justice

SEPARATE CONCURRING OPINION

PERLAS-BERNABE, J.:

I concur in the ponencia's result, but find it necessary to clarify certain points surrounding the
concepts of appropriation, realignment, and augmentation in relation to the Disbursement Allocation
Program (DAP).

This Opinion essentially stems from perceived misconceptions in the usage of the term
"augmentation." The actions and/or practices taken under the DAP should not entirely be taken as
augmentations. This is because the "withdrawal of allotments" and "pooling of funds" by the
Executive Department for realignment (in case of suspension under Section 38 infra) and/or simple
utilization for projects without sufficient funding due to fiscal deficits (in case of stoppage under
Section 38 infra) is not "augmentation" in the constitutional sense of the word. The concept of
augmentation pertains to the delegated legislative authority, conferred by law(as Section 25[5],
Article VI of the 1987 Philippine Constitution [Constitution] cited below reads), to the various heads
of government to transfer appropriations within their respective offices:
(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. (Emphases supplied)

The term "appropriation" merely relates to the authority given by legislature to proper officers to
apply a distinctly specified sum from a designated fund out of the treasury in a given year for a
specific object or demand against the State. In other words, it is "nothing more than the legislative
authorization prescribed by the Constitution that money be paid out of the Treasury."  Borne from
1

this core premise that an appropriation is essentially a legislative concept, the process of a "transfer
of appropriations" should then be understood to pertain to changes in the legislative parameters
found in selected items of appropriations, whereby the statutory value of one increases, and another
decreases. To expound, it is first essential to remember that an appropriation is basically made up of
two (2) legislative parameters, namely: (a) the amount to be spent (or, in other words, the statutory
value); and (b) the purpose for which the amount is to be spent (or, in other words, the statutory
purpose). The word "augmentation," in common parlance, means "[t]he action or process of making
or becoming greater in size or amount."  Accordingly, by the import of this word "augmentation," the
2

process under Section 25(5) supra would then connote changes in the selected appropriation items’
statutory values, and not of its statutory purposes. As earlier stated, augmentation would lead to the
increase of the statutory value of one appropriation item, and a decrease in another.

How does the increase and decrease of statutory values work in the process of augmentation?

The query brings us to the concept of savings.

The incremental value coming from one appropriation item to effectively and actually increase the
statutory value of another appropriation item is what Section 25(5) supra refers to as "savings." The
General Appropriations Acts (GAA)  define savings as those "portions or balances of any
3

programmed appropriation x x x free from any obligation or encumbrance x x x." A programmed

appropriation item produces "portions or balances" "free from any obligation and encumbrance"
when the said item becomes defunct, thereby "freeing-up" either totally or partially the funds initially
allotted thereto. Because an appropriation item is passed at the beginning of the year, the reality and
effect of supervening events hardly figure into the initial budget picture. According to the GAAs,  the
4

following supervening events would render an appropriation item defunct: (a) completion or final
discontinuance or abandonment of the work, activity or purpose for which the appropriation is
authorized (this may happen, when, take for instance, a project, activity or program [PAP] is
determined to be illegal or involves irregular, unnecessary, excessive, extravagant, or
unconscionable expenditures or uses of government funds and properties); (b) regarding employee
compensation, vacancy of positions and leaves of absence without pay; and (c) implementation of
measures resulting in improved systems and efficiencies, thus enabling agencies to meet and
deliver required or planned targets, programs, and services. When any of these events happen, an
appropriation item – meaning, the statutory license to spend – becomes defunct and the funds
allotted therefor become idle. Envisioning this predicament, the Constitution allows augmentation as
a form of re-appropriation so that the various heads of government may, by law, work with existing
but defunct items of appropriation and practically utilize the funds allotted therefor as "savings" in
order to augment another appropriation item which has been established to be deficient – meaning,
the statutory license to spend is not enough to carry out or achieve the purposes of the PAP to be
implemented or under implementation. The requirement that an item be deficient for it to be
augmented may be gleaned from the GAA’s definition of augmentation which "implies the existence
x x x of program, activity or project with an appropriation, which upon implementation or subsequent
evaluation of needed resources, is determined to be deficient." 5
As earlier stated, the term "appropriation" properly refers to the statutory authority to spend.
Although practically related, said term is conceptually different from the term "funds" which refers to
the tangible public money that are allotted, disbursed, and spent. Appropriation is the province of
Congress. The President, in full control of the executive arm of government, in turn, implements the
legislative command in the form of appropriation items pursuant to his constitutional mandate to
faithfully execute the laws.  The Executive Department controls all phases of budget execution;  it
6 7

acts according to and carries out the directive of Congress. Hence, the constitutional mandate that
"[n]o money shall be paid out of the Treasury except in pursuance of an appropriation made by
law."  It is hornbook principle that when the appropriation law is passed, the role and participation of
8

Congress, except for the function of legislative oversight, ends, and the Executive’s begins.  Based
9

on the foregoing, it is then clear that it is the Executive’s job to deal with the actual allotment and
disbursement of public funds, whereas Congress’ job is to pass the statutory license sanctioning the
Executive’s courses of action.

When the Executive Department exercises its power of fiscal management through, for instance,
withdrawing unobligated allotments and pooling them under Sections 38 and 39, Chapter 5, Book VI
of the Administrative Code of 1987  (Administrative Code), which respectively state that:
10

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. (Emphases supplied)

the President acts within his sphere of authority for he is merely managing the execution of the
budget taking into account existing fiscal deficits as well as the circumstances that occur during
actual PAP implementation (the matter of fiscal deficits and implementation circumstances will be
expounded on in the succeeding discussion). However, he must always observe and comply with
existing constitutional and statutory limitations when doing so – that is, his directives in such respect
should not authorize or allow expenditures for an un-appropriated purpose nor sanction
overspending or the modification of the purpose of the appropriation item, or even the suspension or
stoppage of any expenditure without satisfying the public interest requirement, else he would be
substituting his will over that of Congress and thereby violate the separation of powers principle, not
to mention, act against his mandate to faithfully execute the laws.

An appropriation item’s statutory value is a threshold limit to spend. Meaning, the Executive can
allot, disburse, and/or spend x amount of money for x project for as long as the allotment,
disbursement or expenditure is within the value limit and only for the project provided in the
appropriation item. When the Executive implements an appropriation item, it is not always the case
that it automatically and completely allots, disburses, and spends the specified amount of public
funds to the full extent of that statutory limit. There are two reasons for this: first, the usual existence
of fiscal deficits; and, second, the present circumstances surrounding the implementation of the PAP
for which the appropriation item authorizes the Executive’s allotment, disbursement, and expenditure
of public funds. Fiscal deficits connote that not all appropriation items are automatically matched with
corresponding available funding. The circumstances of implementation determine whether actual
allotments, disbursements, and expenditures would be needed to be made either immediately or at a
later time (in case of suspension), or not at all (in case of stoppage). Being part of budget execution,
the President, after the GAA is passed, deals with these two realities by exercising his discretion of
fiscal management which must always be consistent with his constitutional mandate to faithfully
execute the laws. In the execution of the budget, he is guided by Section 3, Chapter 2, Book VI of
the Administrative Code which states:

SECTION 3. Declaration of Policy.—It is hereby declared the policy of the State to formulate and
implement a National Budget that is an instrument of national development, reflective of national
objectives, strategies and plans. The budget shall be supportive of and consistent with the socio-
economic development plan and shall be oriented towards the achievement of explicit objectives and
expected results, to ensure that funds are utilized and operations are conducted effectively,
economically and efficiently. The national budget shall be formulated within the context of a
regionalized government structure and of the totality of revenues and other receipts, expenditures
and borrowings of all levels of government and of government-owned or controlled corporations. The
budget shall likewise be prepared within the context of the national long-term plan and of a long-term
budget program.

When conducting fiscal management through suspending and realigning expenditures under Section
38 supra, the President is not technically "augmenting" according to Section 25(5) supra since he is
not changing the legislative parameters of the appropriation items (through decreasing and
increasing their statutory values). This is because, despite the suspension of expenditures and their
realignment (which are matters that connote temporariness), the legislative parameters of the
appropriation items still remain the same; hence, no savings are generated nor are savings needed.
On the contrary, when he permanently stops expenditures under Section 38 supra in the interest of
the public, he, in relation to the first GAA parameter on completion, final discontinuance and
abandonment, generates savings. The permanent stoppage of expenditures may then be treated as
a precursor act for either: (a) augmentation, when the statutory value of the target appropriation item
resultantly increases (in this case, savings are used under Section 39 supra in relation to Section
25[5] supra to address a deficiency in the appropriation item itself, and not only the funds allocated
therefor) ; or (b) for simple utilization, when the statutory value of the target appropriation item is not
increased and the PAP covered by the said item only needs sufficient funding (in this case, savings
are used under Section 39 supra only to address a fiscal deficit – that is, the actual funds allocated
for the item to be implemented or under implementation were initially inadequate, which is why the
funds allocated to the defunct item [now, as savings] would be utilized for the former). Notably, the
budget deliberations prior to the GAA’s passage only account for projected revenues, and, hence, do
not reflect the government’s actual financial position throughout the course of the year. This is why
when the public interest so requires– taking cue, for instance, from the realities of fiscal deficits and
implementation circumstances – the President, under the authority of Section 38 supra, is given the
power to suspend/stop expenditures which, to stress a previous crucial point, must always be
exercised consistent with his constitutional mandate to faithfully execute the laws. Any arbitrary or
capricious exercise of the same will effectively negate Congress’ power of control over the purse
and, hence, can never be warranted.

When the President approves the wholesale withdrawal of unobligated allotments by invoking the
blanket authority of Section 38 supra vis-à-vis the general policy impetus to ramp up government
spending, without any discernible explanation behind a particular PAP expenditure’s suspension or
stoppage, or any clarification as to whether the funds withdrawn then pooled would be used either
for realignment or only to cover a fiscal deficit, or for augmentation (in this latter case, necessitating
therefor the determination of whether said funds are savings or not), a constitutional conundrum
arises. What results is a pooling of funds, from which a multitude of executive options is opened.
Under its broad context and the government’s presentment thereof, the observation I make is that
the DAP actually constitutes an amalgam of executive actions and/or practices whereby
augmentations may be undertaken, and/or funds realigned or utilized to address fiscal deficits. Thus,
with this in mind, I concur with the ponencia’s limited conclusion that the withdrawal of unobligated
allotments not considered as savings for the purposes of augmentation, or, despite the funds being
considered as savings, the augmentation of items cross-border or the funding of PAPs without an
existing appropriation cover are unconstitutional acts and/or practices taken under the DAP. I also
maintain a similar position with respect to the ponencia’s pronouncement on the Unprogrammed
Fund considering the absence of any proof that the general or exceptive conditions  for its use had
11

been duly complied with. Ultimately, notwithstanding any confusion as to the DAP’s actual workings
or the laudable intentions behind the same, the one guiding principle to which the Executive should
be respectfully minded is that no policy or program of government can be adopted as an avenue to
wrest control of the power of the purse from Congress, for to do so would amount to a violation of
the provisions on appropriation and augmentation as well as an aberration of the faithful execution
clause engraved and enshrined in our Constitution.

ACCORDINGLY, I concur with the ponencia that the following acts and/or practices taken under the
Disbursement Allocation Program, implemented through National Budget Circular No. 541 and other
related executive issuances, are UNCONSTITUTIONAL:

(a) the withdrawal of unobligated allotments from the implementing agencies not considered
as savings for the purposes of augmentation, the transfer of the savings of the Executive to
augment appropriations of other offices outside the Executive, and the augmentation of
items without any existing appropriation covers to the extent that said acts and/or practices
violated Section 25( 5) of the 1987 Philippine Constitution; and

(b) the use of the Unprogrammed Fund despite the absence of any proof that the general
condition for its use under the relevant GAAs, i.e., revenue collections were in excess of the
original revenue targets, was complied with, and without any justification that the exceptive
conditions for such use did concur.

ESTELA M. PERLAS-BERNABE
Associate Justice

CONCURRING OPINION

LEONEN, J.:

I concur in the result.

I agree that some acts and practices covered by the Disbursement Acceleration Program as
articulated in National Budget Circular No. 541 and in related executive issuances and memoranda
are unconstitutional. We declare these principles for guidance of bench and bar considering that the
petitions were mooted. The application of these principles to the 116 expenditures contained in the
"evidence packet" submitted by the Solicitor General as well as the application of the doctrine of
operative fact should await proper appraisal in the proper forum.

I
Isolated from their political color and taking the required sterile juridical view, the petitions
consolidated .in this case ask us to define the limits of the constitutional discretion of the President to
spend in relation to his duty to execute laws passed by Congress. Specifically, we are asked to
decide whether there has been grave abuse of discretion in the promulgation and implementation of
the Disbursement Acceleration Program (DAP).

The DAP was promulgated and implemented in response to the slowdown in economic growth in
2011.  Economic growth in 2011 was within the forecasts of the National Economic Development
1

Authority but below the growth target of 7% expected by other agencies and organizations.  The 2

Senate Economic Planning Office Report of March 2012 cited government’s under spending,
specially in infrastructure, as one of the factors that contributed to the weakened economy.  This was
3

a criticism borne during the early part of this present administration. 4

On July 18, 2012, National Budget Circular No. 541 was issued. This circular recognized that the
spending targets were not met for the first five months of the year.  The reasons can be deduced
5

from a speech delivered by the President on October 23, 2013, wherein he said:

I remember that in 2011, I addressed you for the first time as President of the Republic. Back then,
we had to face a delicate balancing act. As we took a long hard look at the contracts and systems
we inherited, and set about to purge them of opportunities for graft, the necessary pause led to a
growing demand to pump prime the economy. 6

During the oral arguments of this case, Secretary Florencio Abad of the Department of Budget and
Management (DBM) confirmed that they discovered leakages that resulted in the weakened capacity
of agencies in implementing projects when President Aquino assumed office.  Spending was
7

hampered. Economic growth slowed down.

To address the under spending resulting from that "pause," "measures ha[d] to be implemented to
optimize the utilization of available resources"  and "to accelerate spending and sustain the fiscal
8

targets during the year."  The President authorized withdrawals from the agencies’ unobligated
9

allotments.  National Budget Circular (NBC) No. 541, thus, stated its purposes as:
10

a. 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;

b. To prescribe the reports and documents to be used as bases on the withdrawal of said
unobligated allotments; and

c. To provide guidelines in the utilization or reallocation of the withdrawn allotments. 11

The Department of Budget and Management describes the Disbursement Acceleration Program,
which petitioners associate with NBC No. 541, as "a stimulus package under the Aquino
administration designed to fast-track public spending and push economic growth. This covers high-
impact budgetary programs and projects which will be augmented out of the savings generated
during the year and additional revenue sources." 12

According to Secretary Abad, the Disbursement Acceleration Program "is not just about the use of
savings and unprogrammed funds, it is a package of reformed interventions to de-clog processes,
improve the absorptive capacities of agencies and mobilize funds for priority social and economic
services." 13
The President explained in the cited 2013 speech that the "stimulus package" was successful in
ensuring that programs delivered the greatest impact in the most efficient manner.  According to the
14

President, the stimulus package’s contribution of 1.3%percentage points to gross domestic product
(GDP) growth in the last quarter of 2011 was recognized by the World Bank in one of its quarterly
reports. 15

The subject matter of this constitutional challenge is unique. As ably clarified in the ponencia, the
DAPis not covered by National Budget Circular No. 541 alone or by a single legal
issuance.  Furthermore, respondents manifested that it has already served its purpose and is no
16

longer being implemented. 17

II

The Disbursement Acceleration Program(DAP) is indeed a label for a fiscal management

policy.  Several activities and programs are included within this policy. To implement this policy,
18

several internal memoranda requesting for the declaration of savings and specific expenditures  as 19

well as the DBM’s National Budget Circular No. 541 were issued. DAP — as a label — served to
distinguish the activities of a current administration from other past fiscal management policies. 20

It is for this reason that we cannot make a declaration of constitutionality or unconstitutionality of the
DAP. Petitions filed with this court should be more specific in the acts of respondents — other than
the promulgation of policy and rules — alleged to have violated the Constitution.  Judicial review
21

should not be wielded pursuant to political motives; rather, it is a discretion that should be wielded
with deliberation, care, and caution. Our pronouncements should be narrowly tailored to the facts of
the case to ensure that we do not unduly transgress into the province of the other departments.  Ex 22

facto jus oritur. Law arises only from facts.

III

We also run into several technical problems that can cause inadvisable precedents should we
proceed to make declarations on DBM NBC No. 541 alone.

First, this circular is addressed to agencies and meant to define the procedures for adopting and
achieving operational efficiency in government.  Hence, it is a set of rules internal to the executive.
23

Our jurisdiction begins only when these rules are the basis for actual expenditure of funds. Even so,
the petitions that were filed with us should specify which expenditures should be appraised in
relation to existing law and the Constitution.24

Second, there are laudable provisions in this circular that are not subject to controversy. These
include the exhortation that government agencies should effectively and efficiently use their funds
within the soonest possible time so that they become relevant to the purposes for which they had
been allotted.  To declare the whole of the circular unconstitutional confuses and detracts from the
25

constitutional commitment that we should use our power of judicial review cautiously and effectively.
We have to wield our powers deliberately but with precision. Narrowly tailored constitutional
doctrines are better guides to future behavior. These doctrines will not stifle innovative and creative
approaches to good governance.

Third, on its face, the circular covers only appropriations in fiscal years 2011 and 2012.  However,
26

from the "evidence packets" which were submitted by the Solicitor General, there were expenditures
pertaining to the DAP even after the expiration of the circular. Any blanket declaration of
constitutionality of this circular, therefore, will be misdirected.
 IV

In the spirit of deliberate precision, I agree with the ponencia’s efforts to clearly demarcate the
discretion granted by the Constitution to the legislature and the executive. I add some qualifications.

The budget process in the ponencia is descriptive,  not normative. That is, it reflects what is
27

happening. It should not be taken as our agreement that the present process is fully compliant with
the Constitution.

For instance, I am of the firm view that the treatment of departments and offices granted fiscal
autonomy should be different.  Levels of fiscal autonomy among various constitutional organs can
28

be different.
29

For example, the constitutional protection granted to the judiciary is such that its budget cannot be
diminished below the amount appropriated during the previous year.  Yet, we submit our items for
30

expenditure to the executive through the DBM year in and year out. This should be only for advice
and accountability; not for approval.

In the proper case, we should declare that this constitutional provision on fiscal autonomy means
that the budget for the judiciary should be a lump sum corresponding to the amount appropriated
during the previous year.  This may mean that as a proportion of the national budget and in its
31

absolute amount, the judiciary’s budget cannot be reduced. Any additional appropriation for the
judiciary should cover only new items for amounts greater than what have already been
constitutionally appropriated. Public accountability on our expenditures will be achieved through a
resolution of the Supreme Court En Banc detailing the items for expenditure corresponding to that
amount.

The ponencia may inadvertently marginalize this possible view of how the Constitution requires the
judiciary’s budget to be prepared. It will also make it difficult for us to further define fiscal autonomy
as constitutionally or legally mandated for the other constitutional offices.

With respect to the discretions in relation to budget execution: The legislature has the power to
authorize a maximum amount to spend per item,  and the executive has the power to spend for the
32

item up to the amount limited in the appropriations act.  The metaphor that Congress has "the power
33

of the purse" does not fully capture this distinction. It only captures part of the dynamic between the
executive and the legislature.

Any expenditure beyond the maximum amount provided for the item in the appropriations act is an
augmentation of that item.  It amounts to a transfer of appropriation. This is generally prohibited
34

except for instances when "upon implementation or subsequent evaluation of needed resources, [the
appropriation for a program, activity or project existing in the General Appropriations Act] is
determined to be deficient."  In which case, all the conditions provided in Article VI, Section 25 (5) of
35

the Constitution must first be met.

The limits defined in this case only pertain to the power of the President — and by implication, other
constitutional offices — to augment items of appropriation. There is also the power of the President
to realign allocations of funds to another item — without augmenting that item — whenever revenues
are insufficient in order to meet the priorities of government.

V
The President’s power or discretion to spend up to the limits provided by law is inherent in executive
power. It is essential to his exercise of his constitutional duty to "ensure that the laws be faithfully
executed"  and his constitutional prerogative to "have control of all the executive departments."
36 37

The legislative authority to spend up to a certain amount for a specific item does not mean that the
President must spend that full amount. The President can spend less due to efficiency.  He may also 38

recall any allocation of unobligated funds to control an executive agency.  The expenditure may turn
39

out to be irregular, extravagant, unnecessary, or illegal.  It is always possible that there are
40

contemporary circumstances that would lead to these irregularities that could not have been seen by
Congress.

Congress authorizes a budget predicting the needs for an entire fiscal year.  But the President must
41

execute that budget based on the realities that he encounters.

Parenthetically, because of the constitutional principle of independence, the power to spend is also
granted to the judiciary.  The President does not have the discretion to withhold any amount
42

pertaining to the judiciary. The Constitution requires that all appropriations for it shall be
"automatically and regularly released."  The President’s power to implement the laws  and the
43 44

existence of provisions on automatic and regular release of appropriations  of independent

45

constitutional branches and bodies support the concept that the President’s discretion to spend up to
the amount allowed in the appropriations act inherent in executive power is exclusively for offices
within his department.

VI

Congress appropriates based on projected revenues for the fiscal year.  Not all revenues are
46

available at the beginning of the year. The budget is planned, and the General Appropriations Act
(GAA) is enacted, before the actual generation and collection of government funds. Revenue
collection happens all throughout the year. Taxes and fees, for instance, still need to be generated.

The appropriations act is promulgated, therefore, on the basis of hypothetical revenues of

government in the coming fiscal year. While hypothetical, it is the best educated, economic, and
political collective guess of the President and Congress.

Projected expenditures may not be equal to what will actually be collected. Hence, there is no
prohibition from enacting budgets that may result in a deficit spending. There is no requirement in
the Constitution that Congress pass only balanced budgets. 47

Ever since John Maynard Keynes introduced his theories of macroeconomic accounts, governments
have accepted that a certain degree of deficit spending (more expenditures than income) is
acceptable to achieve economic growth that will also meet the needs of an increasing
population.  The dominant economic paradigm is that developmental goals cannot be achieved
48

without economic growth,  i.e., that the amount of products and services available are greater than
49

that measured in the prior years.

Economic growth is dependent on many things.  It is also the result of government
50

expenditures.  The more that the government spends, the more that businesses and individuals are
51

able to raise revenues from their transactions related to these expenditures.  The monies paid to
52

contractors in public infrastructure projects will also be used to allow these contractors to purchase
materials and equipment as well as to pay their workers.  These workers will use their income to
53

purchase services and products and so on.  The possibility that value will be used to create more
54

value is what makes the economy grow.

Theoretically, the more the economy grows, the more that government is able to collect in the form
of taxes and fees.

It is necessary for the government to be able to identify the different factors limiting the impact of
expenditures on economic growth.  It is also necessary that it makes the necessary adjustments
55

consistent with the country’s short-term and long-term goals.  The government must be capable of
56

making its own priorities so that resources could be shifted in accordance with the country’s actual
needs.

Thus, it makes sense for economic managers to recommend that government expenditures be used
efficiently: Scarce resources must be used for the project that will have the most impact at the
soonest time. While Congress contributes by putting the frame through the Appropriations Act,
actual economic impact will be decided by the executive who attends to present needs.

The executive may aim for better distribution of income among the population or, simply, more
efficient ways to build physical and social infrastructure so that prosperity thrives. Certainly, good
economic management on the part of our government officials means being concerned about
projects or activities that do not progress in accordance with measured expectations. At the
beginning of the year or at some regular intervals, the executive should decide on resource
allocations reviewing prior ones so as to achieve the degree of economic efficiency required by good
governance.  These allocations are authorities to start the process of obligation. To obligate means
57

the process of entering into contract for the expenditure of public money. 58

However, disbursement of funds is not automatic upon allocation or allotment. There are
procurement laws to contend with.  Funds are disbursed only after the government enters into a
59

contract, and a notice of cash allocation is issued.60

At any time before disbursement of funds, the President may again deal with contingencies. Inherent
in executive power is also the necessary power for the President to decide on priorities without
violating the law. How and when the President reviews these priorities are within his discretion. The
Constitution should not be viewed with such awkward academic restrictions that will constrain, in
practice, the ability of the President to respond. Constitutional interpretation may be complex, but it
is not unreasonable. It should always be relevant.

Congress has the constitutional authority to determine the maximum levels of expenditures per item
in the budget.  It is not Congress, however, that decides when and how, in fact, the resources are to
61

be actually spent. Congress cannot do so because it is a collective deliberative body designed to

create policy through laws.  It cannot and does not implement the law.
62 63

Parenthetically, this was one of the principal reasons why we declared the Priority Development
Assistance Fund (PDAF) as unconstitutional. 64

Since the President attends to realities and decides according to priorities, our constitutional design
is to grant him the flexibility to make these decisions subject to clear legal limitations.

Hence, changes in the allotment of funds are not prohibited transfers of appropriations if these
changes are still consistent with the maximum allowances under the GAA. They are merely
manifestations of changing priorities in the use of funds. They are still in line with the President’s
duty to implement the General Appropriations Act.
Thus, if revenues have not been fully collected at a certain time but there is a need to fully spend for
an item authorized in the appropriations act, the President should be able to move the funds from an
agency, which is not effectively and efficiently using its allocation, to another agency. This is the
concept of realignment of funds as differentiated from augmentation of an item.

VII

Realignment of the allocation of funds is different from the concept of augmentation contained in
Article VI, Section 25 (5) of the Constitution.

In realignment of allocation of funds, the President, upon recommendation of his subalterns like the
Department of Budget and Management, finds that there is an item in the appropriations act that
needs to be funded. However, it may be that the allocated funds for that targeted item are not
sufficient. He, therefore, moves allocations from another budget item to that item but only to fund the
deficiency: that is, the amount needed to fill in so that the maximum amount authorized to be spent
for that item in the appropriations act is actually spent.

The appropriated amount is not increased. It is only filled in order that the item’s purpose can be fully
achieved with the amount provided in the appropriations law. There is no augmentation that
happens. In such cases, there is no need to identify savings. The concept of savings is only
constitutionally relevant as a requirement for augmentation of items. It is the executive who needs to
fully and faithfully implement sundry policies contained in many statutes and needs to decide on
priorities, given actual revenues.

The flexibility of realignment is required to allow the President to fully exercise his basic
constitutional duty to faithfully execute the law and to serve the public "with utmost responsibility . . .
and efficiency."65

Unlike in augmentation, which deals with increases in appropriations, realignment involves

determining priorities and deals with allotments without increases in the legislated appropriation. In
realignment, therefore, there is no express or implied amendment of any of the provisions of the
Appropriations Act. The actual expenditure is only up to the amount contained in the law.

For purposes of adapting to the country’s changing needs, the President’s power to realign
expenditures necessarily includes the power to withdraw allocations that were previously made for
projects that are not effectively and efficiently moving or that, in his discretion, are not needed at the
present.66

These concepts are implicit in law. Thus, Book VI, Chapter 5, Section 3 of the Administrative Code
provides:

Section 3. Declaration of Policy. — It is hereby declared the policy of the State to formulate and
implement a National Budget that is an instrument of national development, reflective of national
objectives, strategies and plans. The budget shall be supportive of and consistent with the socio-
economic development plan and shall be oriented towards the achievement of explicit objectives and
expected results, to ensure that funds are utilized and operations are conducted effectively,
economically, and efficiently.(Emphasis supplied)

To set priorities is to favor one project over the other given limited resources available. Thus, there is
a possibility when resources are wanting, that some projects or activities authorized in the General
Appropriations Act may be suspended.
Justice Carpio’s interpretation of Section 38, Chapter 5, Book VI of the Administrative Code is that
the power to suspend can only be exercised by the President for appropriated funds that were
obligated.  If the funds were appropriated but not obligated, the power to suspend under Section 38
67

is not available.  Justice Carpio reasons that to allow the President to suspend or stop the
68

expenditure of unobligated funds is equivalent to giving the President the power of impoundment.  If, 69

in the opinion of the President, there are unsound appropriations in the proposed General
Appropriations Act, he is allowed to exercise his line item veto power.  Once the GAA is enacted into
70

law, the President is bound to faithfully execute its provisions. 71

I disagree.

When there are reasons apparent to the President at the time when the General Appropriations Act
is submitted for approval, then he can use his line item veto. However, at a time when he executes
his priorities, suspension of projects is a valid legal remedy.

Suspension is not impoundment. Besides, the prohibition against impoundment is not yet
constitutional doctrine.

It is true that the General Appropriations Act provides for impoundment.  Philconsa v.
72

Enriquez  declined to rule on its constitutional validity.  Until a ripe and actual case, its constitutional
73 74

contours have yet to be determined. Certainly, there has been no specific expenditure under the
umbrella of the Disbursement Allocation Program alleged in the petition and properly traversed by
respondents that would allow us the proper factual framework to delve into this issue. Any definitive
pronouncement on impoundment as constitutional doctrine will be premature, advisory, and,
therefore, beyond the province of review in these cases. 75

Impoundment is not mentioned in the Constitution. At best, it can be derived either from the
requirement for the President to faithfully execute the laws with reference to the General
Appropriations Act.  Alternatively, it can be implied as a limitation imposed by the legislature in
76

relation to the preparation of a budget. The constitutional authority that will serve as the standpoint to
carve out doctrine, thus, is not yet clear.

To be constitutionally sound doctrine, impoundment should refer to a willful and malicious

withholding of funds for a legally mandated and funded project or activity. The difficulty in making
broad academic pronouncements is that there may be instances where it is necessary that some
items in the appropriations act be unfunded.

The President, not Congress, decides priorities when actual revenue collections during a fiscal year
are not sufficient to fund all authorized expenditures. In doing so, the President may have to leave
some items with partial or no funding. Making priorities for spending is inherently a discretion within
the province of the executive. Without priorities, no legal mandate may be fulfilled. It may be that
refusing to fund a project in deficit situations is what is needed to faithfully execute the other
mandates provided in law. In such cases, attempting to partially fund all projects may result in none
being implemented.

Of course, even if there is a deficit, impoundment may exist if there is evidence of willful and
malicious conduct on the part of the executive to withdraw funding from a specific item other than to
make priorities. Whether that situation is present in the cases at bar is not clear. It has neither been
pleaded nor proven. The contrary has not been asserted by petitioners. They have filed broad
petitions unarmed with the specifics of each of the expenditures. They have also failed to traverse
the "evidence packets" presented by respondents.
Impoundment, as a constitutional doctrine, therefore, becomes clear and salient under conditions of
surpluses; that is, that the revenue actually collected and available exceeds the expenditures that
have been authorized. Again, this situation has neither been pleaded nor proven.

Justice Carpio highlights Prof. Laurence Tribe’s position on impoundment.  While I have the highest
77

admiration for Laurence Tribe as constitutional law professor, I understand that his dissertation is on
American Constitutional Law. I maintain the view that the decisions of the United States Supreme
Court and the analysis of their observers are not part of our legal order. They may enlighten us or
challenge our heuristic frames in our reading of our own Constitution. But, in no case should we
capitulate to them by implying that they are binding precedent. To do so would be to undermine our
own sovereignty. Thus, with due respect to Justice Carpio’s views, the discussions in Philconsa v.
Enriquez  could not have been rendered outdated by US Supreme Court decisions. They can only
78

be outdated by the discussions and pronouncements of this court.

VIII

Of course, there are instances when the President must mandatorily withhold allocations and even
suspend expenditure in an obligated item. This is in accordance with the concept of "fiscal
responsibility": a duty imposed on heads of agencies and other government officials with authority
over the finances of their respective agencies.

Section 25 (1) of Presidential Decree No. 1445,  which defines the powers of the Commission on
79

Audit, states:

Section 25. Statement of Objectives. –

. . . . (1) To determine whether or not the fiscal responsibility that rests directly with the head of the
government agency has been properly and effectively discharged; . . . .

This was reiterated in Volume I, Book 1, Chapter 2, Section 13 of the Government Accounting and
Auditing Manual,  which states:
80

Section 13. The Commission and the fiscal responsibility of agency heads. – One primary objective
of the Commission is to determine whether or not the fiscal responsibility that rests directly with the
head of the government agency has been properly and effectively discharged.

The head of an agency and all those who exercise authority over the financial affairs, transaction,
and operations of the agency, shall take care of the management and utilization of government
resources in accordance with law and regulations, and safeguarded against loss or wastage to
ensure efficient, economical, and effect operations of the government.

Included in fiscal responsibility is the duty to prevent irregular, unnecessary, excessive, or

extravagant expenses. Thus:

Section 33. Prevention of irregular, unnecessary, excessive, or extravagant expenditures of funds or

uses of property; power to disallow such expenditures. The Commission shall promulgate such
auditing and accounting rules and regulations as shall prevent irregular, unnecessary, excessive, or
extravagant expenditures or uses of government funds or property.

The provision authorizes the Commission on Audit to promulgate rules and regulations. But, this
provision also guides all other government agencies not to make any expenditure that is "irregular,
unnecessary, excessive, or extravagant."  The President should be able to prevent unconstitutional
81

or illegal expenditure based on any allocation or obligation of government funds.

Volume I, Book III, Title3, Article 2 of the Government Accounting and Auditing Manual defines
irregular, unnecessary, excessive, extravagant, and unconscionable expenditures as:

Section 162. Irregular expenditures.– The term "irregular expenditure" signifies an expenditure
incurred without adhering to established rules, regulations, procedural guidelines, policies, principles
or practices that have gained recognition in law. Irregular expenditures are incurred without
conforming with prescribed usages and rules of discipline. There is no observance of an established
pattern, course, mode of action, behavior, or conduct in the incurrence of an irregular expenditure. A
transaction conducted in a manner that deviates or departs from, or which does not comply with
standards set, is deemed irregular. An anomalous transaction which fails to follow or violate
appropriate rules of procedure is likewise irregular. Irregular expenditures are different from illegal
expenditures since the latter would pertain to expenses incurred in violation of the law whereas the
former in violation of applicable rules and regulations other than the law.

Section 163. Unnecessary expenditures.– The term "unnecessary expenditures" pertains to

expenditures which could not pass the test of prudence or the obligations of a good father of a
family, thereby non-responsiveness to the exigencies of the service. Unnecessary expenditures are
those not supportive of the implementation of the objectives and mission of the agency relative to the
nature of its operation. This could also include incurrence of expenditure not dictated by the
demands of good government, and those the utility of which cannot be ascertained at a specific time.
An expenditure that is not essential or that which can be dispensed with without loss or damage to
property is considered unnecessary. The mission and thrusts of the agency incurring the expenditure
must be considered in determining whether or not the expenditure is necessary.

Section 164. Excessive expenditures.– The term "excessive expenditures" signifies unreasonable
expense or expenses incurred at an immoderate quantity or exorbitant price. It also includes
expenses which exceed what is usual or proper as well as expenses which are unreasonably high,
and beyond just measure or amount. They also include expenses in excess of reasonable limits.

Section 165. Extravagant expenditures.– The term "extravagant expenditures" signifies those
incurred without restraint, judiciousness and economy. Extravagant expenditures exceed the bounds
of propriety. These expenditures are immoderate, prodigal, lavish, luxurious, wasteful, grossly
excessive, and injudicious.

Section 166. Unconscionable expenditures.– The term "unconscionable expenditures" signifies

expenses without a knowledge or sense of what is right, reasonable and just and not guided or
restrained by conscience. These are unreasonable and immoderate expenses incurred in violation of
ethics and morality by one who does not have any feeling of guilt for the violation.

These are sufficient guidelines for government officials and heads of agencies to determine whether
a particular program, activity, project, or any other act that involves the expenditure of government
funds should be approved or not.

The constitutional framework outlined and the cited statutory provisions should be the context for
interpreting Section 38, Chapter 5, Book VI of the Administrative Code:

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.

The General Appropriations Act for Fiscal Years 2011, 2012, and 2013 also uniformly provide:
[S]avings 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 President can withhold allocations from items that he deems will be "irregular, unnecessary,
excessive or extravagant."  Viewed in another way, should the President be confronted with an
82

expenditure that is clearly "irregular, unnecessary, excessive or extravagant,"  it may be an abuse of
83

discretion for him not to withdraw the allotment or withhold or suspend the expenditure

For purposes of augmenting items — as opposed to realigning funds — the President should be
able to treat such amounts resulting from otherwise "irregular, unnecessary, excessive or
extravagant" expenditures as savings.

IX The Constitution mentions "savings" in Article VI, Section 25 (5) in relation to the power of the
heads of government branches and constitutional commissions to augment items in their
appropriations. Thus: Sec. 25.

....

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.

....

The existence of savings in one item is a fundamental constitutional requirement for augmentation of
another item.  Augmentation modifies the maximum amount provided in the General Appropriations
84

Act appropriated for an item by way of increasing such amount.  The power to augment items allows
85

heads of government branches and constitutional commissions to exceed the limitations imposed on
their appropriations, through their savings, to meet the difference between the actual and authorized
allotments.86

The law provides for the definition of savings. The law mentioned in Article VI, Section 25 (5) refers
not only to the General Appropriations Act’s general provisions but also to other statutes such as the
Administrative Code and the Auditing Code contained in Presidential Decree No. 1445.

The clause in the General Appropriations Act for Fiscal Years 2011, 2012, and 2013, subject to our
interpretation for purposes of determination of savings, is as follows:
[S]avings refer to portions or balances of any programmed appropriation in this Act 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. . . . 87

The ponencia,  Justice Antonio Carpio,  Justice Arturo Brion,  and Justice Estela Perlas-
88 89 90

Bernabe  drew attention to this GAA provision that qualified "savings" as "free from any obligation or
91

encumbrances." The phrase, "free from any obligation or encumbrances," however, provides for
three situations namely: (1) completion; (2) final discontinuance; or (3) abandonment. The existence
of any of these three situations should constitute an appropriation as free from obligation.

These words are separated by "or" as a conjunctive. Thus, "final discontinuance" should be given a
meaning that is different from "abandonment."

The only logical reading in relation to the other provisions of law is that "abandonment" may be
discontinuance in progress. This means that a project is temporarily stopped because to continue
would mean to spend in a manner that is "irregular, unnecessary, excessive or extravagant." When
the project is remedied to prevent the irregularity in these expenditures, then the project can further
be funded. When the project is not remedied, then the executive declares a "final discontinuance" of
the project.

In these cases, it makes sense for the President to withdraw or withhold allocation or further
obligation of the funds. It is in this light that the Administrative Code provides that the President may
suspend work or the entire program when, based on his judgment, public interest requires it. 92

To further comply with the duty to use funds "effectively, economically and efficiently,"  the President
93

should be able to realign or reallocate these funds. The allocations withdrawn for any of these
purposes should be available either for realignment or as savings to augment certain appropriation
items.

National Budget Circular No. 541 was issued because of the executive’s concern about the number
of "slow-moving projects."  The slow pace of implementation may have been due to irregularities or
94

illegalities. It could be that it was due to inefficiencies, or it could be that there were simply projects
which the executive refused to implement.

There are other species of legitimate savings for purposes of augmentation of appropriation items
that justify withdrawal of allocations.

"Final discontinuance" or "abandonment" can occur when, even with the exercise of good faith by
officials of the executive departments, there are unforeseen events that make it improbable to
complete the procurement and obligation of an item within the time period allowed in the relevant
General Appropriations Act.

DBM NBC No. 541 provides an implicit deadline of June 30, 2012 for unobligated but allocated
items.  There is a mechanism of consultation with the agencies concerned.  For instance, the 5th
95 96

Evidence Packet submitted by the Office of the Solicitor General shows a copy of Department of
Transportation and Communication Secretary Joseph Abaya’s letter to the Department of Budget
and Management, recommending withdrawal of funds from certain projects,  which they were having
97

difficulties in implementing. 98
In Section 5.4 of Circular No. 541, the bases for the deadline are:

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 carry over appropriations may imply that the agency has a
slower than-programmed implementation capacity or agency tends to implant projects within a two-
year timeframe.

These assumptions as well as the determination of a deadline are consistent with the President’s
power to control "all the executive departments, bureaus and offices."  It is also within the scope of
99

his power to fully and faithfully execute laws. Judicial review of the deadline as well as its policy
basis will only be possible if there is a clear and convincing showing by a petitioner that grave abuse
of discretion is present. Generally, the nature of the expenditure, the time left to procure, and the
efforts both of the agency concerned and the Department of Budget and Management to meet the
obstacles to meet the procurement plans would be relevant. But in most instances, this is really a
matter left to the judgment of the President.

To this extent, I disagree with the proposal of Justice Carpio on our declaration of the timelines for
purposes of determining when there can be savings. Justice Carpio is of the view that there is a
need to declare as unconstitutional:

Disbursements of unobligated allotments for Capital Outlay as savings and their realignment to other
items in the GAA, prior to the last two months of the fiscal year if the period to obligate is one year,
or prior to the last two months of the second year if the period to obligate is two years.
100

It is not within the scope of our powers to insist on a specific time period for all expenditures given
the nuances of executing a budget. To so hold would be to impinge on the ability of the President to
execute laws and exercise his control over all executive departments.

XI

Article VI, Section 25 (5) requires that for any augmentation to be valid, it must be for an existing
item. Furthermore, with respect to the President, the augmentation may only be for items within the
executive department. 101

The power to augment under this provision is qualified by the words, "respective offices." This
means that the President and the other officials enumerated can only augment items within their
departments. In other words, augmentation of items is allowed provided that the source department
and the recipient department are the same.

Transfer of funds from one department to other departments had already been declared as
unconstitutional in Demetria v. Alba.  Moreover, a corollary to our pronouncement in Gonzales v.
102

Macaraig, Jr.  that "[t]he doctrine of separation of powers is in no way endangered because the
103

transfer is made within a department (or branch of government) and not from one department
(branch) to another"  is that transfers across departments are unconstitutional for being violative of
104

the doctrine of separation of powers.

There are admissions in the entries contained in the evidence packets that presumptively show that
there have been at least two (2) instances of augmentation by the executive of items outside its
department.  If these are indeed validated upon the proper audit to have been actually expended,
105

then such acts are unconstitutional.

The Solicitor General suggests that we stay our hand to declare these transfers as unconstitutional
since the Congress has acquiesced to these transfers of funds and have not prohibited them in the
next budget period.  Alternatively, respondents also suggest that the transfers were necessary
106

because of contingencies or for interdepartmental cooperation. 107

Acquiescence of an unconstitutional act by one department of government can never be a

justification for this court not to do its constitutional duty.  The Constitution will fail to provide for the
108

neutrality and predictability inherent in a society thriving within the auspices of the rule of law if this
court fails to act in the face of an actual violation. The interpretation of the other departments of
government of their powers under the Constitution may be persuasive on us,  but it is our collective
109

reading which is final. The constitutional order cannot exist with acquiescence as suggested by
respondents.

Furthermore, the residual powers of the President exist only when there are plainly ambiguous
statements in the Constitution. If there are instances that require more funds for a specific item
outside the executive agencies, a request for supplemental appropriation may be made with
Congress. Interdependence is not proscribed but must happen in the context of the rule of law. No
exigent circumstances were presented that could lead to a clear and convincing explanation why this
constitutional fiat should not be followed.

XII

Definitely, Section 5.7.3 of DBM NBC No. 541 is not an ideal example of good rule writing. By this
provision, withdrawn allotments may be:

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.

This provision is too broad. It appears to sanction the unconstitutional act of augmenting a non-
existing item in the general appropriations acts (GAAs) or any supplemental appropriations law.

The Solicitor General suggests that this provision should be read broadly so as to skirt any
constitutional infirmity, thus:

76. Paragraph 5.7.3 of NBC No. 541 makes no mention of items or appropriations. Instead, it refers
to ‘. . .existing programs and projects of any agency and . . . priority programs and projects not
considered in the 2012 budget but expected to be started or implemented during the current year.’
On questioning from the Chief Justice, respondents submitted that ‘programs and projects’ do not
refer to items of appropriation (as they appear in the GAA) but to specific activities, the specific
details and particular justifications for which may not have been considered by Congress, but are
necessarily included in the broad terms used in the GAA. Activities need not be enumerated for
consideration of Congress, as they are already encapsulated in the broader terms ‘programs’ or
‘projects’. This finds statutory support in the Revised Administrative Code which defines ‘programs’
as ‘functions and activities for the performance of a major purpose for which a government agency is
established’ and ‘project’ as a ‘component of a program covering a homogenous group of activities
that results in the accomplishment of an identifiable output.’ 110
Every presumption in interpreting a provision of law should indeed be granted so as to allow
constitutionality in any provision in law or regulation.  This presumption applies to facial reviews of
111

provisions. However, it is unavailing in the face of actual facts that clearly and convincingly show a
breach of the constitutional provision. Such facts must be established through the rules of evidence.
The Solicitor General himself submitted "evidence packets" which admit projects benefiting from the
DAP.  Based on respondent’s allegations, the projects have "appropriations cover."  Petitioners
112 113

were unable to refute these allegations. Perhaps, it was because it was the first time that they
encountered this full accounting of the DAP.

In my view, it is not in this petition for certiorari and prohibition that the proper traverse of factual
allegations can be done. We cannot go beyond guidance that any allocation — or augmentation —
for an activity not covered by any item in any appropriation act is both unconstitutional and illegal.

XIII

I agree with the assessment on the constitutionality of using unprogrammed funds as appropriations
cover.  An increase in the dividends coming from government financial institutions and government
114

owned and -controlled corporations is not the condition precedent for using revenues for items
allowed to be funded from unplanned revenues. The provisions of the General Appropriations Act
clearly provide that the actual revenues exceed the projected revenues presented and used in the
approval of the current law. 115

I agree with Justice Bernabe’s views relating to the pooling of funds.  There are many laudable
116

intentions in the Disbursement Acceleration Program (DAP). But its major problem lies in the
concept of pooled funds. That is, that there is a lump sum from various sources used both to realign
allocation and to augment appropriations items. It is unclear whether augmentation of one item is
done with funds that are legitimately savings from another. It is difficult to assess each and every
source as well as whether each and every expenditure has appropriations cover.

It would have been better if the executive just augmented an item and was clear about its source for
savings. What happened was that there was an intermediary mechanism of commingling and
pooling funds. Thus, there was the confusion as to whether DAP was the source or ultimately only
the mechanism to create savings. Besides, access to information, clarity, and simplicity of
governmental acts can ensure public accountability. When the information cannot be accessed
freely or when access is too sophisticated, public doubt will not be far behind.

In view of this, I, therefore, agree to lay down the basic principles in the fallo of our decision so that
the expenditures can be properly audited.

XIV

Thus, there are factual issues that need to be determined before some or all of
the  projects  contained in the evidence packets admitted by respondents to have benefitted from
116 117

the DAP can be nullified:

First, whether the transfers of funds were in the nature of realignment of allocations or
augmentation of items;

Second, whether the withdrawal of allocations, under the circumstances and considering the
nature of the work, activity, or project, was consistent with the definition of savings in the
General Appropriations Act, the Administrative Code, and the Auditing Code;
 Third, whether the transfer of allotments and the corresponding expenditures were proper
augmentations of existing items;

Fourth, whether there were actual expenditures from savings that amounted to augmentation
of items outside the executive;

Fifth, whether there were actual expenditures justified with unprogrammed funds as the
appropriations cover.

The accounts submitted by the Solicitor General should be assessed and audited in a proper
proceeding that will allow those involved to traverse the factual issues, thereby ensuring all parties a
full opportunity to be heard. The 116 projects claimed as part of the Disbursement Allocation
Program (DAP) were not alleged by petitioners but were raised as part of the oral arguments of
respondents. The details of each project need to be further examined. Each of the expenditure
involved in every project may, therefore, be the subject of more appropriate procedure such as a
special audit by the Commission on Audit or the proper case filed by any interested party to nullify
any specific transfer based on evidence that they can present.

XV

The general rule is that a declaration of unconstitutionality of any act means that such act has no
legal existence: It is null and void ab initio.
118

The existing exception is the doctrine of operative facts. The application of this doctrine should,
however, be limited to situations where (a) there is a showing of good faith in the acts involved or (b)
where in equity we find that the difficulties that will be borne by the public far outweigh rigid
application to the effect of legal nullity of an act.

The doctrine saves only the effects of the unconstitutional act. It does not hint or even determine
whether there can be any liability arising from such acts. Whether the constitutional violation is in
good faith or in bad faith, or whether any administrative or criminal liability is forthcoming, is the
subject of other proceedings in other forums.

Likewise, to rule that a declaration of unconstitutionality per se is the basis for determining liability is
a dangerous proposition. It is not proper that there are suggestions of administrative or criminal
liability even before the proper charges are raised, investigated, and filed.

Any discussion on good faith or bad faith is, thus, premature. But, in our jurisdiction, the presumption
of good faith is a universal one. It assures the fundamental requisites of due process and fairness. It
frames a judicial attitude that requires us to be impartial.

Certiorari and prohibition as remedies are, thus, unavailing for these questions where the factual
conditions per expense item cannot be convincingly established and where the regulations have
become moot and academic. This is definitely not the proper case to assess the effects of each of
the 116 projects under the DAP.

Our decision today should not be misinterpreted as authority to undo infrastructure built or
expenditures made under the DAP. Nor should it be immediately used as basis for saying that any or
all officials or beneficiaries are either liable or not liable. Each expenditure must be audited in
accordance with our ruling.
 FINAL NOTE

Cases invested with popular and contemporary political interest are difficult. Sustained public focus
is assured because of the effect of this decision on the current balance of political power. It makes
for good stories both in traditional and social media. The public’s interest can be captivated because
the protagonists live in the here and now.

In the efforts to win over an audience, there are a few misguided elements who offer unverified and
illicit peeks into our deliberations. Since they do not sit in our chamber, they provide snapshots
culled from disjointed clues and conversations. Some simply move to speculation on the basis of
their simplified and false view of what motivates our judgments. We are not beholden to the powers
that appoint us. There are no factions in this court. Unjustified rumors are fanned by minds that lack
the ability to appreciate the complexity of our realities. This minority assumes that their stories or
opinions will be well-received by the public as they imagine it to be. Those who peddle stereotypes
and prejudice fail to see the Filipino as they are. They should follow the example of many serious
media practitioners and opinion leaders who help our people as they engage in serious and deep
analytical discussion of public issues in all forms of public media.

The justices of this court are duty-bound to deliberate. This means that we are all open to listening to
the views of others. It is possible that we take tentative positions to be refined in the crucible of
collegial discussion and candid debate. We benefit from the views of others: each one shining their
bright lights on our own views as we search for disposition of cases that will be most relevant to our
people.

We decide based on the actual facts in the cases before us as well as our understanding of the law
and our role in the constitutional order. We are aware of the heavy responsibilities that we bear. Our
decisions will guide and affect the future of our people, not simply those of our public officials.

DAP is a management program that appears to have had been impelled with good motives. It
generally sought to bring government to the people in the most efficient and effective manner. I
entertain no doubt that not a few communities have been inspired or benefited from the
implementation of many of these projects.

A government of the people needs to be efficient and effective. Government has to find ways to
cause change in the lives of people who have lived in our society’s margins: whether this be through
well thought out infrastructure or a more egalitarian business environment or addressing social
services or ensuring that just peace exists. The amount and timing of funding these activities,
projects, or programs are critical.

But, the frailty of the human being is that our passion for results might blind us from the abuses that
can occur. In the desire to meet social goals urgently, processes that similarly congeal our
fundamental values may have been overlooked. After all, "daang matuwid" is not simply a goal but
more importantly, the auspicious way to get to that destination.

The Constitution and our laws are not obstacles to be hurdled. They assure that the best for our
people can be done in the right way. In my view, the Constitution is a necessary document
containing our fundamental norms and values that assure our people that this government will be
theirs and will always be accountable to them. It is to that faith that we have taken our oaths. It is in
keeping with that faith that we discharge our duties.

We can do no less.
ACCORDINGLY, for guidance of the bench and bar, I vote to declare the following acts and
practices under the Disbursement Acceleration Program (DAP); National Budget Circular No. 541
dated July 18, 2012; and related executive issuances as unconstitutional:

(a) any implementation of Section 5. 7 .3 insofar as it relates to activities not related to any
existing appropriation item even if in anticipation of future projects;

(b) any augmentation by the President of items appropriated for offices outside the executive
branch; (c) any augmentation of any item, even within the executive department, which is
sourced from funds withdrawn from activities which have not yet been (1) completed, (2)
finally discontinued, or (3) abandoned; and

(d) any use of unprogrammed funds without all the conditions in the General Appropriations
Act being present.

Let a copy of this decision be served on all the other officers covered in Article VI, Section 25 ( 5) of
the 1987 Constitution for their guidance.

The evidence packets submitted by respondents should also be transmitted to the Commission on
Audit for their appropriate action.

MARVIC MARIO VICTOR F. LEONEN

Associate Justice

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. 205728               January 21, 2015

THE DIOCESE OF BACOLOD, REPRESENTED BY THE MOST REV. BISHOP VICENTE M.

NAVARRA and THE BISHOP HIMSELF IN HIS PERSONAL CAPACITY, Petitioners,
vs.
COMMISSION ON ELECTIONS AND THE ELECTION OFFICER OF BACOLOD CITY, ATTY.
MAVIL V. MAJARUCON, Respondents.

DECISION

LEONEN, J.:

"The Philippines is a democratic and republican State. Sovereignty resides in the people and all
government authority emanates from them." – Article II, Section 1, Constitution

All governmental authority emanates from our people. No unreasonable restrictions of the
fundamental and preferred right to expression of the electorate during political contests no matter
how seemingly benign will be tolerated.

This case defines the extent that our people may shape the debates during elections. It is significant
and of first impression. We are asked to decide whether the Commission on Elections (COMELEC)
has the competence to limit expressions made by the citizens — who are not candidates — during
elections.

Before us is a special civil action for certiorari and prohibition with application for preliminary
injunction and temporary restraining order  under Rule 65 of the Rules of Court seeking to nullify
1

COMELEC’s Notice to Remove Campaign Materials  dated February 22, 2013 and letter  issued on
2 3

February 27, 2013.

The facts are not disputed.

On February 21, 2013, petitioners posted two (2) tarpaulins within a private compound housing the
San Sebastian Cathedral of Bacolod. Each tarpaulin was approximately six feet (6') by ten feet (10')
in size. They were posted on the front walls of the cathedral within public view. The first tarpaulin
contains the message "IBASURA RH Law" referring to the Reproductive Health Law of 2012 or
Republic Act No. 10354. The second tarpaulin is the subject of the present case.  This tarpaulin
4

contains the heading "Conscience Vote" and lists candidates as either "(Anti-RH) Team Buhay" with
a check mark, or "(Pro-RH) Team Patay" with an "X" mark.  The electoral candidates were classified
5

according to their vote on the adoption of Republic Act No. 10354, otherwise known as the RH
Law.  Those who voted for the passing of the law were classified by petitioners as comprising "Team
6

Patay," while those who voted against it form "Team Buhay": 7

TEAM BUHAY TEAM PATAY

Estrada, JV Angara, Juan Edgardo
Honasan, Gregorio Casiño, Teddy
Magsaysay, Mitos Cayetano, Alan Peter
Pimentel, Koko Enrile, Jackie
Trillanes, Antonio Escudero, Francis
Villar, Cynthia Hontiveros, Risa
Party List Buhay Legarda, Loren
Party List Ang Pamilya Party List Gabriela
  Party List Akbayan
  Party List Bayan Muna
  Party List Anak Pawis

During oral arguments, respondents conceded that the tarpaulin was neither sponsored nor paid for
by any candidate. Petitioners also conceded that the tarpaulin contains names ofcandidates for the
2013 elections, but not of politicians who helped in the passage of the RH Law but were not
candidates for that election.

On February 22, 2013, respondent Atty. Mavil V. Majarucon, in her capacity as Election Officer of
Bacolod City, issued a Notice to Remove Campaign Materials  addressed to petitioner Most Rev.
8

Bishop Vicente M. Navarra. The election officer ordered the tarpaulin’s removal within three (3) days
from receipt for being oversized. COMELEC Resolution No. 9615 provides for the size requirement
of two feet (2’) by three feet (3’).
9
On February 25, 2013, petitioners replied  requesting, among others, that (1) petitioner Bishop be
10

given a definite ruling by COMELEC Law Department regarding the tarpaulin; and (2) pending this
opinion and the availment of legal remedies, the tarpaulin be allowed to remain. 11

On February 27, 2013, COMELEC Law Department issued a letter  ordering the immediate removal
12

of the tarpaulin; otherwise, it will be constrained to file an election offense against petitioners. The
letter of COMELEC Law Department was silenton the remedies available to petitioners. The letter
provides as follows:

Dear Bishop Navarra:

It has reached this Office that our Election Officer for this City, Atty. Mavil Majarucon, had already
given you notice on February 22, 2013 as regards the election propaganda material posted on the
church vicinity promoting for or against the candidates and party-list groups with the following names
and messages, particularly described as follows:

Material size : six feet (6’) by ten feet (10’)

Description : FULL COLOR TARPAULIN

Image of : SEE ATTACHED PICTURES

Message : CONSCIENCE VOTE (ANTI RH) TEAM

BUHAY; (PRO RH) TEAM PATAY

Location : POSTED ON THE CHURCH VICINITY

OF THE DIOCESE OF BACOLOD CITY

The three (3) – day notice expired on February 25, 2013.

Considering that the above-mentioned material is found to be in violation of Comelec Resolution No.
9615 promulgated on January 15, 2013 particularly on the size (even with the subsequent division of
the said tarpaulin into two), as the lawful size for election propaganda material is only two feet (2’) by
three feet (3’), please order/cause the immediate removal of said election propaganda material,
otherwise, we shall be constrained to file an election offense case against you.

We pray that the Catholic Church will be the first institution to help the Commission on Elections
inensuring the conduct of peaceful, orderly, honest and credible elections.

Thank you and God Bless!

[signed]
ATTY. ESMERALDA AMORA-LADRA
Director IV13

Concerned about the imminent threatof prosecution for their exercise of free speech, petitioners
initiated this case through this petition for certiorari and prohibition with application for preliminary
injunction and temporary restraining order.  They question respondents’ notice dated February 22,
14

2013 and letter issued on February 27, 2013. They pray that: (1) the petition be given due course;
(2) a temporary restraining order (TRO) and/or a writ of preliminary injunction be issued restraining
respondents from further proceeding in enforcing their orders for the removal of the Team Patay
tarpaulin; and (3) after notice and hearing, a decision be rendered declaring the questioned orders of
respondents as unconstitutional and void, and permanently restraining respondents from enforcing
them or any other similar order.15

After due deliberation, this court, on March 5, 2013, issued a temporary restraining order enjoining
respondents from enforcing the assailed notice and letter, and set oral arguments on March 19,
2013. 16

On March 13, 2013, respondents filed their comment  arguing that (1) a petition for certiorari and
17

prohibition under Rule 65 of the Rules of Court filed before this court is not the proper remedy to
question the notice and letter of respondents; and (2) the tarpaulin is an election propaganda subject
to regulation by COMELEC pursuant to its mandate under Article IX-C, Section 4 of the Constitution.
Hence, respondents claim that the issuances ordering its removal for being oversized are valid and
constitutional.
18

During the hearing held on March 19, 2013, the parties were directed to file their respective
memoranda within 10 days or by April 1, 2013, taking into consideration the intervening holidays. 19

The issues, which also served as guide for the oral arguments, are: 20

I.

WHETHER THE 22 FEBRUARY 2013 NOTICE/ORDER BY ELECTION OFFICER MAJARUCON

AND THE 27 FEBRUARY 2013 ORDER BY THE COMELEC LAW DEPARTMENT ARE
CONSIDERED JUDGMENTS/FINAL ORDERS/RESOLUTIONS OF THE COMELEC WHICH
WOULD WARRANT A REVIEW OF THIS COURT VIA RULE 65 PETITION[;]

A. WHETHER PETITIONERS VIOLATED THE HIERARCHY OF COURTS

DOCTRINE AND JURISPRUDENTIAL RULES GOVERNING APPEALS FROM
COMELEC DECISIONS;

B. ASSUMING ARGUENDO THAT THE AFOREMENTIONED ORDERS ARE NOT

CONSIDERED JUDGMENTS/FINAL ORDERS/RESOLUTIONS OF THE
COMELEC, WHETHER THERE ARE EXCEPTIONAL CIRCUMSTANCES WHICH
WOULD ALLOW THIS COURT TO TAKE COGNIZANCE OF THE CASE[;]

II.

WHETHER IT IS RELEVANT TODETERMINE WHETHER THE TARPAULINS ARE "POLITICAL

ADVERTISEMENT" OR "ELECTION PROPAGANDA" CONSIDERING THAT PETITIONER IS NOT
A POLITICAL CANDIDATE[;]

III.

WHETHER THE TARPAULINS ARE A FORM OR EXPRESSION (PROTECTED SPEECH), OR

ELECTION PROPAGANDA/POLITICAL ADVERTISEMENT[;]

A. ASSUMING ARGUENDO THAT THE TARPAULINS ARE A FORM OF

EXPRESSION, WHETHER THE COMELEC POSSESSES THE AUTHORITY TO
REGULATE THE SAME[;]
 B. WHETHER THIS FORM OF EXPRESSION MAY BE REGULATED[;]

IV.

WHETHER THE 22 FEBRUARY 2013 NOTICE/ ORDER BY ELECTION OFFICER MAJARUCON

AND THE 27 FEBRUARY 2013 ORDER BY THE COMELEC LAW DEPARTMENT VIOLATES THE
PRINCIPLE OF SEPARATION OF CHURCH AND STATE[;] [AND]

V.

WHETHER THE ACTION OF THE PETITIONERS IN POSTING ITS TARPAULIN VIOLATES THE
CONSTITUTIONAL PRINCIPLE OF SEPARATION OF CHURCH AND STATE.

I
PROCEDURAL ISSUES

I.A

This court’s jurisdiction over COMELEC cases

Respondents ask that this petition be dismissed on the ground that the notice and letter are not final
orders, decisions, rulings, or judgments of the COMELEC En Banc issued in the exercise of its
adjudicatory powers, reviewable via Rule 64 of the Rules of Court. 21

Rule 64 is not the exclusive remedy for all acts of the COMELEC. Rule 65 is applicable especially to
raise objections relating to a grave abuse of discretion resulting in the ouster of jurisdiction.  As a
22

special civil action, there must also be a showing that there be no plain, speedy, and adequate
remedy in the ordinary course of the law.

Respondents contend that the assailed notice and letter are not subject to review by this court,
whose power to review is "limited only to final decisions, rulings and orders of the COMELEC En
Banc rendered in the exercise of its adjudicatory or quasi-judicial power."  Instead, respondents
23

claim that the assailed notice and letter are reviewable only by COMELEC itself pursuant to Article
IX-C, Section 2(3) of the Constitution  on COMELEC’s power to decide all questions affecting
24

elections.  Respondents invoke the cases of Ambil, Jr. v. COMELEC,  Repol v.

25 26

COMELEC,  Soriano, Jr. v. COMELEC,  Blanco v. COMELEC,  and Cayetano v. COMELEC,  to
27 28 29 30

illustrate how judicialintervention is limited to final decisions, orders, rulings and judgments of the
COMELEC En Banc. 31

These cases are not applicable.

In Ambil, Jr. v. COMELEC, the losing party in the gubernatorial race of Eastern Samar filed the
election protest.  At issue was the validity of the promulgation of a COMELEC Division
32

resolution.  No motion for reconsideration was filed to raise this issue before the COMELEC En
33

Banc. This court declared that it did not have jurisdiction and clarified:

We have interpreted [Section 7, Article IX-A of the Constitution]  to mean final orders, rulings and
34

decisionsof the COMELEC rendered in the exercise of its adjudicatory or quasi-judicial powers." This
decision must be a final decision or resolution of the Comelec en banc, not of a division, certainly not
an interlocutory order of a division.The Supreme Court has no power to review viacertiorari, an
interlocutory order or even a final resolution of a Division of the Commission on
Elections.  (Emphasis in the original, citations omitted)
35

However, in the next case cited by respondents, Repol v. COMELEC, this court provided exceptions
to this general rule. Repolwas another election protest case, involving the mayoralty elections in
Pagsanghan, Samar.  This time, the case was brought to this court because the COMELEC First
36

Division issued a status quo ante order against the Regional Trial Court executing its decision
pending appeal.  This court’s ponencia discussed the general rule enunciated in Ambil, Jr. that it
37

cannot take jurisdiction to review interlocutory orders of a COMELEC Division.  However, consistent
38

with ABS-CBN Broadcasting Corporation v. COMELEC,  it clarified the exception:

39

This Court, however, has ruled in the past that this procedural requirement [of filing a motion for
reconsideration] may be glossed over to prevent miscarriage of justice, when the issue involves the
principle of social justice or the protection of labor, when the decision or resolution sought to be set
aside is a nullity, or when the need for relief is extremely urgent and certiorari is the only adequate
and speedy remedy available. 40

Based on ABS-CBN, this court could review orders and decisions of COMELEC — in electoral
contests — despite not being reviewed by the COMELEC En Banc, if:

1) It will prevent the miscarriage of justice;

2) The issue involves a principle of social justice;

3) The issue involves the protection of labor;

4) The decision or resolution sought tobe set aside is a nullity; or

5) The need for relief is extremely urgent and certiorari is the only adequate and speedy
remedy available.

Ultimately, this court took jurisdiction in Repoland decided that the status quo anteorder issued by
the COMELEC Division was unconstitutional.

Respondents also cite Soriano, Jr. v. COMELEC.This case was also an election protest case
involving candidates for the city council of Muntinlupa City.  Petitioners in Soriano, Jr.filed before this
41

court a petition for certiorari against an interlocutory order of the COMELEC First

Division.  While the petition was pending in this court, the COMELEC First Division dismissed the
42

main election protest case.  Sorianoapplied the general rule that only final orders should be
43

questioned with this court. The ponencia for this court, however, acknowledged the exceptions to the
general rule in ABS-CBN. 44

Blanco v. COMELEC, another case cited by respondents, was a disqualification case of one of the
mayoralty candidates of Meycauayan, Bulacan.  The COMELEC Second Division ruled that
45

petitioner could not qualify for the 2007 elections due to the findings in an administrative case that he
engaged in vote buying in the 1995 elections.  No motion for reconsideration was filed before the
46

COMELEC En Banc. This court, however, took cognizance of this case applying one of the
exceptions in ABS-CBN: The assailed resolution was a nullity. 47
Finally, respondents cited Cayetano v. COMELEC, a recent election protest case involving the
mayoralty candidates of Taguig City.  Petitioner assailed a resolution of the COMELEC denying her
48

motion for reconsideration to dismiss the election protest petition for lack of form and
substance.  This court clarified the general rule and refused to take cognizance of the review of the
49

COMELEC order. While recognizing the exceptions in ABS-CBN, this court ruled that these
exceptions did not apply. 50

Ambil, Jr., Repol, Soriano, Jr., Blanco, and Cayetano cited by respondents do not operate as
precedents to oust this court from taking jurisdiction over this case. All these cases cited involve
election protests or disqualification cases filed by the losing candidate against the winning candidate.

In the present case, petitioners are not candidates seeking for public office. Their petition is filed to
assert their fundamental right to expression.

Furthermore, all these cases cited by respondents pertained to COMELEC’s exercise of its
adjudicatory or quasi-judicial power. This case pertains to acts of COMELEC in the implementation
of its regulatory powers. When it issued the notice and letter, the COMELEC was allegedly
enforcingelection laws.

I.B

Rule 65, grave abuse of discretion,

and limitations on political speech

The main subject of thiscase is an alleged constitutional violation: the infringement on speech and
the "chilling effect" caused by respondent COMELEC’s notice and letter.

Petitioners allege that respondents committed grave abuse of discretion amounting to lack or excess
of jurisdiction in issuing the notice  dated February 22,2013 and letter  dated February 27, 2013
51 52

ordering the removal of the tarpaulin.  It is their position that these infringe on their fundamental right
53

to freedom of expression and violate the principle of separation of church and state and, thus, are
unconstitutional.54

The jurisdiction of this court over the subject matter is determined from the allegations in the petition.
Subject matter jurisdiction is defined as the authority "to hear and determine cases of the general
class to which the proceedings in question belong and is conferred by the sovereign authority which
organizes the court and defines its powers."  Definitely, the subject matter in this case is different
55

from the cases cited by respondents.

Nothing less than the electorate’s political speech will be affected by the restrictions imposed by
COMELEC. Political speech is motivated by the desire to be heard and understood, to move people
to action. It is concerned with the sovereign right to change the contours of power whether through
the election of representatives in a republican government or the revision of the basic text of the
Constitution. The zeal with which we protect this kind of speech does not depend on our evaluation
of the cogency of the message. Neither do we assess whether we should protect speech based on
the motives of COMELEC. We evaluate restrictions on freedom of expression from their effects. We
protect both speech and medium because the quality of this freedom in practice will define the
quality of deliberation in our democratic society.
COMELEC’s notice and letter affect preferred speech. Respondents’ acts are capable of repetition.
Under the conditions in which it was issued and in view of the novelty of this case,it could result in a
"chilling effect" that would affect other citizens who want their voices heard on issues during the
elections. Other citizens who wish to express their views regarding the election and other related
issues may choose not to, for fear of reprisal or sanction by the COMELEC. Direct resort to this court
is allowed to avoid such proscribed conditions. Rule 65 is also the procedural platform for raising
grave abuse of discretion.

Both parties point to constitutional provisions on jurisdiction. For petitioners, it referred to this court’s
expanded exercise of certiorari as provided by the Constitution as follows:

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 ornot 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.  (Emphasis supplied)
56

On the other hand, respondents relied on its constitutional mandate to decide all questions
affectingelections. Article IX-C, Section 2(3) of the Constitution, provides:

Sec. 2. The Commission on Elections shall exercise the following powers and functions:

....

(3) Decide, except those involving the right to vote, all questions affecting elections, including
determination of the number and location of polling places, appointment of election officials and
inspectors, and registration of voters.

Respondents’ reliance on this provision is misplaced.

We are not confronted here with the question of whether the COMELEC, in its exercise of
jurisdiction, gravely abused it. We are confronted with the question as to whether the COMELEC had
any jurisdiction at all with its acts threatening imminent criminal action effectively abridging
meaningful political speech.

It is clear that the subject matter of the controversy is the effect of COMELEC’s notice and letter on
free speech. This does not fall under Article IX-C, Section 2(3) of the Constitution. The use of the
word "affecting" in this provision cannot be interpreted to mean that COMELEC has the exclusive
power to decide any and allquestions that arise during elections. COMELEC’s constitutional
competencies during elections should not operate to divest this court of its own jurisdiction.

The more relevant provision for jurisdiction in this case is Article VIII, Section 5(1) of the
Constitution.This provision provides for this court’s original jurisdiction over petitions for certiorari
and prohibition. This should be read alongside the expanded jurisdiction of the court in Article VIII,
Section 1 of the Constitution.

Certainly, a breach of the fundamental right of expression by COMELEC is grave abuse of

discretion. Thus, the constitutionality of the notice and letter coming from COMELEC is within this
court’s power to review.

During elections, we have the power and the duty to correct any grave abuse of discretion or any act
tainted with unconstitutionality on the part of any government branch or instrumentality. This includes
actions by the COMELEC. Furthermore, it is this court’s constitutional mandate to protect the people
against government’s infringement of their fundamental rights. This constitutional mandate out
weighs the jurisdiction vested with the COMELEC.

It will, thus, be manifest injustice if the court does not take jurisdiction over this case.

I.C

Hierarchy of courts

This brings us to the issue of whether petitioners violated the doctrine of hierarchy of courts in
directly filing their petition before this court.

Respondents contend that petitioners’ failure to file the proper suit with a lower court of concurrent
jurisdiction is sufficient ground for the dismissal of their petition.  They add that observation of the
57

hierarchy of courts is compulsory, citing Heirs of Bertuldo Hinog v. Melicor.  While respondents claim
58

that while there are exceptions to the general rule on hierarchy of courts, none of these are present
in this case.59

On the other hand, petitioners cite Fortich v. Corona  on this court’s discretionary power to take
60

cognizance of a petition filed directly to it if warranted by "compelling reasons, or [by] the nature and
importance of the issues raised. . . ."  Petitioners submit that there are "exceptional and compelling
61

reasons to justify a direct resort [with] this Court."

62

In Bañez, Jr. v. Concepcion,  we explained the necessity of the application of the hierarchy of
63

courts:

The Court must enjoin the observance of the policy on the hierarchy of courts, and now affirms that
the policy is not to be ignored without serious consequences. The strictness of the policy is designed
to shield the Court from having to deal with causes that are also well within the competence of the
lower courts, and thus leave time to the Court to deal with the more fundamental and more essential
tasks that the Constitution has assigned to it. The Court may act on petitions for the extraordinary
writs of certiorari, prohibition and mandamus only when absolutely necessary or when serious and
important reasons exist to justify an exception to the policy. 64

In Bañez, we also elaborated on the reasons why lower courts are allowed to issue writs of certiorari,
prohibition, and mandamus, citing Vergara v. Suelto: 65

The Supreme Court is a court of lastresort, and must so remain if it is to satisfactorily perform the
functions assigned to it by the fundamental charter and immemorial tradition. It cannot and should
not be burdened with the task of dealing with causes in the first instance. Its original jurisdiction to
issue the so-called extraordinary writs should be exercised only where absolutely necessary or
where serious and important reasons exist therefore. Hence, that jurisdiction should generally be
exercised relative to actions or proceedings before the Court of Appeals, or before constitutional or
other tribunals, bodies or agencies whose acts for some reason or another are not controllable by
the Court of Appeals. Where the issuance of an extraordinary writ is also within the competence of
the Court of Appeals or a Regional Trial Court, it is in either of these courts that the specific action
for the writ’s procurement must be presented. This is and should continue to be the policy in this
regard, a policy that courts and lawyers must strictly observe.  (Emphasis omitted)
66
The doctrine that requires respect for the hierarchy of courts was created by this court to ensure that
every level of the judiciary performs its designated roles in an effective and efficient manner. Trial
courts do not only determine the facts from the evaluation of the evidence presented before them.
They are likewise competent to determine issues of law which may include the validity of an
ordinance, statute, or even an executive issuance in relation to the Constitution.  To effectively
67

perform these functions, they are territorially organized into regions and then into branches. Their
writs generally reach within those territorial boundaries. Necessarily, they mostly perform the all-
important task of inferring the facts from the evidence as these are physically presented before
them. In many instances, the facts occur within their territorial jurisdiction, which properly present the
‘actual case’ that makes ripe a determination of the constitutionality of such action. The
consequences, of course, would be national in scope. There are, however, some cases where resort
to courts at their level would not be practical considering their decisions could still be appealed
before the higher courts, such as the Court of Appeals.

The Court of Appeals is primarily designed as an appellate court that reviews the determination of
facts and law made by the trial courts. It is collegiate in nature. This nature ensures more
standpoints in the review of the actions of the trial court. But the Court of Appeals also has original
jurisdiction over most special civil actions. Unlike the trial courts, its writs can have a nationwide
scope. It is competent to determine facts and, ideally, should act on constitutional issues thatmay not
necessarily be novel unless there are factual questions to determine.

This court, on the other hand, leads the judiciary by breaking new ground or further reiterating — in
the light of new circumstances or in the light of some confusions of bench or bar — existing
precedents. Rather than a court of first instance or as a repetition of the actions of the Court of
Appeals, this court promulgates these doctrinal devices in order that it truly performs that role.

In other words, the Supreme Court’s role to interpret the Constitution and act in order to protect
constitutional rights when these become exigent should not be emasculated by the doctrine in
respect of the hierarchy of courts. That has never been the purpose of such doctrine.

Thus, the doctrine of hierarchy of courts is not an iron-clad rule.  This court has "full discretionary
68

power to take cognizance and assume jurisdiction [over] special civil actions for certiorari . . .filed
directly with it for exceptionally compelling reasons  or if warranted by the nature of the issues
69

clearly and specifically raised in the petition."  As correctly pointed out by petitioners,  we have
70 71

provided exceptions to this doctrine:

First, a direct resort to this court is allowed when there are genuine issues of constitutionality that
must be addressed at the most immediate time. A direct resort to this court includes availing of the
remedies of certiorari and prohibition toassail the constitutionality of actions of both legislative and
executive branches of the government. 72

In this case, the assailed issuances of respondents prejudice not only petitioners’ right to freedom of
expression in the present case, but also of others in future similar cases. The case before this court
involves an active effort on the part of the electorate to reform the political landscape. This has
become a rare occasion when private citizens actively engage the public in political discourse. To
quote an eminent political theorist:

[T]he theory of freedom of expression involves more than a technique for arriving at better social
judgments through democratic procedures. It comprehends a vision of society, a faith and a whole
way of life. The theory grew out of an age that was awakened and invigorated by the idea of new
society in which man's mind was free, his fate determined by his own powers of reason, and his
prospects of creating a rational and enlightened civilization virtually unlimited. It is put forward as a
prescription for attaining a creative, progressive, exciting and intellectually robust community. It
contemplates a mode of life that, through encouraging toleration, skepticism, reason and initiative,
will allow man to realize his full potentialities.It spurns the alternative of a society that is tyrannical,
conformist, irrational and stagnant. 73

In a democracy, the citizen’s right tofreely participate in the exchange of ideas in furtherance of
political decision-making is recognized. It deserves the highest protection the courts may provide, as
public participation in nation-building isa fundamental principle in our Constitution. As such, their
right to engage in free expression of ideas must be given immediate protection by this court.

A second exception is when the issuesinvolved are of transcendental importance.  In these cases,
74

the imminence and clarity of the threat to fundamental constitutional rights outweigh the necessity for
prudence. The doctrine relating to constitutional issues of transcendental importance prevents courts
from the paralysis of procedural niceties when clearly faced with the need for substantial protection.

In the case before this court, there is a clear threat to the paramount right of freedom of speech and
freedom of expression which warrants invocation of relief from this court. The principles laid down in
this decision will likely influence the discourse of freedom of speech in the future, especially in the
context of elections. The right to suffrage not only includes the right to vote for one’s chosen
candidate, but also the right to vocalize that choice to the public in general, in the hope of influencing
their votes. It may be said that in an election year, the right to vote necessarily includes the right to
free speech and expression. The protection of these fundamental constitutional rights, therefore,
allows for the immediate resort to this court.

Third, cases of first impression  warrant a direct resort to this court. In cases of first impression, no
75

jurisprudence yet exists that will guide the lower courts on this matter. In Government of the United
States v. Purganan,  this court took cognizance of the case as a matter of first impression that may
76

guide the lower courts:

In the interest of justice and to settle once and for all the important issue of bail in extradition
proceedings, we deem it best to take cognizance of the present case. Such proceedings constitute a
matter of first impression over which there is, as yet, no local jurisprudence to guide lower courts. 77

This court finds that this is indeed a case of first impression involving as it does the issue of whether
the right of suffrage includes the right of freedom of expression. This is a question which this court
has yet to provide substantial answers to, through jurisprudence. Thus, direct resort to this court is
allowed.

Fourth, the constitutional issues raisedare better decided by this court. In Drilon v. Lim,  this court
78

held that:

. . . it will be prudent for such courts, if only out of a becoming modesty, to defer to the higher
judgmentof this Court in the consideration of its validity, which is better determined after a thorough
deliberation by a collegiate body and with the concurrence of the majority of those who participated
in its discussion.  (Citation omitted)
79

In this case, it is this court, with its constitutionally enshrined judicial power, that can rule with finality
on whether COMELEC committed grave abuse of discretion or performed acts contrary to the
Constitution through the assailed issuances.
Fifth, the time element presented in this case cannot be ignored. This case was filed during the 2013
election period. Although the elections have already been concluded, future cases may be filed that
necessitate urgency in its resolution. Exigency in certain situations would qualify as an exception for
direct resort to this court.

Sixth, the filed petition reviews the act of a constitutional organ. COMELEC is a constitutional body.
In Albano v. Arranz,  cited by petitioners, this court held that "[i]t is easy to realize the chaos that
80

would ensue if the Court of First Instance ofeach and every province were [to] arrogate itself the
power to disregard, suspend, or contradict any order of the Commission on Elections: that
constitutional body would be speedily reduced to impotence." 81

In this case, if petitioners sought to annul the actions of COMELEC through pursuing remedies with
the lower courts, any ruling on their part would not have been binding for other citizens whom
respondents may place in the same situation. Besides, thiscourt affords great respect to the
Constitution and the powers and duties imposed upon COMELEC. Hence, a ruling by this court
would be in the best interest of respondents, in order that their actions may be guided accordingly in
the future.

Seventh, petitioners rightly claim that they had no other plain, speedy, and adequate remedy in the
ordinary course of law that could free them from the injurious effects of respondents’ acts in violation
of their right to freedom of expression.

In this case, the repercussions of the assailed issuances on this basic right constitute an
exceptionally compelling reason to justify the direct resort to this court. The lack of other sufficient
remedies in the course of law alone is sufficient ground to allow direct resort to this court.

Eighth, the petition includes questionsthat are "dictated by public welfare and the advancement of
public policy, or demanded by the broader interest of justice, or the orders complained of were found
to be patent nullities, or the appeal was consideredas clearly an inappropriate remedy."  In the past,
82

questions similar to these which this court ruled on immediately despite the doctrine of hierarchy of
courts included citizens’ right to bear arms,  government contracts involving modernization of voters’
83

registration lists,  and the status and existence of a public office.

84 85

This case also poses a question of similar, if not greater import. Hence, a direct action to this court is
permitted.

It is not, however, necessary that all of these exceptions must occur at the same time to justify a
direct resort to this court. While generally, the hierarchy of courts is respected, the present case falls
under the recognized exceptions and, as such, may be resolved by this court directly.

I.D

The concept of a political question

Respondents argue further that the size limitation and its reasonableness is a political question,
hence not within the ambit of this court’s power of review. They cite Justice Vitug’s separate opinion
in Osmeña v. COMELEC  to support their position:
86

It might be worth mentioning that Section 26, Article II, of the Constitution also states that the "State
shall guarantee equal access to opportunities for public service, and prohibit political dynasties as
may be defined by law." I see neither Article IX (C)(4) nor Section 26, Article II, of the Constitution to
be all that adversarial or irreconcilably inconsistent with the right of free expression. In any event, the
latter, being one of general application, must yield to the specific demands of the Constitution. The
freedom of expression concededly holds, it is true, a vantage point in hierarchy of constitutionally-
enshrined rights but, like all fundamental rights, it is not without limitations.

The case is not about a fight between the "rich" and the "poor" or between the "powerful" and the
"weak" in our society but it is to me a genuine attempt on the part of Congress and the Commission
on Elections to ensure that all candidates are given an equal chance to media coverage and thereby
be equally perceived as giving real life to the candidates’ right of free expression rather than being
viewed as an undue restriction of that freedom. The wisdom in the enactment of the law, i.e., that
which the legislature deems to be best in giving life to the Constitutional mandate, is not for the
Court to question; it is a matter that lies beyond the normal prerogatives of the Court to pass upon. 87

This separate opinion is cogent for the purpose it was said. But it is not in point in this case.

The present petition does not involve a dispute between the rich and poor, or the powerful and weak,
on their equal opportunities for media coverage of candidates and their right to freedom of
expression. This case concerns the right of petitioners, who are non-candidates, to post the tarpaulin
in their private property, asan exercise of their right of free expression. Despite the invocation of the
political question doctrine by respondents, this court is not proscribed from deciding on the merits of
this case.

In Tañada v. Cuenco,  this court previously elaborated on the concept of what constitutes a political
88

question:

What is generally meant, when it is said that a question is political, and not judicial, is that it is a
matter which is to be exercised by the people in their primary political capacity, or that it has been
specifically delegated to some other department or particular officer of the government,
withdiscretionary power to act.  (Emphasis omitted)
89

It is not for this court to rehearse and re-enact political debates on what the text of the law should be.
In political forums, particularly the legislature, the creation of the textof the law is based on a general
discussion of factual circumstances, broadly construed in order to allow for general application by
the executive branch. Thus, the creation of the law is not limited by particular and specific facts that
affect the rights of certain individuals, per se.

Courts, on the other hand, rule on adversarial positions based on existing facts established on a
specific case-to-case basis, where parties affected by the legal provision seek the courts’
understanding of the law.

The complementary nature of the political and judicial branches of government is essential in order
to ensure that the rights of the general public are upheld at all times. In order to preserve this
balance, branches of government must afford due respectand deference for the duties and functions
constitutionally delegated to the other. Courts cannot rush to invalidate a law or rule. Prudence
dictates that we are careful not to veto political acts unless we can craft doctrine narrowly tailored to
the circumstances of the case.

The case before this court does not call for the exercise of prudence or modesty. There is no political
question. It can be acted upon by this court through the expanded jurisdiction granted to this court
through Article VIII, Section 1 of the Constitution.
A political question arises in constitutional issues relating to the powers or competence of different
agencies and departments of the executive or those of the legislature. The political question doctrine
is used as a defense when the petition asks this court to nullify certain acts that are exclusively
within the domain of their respective competencies, as provided by the Constitution or the law. In
such situation, presumptively, this court should act with deference. It will decline to void an act
unless the exercise of that power was so capricious and arbitrary so as to amount to grave abuse of
discretion.

The concept of a political question, however, never precludes judicial review when the act of a
constitutional organ infringes upon a fundamental individual or collective right. Even assuming
arguendo that the COMELEC did have the discretion to choose the manner of regulation of the
tarpaulin in question, it cannot do so by abridging the fundamental right to expression.

Marcos v. Manglapus  limited the use of the political question doctrine:

90

When political questions are involved, the Constitution limits the determination to whether or not
there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of
the official whose action is being questioned. If grave abuse is not established, the Court will not
substitute its judgment for that of the official concerned and decide a matter which by its nature or by
law is for the latter alone to decide.
91

How this court has chosen to address the political question doctrine has undergone an evolution
since the timethat it had been first invoked in Marcos v. Manglapus. Increasingly, this court has
taken the historical and social context of the case and the relevance of pronouncements of carefully
and narrowly tailored constitutional doctrines. This trend was followed in cases such as Daza v.
Singson  and Coseteng v. Mitra Jr.
92 93

Daza and Coseteng involved a question as to the application of Article VI, Section 18 of the 1987
Constitution involving the removal of petitioners from the Commission on Appointments. In times
past, this would have involved a quint essentially political question as it related to the dominance of
political parties in Congress. However, in these cases, this court exercised its power of judicial
review noting that the requirement of interpreting the constitutional provision involved the legality and
not the wisdom of a manner by which a constitutional duty or power was exercised. This approach
was again reiterated in Defensor Santiago v. Guingona, Jr. 94

In Integrated Bar of the Philippines v. Zamora,  this court declared again that the possible existence
95

ofa political question did not bar an examination of whether the exercise of discretion was done with
grave abuse of discretion. In that case, this court ruled on the question of whether there was grave
abuse of discretion in the President’s use of his power to call out the armed forces to prevent and
suppress lawless violence.

In Estrada v. Desierto,  this court ruled that the legal question as to whether a former President
96

resigned was not a political question even if the consequences would be to ascertain the political
legitimacy of a successor President.

Many constitutional cases arise from political crises. The actors in such crises may use the
resolution of constitutional issues as leverage. But the expanded jurisdiction of this court now
mandates a duty for it to exercise its power of judicial review expanding on principles that may avert
catastrophe or resolve social conflict.

This court’s understanding of the political question has not been static or unbending. In Llamas v.
Executive Secretary Oscar Orbos,  this court held:
97
While it is true that courts cannot inquire into the manner in which the President's discretionary
powers are exercised or into the wisdom for its exercise, it is also a settled rule that when the issue
involved concerns the validity of such discretionary powers or whether said powers are within the
limits prescribed by the Constitution, We will not decline to exercise our power of judicial review. And
such review does not constitute a modification or correction of the act of the President, nor does it
constitute interference with the functions of the President.98

The concept of judicial power in relation to the concept of the political question was discussed most
extensively in Francisco v. HRET.  In this case, the House of Representatives arguedthat the
99

question of the validity of the second impeachment complaint that was filed against former Chief
Justice Hilario Davide was a political question beyond the ambit of this court. Former Chief Justice
Reynato Puno elaborated on this concept in his concurring and dissenting opinion:

To be sure, the force to impugn the jurisdiction of this Court becomes more feeble in light of the new
Constitution which expanded the definition of judicial power as including "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." As well
observed by retired Justice Isagani Cruz, this expanded definition of judicial power considerably
constricted the scope of political question. He opined that the language luminously suggests that this
duty (and power) is available even against the executive and legislative departments including the
President and the Congress, in the exercise of their discretionary powers.  (Emphasis in the
100

original, citations omitted)

Francisco also provides the cases which show the evolution of the political question, as applied in
the following cases:

In Marcos v. Manglapus, this Court, speaking through Madame Justice Irene Cortes, held: The
present Constitution limits resort to the political question doctrine and broadens the scope of judicial
inquiry into areas which the Court,under previous constitutions, would have normally left to the
political departments to decide. x x x

In Bengzon v. Senate Blue Ribbon Committee, through Justice Teodoro Padilla, this Court declared:

The "allocation of constitutional boundaries" is a task that this Court must perform under the
Constitution. Moreover, as held in a recent case, "(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 the applicability of the principle in
appropriate cases." (Emphasis and italics supplied)

And in Daza v. Singson, speaking through Justice Isagani Cruz, this Court ruled:

In the case now before us, the jurisdictional objection becomes even less tenable and decisive. The
reason is that, even if we were to assume that the issue presented before us was political in nature,
we would still not be precluded from resolving it under the expanded jurisdiction conferred upon us
that now covers, in proper cases, even the political question.x x x (Emphasis and italics supplied.)

....
In our jurisdiction, the determination of whether an issue involves a truly political and non-justiciable
question lies in the answer to the question of whether there are constitutionally imposed limits on
powers or functions conferred upon political bodies. If there are, then our courts are duty-bound to
examine whether the branch or instrumentality of the government properly acted within such
limits.  (Citations omitted)
101

As stated in Francisco, a political question will not be considered justiciable if there are no
constitutionally imposed limits on powers or functions conferred upon political bodies. Hence, the
existence of constitutionally imposed limits justifies subjecting the official actions of the body to the
scrutiny and review of this court.

In this case, the Bill of Rights gives the utmost deference to the right to free speech. Any instance
that this right may be abridged demands judicial scrutiny. It does not fall squarely into any doubt that
a political question brings.

I.E

Exhaustion of administrative remedies

Respondents allege that petitioners violated the principle of exhaustion of administrative remedies.
Respondents insist that petitioners should have first brought the matter to the COMELEC En Banc or
any of its divisions.
102

Respondents point out that petitioners failed to comply with the requirement in Rule 65 that "there is
no appeal, or any plain, speedy, and adequate remedy in the ordinary course of law."  They add
103

that the proper venue to assail the validity of the assailed issuances was in the course of an
administrative hearing to be conducted by COMELEC.  In the event that an election offense is filed
104

against petitioners for posting the tarpaulin, they claim that petitioners should resort to the remedies
prescribed in Rule 34 of the COMELEC Rules of Procedure. 105

The argument on exhaustion of administrative remedies is not proper in this case.

Despite the alleged non-exhaustion of administrative remedies, it is clear that the controversy is
already ripe for adjudication. Ripeness is the "prerequisite that something had by then been
accomplished or performed by either branch [or in this case, organ of government] before a court
may come into the picture." 106

Petitioners’ exercise of their rightto speech, given the message and their medium, had
understandable relevance especially during the elections. COMELEC’s letter threatening the filing of
the election offense against petitioners is already an actionable infringement of this right. The
impending threat of criminal litigation is enough to curtail petitioners’ speech.

In the context of this case, exhaustion of their administrative remedies as COMELEC suggested in
their pleadings prolongs the violation of their freedom of speech.

Political speech enjoys preferred protection within our constitutional order. In Chavez v.
Gonzales,  Justice Carpio in a separate opinion emphasized: "[i]f everthere is a hierarchy of
107

protected expressions, political expression would occupy the highest rank, and among different
kinds of political expression, the subject of fair and honest elections would be at the
top."  Sovereignty resides in the people.  Political speech is a direct exercise of the sovereignty.
108 109
The principle of exhaustion of administrative remedies yields in order to protect this fundamental
right.

Even assuming that the principle of exhaustion of administrative remedies is applicable, the current
controversy is within the exceptions to the principle. In Chua v. Ang,  this court held:
110

On the other hand, prior exhaustion of administrative remedies may be dispensed with and judicial
action may be validly resorted to immediately: (a) when there is a violation of due process; (b) when
the issue involved is purely a legal question; (c) when the administrative action is patently illegal
amounting to lack or excess of jurisdiction; (d) when there is estoppel on the part ofthe
administrative agency concerned; (e) when there is irreparable injury; (f) when the respondent is a
department secretary whose acts as analter ego of the President bear the implied and assumed
approval of the latter; (g) when to require exhaustion of administrative remedies would be
unreasonable; (h) when it would amount to a nullification of a claim; (i) when the subject matter is a
private land in land case proceedings; (j) whenthe rule does not provide a plain, speedy and
adequate remedy; or (k) when there are circumstances indicating the urgency of judicial
intervention."  (Emphasis supplied, citation omitted)
111

The circumstances emphasized are squarely applicable with the present case. First, petitioners
allegethat the assailed issuances violated their right to freedom of expression and the principle of
separation of church and state. This is a purely legal question. Second, the circumstances of the
present case indicate the urgency of judicial intervention considering the issue then on the RH Law
as well as the upcoming elections. Thus, to require the exhaustion of administrative remedies in this
case would be unreasonable.

Time and again, we have held that this court "has the power to relax or suspend the rules or to
except a case from their operation when compelling reasons so warrant, or whenthe purpose of
justice requires it, [and when] [w]hat constitutes [as] good and sufficient cause that will merit
suspension of the rules is discretionary upon the court".  Certainly, this case of first impression
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where COMELEC has threatenedto prosecute private parties who seek to participate in the elections
by calling attention to issues they want debated by the publicin the manner they feel would be
effective is one of those cases.

II
SUBSTANTIVE ISSUES

II.A

COMELEC had no legal basis to regulate expressions made by private citizens

Respondents cite the Constitution, laws, and jurisprudence to support their position that they had the
power to regulate the tarpaulin.  However, all of these provisions pertain to candidates and political
113

parties. Petitioners are not candidates. Neither do theybelong to any political party. COMELEC does
not have the authority to regulate the enjoyment of the preferred right to freedom of expression
exercised by a non-candidate in this case.

II.A.1

First, respondents cite Article IX-C, Section 4 of the Constitution, which provides:
Section 4. The Commission may,during the election period, supervise or regulate the enjoyment or
utilization of all franchises or permits for the operation of transportation and other public utilities,
media of communication or information, all grants, special privileges, or concessions granted by the
Government or any subdivision, agency, or instrumentality thereof, including any government-owned
or controlled corporation or its subsidiary. Such supervision or regulation shall aim to ensure equal
opportunity, time, and space, and the right to reply, including reasonable, equal rates therefor, for
public information campaigns and forums among candidates in connection with the objective of
holding free, orderly, honest, peaceful, and credible elections.  (Emphasis supplied)
114

Sanidad v. COMELEC  involved the rules promulgated by COMELEC during the plebiscite for the
115

creation of the Cordillera Autonomous Region.  Columnist Pablito V. Sanidad questioned the
116

provision prohibiting journalists from covering plebiscite issues on the day before and on plebiscite
day.  Sanidad argued that the prohibition was a violation of the "constitutional guarantees of the
117

freedom of expression and of the press. . . ."  We held that the "evil sought to be prevented by this
118

provision is the possibility that a franchise holder may favor or give any undue advantage to a
candidate in terms of advertising space or radio or television time."  This court found that "[m]edia
119

practitioners exercising their freedom of expression during plebiscite periods are neither the
franchise holders nor the candidates[,]"  thus, their right to expression during this period may not be
120

regulated by COMELEC. 121

Similar to the media, petitioners in the case at bar are neither franchise holders nor candidates.
II.A.2

Respondents likewise cite Article IX-C, Section 2(7) of the Constitution as follows: 122

Sec. 2. The Commission on Elections shall exercise the following powers and functions:

....

(7) Recommend to the Congress effective measures to minimize election spending, including
limitation of places where propaganda materials shall be posted, and to prevent and penalize all
forms of election frauds, offenses, malpractices, and nuisance candidates. (Emphasis supplied)
Based on the enumeration made on actsthat may be penalized, it will be inferred that this provision
only affects candidates.

Petitioners assail the "Notice to Remove Campaign Materials" issued by COMELEC. This was
followed bythe assailed letter regarding the "election propaganda material posted on the church
vicinity promoting for or against the candidates and party-list groups. . . ."123

Section 9 of the Fair Election Act  on the posting of campaign materials only mentions "parties" and
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"candidates":

Sec. 9. Posting of Campaign Materials. - The COMELEC may authorize political parties and party-
list groups to erect common poster areas for their candidates in not more than ten (10) public places
such as plazas, markets, barangay centers and the like, wherein candidates can post, display or
exhibit election propaganda: Provided, That the size ofthe poster areas shall not exceed twelve (12)
by sixteen (16) feet or its equivalent. Independent candidates with no political parties may likewise
be authorized to erect common poster areas in not more than ten (10) public places, the size of
which shall not exceed four (4) by six (6) feet or its equivalent. Candidates may post any lawful
propaganda material in private places with the consent of the owner thereof, and in public places or
property which shall be allocated equitably and impartially among the candidates. (Emphasis
supplied)
Similarly, Section 17 of COMELEC Resolution No. 9615, the rules and regulations implementing the
Fair Election Act, provides as follows:

SECTION 17. Posting of Campaign Materials. - Parties and candidates may post any lawful
campaign material in:

a. Authorized common poster areasin public places subject to the requirements and/or
limitations set forth in the next following section; and

b. Private places provided it has the consent of the owner thereof.

The posting of campaign materials in public places outside of the designated common poster areas
and those enumerated under Section 7 (g) of these Rules and the like is prohibited. Persons posting
the same shall be liable together with the candidates and other persons who caused the posting. It
will be presumed that the candidates and parties caused the posting of campaign materials outside
the common poster areas if they do not remove the same within three (3) days from notice which
shall be issued by the Election Officer of the city or municipality where the unlawful election
propaganda are posted or displayed.

Members of the PNP and other law enforcement agencies called upon by the Election Officeror
other officials of the COMELEC shall apprehend the violators caught in the act, and file the
appropriate charges against them. (Emphasis supplied)

Respondents considered the tarpaulin as a campaign material in their issuances. The above
provisions regulating the posting of campaign materials only apply to candidates and political parties,
and petitioners are neither of the two.

Section 3 of Republic Act No. 9006on "Lawful Election Propaganda" also states that these are
"allowed for all registered political parties, national, regional, sectoral parties or organizations
participating under the party-list elections and for all bona fide candidates seeking national and local
elective positions subject to the limitation on authorized expenses of candidates and political parties.
. . ." Section 6 of COMELEC Resolution No. 9615 provides for a similar wording. These provisions
show that election propaganda refers to matter done by or on behalf of and in coordination with
candidates and political parties. Some level of coordination with the candidates and political parties
for whom the election propaganda are released would ensure that these candidates and political
parties maintain within the authorized expenses limitation.

The tarpaulin was not paid for byany candidate or political party.  There was no allegation that
125

petitioners coordinated with any of the persons named in the tarpaulin regarding its posting. On the
other hand, petitioners posted the tarpaulin as part of their advocacy against the RH Law.
Respondents also cite National Press Club v. COMELEC  in arguing that its regulatory power under
126

the Constitution, to some extent, set a limit on the right to free speech during election period.
127

National Press Club involved the prohibition on the sale and donation of space and time for political
advertisements, limiting political advertisements to COMELEC-designated space and time. This
case was brought by representatives of mass media and two candidates for office in the 1992
elections. They argued that the prohibition on the sale and donation of space and time for political
advertisements is tantamount to censorship, which necessarily infringes on the freedom of speech of
the candidates.128
This court upheld the constitutionality of the COMELEC prohibition in National Press Club. However,
this case does not apply as most of the petitioners were electoral candidates, unlike petitioners in
the instant case. Moreover, the subject matter of National Press Club, Section 11(b) of Republic Act
No. 6646,  only refers to a particular kind of media such as newspapers, radio broadcasting, or
129

television.  Justice Feliciano emphasized that the provision did not infringe upon the right of
130

reporters or broadcasters to air their commentaries and opinions regarding the candidates, their
qualifications, and program for government. Compared to Sanidadwherein the columnists lost their
ability to give their commentary on the issues involving the plebiscite, National Press Clubdoes not
involve the same infringement.

In the case at bar, petitioners lost their ability to give a commentary on the candidates for the 2013
national elections because of the COMELEC notice and letter. It was not merelya regulation on the
campaigns of candidates vying for public office. Thus, National Press Clubdoes not apply to this
case.

Finally, Section 79 of Batas Pambansa Blg. 881, otherwise known as the Omnibus Election Code,
defines an"election campaign" as follows:

....

(b) The term "election campaign" or "partisan political activity" refers to an act designed to promote
the election or defeat of a particular candidate or candidates to a public office which shall include:

(1) Forming organizations, associations, clubs, committees or other groups of persons for the
purpose of soliciting votes and/or undertaking any campaign for or against a candidate;

(2) Holding political caucuses, conferences, meetings, rallies, parades, or other similar
assemblies, for the purpose of soliciting votes and/or undertaking any campaign or
propaganda for or against a candidate;

(3) Making speeches, announcements or commentaries, or holding interviews for or against

the election of any candidate for public office;

(4) Publishing or distributing campaign literature or materials designed to support or oppose

the election of any candidate; or

(5) Directly or indirectly soliciting votes, pledges or support for or against a candidate.

The foregoing enumerated acts ifperformed for the purpose of enhancing the chances of aspirants
for nomination for candidacy to a public office by a political party, aggroupment, or coalition of
parties shall not be considered as election campaign or partisan election activity. Public expressions
or opinions or discussions of probable issues in a forthcoming electionor on attributes of or criticisms
against probable candidates proposed to be nominated in a forthcoming political party convention
shall not be construed as part of any election campaign or partisan political activity contemplated
under this Article. (Emphasis supplied)

True, there is no mention whether election campaign is limited only to the candidates and political
parties themselves. The focus of the definition is that the act must be "designed to promote the
election or defeat of a particular candidate or candidates to a public office."
In this case, the tarpaulin contains speech on a matter of public concern, that is, a statement of
either appreciation or criticism on votes made in the passing of the RH law. Thus, petitioners invoke
their right to freedom of expression.

II.B

The violation of the constitutional right

to freedom of speech and expression

Petitioners contend that the assailed notice and letter for the removal of the tarpaulin violate their
fundamental right to freedom of expression.

On the other hand, respondents contend that the tarpaulin is an election propaganda subject to their
regulation pursuant to their mandate under Article IX-C, Section 4 of the Constitution. Thus, the
assailed notice and letter ordering itsremoval for being oversized are valid and constitutional. 131

II.B.1

Fundamental to the consideration of this issue is Article III, Section 4 of the Constitution:

Section 4. No law shall be passed abridging the freedom of speech, of expression, or of the press, or
the right of the people peaceably to assemble and petition the government for redress of
grievances. 132

No law. . .

While it is true that the present petition assails not a law but an opinion by the COMELEC Law
Department, this court has applied Article III, Section 4 of the Constitution even to governmental
acts.

In Primicias v. Fugoso,  respondent Mayor applied by analogy Section 1119 of the Revised
133

Ordinances of 1927 of Manila for the public meeting and assembly organized by petitioner
Primicias.  Section 1119 requires a Mayor’s permit for the use of streets and public places for
134

purposes such as athletic games, sports, or celebration of national holidays.  What was questioned
135

was not a law but the Mayor’s refusal to issue a permit for the holding of petitioner’s public
meeting.  Nevertheless, this court recognized the constitutional right to freedom of speech, to
136

peaceful assembly and to petition for redress of grievances, albeit not absolute,  and the petition for
137

mandamus to compel respondent Mayor to issue the permit was granted. 138

In ABS-CBN v. COMELEC, what was assailed was not a law but COMELEC En Banc Resolution
No. 98-1419 where the COMELEC resolved to approve the issuance of a restraining order to stop
ABS-CBN from conducting exit surveys.  The right to freedom of expression was similarly upheld in
139

this case and, consequently, the assailed resolution was nullified and set aside. 140

. . . shall be passed abridging. . .

All regulations will have an impact directly or indirectly on expression. The prohibition against the
abridgment of speech should not mean an absolute prohibition against regulation. The primary and
incidental burden on speech must be weighed against a compelling state interest clearly allowed in
the Constitution. The test depends on the relevant theory of speech implicit in the kind of society
framed by our Constitution.

. . . of expression. . .

Our Constitution has also explicitly included the freedom of expression, separate and in addition to
the freedom of speech and of the press provided in the US Constitution. The word "expression" was
added in the 1987 Constitution by Commissioner Brocka for having a wider scope:

MR. BROCKA: This is a very minor amendment, Mr. Presiding Officer. On Section 9, page 2, line 29,
it says: "No law shall be passed abridging the freedom of speech." I would like to recommend to the
Committee the change of the word "speech" to EXPRESSION; or if not, add the words AND
EXPRESSION after the word "speech," because it is more expansive, it has a wider scope, and it
would refer to means of expression other than speech.

THE PRESIDING OFFICER (Mr.Bengzon): What does the Committee say?

FR. BERNAS: "Expression" is more broad than speech. We accept it.

MR. BROCKA: Thank you.

THE PRESIDING OFFICER (Mr.Bengzon): Is it accepted?

FR. BERNAS: Yes.

THE PRESIDING OFFICER (Mr.Bengzon): Is there any objection? (Silence) The Chair hears none;
the amendment is approved.

FR. BERNAS: So, that provision will now read: "No law shall be passed abridging the freedom of
speech, expression or of the press . . . ."  Speech may be said to be inextricably linked to freedom
141

itself as "[t]he right to think is the beginning of freedom, and speech must be protected from the
government because speech is the beginning of thought." 142

II.B.2

Communication is an essential outcome of protected speech.  Communication exists when "(1) a

143

speaker, seeking to signal others, uses conventional actions because he orshe reasonably believes
that such actions will be taken by the audience in the manner intended; and (2) the audience so
takes the actions."  "[I]n communicative action[,] the hearer may respond to the claims by . . . either
144

accepting the speech act’s claims or opposing them with criticism or requests for justification."
145

Speech is not limited to vocal communication. "[C]onduct is treated as a form of speech sometimes
referred to as ‘symbolic speech[,]’"  such that "‘when ‘speech’ and ‘nonspeech’ elements are
146

combined in the same course of conduct,’ the ‘communicative element’ of the conduct may be
‘sufficient to bring into play the [right to freedom of expression].’" 147

The right to freedom of expression, thus, applies to the entire continuum of speech from utterances
made to conduct enacted, and even to inaction itself as a symbolic manner of communication.

In Ebralinag v. The Division Superintendent of Schools of Cebu,  students who were members of
148

the religious sect Jehovah’s Witnesses were to be expelled from school for refusing to salute the
flag, sing the national anthem, and recite the patriotic pledge.  In his concurring opinion, Justice
149

Cruz discussed how the salute is a symbolic manner of communication and a valid form of
expression.  He adds that freedom of speech includes even the right to be silent:
150

Freedom of speech includes the right to be silent. Aptly has it been said that the Bill of Rights that
guarantees to the individual the liberty to utter what is in his mind also guarantees to him the liberty
not to utter what is not in his mind. The salute is a symbolic manner of communication that conveys
its messageas clearly as the written or spoken word. As a valid form of expression, it cannot be
compelled any more than it can be prohibited in the face of valid religious objections like those
raised in this petition. To impose it on the petitioners is to deny them the right not to speak when
their religion bids them to be silent. This coercion of conscience has no place in the free society.

The democratic system provides for the accommodation of diverse ideas, including the
unconventional and even the bizarre or eccentric. The will of the majority prevails, but it cannot
regiment thought by prescribing the recitation by rote of its opinions or proscribing the assertion of
unorthodox or unpopular views as inthis case. The conscientious objections of the petitioners, no
less than the impatience of those who disagree with them, are protected by the Constitution. The
State cannot make the individual speak when the soul within rebels. 151

Even before freedom "of expression" was included in Article III, Section 4 of the present
Constitution,this court has applied its precedent version to expressions other than verbal utterances.

In the 1985 case of Gonzalez v. Chairman Katigbak,  petitioners objected to the classification of the
152

motion picture "Kapit sa Patalim" as "For Adults Only." They contend that the classification "is
without legal and factual basis and is exercised as impermissible restraint of artistic
expression."  This court recognized that "[m]otion pictures are important both as a medium for the
153

communication of ideas and the expression of the artistic impulse."  It adds that "every writer,actor,
154

or producer, no matter what medium of expression he may use, should be freed from the
censor."  This court found that "[the Board’s] perception of what constitutes obscenity appears to be
155

unduly restrictive."  However, the petition was dismissed solely on the ground that there were not
156

enough votes for a ruling of grave abuse of discretion in the classification made by the Board. 157

II.B.3

Size does matter

The form of expression is just as important as the information conveyed that it forms part of the
expression. The present case is in point.

It is easy to discern why size matters.

First, it enhances efficiency in communication. A larger tarpaulin allows larger fonts which make it
easier to view its messages from greater distances. Furthermore, a larger tarpaulin makes it easier
for passengers inside moving vehicles to read its content. Compared with the pedestrians, the
passengers inside moving vehicles have lesser time to view the content of a tarpaulin. The larger the
fonts and images, the greater the probability that it will catch their attention and, thus, the greater the
possibility that they will understand its message.

Second, the size of the tarpaulin may underscore the importance of the message to the reader.
From an ordinary person’s perspective, those who post their messages in larger fonts care more
about their message than those who carry their messages in smaller media. The perceived
importance given by the speakers, in this case petitioners, to their cause is also part of the message.
The effectivity of communication sometimes relies on the emphasis put by the speakers and onthe
credibility of the speakers themselves. Certainly, larger segments of the public may tend to be more
convinced of the point made by authoritative figures when they make the effort to emphasize their
messages.

Third, larger spaces allow for more messages. Larger spaces, therefore, may translate to more
opportunities to amplify, explain, and argue points which the speakers might want to communicate.
Rather than simply placing the names and images of political candidates and an expression of
support, larger spaces can allow for brief but memorable presentations of the candidates’ platforms
for governance. Larger spaces allow for more precise inceptions of ideas, catalyze reactions to
advocacies, and contribute more to a more educated and reasoned electorate. A more educated
electorate will increase the possibilities of both good governance and accountability in our
government.

These points become more salient when it is the electorate, not the candidates or the political
parties, that speaks. Too often, the terms of public discussion during elections are framed and kept
hostage by brief and catchy but meaningless sound bites extolling the character of the candidate.
Worse, elections sideline political arguments and privilege the endorsement by celebrities. Rather
than provide obstacles to their speech, government should in fact encourage it. Between the
candidates and the electorate, the latter have the better incentive to demand discussion of the more
important issues. Between the candidates and the electorate, the former have better incentives to
avoid difficult political standpoints and instead focus on appearances and empty promises.

Large tarpaulins, therefore, are not analogous to time and place.  They are fundamentally part of
158

expression protected under Article III, Section 4 of the Constitution.

II.B.4

There are several theories and schools of thought that strengthen the need to protect the basic right
to freedom of expression.

First, this relates to the right ofthe people to participate in public affairs, including the right to criticize
government actions.

Proponents of the political theory on "deliberative democracy" submit that "substantial, open, [and]
ethical dialogue isa critical, and indeed defining, feature of a good polity."  This theory may be
159

considered broad, but it definitely "includes [a] collective decision making with the participation of all
who will beaffected by the decision."  It anchors on the principle that the cornerstone of every
160

democracy is that sovereignty resides in the people.  To ensure order in running the state’s affairs,
161

sovereign powers were delegated and individuals would be elected or nominated in key government
positions to represent the people. On this note, the theory on deliberative democracy may evolve to
the right of the people to make government accountable. Necessarily, this includes the right of the
people to criticize acts made pursuant to governmental functions.

Speech that promotes dialogue on publicaffairs, or airs out grievances and political discontent,
should thus be protected and encouraged.

Borrowing the words of Justice Brandeis, "it is hazardous to discourage thought, hope and
imagination; that fear breeds repression; that repression breeds hate; that hate menaces stable
government; that the path of safety lies in the opportunity to discuss freely supposed grievances and
proposed remedies." 162
In this jurisdiction, this court held that "[t]he interest of society and the maintenance of good
government demand a full discussion of public affairs."  This court has, thus, adopted the principle
163

that "debate on public issues should be uninhibited, robust,and wide open . . . [including even]
unpleasantly sharp attacks on government and public officials." 164

Second, free speech should be encouraged under the concept of a market place of ideas. This
theory was articulated by Justice Holmes in that "the ultimate good desired is better reached by [the]
free trade in ideas:" 165

When men have realized that time has upset many fighting faiths, they may come to believe even
more than they believe the very foundations of their own conduct that the ultimate good desired is
better reached by free trade in ideas - that the best test of truth is the power of the thought to get
itself accepted in the competition of the market, and that truth is the only ground upon which their
wishes safely can be carried out. 166

The way it works, the exposure to the ideas of others allows one to "consider, test, and develop their
own conclusions."  A free, open, and dynamic market place of ideas is constantly shaping new
167

ones. This promotes both stability and change where recurring points may crystallize and weak ones
may develop. Of course, free speech is more than the right to approve existing political beliefs and
economic arrangements as it includes, "[t]o paraphrase Justice Holmes, [the] freedom for the
thought that we hate, no less than for the thought that agrees with us."  In fact, free speech may
168

"best serve its high purpose when it induces a condition of unrest, creates dissatisfaction with
conditions as they are, or even stirs people to anger."  It is in this context that we should guard
169

against any curtailment of the people’s right to participate in the free trade of ideas.

Third, free speech involves self-expression that enhances human dignity. This right is "a means of
assuring individual self-fulfillment,"  among others. In Philippine Blooming Mills Employees
170

Organization v. Philippine Blooming Mills Co., Inc,  this court discussed as follows:
171

The rights of free expression, free assembly and petition, are not only civil rights but also political
rights essential to man's enjoyment of his life, to his happiness and to his full and complete
fulfillment.Thru these freedoms the citizens can participate not merely in the periodic establishment
of the government through their suffrage but also in the administration of public affairs as well as in
the discipline of abusive public officers. The citizen is accorded these rights so that he can appeal to
the appropriate governmental officers or agencies for redress and protection as well as for the
imposition of the lawful sanctions on erring public officers and employees.  (Emphasis supplied)
172

Fourth, expression is a marker for group identity. For one, "[v]oluntary associations perform [an]
important democratic role [in providing] forums for the development of civil skills, for deliberation,
and for the formation of identity and community spirit[,] [and] are largely immune from [any]
governmental interference."  They also "provide a buffer between individuals and the state - a free
173

space for the development of individual personality, distinct group identity, and dissident ideas - and
a potential source of opposition to the state."  Free speech must be protected as the vehicle to find
174

those who have similar and shared values and ideals, to join together and forward common goals.

Fifth, the Bill of Rights, free speech included, is supposed to "protect individuals and minorities
against majoritarian abuses perpetrated through [the] framework [of democratic
governance]."  Federalist framers led by James Madison were concerned about two potentially
175

vulnerable groups: "the citizenry at large - majorities - who might be tyrannized or plundered by
despotic federal officials"  and the minorities who may be oppressed by "dominant factions of the
176

electorate [that] capture [the] government for their own selfish ends[.]"  According to Madison, "[i]t is
177

of great importance in a republic not only to guard the society against the oppression of its rulers, but
to guard one part of the society against the injustice of the other part."  We should strive to ensure
178

that free speech is protected especially in light of any potential oppression against those who find
themselves in the fringes on public issues.

Lastly, free speech must be protected under the safety valve theory.  This provides that "nonviolent
179

manifestations of dissent reduce the likelihood of violence[.]"  "[A] dam about to burst . . . resulting
180

in the ‘banking up of a menacing flood of sullen anger behind the walls of restriction’"  has been181

used to describe the effect of repressing nonviolent outlets.  In order to avoid this situation and
182

prevent people from resorting to violence, there is a need for peaceful methods in making
passionate dissent. This includes "free expression and political participation"  in that they can "vote
183

for candidates who share their views, petition their legislatures to [make or] change laws, . . .
distribute literature alerting other citizens of their concerns[,]"  and conduct peaceful rallies and
184

other similar acts.  Free speech must, thus, be protected as a peaceful means of achieving one’s
185

goal, considering the possibility that repression of nonviolent dissent may spill over to violent means
just to drive a point.

II.B.5

Every citizen’s expression with political consequences enjoys a high degree of protection.
Respondents argue that the tarpaulinis election propaganda, being petitioners’ way of endorsing
candidates who voted against the RH Law and rejecting those who voted for it.  As such, it is
186

subject to regulation by COMELEC under its constitutional mandate.  Election propaganda is

187

defined under Section 1(4) of COMELEC Resolution No. 9615 as follows: SECTION 1. Definitions . .
.

....

4. The term "political advertisement" or "election propaganda" refers to any matter broadcasted,
published, printed, displayed or exhibited, in any medium, which contain the name, image, logo,
brand, insignia, color motif, initials, and other symbol or graphic representation that is capable of
being associated with a candidate or party, and is intended to draw the attention of the public or a
segment thereof to promote or oppose, directly or indirectly, the election of the said candidate or
candidates to a public office. In broadcast media, political advertisements may take the form of
spots, appearances on TV shows and radio programs, live or taped announcements, teasers, and
other forms of advertising messages or announcements used by commercial advertisers. Political
advertising includes matters, not falling within the scope of personal opinion, that appear on any
Internet website, including, but not limited to, social networks, blogging sites, and micro-blogging
sites, in return for consideration, or otherwise capable of pecuniary estimation.

On the other hand, petitioners invoke their "constitutional right to communicate their opinions, views
and beliefs about issues and candidates."  They argue that the tarpaulin was their statement of
188

approval and appreciation of the named public officials’ act of voting against the RH Law, and their
criticism toward those who voted in its favor.  It was "part of their advocacy campaign against the
189

RH Law,"  which was not paid for by any candidate or political party.  Thus, "the questioned orders
190 191

which . . . effectively restrain[ed] and curtail[ed] [their] freedom of expression should be declared
unconstitutional and void." 192

This court has held free speech and other intellectual freedoms as "highly ranked in our scheme of
constitutional values."  These rights enjoy precedence and primacy.  In Philippine Blooming Mills,
193 194

this court discussed the preferred position occupied by freedom of expression:

Property and property rights can belost thru prescription; but human rights are imprescriptible. If
human rights are extinguished by the passage of time, then the Bill of Rights is a useless attempt to
limit the power of government and ceases to be an efficacious shield against the tyranny of officials,
of majorities, ofthe influential and powerful, and of oligarchs - political, economic or otherwise.

In the hierarchy of civil liberties, the rights of free expression and of assembly occupy a preferred
position as they are essential to the preservation and vitality of our civil and political institutions; and
such priority "gives these liberties the sanctity and the sanction not permitting dubious
intrusions."  (Citations omitted)
195

This primordial right calls for utmost respect, more so "when what may be curtailed is the
dissemination of information to make more meaningful the equally vital right of suffrage."  A similar
196

idea appeared in our jurisprudence as early as 1969, which was Justice Barredo’s concurring and
dissenting opinion in Gonzales v. COMELEC: 197

I like to reiterate over and over, for it seems this is the fundamental point others miss, that genuine
democracy thrives only where the power and right of the people toelect the men to whom they would
entrust the privilege to run the affairs of the state exist. In the language of the declaration of
principles of our Constitution, "The Philippines is a republican state. Sovereignty resides in the
people and all government authority emanates from them" (Section 1, Article II). Translating this
declaration into actuality, the Philippines is a republic because and solely because the people in it
can be governed only by officials whom they themselves have placed in office by their votes. And in
it is on this cornerstone that I hold it tobe self-evident that when the freedoms of speech, press and
peaceful assembly and redress of grievances are being exercised in relation to suffrage or asa
means to enjoy the inalienable right of the qualified citizen to vote, they are absolute and timeless. If
our democracy and republicanism are to be worthwhile, the conduct of public affairs by our officials
must be allowed to suffer incessant and unabating scrutiny, favorable or unfavorable, everyday and
at all times. Every holder of power in our government must be ready to undergo exposure any
moment of the day or night, from January to December every year, as it is only in this way that he
can rightfully gain the confidence of the people. I have no patience for those who would regard
public dissection of the establishment as an attribute to be indulged by the people only at certain
periods of time. I consider the freedoms of speech, press and peaceful assembly and redress of
grievances, when exercised in the name of suffrage, as the very means by which the right itself to
vote can only be properly enjoyed.It stands to reason therefore, that suffrage itself would be next to
useless if these liberties cannot be untrammelled [sic] whether as to degree or time.  (Emphasis
198

supplied)

Not all speech are treated the same. In Chavez v. Gonzales, this court discussed that some types of
speech may be subject to regulation:

Some types of speech may be subjected to some regulation by the State under its pervasive police
power, in order that it may not be injurious to the equal right of others or those of the community or
society. The difference in treatment is expected because the relevant interests of one type of
speech, e.g., political speech, may vary from those of another, e.g., obscene speech.
Distinctionshave therefore been made in the treatment, analysis, and evaluation ofthe permissible
scope of restrictions on various categories of speech. We have ruled, for example, that in our
jurisdiction slander or libel, lewd and obscene speech, as well as "fighting words" are not entitled to
constitutional protection and may be penalized.  (Citations omitted)
199

We distinguish between politicaland commercial speech. Political speech refers to speech "both
intended and received as a contribution to public deliberation about some issue,"  "foster[ing]
200

informed and civicminded deliberation."  On the other hand, commercial speech has been defined
201
as speech that does "no more than propose a commercial transaction."  The expression resulting
202

from the content of the tarpaulin is, however, definitely political speech. In Justice Brion’s dissenting
opinion, he discussed that "[t]he content of the tarpaulin, as well as the timing of its posting, makes it
subject of the regulations in RA 9006 and Comelec Resolution No. 9615."  He adds that "[w]hile
203

indeed the RH issue, by itself,is not an electoralmatter, the slant that the petitioners gave the issue
converted the non-election issue into a live election one hence, Team Buhay and Team Patay and
the plea to support one and oppose the other." 204

While the tarpaulin may influence the success or failure of the named candidates and political
parties, this does not necessarily mean it is election propaganda. The tarpaulin was not paid for or
posted "in return for consideration" by any candidate, political party, or party-list group.

The second paragraph of Section 1(4) of COMELEC Resolution No. 9615, or the rules and
regulations implementing Republic Act No. 9006 as an aid to interpret the law insofar as the facts of
this case requires, states:

4. The term "political advertisement" or "election propaganda" refers to any matter broadcasted,
published, printed, displayed or exhibited, in any medium, which contain the name, image, logo,
brand, insignia, color motif, initials, and other symbol or graphic representation that is capable of
being associated with a candidate or party, and is intended to draw the attention of the public or a
segment thereof to promote or oppose, directly or indirectly, the election of the said candidate or
candidates to a public office. In broadcast media, political advertisements may take the form of
spots, appearances on TV shows and radio programs, live or taped announcements, teasers, and
other forms of advertising messages or announcements used by commercial advertisers. Political
advertising includes matters, not falling within the scope of personal opinion, that appear on any
Internet website, including, but not limited to, social networks, blogging sites, and micro-blogging
sites, in return for consideration, or otherwise capable of pecuniary estimation. (Emphasis supplied)

It is clear that this paragraph suggests that personal opinions are not included, while sponsored
messages are covered.

Thus, the last paragraph of Section 1(1) of COMELEC Resolution No. 9615 states:

SECTION 1. Definitions - As used in this Resolution:

1. The term "election campaign" or "partisan political activity" refers to an act designed to promote
the election or defeat of a particular candidate or candidates to a public office, and shall include any
of the following:

....

Personal opinions, views, and preferences for candidates, contained in blogs shall not be considered
acts of election campaigning or partisan politicalactivity unless expressed by government officials in
the Executive Department, the Legislative Department, the Judiciary, the Constitutional
Commissions, and members of the Civil Service.

In any event, this case does not refer to speech in cyberspace, and its effects and parameters
should be deemed narrowly tailored only in relation to the facts and issues in this case. It also
appears that such wording in COMELEC Resolution No. 9615 does not similarly appear in Republic
Act No. 9006, the law it implements.
We should interpret in this manner because of the value of political speech.

As early as 1918, in United States v. Bustos,  this court recognized the need for full discussion of
205

public affairs. We acknowledged that free speech includes the right to criticize the conduct of public
men:

The interest of society and the maintenance of good government demand a full discussion of public
affairs. Complete liberty to comment on the conduct of public men is a scalpel in the case of free
speech. The sharp incision of its probe relieves the abscesses of official dom. Men in public life may
suffer under a hostile and an unjust accusation; the wound can be assuaged with the balm of a clear
conscience. A public officer must not be too thin-skinned with reference to comment upon his official
acts. Only thus can the intelligence and dignity of the individual be exalted.
206

Subsequent jurisprudence developed the right to petition the government for redress of grievances,
allowing for criticism, save for some exceptions.  In the 1951 case of Espuelas v. People,  this
207 208

court noted every citizen’s privilege to criticize his or her government, provided it is "specific and
therefore constructive, reasoned or tempered, and not a contemptuous condemnation of the entire
government set-up." 209

The 1927 case of People v. Titular  involved an alleged violation of the Election Law provision
210

"penaliz[ing] the anonymous criticism of a candidate by means of posters or circulars."  This court
211

explained that it is the poster’s anonymous character that is being penalized.  The ponente adds
212

that he would "dislike very muchto see this decision made the vehicle for the suppression of public
opinion."
213

In 1983, Reyes v. Bagatsing  discussed the importance of allowing individuals to vent their views.
214

According to this court, "[i]ts value may lie in the fact that there may be something worth hearing
from the dissenter [and] [t]hat is to ensurea true ferment of ideas."215

Allowing citizens to air grievances and speak constructive criticisms against their government
contributes to every society’s goal for development. It puts forward matters that may be changed for
the better and ideas that may be deliberated on to attain that purpose. Necessarily, it also makes the
government accountable for acts that violate constitutionally protected rights.

In 1998, Osmeña v. COMELEC found Section 11(b) of Republic Act No. 6646, which prohibits mass
media from selling print space and air time for campaign except to the COMELEC, to be a
democracy-enhancing measure.  This court mentioned how "discussion of public issues and debate
216

on the qualifications of candidates in an election are essential to the proper functioning of the
government established by our Constitution." 217

As pointed out by petitioners, "speech serves one of its greatest public purposes in the context of
elections when the free exercise thereof informs the people what the issues are, and who are
supporting what issues."  At the heart of democracy is every advocate’s right to make known what
218

the people need to know,  while the meaningful exercise of one’s right of suffrage includes the right
219

of every voter to know what they need to know in order to make their choice.

Thus, in Adiong v. COMELEC,  this court discussed the importance of debate on public issues, and
220

the freedom of expression especially in relation to information that ensures the meaningful exercise
of the right of suffrage:
We have adopted the principle that debate on public issues should be uninhibited, robust, and wide
open and that it may well include vehement, caustic and sometimes unpleasantly sharp attacks on
government and public officials. Too many restrictions will deny to people the robust, uninhibited,
and wide open debate, the generating of interest essential if our elections will truly be free, clean and
honest.

We have also ruled that the preferred freedom of expression calls all the more for the utmost respect
when what may be curtailed is the dissemination of information to make more meaningful the equally
vital right of suffrage.  (Emphasis supplied, citations omitted)
221

Speech with political consequences isat the core of the freedom of expression and must be
protected by this court.

Justice Brion pointed out that freedomof expression "is not the god of rights to which all other rights
and even government protection of state interest must bow." 222

The right to freedom of expression isindeed not absolute. Even some forms of protected speech are
still subjectto some restrictions. The degree of restriction may depend on whether the regulation is
content-based or content-neutral.  Content-based regulations can either be based on the viewpoint
223

of the speaker or the subject of the expression.

II.B.6

Content-based regulation

COMELEC contends that the order for removal of the tarpaulin is a content-neutral regulation. The
order was made simply because petitioners failed to comply with the maximum size limitation for
lawful election propaganda. 224

On the other hand, petitioners argue that the present size regulation is content-based as it applies
only to political speech and not to other forms of speech such as commercial speech.  "[A]ssuming
225

arguendo that the size restriction sought to be applied . . . is a mere time, place, and manner
regulation, it’s still unconstitutional for lack of a clear and reasonable nexus with a constitutionally
sanctioned objective." 226

The regulation may reasonably be considered as either content-neutral or content-

based.  Regardless, the disposition of this case will be the same. Generally, compared with other
227

forms of speech, the proposed speech is content-based.

As pointed out by petitioners, the interpretation of COMELEC contained in the questioned order
applies only to posters and tarpaulins that may affect the elections because they deliver opinions
that shape both their choices. It does not cover, for instance, commercial speech.

Worse, COMELEC does not point to a definite view of what kind of expression of non-candidates will
be adjudged as "election paraphernalia." There are no existing bright lines to categorize speech as
election-related and those that are not. This is especially true when citizens will want to use their
resources to be able to raise public issues that should be tackled by the candidates as what has
happened in this case. COMELEC’s discretion to limit speech in this case is fundamentally
unbridled.
Size limitations during elections hit ata core part of expression. The content of the tarpaulin is not
easily divorced from the size of its medium.

Content-based regulation bears a heavy presumption of invalidity, and this court has used the clear
and present danger rule as measure.  Thus, in Chavez v. Gonzales:
228

A content-based regulation, however, bears a heavy presumption of invalidity and is measured

against the clear and present danger rule. The latter will pass constitutional muster only if justified by
a compelling reason, and the restrictions imposedare neither overbroad nor vague.  (Citations 229

omitted)

Under this rule, "the evil consequences sought to be prevented must be substantive, ‘extremely
serious and the degree of imminence extremely high.’"  "Only when the challenged act has
230

overcome the clear and present danger rule will it pass constitutional muster, with the government
having the burden of overcoming the presumed unconstitutionality." 231

Even with the clear and present danger test, respondents failed to justify the regulation. There is no
compelling and substantial state interest endangered by the posting of the tarpaulinas to justify
curtailment of the right of freedom of expression. There is no reason for the state to minimize the
right of non-candidate petitioners to post the tarpaulin in their private property. The size of the
tarpaulin does not affect anyone else’s constitutional rights.

Content-based restraint or censorship refers to restrictions "based on the subject matter of the
utterance or speech."  In contrast, content-neutral regulation includes controls merely on the
232

incidents of the speech such as time, place, or manner of the speech. 233

This court has attempted to define "content-neutral" restraints starting with the 1948 case of
Primicias v. Fugoso.  The ordinance in this case was construed to grant the Mayor discretion only to
234

determine the public places that may be used for the procession ormeeting, but not the power to
refuse the issuance of a permit for such procession or meeting.  This court explained that free
235

speech and peaceful assembly are "not absolute for it may be so regulated that it shall not
beinjurious to the equal enjoyment of others having equal rights, nor injurious to the rights of the
community or society." 236

The earlier case of Calalang v. Williams  involved the National Traffic Commission resolution that
237

prohibited the passing of animal-drawn vehicles along certain roads at specific hours.  This court 238

similarly discussed police power in that the assailed rules carry outthe legislative policy that "aims to
promote safe transit upon and avoid obstructions on national roads, in the interest and convenience
of the public."
239

As early as 1907, United States v. Apurado  recognized that "more or less disorder will mark the
240

public assembly of the people to protest against grievances whether real or imaginary, because on
such occasions feeling is always wrought to a high pitch of excitement. . . ."  It is with this backdrop
241

that the state is justified in imposing restrictions on incidental matters as time, place, and manner of
the speech.

In the landmark case of Reyes v. Bagatsing, this court summarized the steps that permit applicants
must follow which include informing the licensing authority ahead of time as regards the date, public
place, and time of the assembly.  This would afford the public official time to inform applicants if
242

there would be valid objections, provided that the clear and present danger test is the standard used
for his decision and the applicants are given the opportunity to be heard.  This ruling was practically
243

codified in Batas Pambansa No. 880, otherwise known as the Public Assembly Act of 1985.
Subsequent jurisprudence have upheld Batas Pambansa No. 880 as a valid content-neutral
regulation. In the 2006 case of Bayan v. Ermita,  this court discussed how Batas Pambansa No. 880
244

does not prohibit assemblies but simply regulates their time, place, and manner.  In 2010, this court
245

found in Integrated Bar of the Philippines v. Atienza  that respondent Mayor Atienza committed
246

grave abuse of discretion when he modified the rally permit by changing the venue from Mendiola
Bridge to Plaza Miranda without first affording petitioners the opportunity to be heard. 247

We reiterate that the regulation involved at bar is content-based. The tarpaulin content is not easily
divorced from the size of its medium.

II.B.7

Justice Carpio and Justice Perlas-Bernabe suggest that the provisions imposing a size limit for
tarpaulins are content-neutral regulations as these "restrict the mannerby which speech is relayed
but not the content of what is conveyed." 248

If we apply the test for content-neutral regulation, the questioned acts of COMELEC will not pass the
three requirements for evaluating such restraints on freedom of speech.  "When the speech
249

restraints take the form of a content-neutral regulation, only a substantial governmental interest is
required for its validity,"  and it is subject only to the intermediate approach.
250 251

This intermediate approach is based on the test that we have prescribed in several cases.  A 252

content-neutral government regulation is sufficiently justified:

[1] if it is within the constitutional power of the Government; [2] if it furthers an important or
substantial governmental interest; [3] if the governmental interest is unrelated to the suppression of
free expression; and [4] if the incident restriction on alleged [freedom of speech & expression] is no
greater than is essential to the furtherance of that interest.
253

On the first requisite, it is not within the constitutional powers of the COMELEC to regulate the
tarpaulin. As discussed earlier, this is protected speech by petitioners who are non-candidates. On
the second requirement, not only must the governmental interest be important or substantial, it must
also be compelling as to justify the restrictions made.

Compelling governmental interest would include constitutionally declared principles. We have held,
for example, that "the welfare of children and the State’s mandate to protect and care for them, as
parens patriae,  constitute a substantial and compelling government interest in regulating . . .
254

utterances in TV broadcast." 255

Respondent invokes its constitutional mandate to ensure equal opportunity for public information
campaigns among candidates in connection with the holding of a free, orderly, honest, peaceful, and
credible election. 256

Justice Brion in his dissenting opinion discussed that "[s]ize limits to posters are necessary to ensure
equality of public information campaigns among candidates, as allowing posters with different sizes
gives candidates and their supporters the incentive to post larger posters[,] [and] [t]his places
candidates with more money and/or with deep-pocket supporters at an undue advantage against
candidates with more humble financial capabilities." 257

First, Adiong v. COMELEC has held that this interest is "not as important as the right of [a private
citizen] to freely express his choice and exercise his right of free speech."  In any case, faced with
258
both rights to freedom of speech and equality, a prudent course would be to "try to resolve the
tension in a way that protects the right of participation."
259

Second, the pertinent election lawsrelated to private property only require that the private property
owner’s consent be obtained when posting election propaganda in the property.  This is consistent
260

with the fundamental right against deprivation of property without due process of law.  The present
261

facts do not involve such posting of election propaganda absent consent from the property owner.
Thus, this regulation does not apply in this case.

Respondents likewise cite the Constitution  on their authority to recommend effective measures to
262

minimize election spending. Specifically, Article IX-C, Section 2(7) provides:

Sec. 2. The Commission on Elections shall exercise the following powers and functions:

....

(7) Recommend to the Congress effective measures to minimize election spending, including
limitation of places where propaganda materials shall be posted, and to prevent and penalize all
forms of election frauds, offenses, malpractices, and nuisance candidates. (Emphasis supplied) This
does not qualify as a compelling and substantial government interest to justify regulation of the
preferred right to freedom of expression.

The assailed issuances for the removal of the tarpaulin are based on the two feet (2’) by three feet
(3’) size limitation under Section 6(c) of COMELEC Resolution No. 9615. This resolution implements
the Fair Election Act that provides for the same size limitation.263

This court held in Adiong v. COMELEC that "[c]ompared to the paramount interest of the State in
guaranteeing freedom of expression, any financial considerations behind the regulation are of
marginal significance."  In fact, speech with political consequences, as in this case, should be
264

encouraged and not curtailed. As petitioners pointed out, the size limitation will not serve the
objective of minimizing election spending considering there is no limit on the number of tarpaulins
that may be posted. 265

The third requisite is likewise lacking. We look not only at the legislative intent or motive in imposing
the restriction, but more so at the effects of such restriction, if implemented. The restriction must not
be narrowly tailored to achieve the purpose. It must be demonstrable. It must allow alternative
avenues for the actor to make speech.

In this case, the size regulation is not unrelated to the suppression of speech. Limiting the maximum
sizeof the tarpaulin would render ineffective petitioners’ message and violate their right to exercise
freedom of expression.

The COMELEC’s act of requiring the removal of the tarpaulin has the effect of dissuading
expressions with political consequences. These should be encouraged, more so when exercised to
make more meaningful the equally important right to suffrage.

The restriction in the present case does not pass even the lower test of intermediate scrutiny for
content-neutral regulations.
The action of the COMELEC in thiscase is a strong deterrent to further speech by the electorate.
Given the stature of petitioners and their message, there are indicators that this will cause a "chilling
effect" on robust discussion during elections.

The form of expression is just as important as the message itself. In the words of Marshall McLuhan,
"the medium is the message."  McLuhan’s colleague and mentor Harold Innis has earlier asserted
266

that "the materials on which words were written down have often counted for more than the words
themselves." 267

III
Freedom of expression and equality

III.A

The possibility of abuse

Of course, candidates and political parties do solicit the help of private individuals for the
endorsement of their electoral campaigns.

On the one extreme, this can take illicit forms such as when endorsement materials in the form of
tarpaulins, posters, or media advertisements are made ostensibly by "friends" but in reality are really
paid for by the candidate or political party. This skirts the constitutional value that provides for equal
opportunities for all candidates.

However, as agreed by the parties during the oral arguments in this case, this is not the situation
that confronts us. In such cases, it will simply be a matter for investigation and proof of fraud on the
part of the COMELEC.

The guarantee of freedom of expression to individuals without any relationship to any political
candidate should not be held hostage by the possibility of abuse by those seeking to be elected. It is
true that there can be underhanded, covert, or illicit dealings so as to hide the candidate’s real levels
of expenditures. However, labelling all expressions of private parties that tend to have an effect on
the debate in the elections as election paraphernalia would be too broad a remedy that can stifle
genuine speech like in this case. Instead, to address this evil, better and more effective enforcement
will be the least restrictive means to the fundamental freedom.

On the other extreme, moved by the credentials and the message of a candidate, others will spend
their own resources in order to lend support for the campaigns. This may be without agreement
between the speaker and the candidate or his or her political party. In lieu of donating funds to the
campaign, they will instead use their resources directly in a way that the candidate or political party
would have doneso. This may effectively skirt the constitutional and statutory limits of campaign
spending.

Again, this is not the situation in this case.

The message of petitioners in thiscase will certainly not be what candidates and political parties will
carry in their election posters or media ads. The message of petitioner, taken as a whole, is an
advocacy of a social issue that it deeply believes. Through rhetorical devices, it communicates the
desire of Diocese that the positions of those who run for a political position on this social issue be
determinative of how the public will vote. It primarily advocates a stand on a social issue; only
secondarily — even almost incidentally — will cause the election or non-election of a candidate.
The twin tarpaulins consist of satire of political parties. Satire is a "literary form that employs such
devices as sarcasm, irony and ridicule to deride prevailing vices or follies,"  and this may target any
268

individual or group in society, private and government alike. It seeks to effectively communicate a
greater purpose, often used for "political and social criticism"  "because it tears down facades,
269

deflates stuffed shirts, and unmasks hypocrisy. . . . Nothing is more thoroughly democratic than to
have the high-and-mighty lampooned and spoofed."  Northrop Frye, wellknown in this literary field,
270

claimed that satire had two defining features: "one is wit or humor founded on fantasy or a sense of
the grotesque and absurd, the other is an object of attack."  Thus, satire frequently uses
271

exaggeration, analogy, and other rhetorical devices.

The tarpaulins exaggerate. Surely, "Team Patay" does not refer to a list of dead individuals nor could
the Archbishop of the Diocese of Bacolod have intended it to mean that the entire plan of the
candidates in his list was to cause death intentionally. The tarpaulin caricatures political parties and
parodies the intention of those in the list. Furthermore, the list of "Team Patay" is juxtaposed with the
list of "Team Buhay" that further emphasizes the theme of its author: Reproductive health is an
important marker for the church of petitioners to endorse.

The messages in the tarpaulins are different from the usual messages of candidates. Election
paraphernalia from candidates and political parties are more declarative and descriptive and contain
no sophisticated literary allusion to any social objective. Thus, they usually simply exhort the public
to vote for a person with a brief description of the attributes of the candidate. For example "Vote for
[x], Sipag at Tiyaga," "Vote for [y], Mr. Palengke," or "Vote for [z], Iba kami sa Makati."

This court’s construction of the guarantee of freedom of expression has always been wary of
censorship or subsequent punishment that entails evaluation of the speaker’s viewpoint or the
content of one’s speech. This is especially true when the expression involved has political
consequences. In this case, it hopes to affect the type of deliberation that happens during elections.
A becoming humility on the part of any human institution no matter how endowed with the secular
ability to decide legal controversies with finality entails that we are not the keepers of all wisdom.

Humanity’s lack of omniscience, even acting collectively, provides space for the weakest dissent.
Tolerance has always been a libertarian virtue whose version is embedded in our Billof Rights.
There are occasional heretics of yesterday that have become our visionaries. Heterodoxies have
always given us pause. The unforgiving but insistent nuance that the majority surely and comfortably
disregards provides us with the checks upon reality that may soon evolve into creative solutions to
grave social problems. This is the utilitarian version. It could also be that it is just part of human
necessity to evolve through being able to express or communicate.

However, the Constitution we interpret is not a theoretical document. It contains other provisions
which, taken together with the guarantee of free expression, enhances each other’s value. Among
these are the provisions that acknowledge the idea of equality. In shaping doctrine construing these
constitutional values, this court needs to exercise extraordinary prudence and produce narrowly
tailored guidance fit to the facts as given so as not to unwittingly cause the undesired effect of
diluting freedoms as exercised in reality and, thus, render them meaningless.

III.B.

Speech and equality:

Some considerations We first establish that there are two paradigms of free speech that separate at
the point of giving priority to equality vis-à-vis liberty.
272
In an equality-based approach, "politically disadvantaged speech prevails over regulation[,] but
regulation promoting political equality prevails over speech."  This view allows the government
273

leeway to redistribute or equalize ‘speaking power,’ such as protecting, even implicitly subsidizing,
unpopular or dissenting voices often systematically subdued within society’s ideological
ladder.  This view acknowledges that there are dominant political actors who, through authority,
274

power, resources, identity, or status, have capabilities that may drown out the messages of others.
This is especially true in a developing or emerging economy that is part of the majoritarian world like
ours.

The question of libertarian tolerance

This balance between equality and the ability to express so as to find one’s authentic self or to
participate in the self determination of one’s communities is not new only to law. It has always been
a philosophical problematique.

In his seminal work, Repressive Tolerance, philosopher and social theorist Herbert Marcuse
recognized how institutionalized inequality exists as a background limitation, rendering freedoms
exercised within such limitation as merely "protect[ing] the already established machinery of
discrimination."  In his view, any improvement "in the normal course of events" within an unequal
275

society, without subversion, only strengthens existing interests of those in power and control.276

In other words, abstract guarantees of fundamental rights like freedom of expression may become
meaningless if not taken in a real context. This tendency to tackle rights in the abstract compromises
liberties. In his words:

Liberty is self-determination, autonomy—this is almost a tautology, but a tautology which results

from a whole series of synthetic judgments. It stipulates the ability to determine one’s own life: to be
able to determine what to do and what not to do, what to suffer and what not. But the subject of this
autonomy is never the contingent, private individual as that which he actually is or happens to be; it
is rather the individual as a human being who is capable of being free with the others. And the
problem of making possible such a harmony between every individual liberty and the other is not that
of finding a compromise between competitors, or between freedom and law, between general and
individual interest, common and private welfare in an established society, but of creating the society
in which man is no longer enslaved by institutions which vitiate self-determination from the
beginning. In other words, freedom is still to be created even for the freest of the existing
societies.  (Emphasis in the original)
277

Marcuse suggests that the democratic argument — with all opinions presented to and deliberated by
the people — "implies a necessary condition, namely, that the people must be capable of
deliberating and choosing on the basis of knowledge, that they must have access to authentic
information, and that, on this basis, their evaluation must be the result of autonomous thought."  He278

submits that "[d]ifferent opinions and ‘philosophies’ can no longer compete peacefully for adherence
and persuasion on rational grounds: the ‘marketplace of ideas’ is organized and delimited by those
who determine the national and the individual interest."  A slant toward left manifests from his belief
279

that "there is a ‘natural right’ of resistance for oppressed and overpowered minorities to use
extralegal means if the legal ones have proved to be inadequate."  Marcuse, thus, stands for an
280

equality that breaks away and transcends from established hierarchies, power structures, and
indoctrinations. The tolerance of libertarian society he refers to as "repressive tolerance."

Legal scholars
The 20th century also bears witness to strong support from legal scholars for "stringent protections
of expressive liberty,"  especially by political egalitarians. Considerations such as "expressive,
281

deliberative, and informational interests,"  costs or the price of expression, and background facts,
282

when taken together, produce bases for a system of stringent protections for expressive liberties. 283

Many legal scholars discuss the interest and value of expressive liberties. Justice Brandeis proposed
that "public discussion is a political duty."  Cass Sustein placed political speech on the upper tier of
284

his twotier model for freedom of expression, thus, warranting stringent protection.  He defined
285

political speech as "both intended and received as a contribution to public deliberation about some
issue."286

But this is usually related also tofair access to opportunities for such liberties.  Fair access to
287

opportunity is suggested to mean substantive equality and not mere formal equalitysince "favorable
conditions for realizing the expressive interest will include some assurance of the resources required
for expression and some guarantee that efforts to express views on matters of common concern will
not be drowned out by the speech of betterendowed citizens."  Justice Brandeis’ solution is to
288

"remedy the harms of speech with more speech."  This view moves away from playing down the
289

danger as merely exaggerated, toward "tak[ing] the costs seriously and embrac[ing] expression as
the preferred strategy for addressing them."  However, in some cases, the idea of more speech
290

may not be enough. Professor Laurence Tribe observed the need for context and "the specification
of substantive values before [equality] has full meaning."  Professor Catherine A. MacKinnon adds
291

that "equality continues to be viewed in a formal rather than a substantive sense."  Thus, more
292

speech can only mean more speech from the few who are dominant rather than those who are not.

Our jurisprudence

This court has tackled these issues.

Osmeña v. COMELEC affirmed National Press Club v. COMELEC on the validity of Section 11(b)
ofthe Electoral Reforms Law of 1987.  This section "prohibits mass media from selling or giving free
293

of charge print space or air time for campaign or other political purposes, except to the Commission
on Elections."  This court explained that this provision only regulates the time and manner of
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advertising in order to ensure media equality among candidates.  This court grounded this measure
295

on constitutional provisions mandating political equality:  Article IX-C, Section 4

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Section 4. The Commission may, during the election period, supervise or regulate the enjoyment or
utilization of all franchises or permits for the operation of transportation and other public utilities,
media of communication or information, all grants, special privileges, or concessions granted by the
Government or any subdivision, agency, or instrumentality thereof, including any government-owned
or controlled corporation or its subsidiary. Such supervision or regulation shall aim to ensure equal
opportunity, time, and space, and the right to reply, including reasonable, equal rates therefor, for
public information campaigns and forums among candidates in connection with the objective of
holding free, orderly, honest, peaceful, and credible elections. (Emphasis supplied)

Article XIII, Section 1

Section 1. The Congress shall give highest priorityto the enactment of measures that protect and
enhance the right of all the people to human dignity, reducesocial, economic, and political
inequalities, and remove cultural inequities by equitably diffusing wealth and political power for the
common good.
To this end, the State shall regulate the acquisition, ownership, use, and disposition of property and
its increments. (Emphasis supplied)

Article II, Section 26

Section 26. The State shall guarantee equal access to opportunities for public service, and prohibit
political dynasties as may be defined by law. (Emphasis supplied)

Thus, in these cases, we have acknowledged the Constitution’s guarantee for more substantive
expressive freedoms that take equality of opportunities into consideration during elections.

The other view

However, there is also the other view. This is that considerations of equality of opportunity or
equality inthe ability of citizens as speakers should not have a bearing in free speech doctrine.
Under this view, "members of the public are trusted to make their own individual evaluations of
speech, and government is forbidden to intervene for paternalistic or redistributive reasons . . .
[thus,] ideas are best left to a freely competitive ideological market."  This is consistent with the
297

libertarian suspicion on the use of viewpoint as well as content to evaluate the constitutional validity
or invalidity of speech.

The textual basis of this view is that the constitutional provision uses negative rather than affirmative
language. It uses ‘speech’ as its subject and not ‘speakers’.  Consequently, the Constitution
298

protects free speech per se, indifferent to the types, status, or associations of its
speakers.  Pursuant to this, "government must leave speakers and listeners in the private order to
299

their own devices in sorting out the relative influence of speech." 300

Justice Romero’s dissenting opinion in Osmeña v. COMELEC formulates this view that freedom of
speech includes "not only the right to express one’s views, but also other cognate rights relevant to
the free communication [of] ideas, not excluding the right to be informed on matters of public
concern."  She adds:
301

And since so many imponderables may affect the outcome of elections — qualifications of voters
and candidates, education, means of transportation, health, public discussion, private animosities,
the weather, the threshold of a voter’s resistance to pressure — the utmost ventilation of opinion of
men and issues, through assembly, association and organizations, both by the candidate and the
voter, becomes a sine qua non for elections to truly reflect the will of the electorate.  (Emphasis
302

supplied)

Justice Romero’s dissenting opinion cited an American case, if only to emphasize free speech
primacy such that"courts, as a rule are wary to impose greater restrictions as to any attempt to
curtail speeches with political content,"  thus:
303

the concept that the government may restrict the speech of some elements in our society in order to
enhance the relative voice of the others is wholly foreign to the First Amendment which was
designed to "secure the widest possible dissemination of information from diverse and antagonistic
sources" and "to assure unfettered interchange of ideas for the bringing about of political and social
changes desired by the people." 304

This echoes Justice Oliver Wendell Holmes’ submission "that the market place of ideas is still the
best alternative to censorship."305
Parenthetically and just to provide the whole detail of the argument, the majority of the US Supreme
Court in the campaign expenditures case of Buckley v. Valeo "condemned restrictions (even if
content-neutral) on expressive liberty imposed in the name of ‘enhanc[ing] the relative voice of
others’ and thereby ‘equaliz[ing] access to the political arena."  The majority did not use the
306

equality-based paradigm.

One flaw of campaign expenditurelimits is that "any limit placed on the amount which a person can
speak, which takes out of his exclusive judgment the decision of when enough is enough, deprives
him of his free speech."307

Another flaw is how "[a]ny quantitative limitation on political campaigning inherently constricts the
sum of public information and runs counter to our ‘profound national commitment that debate on
public issues should be uninhibited, robust, and wide-open.’" 308

In fact, "[c]onstraining those who have funds or have been able to raise funds does not ease the
plight of those without funds in the first place . . . [and] even if one’s main concern isslowing the
increase in political costs, it may be more effective torely on market forces toachieve that result than
on active legal intervention."  According to Herbert Alexander, "[t]o oppose limitations is not
309

necessarily to argue that the sky’s the limit [because in] any campaign there are saturation levels
and a point where spending no longer pays off in votes per dollar." 310

III. C.

When private speech amounts

to election paraphernalia

The scope of the guarantee of free expression takes into consideration the constitutional respect for
human potentiality and the effect of speech. It valorizes the ability of human beings to express and
their necessity to relate. On the other hand, a complete guarantee must also take into consideration
the effects it will have in a deliberative democracy. Skewed distribution of resources as well as the
cultural hegemony of the majority may have the effect of drowning out the speech and the messages
of those in the minority. In a sense, social inequality does have its effect on the exercise and effect
of the guarantee of free speech. Those who have more will have better access to media that
reaches a wider audience than those who have less. Those who espouse the more popular ideas
will have better reception than the subversive and the dissenters of society.To be really heard and
understood, the marginalized view normally undergoes its own degree of struggle.

The traditional view has been to tolerate the viewpoint of the speaker and the content of his or her
expression. This view, thus, restricts laws or regulation that allows public officials to make judgments
of the value of such viewpoint or message content. This should still be the principal approach.

However, the requirements of the Constitution regarding equality in opportunity must provide limits to
some expression during electoral campaigns.

Thus clearly, regulation of speech in the context of electoral campaigns made by candidates or the
members of their political parties or their political parties may be regulated as to time, place, and
manner. This is the effect of our rulings in Osmeña v. COMELEC and National Press Club v.
COMELEC.
Regulation of speech in the context of electoral campaigns made by persons who are not candidates
or who do not speak as members of a political party which are, taken as a whole, principally
advocacies of a social issue that the public must consider during elections is unconstitutional. Such
regulation is inconsistent with the guarantee of according the fullest possible range of opinions
coming from the electorate including those that can catalyze candid, uninhibited, and robust debate
in the criteria for the choice of a candidate.

This does not mean that there cannot be a specie of speech by a private citizen which will not
amount toan election paraphernalia to be validly regulated by law.

Regulation of election paraphernalia will still be constitutionally valid if it reaches into speech of
persons who are not candidates or who do not speak as members of a political party if they are not
candidates, only if what is regulated is declarative speech that, taken as a whole, has for its principal
object the endorsement of a candidate only. The regulation (a) should be provided by law, (b)
reasonable, (c) narrowly tailored to meet the objective of enhancing the opportunity of all candidates
to be heard and considering the primacy of the guarantee of free expression, and (d) demonstrably
the least restrictive means to achieve that object. The regulation must only be with respect to the
time, place, and manner of the rendition of the message. In no situation may the speech be
prohibited or censored onthe basis of its content. For this purpose, it will notmatter whether the
speech is made with or on private property.

This is not the situation, however, in this case for two reasons. First, as discussed, the principal
message in the twin tarpaulins of petitioners consists of a social advocacy.

Second, as pointed out in the concurring opinion of Justice Antonio Carpio, the present law —
Section 3.3 of Republic Act No. 9006 and Section 6(c) of COMELEC Resolution No. 9615 — if
applied to this case, will not pass the test of reasonability. A fixed size for election posters or
tarpaulins without any relation to the distance from the intended average audience will be arbitrary.
At certain distances, posters measuring 2 by 3 feet could no longer be read by the general public
and, hence, would render speech meaningless. It will amount to the abridgement of speech with
political consequences.

IV
Right to property

Other than the right to freedom of expression  and the meaningful exercise of the right to
311

suffrage,  the present case also involves one’s right to property.

312 313

Respondents argue that it is the right of the state to prevent the circumvention of regulations relating
to election propaganda by applying such regulations to private individuals.  Certainly, any provision
314

or regulation can be circumvented. But we are not confronted with this possibility. Respondents
agree that the tarpaulin in question belongs to petitioners. Respondents have also agreed, during
the oral arguments, that petitioners were neither commissioned nor paid by any candidate or political
party to post the material on their walls.

Even though the tarpaulin is readily seen by the public, the tarpaulin remains the private property of
petitioners. Their right to use their property is likewise protected by the Constitution.

In Philippine Communications Satellite Corporation v. Alcuaz: 315

Any regulation, therefore, which operates as an effective confiscation of private property or
constitutes an arbitrary or unreasonable infringement of property rights is void, because it is
repugnant to the constitutional guaranties of due process and equal protection of the laws.  (Citation
316

omitted)

This court in Adiong held that a restriction that regulates where decals and stickers should be posted
is "so broad that it encompasses even the citizen’s private property."  Consequently, it violates
317

Article III, Section 1 of the Constitution which provides thatno person shall be deprived of his
property without due process of law. This court explained:

Property is more than the mere thing which a person owns, it includes the right to acquire, use, and
dispose of it; and the Constitution, in the 14th Amendment, protects these essential attributes.

Property is more than the mere thing which a person owns. It is elementary that it includes the right
to acquire, use, and dispose of it. The Constitution protects these essential attributes of property.
Holden v. Hardy, 169 U.S. 366, 391, 41 L. ed. 780, 790, 18 Sup. Ct. Rep. 383. Property consists of
the free use, enjoyment, and disposal of a person’s acquisitions without control or diminution save
by the law of the land. 1 Cooley’s Bl. Com. 127. (Buchanan v. Warley 245 US 60 [1917]) 318

This court ruled that the regulation in Adiong violates private property rights:

The right to property may be subject to a greater degree of regulation but when this right is joined by
a "liberty" interest, the burden of justification on the part of the Government must be exceptionally
convincing and irrefutable. The burden is not met in this case.

Section 11 of Rep. Act 6646 is so encompassing and invasive that it prohibits the posting or display
of election propaganda in any place, whether public or private, except inthe common poster areas
sanctioned by COMELEC. This means that a private person cannot post his own crudely prepared
personal poster on his own front dooror on a post in his yard. While the COMELEC will certainly
never require the absurd, there are no limits to what overzealous and partisan police officers, armed
with a copy of the statute or regulation, may do.  Respondents ordered petitioners, who are private
319

citizens, to remove the tarpaulin from their own property. The absurdity of the situation is in itself an
indication of the unconstitutionality of COMELEC’s interpretation of its powers.

Freedom of expression can be intimately related with the right to property. There may be no
expression when there is no place where the expression may be made. COMELEC’s infringement
upon petitioners’ property rights as in the present case also reaches out to infringement on their
fundamental right to speech.

Respondents have not demonstrated thatthe present state interest they seek to promote justifies the
intrusion into petitioners’ property rights. Election laws and regulations must be reasonable. It must
also acknowledge a private individual’s right to exercise property rights. Otherwise, the due process
clause will be violated.

COMELEC Resolution No. 9615 and the Fair Election Act intend to prevent the posting of election
propaganda in private property without the consent of the owners of such private property.
COMELEC has incorrectly implemented these regulations. Consistent with our ruling in Adiong, we
find that the act of respondents in seeking to restrain petitioners from posting the tarpaulin in their
own private property is an impermissible encroachments on the right to property.
 V
Tarpaulin and its message are not religious speech

We proceed to the last issues pertaining to whether the COMELEC in issuing the questioned notice
and letter violated the right of petitioners to the free exercise of their religion.

At the outset, the Constitution mandates the separation of church and state.  This takes many
320

forms. Article III, Section 5 of the Constitution, for instance provides:

Section 5. No law shall be made respecting an establishment of religion, or prohibiting the free
exercise thereof. The free exercise and enjoyment of religious profession and worship, without
discrimination or preference, shall forever be allowed. Noreligious test shall be required for the
exercise of civil or political rights.

There are two aspects of this provision.  The first is the none stablishment clause.  Second is the
321 322

free exercise and enjoyment of religious profession and worship. 323

The second aspect is atissue in this case.

Clearly, not all acts done by those who are priests, bishops, ustadz, imams, or any other religious
make such act immune from any secular regulation.  The religious also have a secular existence.
324

They exist within a society that is regulated by law.

The Bishop of Bacolod caused the posting of the tarpaulin. But not all acts of a bishop amounts to
religious expression. This notwithstanding petitioners’ claim that "the views and position of the
petitioners, the Bishop and the Diocese of Bacolod, on the RH Bill is inextricably connected to its
Catholic dogma, faith, and moral teachings. . . ."325

The difficulty that often presents itself in these cases stems from the reality that every act can be
motivated by moral, ethical, and religious considerations. In terms of their effect on the corporeal
world, these acts range from belief, to expressions of these faiths, to religious ceremonies, and then
to acts of a secular character that may, from the point of view of others who do not share the same
faith or may not subscribe to any religion, may not have any religious bearing.

Definitely, the characterizations ofthe religious of their acts are not conclusive on this court.
Certainly, our powers of adjudication cannot be blinded by bare claims that acts are religious in
nature.

Petitioners erroneously relied on the case of Ebralinag v. The Division Superintendent of Schools of
Cebu  in claiming that the court "emphatically" held that the adherents ofa particular religion shall be
326

the ones to determine whether a particular matter shall be considered ecclesiastical in nature.  This
327

court in Ebralinagexempted Jehovah’s Witnesses from participating in the flag ceremony "out of
respect for their religious beliefs, [no matter how] "bizarre" those beliefsmay seem to others."  This
328

court found a balance between the assertion of a religious practice and the compelling necessities of
a secular command. It was an early attempt at accommodation of religious beliefs.

In Estrada v. Escritor,  this court adopted a policy of benevolent neutrality:

329

With religion looked upon with benevolence and not hostility, benevolent neutrality allows
accommodation of religion under certain circumstances. Accommodations are government policies
that take religion specifically intoaccount not to promote the government’s favored form of religion,
but to allow individuals and groups to exercise their religion without hindrance. Their purpose or
effect therefore is to remove a burden on, or facilitate the exercise of, a person’s or institution’s
religion. As Justice Brennan explained, the "government [may] take religion into account . . . to
exempt, when possible, from generally applicable governmental regulation individuals whose
religious beliefs and practices would otherwise thereby be infringed, or to create without state
involvement an atmosphere in which voluntary religious exercise may flourish." 330

This court also discussed the Lemon test in that case, such that a regulation is constitutional when:
(1) it has a secular legislative purpose; (2) it neither advances nor inhibits religion; and (3) it does not
foster an excessive entanglement with religion. 331

As aptly argued by COMELEC, however, the tarpaulin, on its face, "does not convey any religious
doctrine of the Catholic church."  That the position of the Catholic church appears to coincide with
332

the message of the tarpaulin regarding the RH Law does not, by itself, bring the expression within
the ambit of religious speech. On the contrary, the tarpaulin clearly refers to candidates classified
under "Team Patay" and "Team Buhay" according to their respective votes on the RH Law.

The same may be said of petitioners’ reliance on papal encyclicals to support their claim that the
expression onthe tarpaulin is an ecclesiastical matter. With all due respect to the Catholic faithful,
the church doctrines relied upon by petitioners are not binding upon this court. The position of the
Catholic religion in the Philippines as regards the RH Law does not suffice to qualify the posting by
one of its members of a tarpaulin as religious speech solely on such basis. The enumeration of
candidates on the face of the tarpaulin precludes any doubtas to its nature as speech with political
consequences and not religious speech.

Furthermore, the definition of an "ecclesiastical affair" in Austria v. National Labor Relations

Commission  cited by petitioners finds no application in the present case. The posting of the
333

tarpaulin does not fall within the category of matters that are beyond the jurisdiction of civil courts as
enumerated in the Austriacase such as "proceedings for excommunication, ordinations of religious
ministers, administration of sacraments and other activities withattached religious significance." 334

A FINAL NOTE

We maintain sympathies for the COMELEC in attempting to do what it thought was its duty in this
case. However, it was misdirected.

COMELEC’s general role includes a mandate to ensure equal opportunities and reduce spending
among candidates and their registered political parties. It is not to regulate or limit the speech of the
electorate as it strives to participate inthe electoral exercise.

The tarpaulin in question may be viewed as producing a caricature of those who are running for
public office.Their message may be construed generalizations of very complex individuals and party-
list organizations.

They are classified into black and white: as belonging to "Team Patay" or "Team Buhay."

But this caricature, though not agreeable to some, is still protected speech.

That petitioners chose to categorize them as purveyors of death or of life on the basis of a single
issue — and a complex piece of legislation at that — can easily be interpreted as anattempt to
stereo type the candidates and party-list organizations. Not all may agree to the way their thoughts
were expressed, as in fact there are other Catholic dioceses that chose not to follow the example of
petitioners.

Some may have thought that there should be more room to consider being more broad-minded and
non-judgmental. Some may have expected that the authors would give more space to practice
forgiveness and humility.

But, the Bill of Rights enumerated in our Constitution is an enumeration of our fundamental liberties.
It is not a detailed code that prescribes good conduct. It provides space for all to be guided by their
conscience, not only in the act that they do to others but also in judgment of the acts of others.

Freedom for the thought we can disagree with can be wielded not only by those in the minority. This
can often be expressed by dominant institutions, even religious ones. That they made their point
dramatically and in a large way does not necessarily mean that their statements are true, or that they
have basis, or that they have been expressed in good taste.

Embedded in the tarpaulin, however, are opinions expressed by petitioners. It is a specie of

expression protected by our fundamental law. It is an expression designed to invite attention, cause
debate, and hopefully, persuade. It may be motivated by the interpretation of petitioners of their
ecclesiastical duty, but their parishioner’s actions will have very real secular consequences.
Certainly, provocative messages do matter for the elections.

What is involved in this case is the most sacred of speech forms: expression by the electorate that
tends to rouse the public to debate contemporary issues. This is not speechby candidates or political
parties to entice votes. It is a portion of the electorate telling candidates the conditions for their
election. It is the substantive content of the right to suffrage.

This. is a form of speech hopeful of a quality of democracy that we should all deserve. It is protected
as a fundamental and primordial right by our Constitution. The expression in the medium chosen by
petitioners deserves our protection.

WHEREFORE, the instant petition is GRANTED. The temporary restraining order previously issued
is hereby made permanent. The act of the COMELEC in issuing the assailed notice dated February
22, 2013 and letter dated February 27, 2013 is declared unconstitutional.

SO ORDERED.

MARVIC M.V.F. LEONEN

Associate Justice

SEPARATE CONCURRING OPINION

CARPIO, J.:

I join the holding of the ponencia setting aside the "take down" Notices  sent by the Commission on
1

Elections (COMELEC) to petitioners. My concurrence, however, is grounded on the fact that such
notices, and the administrative and statutory provisions on which they are based, are content neutral
regulations of general applicability repugnant to the Free Speech Clause. Hence, I vote to strike
down not only the COMELEC notices but also Section 6(c) of COMELEC Resolution No. 9615,
dated 15 January 2013 (Resolution 9615), the regulatory basis for the COMELEC notices, and
Section 3.3 of Republic Act No. 9006 (RA 9006), the statutory basis for Resolution 9615.
Section 3.3 of RA 9006, Section 6(c) of Resolution 9615, and the COMELEC Notices Repugnant to
the Free Speech Clause

The COMELEC notices were based on Section 6(c) of Resolution 9615, dated 15 January 2013,
which provides:

Lawful Election Propaganda. x x x.

Lawful election propaganda shall include:

xxxx

c. Posters made of cloth, paper, cardboard or any other material, whether framed or posted, with an
area not exceeding two feet (2’) by three feet (3’). (Emphasis supplied)

This provision is, in turn, based on Section 3.3 of RA 9006:

Lawful Election Propaganda. x x x.

For the purpose of this Act, lawful election propaganda shall include:

xxxx

3.3. Cloth, paper or cardboard posters, whether framed or posted, with an area not exceeding two
(2) feet by three (3) feetx x x. (Emphasis supplied)

The COMELEC required petitioner Navarra to remove the streamer hanging within the compound of
the Roman Catholic church in Bacolod City because, at six by ten feet, it exceeded the maximum
size for election posters under Section 3.3 of RA 9006as implemented byResolution 9615.

Section 3.3 of RA 9006 and

Section 6(c) of Resolution 9615, Regulations of General Applicability

Section 3.3 of RA 9006 and its implementing rule for the 2013 elections, Section 6(c) of Resolution
9615, are regulations of general applicability, covering campaign speech of all – candidates, non-
candidates, political parties and non-political parties. This conclusion is compelled by the absence of
any provision in RA 9006, and indeed, in any related statutes, limiting their application only to the
campaign speech of candidates and political parties. On the contrary, the penal clause of RA 9006 is
couched in broad language encompassing within its ambit anyone who breaches its provisions:
"[v]iolation of th[e] Act and the rules and regulations of the COMELEC issued to implement [it] shall
be an election offense punishable under the first and second paragraphs of Section 264 of the
Omnibus Election Code."  Indeed, RA 9006 regulates a host of other campaign related acts, such as
2

the airing and printing of paid political ads (Section 3.4 in relation to Section 4) and the conduct of
election surveys (Section 5), which involve not only political parties and candidates but also other
individuals or entities who fall within the ambit of these provisions. RA 9006 is a generally applicable
law asmuch as the Omnibus Election Code is in the field of election propaganda regulation.

To hold the COMELEC without authority to enforce Section 3.3 of RA 9006 against non-candidates
and non-political parties, despite the absence of any prohibition under thatlaw, is not only to defeat
the constitutional intent behind the regulation of "minimiz[ing] election spending"  but also to open a
3
backdoor through which candidates and political parties can indirectly circumvent the myriad
campaign speech regulations the government adopted toensure fair and orderly elections.

"Election spending" refers not only to expenses of political parties and candidates but also to
expenses of their supporters. (Otherwise, all the limitations on election spending and on what
constitutes lawful election propaganda would be meaningless). Freeing non-candidates and non-
parties from the coverage of RA 9006 allows them to (1) print campaign ad banners and posters of
any size and in any quantity, (2) place TV and radio ads in national and local stations for any length
of time, and (3) place full-pageprint ads in broadsheets, tabloids and related media. Obviously,
printing posters of any size, placing full-page print ads, and running extended broadcast ads all
entail gargantuan costs.  Yet, under the ponencia’s holding, so long as these are done by non-
4

candidates and nonpolitical parties, the state ispowerless to regulate them.

The second evil which results from treating private campaign speech as absolutely protected (and
thus beyond the power of the state to regulate) is that candidates and political parties, faced with the
limitations on the size of print ads and maximum air time for TV and radio ads under RA 9006, will
have a ready means of circumventing these limitations by simply channeling their campaign
propaganda activities to supporters who do not happen to be candidates or political parties. Thus,
voters during an election season can one day wake up to find print media and broadcast airwaves
blanketed with political ads, running full-page and airing night and day, respectively, to promote
certain candidates, all paid for by a non-candidate billionaire supporter. Such bifurcated application
of RA 9006’s limitations on the sizes of print ads (Section 6.1 ) and maximum broadcast time for TV
5

and radio campaign ads (Section 6.2 ) defeats the purpose of regulating campaign speech.
6

Section 3.3 of RA 9006 and Section 6(c) of Resolution 9615, Content-Neutral Regulations which
Impermissibly Restrict Freedom of Speech

Section 3.3 of RA 9006 and Section 6(c) of Resolution 9615 regulate campaign posters by limiting
their sizeto two by three feet, regardless of what is printed on the face of the posters. These
provisions are classic examples of content-neutral regulations which restrict the manner by which
speech is relayed but not the content of what is conveyed. Thus, the notices sent by the COMELEC
to petitioner Navarra required the latter to remove the streamer in question not because it contained
a message favoring and disfavoring certain senatorial candidates who ran in the last elections but
because the streamer, taking into account existing law, was "oversized." Testing the validity of
content-neutral regulations like the statutory and administrative provisions in question, requires
analysis along four prongs, namely, whether (1) they are within the constitutional power of the
government; (2) they further an important or substantial governmental interest; (3) the governmental
interest is unrelated to the suppression of free expression; and (4) the incidental restriction on
freedoms of speech, expression and press is no greater than is essential to the furtherance of that
interest.  The level of interest required of the government to justify the validity of content-neutral
7

regulations – "important or substantial" - is lower than the most stringent standard of "compelling
interest" because such regulations are "unrelated to the suppression of free expression."  Proof of
8

compelling interest is required of the government only in the scrutiny of content-based regulations
which strike at the core of the freedoms of speech, of expression and of the press protected by the
FreeSpeech Clause.  Nevertheless, content-neutral regulations may still fail constitutional muster if
9

"the incidental restriction on [expressive] freedoms is x x x greater than is essential to the

furtherance" of the proffered government interest. 10

No serious objections can be raised against the conclusion that it was within the government’s
constitutional powers to adopt Section 3.3 of RA 9006 and Section 6(c) of Resolution 9615. Nor is
there any quarrel that these regulations advance the important and substantial government interests
of "minimiz[ing] election spending" and ensuring orderly elections in light of unmistakable connection
between the size of campaign posters, on the one hand, and the overall cost of campaigns and
orderly dissemination of campaign information, on the other hand. As these interests relate to the
reduction of campaign costs and the maintenance of order, they are also "unrelated to the
suppression of free expression." It is in the extent of the incidental restriction wrought by these
regulations on expressive freedoms where they ran afoul with the Free Speech Clause.

As crafted, Section 3.3 of RA 9006 provides a uniform and fixed size for all campaign posters, two
by three feet,  irrespective of the location where the posters are placed in relation to the distance
11

from the nearest possible viewer. Thus, whether placed at a common poster area, at the gate of a
residential house or outside a 30th floor condominium unit, the campaign poster must be of the
same size. However, when placed at the 30th floor of a condominium, the letters in a two by three
feet poster would be so small that they would no longer be readable from the ground or from the
street.

A space of two by three feet can only accommodate so much number of letters of a particular size to
be reasonably visible to the reader standing from a certain distance. Even if only the name of a
single candidate, the position he seeks, and his party affiliation are printed on the poster, the limited
space available allows the printing of these data using letters of relatively small size, compared with
those printed in a larger canvass. The size of the letters inevitably shrinks ifmore names and data
are added to the poster.

The practical effect of the fixed-size rule under Section 3.3 of RA 9006 (and its implementing rule) is
to further narrow the choices of poster locations for anyone wishing to display them in any of the
venues allowed by law.  Voters who wish to make known to the public their choice of candidates (or
12

for that matter, candidates who wish to advertise their candidacies) through the display of posters
are precluded from doing so from certain areas not because these areas are off-limits but because,
for reasons of geography vis-a-vis the size of the poster, their contents simply become illegible.
Such restriction on campaign speech appears to me to be "greater than is essential" to advance the
important government interests of minimizing election spending and ensuring orderly elections. To
satisfy the strictures of the Free Speech Clause, Congress needs to craft legislation on the sizing of
campaign posters and other paraphernalia with sufficient flexibility to address concerns inherent in
the present fixed-dimension model. Accordingly, I vote to GRANT the petition and DECLARE
UNCONSTITUTIONAL (1) Section 3.3 of Republic Act No. 9006; (2) Section 6(c) of COMELEC
Resolution No. 9615, dated 15 January 2013; and (3) the notices, dated 22 February 2013 and 27
February 2013, of the Commission on Elections for being violative of Section 4, Article III of the
Constitution.

ANTONIO T. CARPIO
Associate Justice

SEPARATE CONCURRING OPINION

PERLAS-BERNABE, J.:

I concur with the ponencia that the COMELEC's Notice to Remove Campaign Materials dated
February 22, 2013 and Letter dated February 27, 2013 (the COMELEC issuances) ordering the
immediate removal of the tarpaulin subject of this case are null and void for being unreasonable
restrictions on free speech. I, however, disagree in the approach the ponencia takes in decreeing the
same. This stems from my view that the said COMELEC issuances constitute content-neutral and
not content-based regulations as the ponencia so holds, reasoning that "the content of the tarpaulin
is not easily divorced from the size of its medium."  In this regard, I agree with the opinion of Senior
1

Associate Justice Antonio T. Carpio that these issuances, which effectively limit the size of the
tarpaulin, are examples of content-neutral regulations as they restrict only the manner by which
speech is relayed but not the content of what is conveyed.  I find this to be true since no peculiar
2

reason was proffered by the petitioners behind the sizing of their poster - say, to put emphasis on a
particular portion of the text or to deliberately serve as some sort of symbolic allusion. The tarpaulin's
size links, as it appears, only to the efficiency of the communication, following the logic that a larger
size makes them more visible. This, to my mind, merely concerns the manner by which the speech
is communicated, and not its content. In the same vein, it is my observation that sensible use of time
and place (both of which are generally recognized as incidents of speech, akin to how I perceive the
poster's size) may also affect the efficiency of communication: perceptibly, a message conveyed at a
time and place where people are most likely to view the same may have the effect of making the
communication more "efficient." The distinction between a content-neutral regulation and a content-
based regulation, as enunciated in the case of New sounds Broadcasting Network, Inc. v. Hon.
Dy,  is as follows: [J]urisprudence distinguishes between a content-neutral regulation, i.e., merely
3

concerned withthe incidents of the speech, or one that merely controls the time, place or manner,
and under well-defined standards; and a content-based restraint or censorship, i.e., the restriction is
based on the subject matter of the utterance or speech. 4

x x x x (Enphases supplied)

Since the sizing regulations, i.e., the COMELEC issuances, are concerned only with an incident of
speech, that is, the manner by which the speech was communicated, I thus respectfully submit that
they should have been characterized by the ponencia as content-neutral, and not content-based
regulations. As I see it, the medium here is not the message.

On the premise that the COMELEC issuances constitute contentneutral regulations, the method of
constitutional scrutiny which should be applied would then be the intermediate scrutiny test, and not
the strict scrutiny test which the ponencia necessarily utilized due to its content-based classification.

As comprehensively explained in the seminal case of Chavez v. Gonzales,  "[w]hen the speech
5

restraints take the form of a content-neutral regulation, only a substantial governmental interestis
required for its validity. Because regulations of this type are not designed to suppress any particular
message, they are not subjectto the strictest form of judicial scrutiny but an intermediate approach
— somewhere between the mere rationality that is required of any other law and the compelling
interest standard applied to content-based restrictions. The testis called intermediate because the
Court will not merely rubberstamp the validity of a law but also require that the restrictions be
narrowly-tailored to promote an important or significant governmental interest that is unrelated to the
suppression of expression. The intermediate approachhas [thus] been formulated in this manner: A
governmental regulation is sufficiently justified if it is within the constitutional power of the
Government, if [(a)] it furthers an important or substantial governmental interest; [(b)]the
governmental interest is unrelated to the suppression of free expression; and [(c)]the incident
restriction on alleged [freedom of speech and expression] is no greater than is essential to the
furtherance of that interest."
6

"On the other hand, a governmental action that restricts freedom of speech or of the press based on
contentis given the strictest scrutinyin light of its inherent and invasive impact. Only when the
challenged act has overcome the clear and present danger rule will it pass constitutional muster,
with the government having the burden of overcoming the presumed unconstitutionality." 7

Given the peculiar circumstances of this case, it is my view that the COMELEC issuances do not
advance an important or substantial governmental interest so as to warrantthe restriction of free
speech. The subject tarpaulin cannot be classifiedas the usual election propaganda directly
endorsing a particular candidate’s campaign. Albeit with the incidental effect of manifesting
candidate approval/disapproval, the subject tarpaulin, at its core, reallyasserts a private entity’s, i.e.,
the Diocese’s, personal advocacy on a social issue, i.e., reproductive health, in relation to the
passage of Republic Act No. 10354,  otherwise known as the "Responsible Parenthood and
8

Reproductive Health Act of 2012." What is more is that the tarpaulin, although open to the public’s
view, was posted in purely private property by the Diocese’s own volition and without the prodding or
instruction of any candidate. In Blo Umpar Adiong v. COMELEC (Adiong),  the Court nullified the
9

prohibition on the posting of decals and stickers in "mobile" places like cars and other moving
vehicles as the restriction did not endanger any substantial government interest, observing, among
others, that "the freedom of expression curtailed by the questioned prohibition is not so much that of
the candidate or the political party."  The Court rationalized that:
10

The regulation strikes at the freedomof an individual to express his preference and, by displaying it
on his car, to convince others to agree with him. A sticker may be furnished by a candidate but once
the car owner agrees to have it placed on his private vehicle, the expression becomes a statement
by the owner,primarily his own and not of anybody else. If, in the National Press Club[v. Comelec]
case [G.R. No. 102653, March 5, 1992, 207 SCRA 1] , the Court was careful to rule out restrictions
on reporting by newspapers or radio and television stations and commentators or columnists as long
as these are not correctly paid-for advertisements or purchased opinions[,] with less reason can we
sanction the prohibition against a sincere manifestation of support and a proclamation of belief by an
individual person who pastes a sticker or decal on his private property.  (Emphases supplied)
11

Considering the totality of the factors herein detailed, and equally bearing in mind the discussions
made in Adiong, I submit that the COMELEC issuances subjectof this case do not satisfy the
substantial governmental interest requisite and, hence, fail the intermediate scrutiny test. Surely,
while the COMELEC’s regulatory powers ought to be recognized, personal advocacies pertaining to
relevant social issues by a private entity within its own private property ought to fall beyond that
broad authority, lest we stifle the value of a core liberty.

ACCORDINGLY, subject to the above-stated reasons, I concur with the ponencia and vote to
GRANT the petition.

ESTELA M. PERLAS-BERNABE
Associate Justice

DISSENTING OPINION

BRION, J.:

Prefatory Statement

The present case asks us to deterrrline whether respondent Commission on Elections ( Comelec)
should be prevented from implementing the size restrictions in Republic Act No. 9006 (RA 9006,
otherwise known as the Fair Elections Act) to the six by ten feet tall tarpaulin posted by petitioner
Diocese of Bacolod containing the message "RH LAW IBASURA" during the election period.

The ponente opts to give due course to the petition despite obvious jurisprudential, practical and
procedural infirmities that will prejudicially impact on established rules to the detriment of the
electoral process; that confuses the lines between right of free speech and election propaganda; and
that inordinately disregards constitutional electoral values through its misplaced views on the right to
free speech – a right that can exist only if this country continues to be a democratic one where
leaders are elected under constitutionally established electoral values and orderly processes.
Thus, the ponente declares as unconstitutional Section 3.3 of RA 9006, and its implementing rule,
Section 6(c) of Comelec Resolution No. 9615, for violating the freedom of speech. In so doing, it
classifies the size restrictions in RA 9006 as a content-based regulation and applied the strict
scrutiny test to a regulation of a poster's size.

In my view, the petition prematurely availed of the Court's power of judicial review BY OPENLY
DISREGARDING ESTABLISHED COMELEC PROCESSES BY BYPASSING THE COMELEC EN
BANC. This is a legal mortal sin that will sow havoc in future cases before this Court. The petition
consequently failed to show any prima facie case of grave abuse of discretion on the part of the
Comelec, as it had not yet finally decided on its course of action.

Most importantly, the issues the petition presents have now been MOOTED and do not now present
any LIVE CONTROVERSY. The Court will recall that we immediately issued a temporary restraining
order to halt further Comelec action, so that the petitioner was effectively the prevailing party when
the elections - the critical time involved in this case - took place. Subsequently, the interest
advocated inthe disputed tarpaulin was decided by this Court to the satisfaction of the public at
large, among them the Church whose right to life views prevailed. THESE ARE CIRCUMSTANCES
THAT SHOULD DISSUADE THIS COURT FROM RULING ON A CASE THAT WEIGHS THE
RIGHTS OF FREE SPEECH AND DEMOCRATIC ELECTORAL VALUES.

A point that should not be missed is that the disputed tarpaulin is covered by regulations under RA
9006, asit falls within the definition of election propaganda. The key in determining whether a
material constitutes as election propaganda lies in whether it is intended to promote the election of a
list of candidates it favors and/or oppose the election of candidates in another list. RA 9006 did not,
as the ponente infers, require that the material be posted by, or in behalf of the candidates and/or
political parties.

Lastly, the assailed law is a valid content-neutral regulation on speech, and is thus not
unconstitutional. The assailed regulation does not prohibit the posting of posters; does not limit the
number of allowable posters that may be posted; and does not even restrict the place where election
propaganda may be posted. It only regulates the posters’ size.

To reiterate, our decision in the present case sets the tone in resolving future conflicts between the
values before us. While freedom of speech is paramount, it does have its limits. We should thus be
careful in deciding the present case, such that in recognizing one man’s right to speak, we do not
end up sacrificing the ideals in which our republican, democratic nation stands upon. IN SUM, THE
MORE PRUDENT APPROACH FOR THIS COURT IS TO SIMPLY DISMISS THE PETITION FOR
MOOTNESS AND PROCEDURAL INFIRMITIES, AND TO PROCEED TO THE WEIGHING OF
CONSTITUTIONAL VALUES IN A FUTURE LIVE AND MORE APPROPRIATE CASE WHERE OUR
RULING WILL CLARIFY AND ELUCIDATE RATHER THAN CONFUSE.

I. Factual Antecedent

This case reached us through a special civil action for certiorari and prohibition with application for
preliminary injunction and temporary restraining order under Rule 65 of the Rules of Court. The
petition assails the Comelec’s Notice to Remove Campaign Materials that it issued through Election
Officer Mavil V. Majarucon on February 22, 2013, and through Comelec Law Director Esmeralda
Amora-Ladra on February 27, 2013.

The assailed notices direct the petitioners to remove the tarpaulin (subject poster) they placed within
a private compound housing at the San Sebastian Cathedral of Bacolod on February 21, 2013 for
exceeding the size limitations on election propaganda. The notice dated February 27, 2013 warned
the petitioners that the Comelec Law Department would be forced to file an election offense case
against them if the subject poster would not be removed.

The petitioners responded by filing the present petition assailing the two notices the Comelec sent to
them on the ground that the poster is not a campaign material, and is hence outside the coverage of
Comelec Resolution No. 9615. The petitioners also supported their position by invoking their rights
to freedom of expression and freedom of religion.

II. Procedural Arguments

A. Reviewability of the assailed notices as an administrative act of the Comelec

The ponente posits that a judicial review of the size limitations under RA 9006 is necessary, as it has
a chilling effect on political speech. According to the ponente, the present petition has triggered the
Court’s expanded jurisdiction since the Comelec’s letter and notice threaten the fundamental right to
speech.

To be sure, the concept of judicial power under the 1987 Constitution recognizes its (1)traditional
jurisdiction to settle actual cases or controversies; and (2)expanded jurisdiction to determine whether
a government agency or instrumentality committed a grave abuse of discretion.  The exercise of
1

either power could pave the way to the Court’s power of judicial review, the Court’s authority to strike
down acts of the legislative and/or executive, constitutional bodies or administrative agencies that
are contrary to the Constitution.2

Judicial review under the traditional jurisdiction of the Court requires the following requirements of
justiciability: (1) there must be an actual case or controversy 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 itsenforcement; (3) the question of
constitutionality must be raised at the earliest opportunity; and (4) the issue of constitutionality must
be the very lis motaof the case. 3

Failure to meet any of these requirements justifies the Court’s refusal to exercise its power of judicial
review under the Court’s traditional power. The Court, however, has, inseveral instances, opted
torelax one or more of these requirements to give due courseto a petition presenting issues of
transcendental importance to the nation.

In these cases, the doctrine of transcendental importance relaxes the standing requirement, and
thereby indirectly relaxes the injury embodied in the actual case or controversy requirement. Note at
this point that an actual case or controversy is present when the issues it poses are ripe for
adjudication, that is, when the act being challenged has had a direct adverse effect on the individual
challenging it. Standing, on the other hand, requires a personal and substantial interest manifested
through a direct injury that the petitioner has or will sustain as a result of the questioned act.

Thus, when the standing is relaxed because of the transcendental importance doctrine, the
character of the injury presented to fulfill the actual case or controversy requirementis likewise
tempered. When we, for instance, say that the petitioners have no standing as citizens or as
taxpayers but we nevertheless give the petition due course, we indirectly acknowledge that the injury
that they had or will sustain is not personally directed towards them, but to the more general and
abstract Filipino public.
A readily apparent trend from jurisprudence invoking the transcendental importance doctrine shows
its application in cases where the government has committed grave abuse of discretion amounting to
lack of, or excess of jurisdiction. This strong correlation between the exercise of the Court’s
expanded jurisdiction and its use of the transcendental importance doctrine reflects the
former’sdistinct nature and origin. The Court’s expanded jurisdiction roots from the constitutional
commissioners’ perception of the political question doctrine’s overuse prior to the 1987 Constitution,
a situation that arguably contributed to societal unrest in the years preceding the 1987 Constitution.

The political question doctrine prevents the Court from deciding cases that are of a political nature,
and leaves the decision to the electedofficials of government. In other words, the Court, through the
political question doctrine, defers to the judgment and discretion of the Executive and Legislature,
matters that involve policy because they are the people’s elected officials and hence are more
directly accountable to them.

The 1987 Constitution, recognizing the importance of the Court’s active role in checking abuses in
government, relaxed the political question doctrine and made it a duty upon the Court to determine
whether there had been abuses in the government’s exercise of discretion and consequently nullify
such actions that violate the Constitution albeitin the narrow and limited instances of grave abuse of
discretion. Thus, when a government agency’s exercise of discretion is so grave as to amount to an
excess or lack of jurisdiction, it becomes the duty to step in and check for violations of the
Constitution. In these instances, the political question doctrine cannot prevent the Court from
determining whether the government gravely abused its jurisdiction, against the back drop of the
Constitution.

Necessarily, the government’s actof grave abuse of discretion, more so if it has nationwide impact,
involves a matter of transcendental importance to the nation. On the other hand, whenthe
government’s act involves a legitimate exercise of discretion, or amounts to an abuse of discretion
that is not grave, then the need to temper standing requirements through the transcendental
importance doctrine is not apparent.

This correlation between the Court’s use of the transcendental doctrine requirement and its eventual
exercise of the power of judicial review under its expanded jurisdiction warrants a review, prima
facie, of whether there had been a grave abuse of discretion on the part of government. Where there
is a showing prima facieof grave abuse, the Court relaxes its locus standi requirement (and indirectly
its actual case or controversy requirement) through the transcendental importance doctrine. Where
there is no showing of prima faciegrave abuse, then the requirements of justiciability are applied
strictly.

Thus, translated in terms of the Court’s expanded jurisdiction, the actual case or controversy
requirement is fulfilled by a prima facieshowing of grave abuse of discretion. This approach reflects
the textual requirement of grave abuse of discretion in the second paragraph of Article VIII, Section 1
of the 1987 Constitution.As I have earlier pointed out in my separate opinion in Araullo v. Aquino,
justiciability under the expanded judicial power expressly and textually depends only on the
presence or absence of grave abuse of discretion, as distinguished from a situation where the issue
of constitutional validity is raised within a "traditionally" justiciable case which demands that the
requirement of actual controversy based on specific legal rights must exist.

That a case presents issues of transcendental importance, on the other hand, justifies direct resort
to this Court without first complying with the doctrine of hierarchy of courts.

A review of the petition shows that it has failed to show a prima facie case of grave abuse of
discretion on the part of the Comelec.
The petition characterizes the noticesas administrative acts of the Comelec that are outside the
latter’s jurisdiction to perform. The Comelec’s administrative functionrefers to the enforcement and
administration of election laws. Under the Section 2(6), Article IX-C of the Constitution, the Comelec
is expressly given the power to"prosecute cases of violations of election laws, including acts or
omissions constituting election frauds, offenses, and malpractices." The constitutional grant to the
Comelec of the power to investigate and to prosecute election offenses as an adjunct to the
enforcement and administration of all election laws is intended to enable the Comelec to effectively
ensure to the people the free, orderly, and honest conduct of elections. 4

This administrative function is markedly distinct from the Comelec’s two other powers as an
independent government agency established under the 1987 Constitution, i.e., its quasi-legislative
powerto issue rules and regulations to implement the provisions of the 1987 Constitution,  the 5

Omnibus Election Code,  and other election laws;  and its quasi-judicial powerto resolve
6 7

controversies arising from the enforcement of election laws, and to be the sole judge of all pre-
proclamation controversies and of all contests relating to the elections, returns, and qualifications. 8

The nature of the assailed action of the Comelec is essential to determine the proper remedy by
which a review of its actions can reach this Court. As a general rule, an administrative order of the
Comelec is not an appropriate subject of a special civil action for certiorari. 9

Through jurisprudence, the Court has clarified that the petition for certiorari under Rule 64 in relation
to Rule 65 of the Rules of Court covers only the Comelec’s quasi-judicial functions.  By reason of its
10

distinct role in our scheme of government, the Comelec is allowed considerable latitude in devising
means and methods to ensure the accomplishment of the great objective for which it was created –
free, orderly and honest elections.  The Court recognizes this reality and concedes that it has no
11

general powers of supervision over the Comelec except those specifically granted by the
Constitution, i.e., to review its decisions, orders and rulings within the limited terms of a petition for
certiorari.
12

Thus, the Court reviews Comelec’s administrative acts only by way of exception, when it acts
capriciouslyor whimsically, with grave abuse of discretion amounting to lack or excess of jurisdiction.
Necessarily, this invokes the Court’s expanded jurisdiction under the second paragraph of Article
VIII, Section 1. That there is an alleged grave abuse of discretion on the part of Comelec, however,
does not automatically mean that the petition should be given due course. It has to meet the
requirements of justiciability which, under the terms of the Court’s expanded judicial power, has
been translated to mean a prima facie showing of a governmental entity, office or official granted
discretionary authority to act and that this authority has been gravely abused. There can be no prima
facie showing of grave abuse of discretion unless something has already been done  or has taken 13

place under the law  and the petitioner sufficiently alleges the existence of a threatened or
14

immediate injury to itself as a result of the gravely abusive exercise of discretion. 15

In the case of an administrative agency (more so, if it involves an independent constitutional body), a
matter cannot be considered ripe for judicial resolution unless administrative remedies have been
exhausted.  Judicial review is appropriate only if, at the very least, those who have the power to
16

address the petitioner’s concerns have been given the opportunity to do so.In short, the requirement
of ripeness does not become less relevant under the courts’ expanded judicial power.

In this light, I find it worthy to note that that the petition challenges RA 9006 and Comelec Resolution
No. 9615 not because its text, on its face, violates fundamental rights,  but because Comelec
17

erroneously applied an otherwise constitutional law. Comelec’s administrative act of including the
petitioners’ poster within the coverage of Comelec Resolution No. 9615 allegedly violated their
constitutional rights to freedom of speech and religion.
This issue could have been best decided by the Comelec, had the petitioners followed the regular
course ofprocedure in the investigation and prosecution of election offense cases. The assailed
action of Comelec, after all, contained a warning against possible prosecution for an election offense
that would have had to undergo an entire process before it is filed before the proper tribunal. This
process allows suspected election offenders to explain why an election offense should not be filed
against them, and for the Comelec to consider the explanation.

Comelec Resolution No. 9386 (Rules of Procedure in the Investigation and Prosecution of Election
Offense Cases in the Commission on Elections), in particular, provides that once a complaint is
initiated, an investigating officer would have to conduct a preliminary investigation to determine
whether it warrants prosecution. At this stage, the respondent(s) to the complaint may submit his
counter-affidavit and other supporting documents for the complaint’s dismissal.  The investigating
18

officer may also hold a hearing to propound clarificatory questions to the parties and their witnesses.
The parties may even submit questions to the investigating officer, which the latter may propound to
the parties or parties or witnesses concerned. 19

After preliminary investigation, the investigating officer has two options: if he finds no cause to hold
the respondent for trial, he shall recommend the dismissal of the complaint; otherwise, he shall
prepare a recommendation to prosecute, and the corresponding Information.  Whichever course he
20

takes, the investigating officer is required to forward the records of the case to the Commission En
Banc (in cases investigated by the Law Department or the Regional Election Director) or to the
Regional Election Director (in cases investigated by the Assistant Regional Election Director,
Regional Election Attorney, or Provincial Election Supervisor or any of the Commission's lawyers
assigned in the field office) for their approval or disapproval. In the latter case, the resolution of the
Regional Election Director may be subject of a motion for reconsideration and, if need be, a petition
for review with the COMELEC En Banc. 21

In the case before us, the petitioners ask us to exercise our power of judicial review over the action
of the COMELEC’s Election Officer, Mavil Majarucon, who ordered the petitioners to remove the
subject poster, and over the action of Director Esmeralda Amora-Ladra of the Comelec Law
Department, reiterating the previous order with a warningof possible criminal prosecution – without
any other action by the Comelec at its higher levels as the established procedures provide.

Contrary to the petitioners’ allegation that they "have no other plain, speedy, and adequate remedy,
the above-described procedure before the Comelec clearly shows otherwise. By immediately
invoking remedies before this Court, the petitioners deprived the Comelec itself of the opportunity to
pass upon the issue before us– a procedure critical in a certiorari proceeding. In short, the direct
invocation of judicial intervention is clearly premature.

In the interest of orderly procedure and the respect for an independent constitutional commission
such as the Comelec, on matters that are prima faciewithin its jurisdiction, the expansion of the
power of judicial review could not have meant the power to review any and all acts of a department
or office within an administrative framework.

While I agree with the ponencia that Section 2(3), Article IX-C does not grant the Comelec the power
to determine "any and all" issues arising during elections, the Comelec under this provision can
certainly decide whether to initiate a preliminary investigation against the petitioners. It can decide
based on the arguments and pieces of evidence presented during the preliminary investigation
―whether there is probable cause to file an information for an election offense against the
petitioners. This determination is even subject to review and reconsideration, as discussed in the
above-described process.
To be sure, this is a matter that the Comelec should have been given first an opportunity to resolve
before the petitioners directly sought judicial recourse. While the freedoms invoked by the petitioners
certainly occupy preferential status in our hierarchy of freedoms, the Court cannot second guess
what the Comelec’s action would have been, particularly when the matters before us are nothing
more than the Election Officer Majarucon’s notice and the Director Amora-Ladra’s order.

In these lights, I see no occasion to discuss the traditional rules on hierarchy of courtsand
transcendental importance, which only concern the propriety of a direct resort to the Supreme Court
instead of the lower courts, and not the question of whether judicial intervention is proper in the first
place. As I concluded above, the direct invocation of judicial intervention is as yet premature.

B. The petition is already moot and academic

Aside from the petition’s premature recourse to the Court, the legal issues it presents has already
become moot and academic.

A petition becomes moot and academic when it "ceases to present a justiciable controversy by virtue
of supervening events, so that a declaration thereon would be of no practical use or value."  A case
22

becomes moot and academic when there is no more actual controversy between the parties, or no
useful purpose can be served in passing upon the merits. 23

The passage of the election period has effectively made the issues in the present petition moot and
academic. Any decision on our part – whether for the validity or invalidityof the Comelec’s actions
would no longer affect the rights of either the petitioners to post the subject posters, or the Comelec
to prosecute election offenses.

The present petition had been filed to assail an administrative act of the Comelec, which warned the
petitioners of a possible prosecution should they continue posting election propaganda that do not
comply with the size requirements under RA 9006. The Letter issued by Comelec Director Amora-
Ladra, in particular, advised compliance with the size requirements, otherwise it would file an
election case against them. Thus, as per the Comelec’s Letter, prosecution of the offense would
commence only if the petitioners continued posting the poster without complying with the size
requirements. Had the petitioners complied with the size requirements for their poster, no election
offense would have been filed against them.

The petitioners, upon receipt of the letter, immediately filed a petition for certioraribefore the Court
the next day. Five days later, they were granted a temporary restraining order that forbade the
Comelec from enforcing its Notice and Letter. At this point, the Comelec had not yet implemented
the warning it gave the petitioners in its Letter. Thus, the temporary restraining order effectively
prevented the Comelec’s Letter from being enforced. At the time the TRO prevented the
enforcement of the Comelec’s Letter, the petitioners could have still exercised the choice of
complying with the Comelec’s Notice and Letter, and hence avoided the initiation of an election
offense against them. This choice had never been exercised by the petitioners as the temporary
restraining order forbade the Notice and Letter’s implementation, and effectively allowed them to
continue posting the subject posters without threat of prosecution.

In the mean time, the election period, during which the election offense of illegally posting election
propaganda may be committed and prosecuted, came to pass. Thus, our decision in this case, and
the consequent lifting of the temporary restraining order against the Comelec, could no longer affect
the rights of the petitioners. At this point in time, our ruling regarding the validity of the Comelec’s
Notice and Letter (whether for its validity or invalidity) would no longer have any impact on the
petitioners and respondent.
To be sure, the issue of the constitutionality of the poster’s size limitations, as well as the inclusion of
speech of private individuals are issues capable of repetition, as elections are held every three
years.

But while these issues are capable of repetition, they most certainly cannot escape review. The
administrative process outlined in Comelec Resolution No. 9615 provides a process through which
the Comelec may decide these issues with finality. After the Comelec had been allowed to exercise
its jurisdiction to the fullest, judicial review of its actions may be availed of through a petition for
certiorari under the Rules of Court. At that point, the issues would certainly no longer be premature.

III. Substantive Arguments:

Section 3.3 of RA 9006 and

Section 6(c) of Comelec Resolution No. 9615 are valid content-neutral regulations on election
propaganda

Even assuming that the Court can give due course to the present petition, I strongly disagree with
the ponencia’s finding that the notices, as well as the regulations they enforce,are unconstitutional
for violating the petitioners’ right to free speech.

According to the ponencia, the Comelec’s attempt to enforce Comelec Resolution No. 9615 is a
content-based regulation that is heavily burdened with unconstitutionality. Even assuming that the
letter and notice contain a content-neutral regulation, the ponencia asserts that it still fails to pass the
intermediate test of constitutionality.

The letter and notice sent by the Comelec’s legal department both sought to enforce the size
restrictions on election propaganda applicable to the subject poster. The Comelec advised the
petitioners to comply with these size restrictions or take down the poster, or else it would be
compelled to file an election offense against him. Thereby, the Comelec recognized that it would not
have any cause of action or complaint if only the petitioners would comply with the size restriction.

The size restrictions are found in Comelec Resolution No. 9615, which implements Section 3 of the
Fair Elections Act. Section 3.3 of the Fair Elections Act and Section 6(c) of Comelec Resolution No.
9615 mandate that posters containing election propaganda must not exceed an area of two by three
feet.

Three queries must be resolved in determining the legality of Comelec’s letter and notice:

First, whether the subject poster falls within the election propaganda that may be regulated by the
Comelec;

Second, whether the size restrictions in Comelec Resolution No. 9615 and RA 9006 impose content-
neutral or content-based restrictions on speech; and

Third, whether this regulation pass the appropriate test of constitutionality.

A. The subject poster falls within the regulated election propaganda in RA 9006 and Comelec
Resolution No. 9615

The subject poster carries the following characteristics:

 (1) It was postedduring the campaign period, by private individuals and within a private
compound housing at the San Sebastian Cathedral of Bacolod.

(2) It was posted with another tarpaulin with the message "RH LAW IBASURA."

(3) Both tarpaulins were approximately six by ten feet in size, and were posted in front of the
Cathedral within public view.

(4) The subject poster contains the heading "conscience vote" and two lists of senators and
members of the House of Representatives. The first list contains names of legislators who
voted against the passage of the Reproductive Health Law, denominated as Team Buhay.
The second listcontains names of legislators who voted for the RH Law’s passage,
denominated as "Team Patay." The "Team Buhay" list contained a check mark, while the
Team Patay list an X mark. All the legislators named in both lists were candidates during the
2013 national elections.

(5) It does not appear to have been sponsored or paid for by any candidate.

The content of the tarpaulin, as well as the timing of its posting, makes it subject of the regulations in
RA 9006 and Comelec Resolution No. 9615.

Comelec Resolution No. 9615 contains rules and regulations implementing RA 9006 during the 2013
national elections. Section 3 of RA 9006 and Section 6 of Comelec Resolution No. 9615 seek to
regulate election propaganda, defined in the latter as:

The term "political advertisement" or "election propaganda" refers to any matter broadcasted,
published, printed, displayed or exhibited, in any medium, which contain the name, image, logo,
brand, insignia, color motif, initials, and other symbol or graphic representation that iscapable of
being associated with a candidate or party, and is intended to draw the attention of the public or a
segment thereof to promote or oppose, directly or indirectly, the election of the said candidate or
candidates to a public office. In broadcast media, political advertisements may take the form of
spots, appearances on TV shows and radio programs, live or taped announcements, teasers, and
other forms of advertising messages or announcements used by commercial advertisers. Political
advertising includes matters, not falling within the scope of personal opinion, that appear on any
Internet website, including, but not limited to, social networks, blogging sites, and microblogging
sites, in return for consideration, or otherwise capable of pecuniary estimation. [Emphasis supplied]

Based on these definitions, the subject poster falls within the definition of election propaganda. It
named candidates for the 2013 elections, and was clearly intended to promote the election of a list
of candidates it favors and oppose the election of candidates in another list. It wasdisplayed in public
view,and as such is capable of drawing the attention of the voting public passing by the cathedral to
its message.

That the subject poster was posted by private individuals does not take it away from the ambit of the
definition. The definition found in Comelec Resolution No. 9615 does not limit election propaganda
to acts by or in behalf of candidates.

Neither does RA 9006 contain such restrictions: a look at what constitutes lawful election
propaganda in RA 9006 also does not specify by whom or for whom the materials are posted, viz.:
Sec. 3. Lawful Election Propaganda. - Election propaganda whether on television, cable television,
radio, newspapers or any other medium is hereby allowed for all registered political parties, national,
regional, sectoral parties or organizations participating under the partylist elections and for all bona
fide candidates seeking national and local elective positions subject to the limitation onauthorized
expenses of candidates and political parties, observance of truth in advertising and to the
supervision and regulation by the Commission on Elections (COMELEC). x x x [Emphasis supplied]

Further, lawful election propaganda under the Omnibus Election Code, which RA 9006 cites as part
of its definition of what constitutes lawful propaganda, does not limit the materials enumerated
therein to those posted by or in behalf of candidates.  Neither does the definition of what constitutes
24

an election offense limit the unlawful posting of election propaganda to those posted by, or in behalf
of candidates and their parties.25

Thus, I find it clear that the law does not distinguish between materials posted by or in behalf of
candidates or by private individuals who have no political affiliation. When the law does not
distinguish, neither should we.

Had Congress intended to limit its definition of election propaganda to materials posted for or in
behalf of candidates, it could have so specified. Notably, Section 9  on the Posting of Campaign
26

Materials indicates who the Comelec may authorize to erect common poster areas for campaign
materials in publicplaces. It does not, as the ponencia makes it appear, limit the definition of election
propaganda to those posted by candidates and parties.

The title of Section 9 uses the word "campaign materials" and not election propaganda; thus, it
refers to a particular type of election propaganda. Election propaganda becomes a campaign
material once it is used by candidates and political parties. Nevertheless, the latter is different from
the more generic term ‘election propaganda’ in the other parts of RA 9006.

As worded, Section 9 regulates the manner by which candidates may post campaign materials,
allowing them, subject to the Comelec’s authorization, to erect common poster areas in public
places, and to post campaign materials in private property subject to its owner’s consent. It does not,
by any stretch of statutory construction, limit election propaganda to posts by parties and
candidates.Notably, the word "campaign material" appears only once in RA 9006, signifying its
limited application to Section 9, and that it should not be interchanged with the term "election
propaganda" appearing in other parts of the law.

In these lights, I disagree with the ponencia’s insistence that the Comelec had no legal basis to
regulate the subject posters, as these are expressions made by private individuals.

To support this conclusion, the ponencia pointed out that first, it may be inferred from Section 9 of
RA 9006 and Section 17 of Comelec Resolution No. 9615 (both referring to campaign materials) that
election propaganda are meant to apply only topolitical parties and candidates because the
provisions on campaign materials only mention political parties and candidates;  second, the focus
27

of the definition of the term election propaganda hinges on whether it is "designed to promote the
election or defeat of a particular candidate or candidates to a public office;"  and third, the subject
28

poster falls within the scope of personal opinion that is not considered as political advertising under
Section 1, paragraph 4  of Comelec Resolution No. 9615.
29 30

To my mind, the first two arguments lead us to navigate the forbidden waters of judicial legislation.
We cannot make distinctions when the law provides none– ubi lex non distinguit, nec nosdistinguere
debemos.
As I have earlier pointed out, the definition of election propaganda is not limited to those posted by,
or in behalf of candidates. Further, campaign materials are different from election propaganda – the
former refers to election propaganda used by candidates and political parties, and hence it is
understandable that it would only mention candidates and political parties. Indeed, the definition of
election propaganda focuses on the impact of the message, i.e., that it is intended to promote or
dissuade the election of candidates, and not for whom or by whom it is posted. This nuance in the
definition recognizes that the act ofposting election propaganda can be performed by anyone,
regardless of whether he is a candidate or private individual.

It does not serve to limit the definition of election propaganda to materials posted by candidates. At
this point, I find it worthy toemphasize that our first and primary task is to apply and interpret the law
as written, and not as how we believe it should be.

With respect to the third argument, personal opinions are of course not included within the definition
of election propaganda. But when these opinions on public issues comingle with persuading or
dissuading the public to elect candidates, then these opinions become election propaganda.

Notably, the exclusion of personal opinions in the definition of political advertisements refers to
mattersthat are printed in social media for pecuniary consideration. The entire provision was meant
to cover the phenomenon of paid blogs and advertisements in the Internet, without including in its
scope personal opinions of netizens. I do not think it can be extended to election propaganda, as
exceptions usually qualify the phrase nearest to it – in this case, it was meant to qualify matters
appearing in the Internet.

Further, if we were to follow the ponencia’s logic, and proclaim a personal opinion by a private
individual meant to influence the public as regards their vote an exemption to the election
propaganda definition, then it would render the entire definition useless. Since Comelec Resolution
No. 9615 does not limit personal opinions to private individuals, then it applies with equal force to
candidates, who necessarily have a personal opinion that they should get elected, and would not
pay themselves to utter these opinions. I dare say that such an absurd situation, where an exception
nullifies the general provision, had not been the intent of Comelec Resolution No. 9615.

Additionally, the definition of election propaganda under RA 9006 has no mention of personal
opinions, and in case of inconsistency (which to me does not exist in the present case) between a
law and a regulation implementing it, the law should prevail.

Worthy of note, lastly, is that the commingling of the subject poster’s content with a public issue in
another poster does not exempt the former from regulation as an election propaganda. The definition
of election propaganda necessarily includes issues that candidates support, because these issues
can persuade or dissuade voters to vote for them. To be sure, it is a very short-sighted view to claim
that propaganda only relates to candidates, not to the issues they espouse or oppose.

The present case reached this Court because the petitioners, who apparently are bent on carrying
their Reproductive Health (RH) message to the people, and as a means, rode on tothe then raging
electoral fight by identifying candidates supporting and opposing the RH. While indeed the RH issue,
by itself, is not an electoralmatter, the slant that the petitioners gave the issue converted the non-
election issue into a live election one hence, Team Buhay and Team Patay and the plea to support
one and oppose the other.

From this perspective, I find it beyond question that the poster containing the message "RH LAW
IBASURA" was an election propaganda, and should thus comply with the size limitations. To stress,
the subject poster and its Team Buhay and Team Patay message advocated support or opposition
to specific candidates based ontheir respective RH stand and thus cannot but fall within the
coverage of what constitutes as election propaganda.

Lastly, that the subject poster was posted on private property does not divest the Comelec of
authority toregulate it. The law specifically recognizes the posting of election propaganda on private
property provided its owner consents to it. In the present case, the property owner is the Diocese of
Bacolod itself, and the posting of the subject poster was made upon its own directive.

B. The notice and letter enforce a content-neutral regulation

Philippine jurisprudence distinguishes between the regulation of speech that is content-based, from
regulation that is content-neutral. Content-based regulations regulate speech because of the
substance of the message it conveys.  In contrast, content-neutral regulations are merely concerned
31

with the incidents of speech: the time, place or manner of the speech’s utterance under well-defined
standards. 32

Distinguishing the nature of the regulation is crucial in cases involving freedom of speech, as it
determines the test the Court shall apply in determining its validity.

Content-based regulations are viewed with a heavy presumption of unconstitutionality. Thus, the
governmenthas the burden of showing that the regulation is narrowly tailored tomeet a compelling
state interest, otherwise, the Court will strike it down as unconstitutional.
33

In contrast, content-neutral regulations are not presumed unconstitutional. They pass constitutional
muster once they meet the following requirements: first, that the regulation is within the constitutional
power of the Government; second, that it furthers an important or substantial governmental interest;
third, that the governmental interest is unrelated to the suppression of free expression; and fourth,
that the incidental restriction on speech is no greater than is essential to further that interest.
34

The assailed regulations in the present case involve a content neutral regulation that controls the
incidents of speech. Both the notice and letter sent by the Comelec to the Diocese of Bacolod
sought to enforce Section 3.3 of RA 9006 and Section 6(c) of Comelec Resolution No. 9615 which
limits the size of posters that contain election propaganda to not more than two by three feet. It does
notprohibit anyone from posting materials that contain election propaganda, so long as it meets the
size limitations.

Limitations on the size of a poster involve a content-neutral regulation involving the manner by which
speech may be uttered. It regulates how the speech shall be uttered, and does not, inany manner
affect or target the actual content of the message.

That the size of a poster or billboard involves a time, manner and place regulation is not without
judicial precedent, albeitin the US jurisdiction where our Bill of Rights and most of our constitutional
tests involving the exercise of fundamental rights first took root. Several cases  decided by the US
35

Supreme Court treated size restrictions in posters as a content-neutral regulation, and consequently
upheld their validity upon a showing of their relationship to a substantial government interest.

Admittedly, the size of the poster impacts on the effectiveness of the communication and the gravity
of its message. Although size may be considered a part of the message, this is an aspect that
merely highlights the content of the message. It is an incident of speech that government can
regulate, provided it meets the requirements for content-neutral regulations.
That the incidents of speech are restricted through government regulation do not automatically taint
them because they do not restrict the message the poster itself carries. Again, for emphasis,
Comelec Resolution No. 9615 and RA 9006 regulate how the message shall be transmitted, and not
the contents of the message itself.

The message in the subject poster istransmitted through the text and symbols that it contains. We
can, by analogy, compare the size of the poster to the volume of the sound of a message.  A blank
36

poster, for instance and as a rule, does not convey any message regardless of its size (unless, of
course, vacuity itself is the message being conveyed). In the same manner, a sound or utterance,
without words or tunes spoken or played, cannot be considered a message regardless of its volume.
We communicate with each other by symbols – written, verbal or illustrated – and these
communications are what the freedom of speech protects, not the manner by which these symbols
are conveyed.

Neither is the ponencia’s contention ―that larger spaces allow for more messages persuade to treat
the size limitation as a content-based regulation – persuasive. RA 9006 and Comelec Resolution No.
9615 do not limit the number of posters that may be posted; only their size is regulated. Thus, the
number of messages that a private person may convey is not limited by restrictions on poster size.

Additionally, I cannot agree with the ponencia’s assertion that the assailed regulation is content-
based because it only applies to speech connected to the elections, and does not regulate other
types of speech, such as commercial speech. 37

I am sure there are cases in the United States that recognize that a difference in treatment of speech
based on the content of the message involves a content-based regulation. These cases, however,
involve a single law providing either a preferential or prejudicial treatment on certain types of
messages over other messages.  In contrast, the assailed regulation covers only election
38

propaganda (without regard to the actual message), and applies only during the election period.

Further, this kind of assertion, if followed, would amount to the declaration that the entire RA 9006 is
a content-based regulation of speech, because it only regulates speech related tothe elections. On
the flipside, this kind of assertion would render time, manner and place regulations on commercial
speech as content-based regulations because they regulate only speech pertaining to commerce
and not others. I find these resulting situations to be absurd as, in effect, they eradicate the
jurisprudential distinction between content-based and content-neutral regulations.

The more reasonable approach, tomy mind, is to examine the regulation based on what it has
intended to regulate, i.e., the resulting impact of the regulation. In the present case,the assailed
regulation results into restricting the size of posters containing election propaganda, which, as I have
explained above, is a content-neutral regulation.

C. Comelec Resolution No. 9615 passes the intermediate scrutiny test for content-neutral regulation

Applying the test for the intermediate test to Section 3.3 of RA 9006 and Section 6(c) of Comelec
Resolution No. 9615, I find that the size limitation on posters does not offend the Constitution.

1. The size limitation for posters containing election propaganda in Section 6(c) of Comelec
Resolution No. 9615 and Section

3.3 of RA 9006 is within the constitutional power of the Government

Philippine jurisprudence has long settled that the time, place, and manner of speech may be subject
to Government regulation. Since the size of a poster involves a time, place and manner regulation,
then it may be the proper subject of a government regulation.

That Congress may impose regulations on the time place, and manner of speech during the election
period is even implicitly recognized in Section 2, paragraph 7, Article IX-C of the 1987 Constitution.
Under this provision, the Comelec is empowered to recommend to Congress effective measures to
minimize election spending, including limitation of places where propaganda materials shall be
posted. That Congress can pass regulations regarding places where propaganda materials may be
posted necessarily indicates that it can also pass other content-neutral regulations, such as the time
and manner of the speech’s utterance.

In considering the matter before us, it should not be lost to us that we are examining actions
implementing election laws. Both interests – freedom of speech and honest, fair and orderly
elections – have been specifically recognized, in our Constitution  and in the jurisprudence applying
39

them,  as important constitutional values. If speech enjoys preference for the individualin the
40

hierarchy of rights, election regulations likewise have their preferred status in the hierarchy of
governmental interests and have no less basis than the freedom of speech. 41

2. The size limitation for posters containing election propaganda furthers an important and
substantial governmental interest

To justify its imposition of size restrictions on posters containing election propaganda, the Comelec
invokes its constitutional mandate to ensure equal opportunity for public information campaigns
among candidates, to ensure orderly elections and to recommend effective measures to minimize
election spending.

These, to me, are substantial government interests sufficient to justify the content-neutral regulation
on the size of the subject poster. Their inclusion in the Constitution signifies that they are important.
We have, in several cases, upheld the validity of regulations on speech because of these state
interests.42

Further, the limitation on the size of posters serves these interests: a cap on the size of a poster
ensures, to some extent, uniformity in the medium through which information on candidates may be
conveyed to the public. It effectively bars candidates, supporters or detractors from using posters too
large that they result in skewed attention from the public. The limitation also prevents the candidates
and their supporting parties from engaging in a battle of sizes (of posters) and, in this sense, serve
to minimize election spending and contribute to the maintenance of peace and order during the
election period.

The ponencia dismissed the government interests the Comelec cites for not being compelling
enough to justify a restriction on protected speech. According to the ponencia, a compelling state
interestis necessary to justify the governmental action because it affects constitutionally-declared
principles, i.e., freedom of speech.43

Firstof all, the ponenciahas mixed and lumped together the test for the constitutionality of a content-
based regulation with that of a contentneutral regulation.

A compelling state interest is a requirement for the constitutionality of a content-based regulation.

The ponencia imposes this requirement as an addition to the intermediate test for content-neutral
regulations, while at the same time applying this modified intermediate test to a regulation that it has
described as content-based. The test to determine the constitutionality of a content-based regulation
is different, and in fact requires a higher standard, from the test to determine a content-neutral
regulation’s validity. The requirements for the compelling state interest test should not be confused
with the requirements for the intermediate test, and vice versa.

If we were to require a compelling state interest in content-neutral regulations, we, in effect, would
be transforming the intermediate test to a strict scrutiny test, and applying it to both content-based
and content-neutral regulations, as both regulations involve a constitutional principle (i.e. the content
of speech and the manner of speech). In other words, we would be eradicating a crucial
jurisprudential distinction on testing the validity of a speech regulation, something that I find no
cogent reason to disturb.

Neither can I agree with the ponencia’suse of Adiong v. Comelec  as authority for holding that
44

ensuringe quality between candidates is less important than guaranteeing the freedom of
expression.  This pronouncement is within the context of characterizing the prohibition of stickers
45

and decals to private places as a form of unjustified censorship. In contrast, the regulation in
question does not prohibit anyone from posting any election propaganda, but only to regulate its
size. Notably, the weighing of constitutional values applies on a case-to-case basis; we have, in the
past, decided cases where the regulation of speech is allowed to ensure equal access to public
service.

I note, too that ensuring equality between candidates is not the only goal achieved in regulating the
size of election posters – it is also meant to enforce the constitutional goals of minimizing election
spending, and ensuring orderly elections.

Lastly, I cannot agree with the ponencia’s contention that the Comelec’s interest and regulatory
authority in the posting of election propaganda is limited to postings in public places. The regulatory
frame work of RA 9006 is not limited to election propaganda in public places, and in fact recognizes
that they may be posted inprivate property, subject to their owners’ consent.

Further, the pronouncement in Adiong, where the Court held that the regulation prohibiting the
posting of decals and stickers in private property violates the property owners’ right to property, does
not apply in the presently assailed regulation, because the latter does not prohibit the posting of
posters but merely regulates its size.

The ponencia’s legal conclusion also contravenes settled doctrine regarding the government’s
capacity to regulate the incidents of speech, i.e., its time, place and manner of utterance. Notably,
paragraph 7, Section 2, Article IX-C of the 1987 Constitution ―one of the provisions the Comelec
invokes to justify its regulation ―specifically recognizes that the Congress may regulate the places
of posting election propaganda. This provision, like RA 9006, does not limit the generic term‘place,’
and thus applies to both public and private property. Justice Estela M. Perlas-Bernabe, on the other
hand, argues that there is no substantial state interest in restricting the posters’ size, because like
the posting of decals and stickers in Adiong,  it does not endanger any substantial government
46

interest and at the same time restricts the speech of individuals on a social issue. 47

It must be stressed, however, that unlike in Adiong, which prohibited the posting of decals and
stickers in private places, the assailed regulation in the present case does not prohibit the posting of
election propaganda, but merely requires that it comply with size requirements. These size
requirements promote government interests enumerated in the Constitution, and its non-regulation
would hinder them.

3. The governmental interest in limiting the size of posters containing election propaganda is
unrelated to the suppression of free expression
The government’s interest in limiting the size of posters containing election propaganda does add to
or restrict the freedom of expression. Its interests in equalizing opportunity for public information
campaigns among candidates, minimizing election spending, and ensuring orderly elections do not
relate to the suppression of free expression.

Freedom of expression, in the first place, is not the god of rights to which all other rights and even
government protection of state interest must bow. Speech rights are not the only important and
relevant values even in the most democratic societies. Our Constitution, for instance, values giving
equal opportunity to proffer oneself for public office, without regard to a person’s status, or the level
of financial resources that one may have at one's disposal. 48

On deeper consideration, elections act as one of the means by which the freedom of expression and
other guaranteed individual rights are protected, as they ensure that our democratic and republican
ideals of government are fulfilled. To put it more bluntly, unless there are clean, honest and orderly
elections that give equal opportunities and free choice to all, the freedoms guaranteed to individuals
may become a joke, a piece of writing held in reverence only when it suits the needs or fancy of
officials elected in tainted elections.

4. The incidental restriction on speech is no greater than is essential to further that interest

Indeed, the restriction on the poster’s size affects the manner by which the speech may be uttered,
but this restriction is no greater than necessary to further the government’s claimed interests.

Size limits to posters are necessary to ensure equality of public information campaigns among
candidates, as allowing posters with different sizes gives candidates and their supporters the
incentive to post larger posters. This places candidates with more money and/or with deep-pocket
supporters at an undue advantage against candidates with more humble financial capabilities.

Notably, the law does not limit the number of posters that a candidate, his supporter, or a private
individual may post. If the size of posters becomes unlimited as well, then candidates and parties
with bigger campaign funds could effectively crowd out public information on candidates with less
money to spend to secure posters – the former’s bigger posters and sheer number could effectively
take the attention away from the latter’s message. In the same manner, a lack of size limitations
would also crowd out private, unaffiliated individuals from participating in the discussion through
posters, or at the very least, compel them to erect bigger posters and thus spend more.

Prohibiting size restrictions on posters is also related to election spending, as it would allow
candidates and their supporters to post as many and as large posters as their pockets could afford.

In these lights, I cannot agree with Justice Antonio T. Carpio’s argument that the size restriction on
posters restricts speech greater than what is necessary to achieve the state’s interests. The
restriction covers only the size of the posters, and not the message it contains. If posting a longer
message or its readability is the issue, then it must be pointed out that nothing in RA 9006 or
Comelec Resolution No. 9615 prevents the posting of more than one poster containing the longer
message in one site. Applying this to Justice Carpio's example, condominium owners in the 30th
floor, should they be adamant in posting their message in the said floor, can post more than one
poster to make their message readable.

Too, they can still post their message in other areas where their message may be read. It may be
argued, at this point, that this would amount to an indirect regulation of the place where posters may
be posted. It must be remembered, however, that the place of posting involves a content neutral
regulation that the Comelec is authorized to implement, and that in any case, there is no explicit
limitation as to where the posters may be posted. They may still be posted anywhere, subject only to
the size requirements for election propaganda.

ARTURO D. BRION
Associate Justice