EN BANC

[G.R. No. 158791. July 22, 2005.]

CIVIL SERVICE COMMISSION , petitioner, vs . DEPARTMENT OF

BUDGET AND MANAGEMENT , respondent.

The Solicitor General for petitioner.

Mary Grace R. Chua and Ariston P. Aganon for Sec. E. Boncodin.

SYLLABUS
1.POLITICAL LAW; CONSTITUTIONAL LAW; FISCAL AUTONOMY; AUTOMATIC AND
REGULAR RELEASE OF APPROPRIATIONS; CONSTRUED. — The DBM furthermore argues
that this Court's Resolution of June 3, 1993 in A.M. No. 92-9-029-SC (the Resolution)
reading: After approval by Congress, the appropriations for the Judiciary shall be
automatically and regularly released subject to availability of funds means that fund
releases may still be subject to a cash release program. In support of this argument, the
DBM cites a letter dated May 18, 1993 of then Chief Presidential Legal Counsel Antonio T.
Carpio (now a member of this Court) to the Secretary of Budget and Management,
regarding A.M. No. 92-9-029-SC then pending with this Court. The letter quotes then Chief
Justice Narvasa's summary of this Court's position on the controversy, which summary
states, inter alia: "4) the Court will look to releases by the DBM of funds against the
approved budget of the Judiciary, in the full amount sought and promptly upon notice; it is
willing to consider and pass upon suggestions by the DBM for scheduling of releases; . . ."
In the same letter, the Chief Presidential Legal Counsel, after considering the Court's
position, opined that one of the principles by which the constitutional mandate on judicial
scal autonomy can be achieved is that "[a]fter approval by Congress, the appropriations
for the judiciary shall be automatically and regularly released subject to availability of
funds" — which opinion, the DBM alleges, is the position adopted by this Court. Instead of
supporting the DBM's position, however, this letter only shows the consistency of this
Court in interpreting "automatic release" as requiring the full release of appropriations. The
Court's willingness to pass upon suggestions for scheduling of releases in no way implies
that it was assenting to an incomplete or delayed release of funds. Rather, it was a
recognition by this Court that scheduling of releases, as such, does not violate the
Constitution and is, in fact, presupposed in the phrase "automatically and regularly
released." The phrase "subject to availability of funds" must thus be understood in harmony
with the constitutional mandate to automatically release funds as the same has been
consistently interpreted by this Court. It is not an authority for the DBM to implement a
policy which, although labeled "cash payment schedule," actually goes beyond mere
scheduling of releases and effects a withholding and reduction of the approved
appropriations, as it did in the present case against petitioner Civil Service Commission.
2.ID.; ID.; ID.; AGENCY VESTED THEREWITH MAY SUBMIT REPORT RELATIVE TO ITS
APPROPRIATION FOR RECORDS PURPOSES ONLY. — Finally, while acknowledging the
unconstitutionality of imposing a "no report, no release" policy on agencies clothed with
scal autonomy, the DBM prays for a clari cation that such agencies are still responsible
for the timely submission to it of financial reports. The Court considers it sufficient to echo
the following statements in the Separate Opinion of former Chief Justice Hilario G. Davide,
CD Technologies Asia, Inc. 2019 cdasiaonline.com
 Jr.: This is not to say that agencies vested with scal autonomy have no reporting
responsibility at all to the DBM. This is precisely the reason why guideline No. 5 under the
Resolution of 3 June [1993] states that the Supreme Court, or constitutional commissions
clothed with scal autonomy for that matter, may submit reports relative to its
appropriation "for records purposes only." The word "may" is permissive [ Dizon v.
Encarnacion, 119 Phil. 20, 22 (1963)], as it is an auxiliary verb manifesting "opportunity or
possibility" and, under ordinary circumstances, "implies the possible existence of
something." [ Supangan, Jr. v. Santos, G.R. No. 84663, 24 August 1990] . . . Interdependence
will work only if it is undertaken within the parameters of the Constitution."

DECISION

CARPIO MORALES , J : p

The Civil Service Commission (petitioner) via the present petition for mandamus
seeks to compel the Department of Budget and Management (respondent) to release the
balance of its budget for scal year 2002. At the same time, it seeks a determination by
this Court of the extent of the constitutional concept of fiscal autonomy.
By petitioner's claim, the amount of P215,270,000.00 was appropriated for its
Central O ce by the General Appropriations Act (GAA) of 2002, while the total allocations
for the same O ce, if all sources of funds are considered, amount to P285,660,790.44. 1 It
complains, however, that the total fund releases by respondent to its Central O ce during
the scal year 2002 was only P279,853,398.14, thereby leaving an unreleased balance of
P5,807,392.30.
To petitioner, this balance was intentionally withheld by respondent on the basis of
its "no report, no release" policy whereby allocations for agencies are withheld pending
their submission of the documents mentioned in Sections 3.8 to 3.10 and Section 7.0 of
National Budget Circular No. 478 on Guidelines on the Release of the FY 2002 Funds, 2
which documents are:
1.Annual Cash Program (ACP)
2.Requests for the Release of Special Allotment Release
Order (SARO) and Notice of Cash Allocation (NCA)
3.Summary List of Checks Issued and Cancelled
4.Statement of Allotment, Obligations and Balances
5.Monthly Statement of Charges to Accounts Payable
6.Quarterly Report of Actual Income
7.Quarterly Financial Report of Operations
8.Quarterly Physical Report of Operations
9.FY 2001 Preliminary and Final Trial Balance
10.Statement of Accounts Payable

CD Technologies Asia, Inc. 2019 cdasiaonline.com

 Petitioner contends that the application of the "no report, no release" policy upon
independent constitutional bodies of which it is one is a violation of the principle of scal
autonomy and, therefore, unconstitutional. DaAISH

Respondent, at the outset, opposes the petition on procedural grounds. It contends

that rst, petitioner did not exhaust administrative remedies as it could have sought
clari cation from respondent's Secretary regarding the extent of scal autonomy before
resorting to this Court. Second, even assuming that administrative remedies were
exhausted, there are no exceptional and compelling reasons to justify the direct ling of
the petition with this Court instead of the trial court, thus violating the hierarchy of courts.
On the merits, respondent, glossing over the issue raised by petitioner on the
constitutionality of enforcing the "no report, no release" policy, denies having strictly
enforced the policy upon offices vested with fiscal autonomy, it claiming that it has applied
by extension to these o ces the Resolution of this Court in A.M. No. 92-9-029-SC
(Constitutional Mandate on the Judiciary's Fiscal Autonomy) issued on June 3, 1993, 3
particularly one of the guiding principles established therein governing the budget of the
Judiciary, to wit:
5.The Supreme Court may submit to the Department of Budget and
Management reports of operation and income, current plantilla of personnel, work
and nancial plans and similar reports only for recording purposes . The
submission thereof concerning funds previously released shall not be a
condition precedent for subsequent fund releases . (Emphasis and
underscoring supplied)

Respondent proffers at any rate that the delay in releasing the balance of petitioner's
budget was not on account of any failure on petitioner's part to submit the required
reports; rather, it was due to a shortfall in revenues. 4
The rule on exhaustion of administrative remedies invoked by respondent applies
only where there is an express legal provision requiring such administrative step as a
condition precedent to taking action in court. 5 As petitioner is not mandated by any law to
seek clari cation from the Secretary of Budget and Management prior to ling the present
action, its failure to do so does not call for the application of the rule. AECacS

As for the rule on hierarchy of courts, it is not absolute. A direct invocation of this
Court's original jurisdiction may be allowed where there are special and important reasons
therefor, clearly and speci cally set out in the petition. 6 Petitioner justi es its direct ling
of the petition with this Court "as the matter involves the concept of scal autonomy
granted to [it] as well as other constitutional bodies, a legal question not heretofore
determined and which only the Honorable Supreme Court can decide with authority and
finality". 7 To this Court, such justification suffices for allowing the petition.
Now on the substantive issues.
That the "no report, no release" policy may not be validly enforced against o ces
vested with scal autonomy is not disputed. Indeed, such policy cannot be enforced
against o ces possessing scal autonomy without violating Article IX (A), Section 5 of
the Constitution which provides:
Sec. 5.The Commission shall enjoy scal autonomy. Their approved
appropriations shall be automatically and regularly released.

In Province of Batangas v. Romulo , 8 this Court, in construing the phrase "automatic

CD Technologies Asia, Inc. 2019 cdasiaonline.com
 release" in Section 6, Article X of the Constitution reading:
Section 6.Local government units shall have a just share, as determined by
law, in the national taxes which shall be automatically released to them,

held:
Webster's Third New International Dictionary de nes "automatic" as
"involuntary either wholly or to a major extent so that any activity of the will is
largely negligible; of a re ex nature; without volition; mechanical; like or
suggestive of an automaton." Further, the word "automatically" is de ned as "in
an automatic manner: without thought or conscious intention." Being "automatic,"
thus, connotes something mechanical, spontaneous and perfunctory. As such the
LGUs are not required to perform any act to receive the "just share" accruing
to them from the national coffers. . . ." (Emphasis and underscoring supplied) 9

By parity of construction, "automatic release" of approved annual appropriations to

petitioner, a constitutional commission which is vested with scal autonomy, should thus
be construed to mean that no condition to fund releases to it may be imposed. This
conclusion is consistent with the above-cited June 3, 1993 Resolution of this Court which
effectively prohibited the enforcement of a "no report, no release" policy against the
Judiciary which has also been granted fiscal autonomy by the Constitution. 1 0
Respecting respondent's justi cation for the withholding of funds from petitioner as
due to a shortfall in revenues, the same does not lie. In the rst place, the alleged shortfall
is totally unsubstantiated. In the second place, even assuming that there was indeed such
a shortfall, that does not justify non-compliance with the mandate of above-quoted Article
IX (A), Section 5 of the Constitution. SAHIDc

Asturias Sugar Central, Inc. v. Commissioner of Customs teaches that "[a]n

interpretation should, if possible, be avoided under which a statute or provision being
construed is defeated, or as otherwise expressed, nulli ed, destroyed, emasculated,
repealed, explained away, or rendered insigni cant, meaningless, inoperative, or nugatory."
11

If respondent's theory were adopted, then the constitutional mandate to

automatically and regularly release approved appropriations would be suspended every
year, or even every month 1 2 that there is a shortfall in revenues, thereby emasculating to a
significant degree, if not rendering insignificant altogether, such mandate.
Furthermore, the Constitution grants the enjoyment of scal autonomy only to the
Judiciary, the Constitutional Commissions of which petitioner is one, and the Ombudsman.
To hold that petitioner may be subjected to withholding or reduction of funds in the event
of a revenue shortfall would, to that extent, place petitioner and the other entities vested
with scal autonomy on equal footing with all others which are not granted the same
autonomy, thereby reducing to naught the distinction established by the Constitution.
The agencies which the Constitution has vested with scal autonomy should thus be
given priority in the release of their approved appropriations over all other agencies not
similarly vested when there is a revenue shortfall.
Signi cantly, the Year 2002 GAA itself distinguished between two types of public
institutions in the matter of fund releases. With respect to government agencies in general,
the pertinent General Provisions of the GAA read as follows:

CD Technologies Asia, Inc. 2019 cdasiaonline.com

 Sec. 62.Prohibition Against Impoundment of Appropriations. No
appropriations authorized in this Act shall be impounded through deduction or
retention, unless in accordance with the guidelines for the imposition
and release of reserves and the rules and regulations for deduction,
retention or deferral of releases shall have been issued by the DBM in
coordination with the House Committee on Appropriations and the Senate
Committee on Finance. Accordingly, all the funds appropriated for the purposes,
programs, projects and activities authorized in this Act, except those covered by
Special Provision No. 1 of the Unprogrammed Fund shall be regularly and
automatically released in accordance with the established allotment period
and system by the DBM without any deduction, retention or imposition of
reserves. (Emphasis and underscoring supplied)

Sec. 63.Unmanageable National Government Budget De cit.

Retention or reduction of appropriations authorized in this Act shall be effected
only in cases where there is unmanageable national government budget
deficit.

Unmanageable national government budget de cit as used in this Section

shall be construed to mean that the actual national government budget de cit
has exceeded the quarterly budget de cit targets consistent with the full-year
target de cit of P130.0 billion as indicated in the FY 2002 Budget of Expenditures
and Sources of Financing submitted by the President to Congress pursuant to
Section 22, Article VII of the Constitution or 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. (Emphasis and
underscoring supplied)

In contrast, the immediately succeeding provision of the Year 2002 GAA, which
specifically applied to offices vested with fiscal autonomy, stated:
Sec. 64.Appropriations of Agencies Vested with Fiscal Autonomy.
Any provision of law to the contrary notwithstanding , the appropriations
authorized in this Act for the Judiciary, Congress of the Philippines, the
Commission on Human Rights, the O ce of the Ombudsman, the Civil Service
Commission, the Commission on Audit and the Commission on Elections shall
be automatically and regularly released . (Emphasis and underscoring
supplied)

Clearly, while the retention or reduction of appropriations for an o ce is generally

allowed when there is an unmanageable budget de cit, the Year 2002 GAA, in conformity
with the Constitution, excepted from such rule the appropriations for entities vested with
scal autonomy. Thus, even assuming that there was a revenue shortfall as respondent
claimed, it could not withhold full release of petitioner's funds without violating not only the
Constitution but also Section 64 of the General Provisions of the Year 2002 GAA. CSIcHA

This Court is not unaware that its above-cited June 3, 1993 Resolution also states
as a guiding principle on the Constitutional Mandate on the Judiciary's Fiscal Autonomy
that:
4.After approval by Congress, the appropriations for the Judiciary shall be
automatically and regularly released subject to availability of funds.
(Underscoring supplied)
CD Technologies Asia, Inc. 2019 cdasiaonline.com
 This phrase "subject to availability of funds" does not, however, contradict the
present ruling that the funds of entities vested with scal autonomy should be
automatically and regularly released, a shortfall in revenues notwithstanding. What is
contemplated in the said quoted phrase is a situation where total revenue collections are
so low that they are not su cient to cover the total appropriations for all entities vested
with scal autonomy . In such event, it would be practically impossible to fully release
the Judiciary's appropriations or any of the entities also vested with scal autonomy for
that matter, without violating the right of such other entities to an automatic release of
their own appropriations. It is under that situation that a relaxation of the constitutional
mandate to automatically and regularly release appropriations is allowed.
Considering that the budget for agencies enjoying scal autonomy is only a small
portion of the total national budget, only in the most extreme circumstances will the total
revenue collections fall short of the requirements of such agencies. To illustrate, in the
Year 2002 GAA the budget for agencies vested with scal autonomy amounted only to
P14,548,620,000.00, which is 2.53% of the total appropriations in the amount of
P575,123,728,000.00. 1 3 In Year 2003 GAA, which was re-enacted in 2004, the budget for
the same agencies was P13,807,932,000.00, which is 2.27% of the total appropriations
amounting to P609,614,730,000.00. 1 4 And in the Year 2005, the budget for the same
agencies was only P13,601,124,000.00, which is 2.28% of the total appropriations
amounting to P597,663,400,000.00. 1 5
Finally, petitioner's claim that its budget may not be reduced by Congress lower than
that of the previous fiscal year, as is the case of the Judiciary, must be rejected. DHIETc

For with respect to the Judiciary, Art. VIII, Section 3 of the Constitution explicitly
provides:
Section 3.The Judiciary shall enjoy fiscal autonomy. Appropriations for the
Judiciary may not be reduced by the legislature below the amount
appropriated for the previous year and, after approval, shall be automatically
and regularly released. 1 6 (Emphasis and underscoring supplied)

On the other hand, in the parallel provision granting scal autonomy to

Constitutional Commissions, a similar proscription against the reduction of appropriations
below the amount for the previous year is clearly absent. Article IX (A), Section 5 merely
states:
Section 5.The Commission shall enjoy scal autonomy. Their approved
annual appropriations shall be automatically and regularly released.

The plain implication of the omission of the provision proscribing such reduction of
appropriations below that for the previous year is that Congress is not prohibited from
reducing the appropriations of Constitutional Commissions below the amount
appropriated for them for the previous year. DcTSHa

WHEREFORE, the petition is, in light of all the foregoing discussions, GRANTED.
Respondent's act of withholding the subject funds from petitioner due to revenue shortfall
is hereby declared UNCONSTITUTIONAL.
Accordingly, respondent is directed to release to petitioner the amount of Five
Million Eight Hundred Seven Thousand, Three hundred Ninety Two Pesos and Thirty
Centavos (P5,807,392.30) representing the unreleased balance of petitioner's
appropriation for its Central Office by the General Appropriations Act for FY 2002.
CD Technologies Asia, Inc. 2019 cdasiaonline.com
 SO ORDERED.
Quisumbing, Carpio, Corona Callejo, Sr., Azcuna, Chico-Nazario and Garcia, JJ.,
concur.
Davide, Jr., C.J., see separate concurring opinion.
Puno, J., also concur with the CJ's separate opinion.
Panganiban, J., I concur and also join the separate opinion of CJ Davide.
Ynares-Santiago, J., concur with ChJ separate opinion also.
Sandoval-Gutierrez, J., I also concur with the CJ in his separate opinion.
Austria-Martinez, J., I concur with the main and separate opinion.
Tinga, J., I concur with both main and separate opinions.

Separate Opinions
DAVIDE, JR., C.J. :

The Civil Service Commission (CSC) is before this Court on a petition for mandamus
to compel the Department of Budget and Management (DBM) to release immediately its
unfunded allotment for Fiscal Year 2002 in the amount of P5,807,392.30. The petitioner
also prays that this Court determine the extent of the scal autonomy granted to
government agencies by the Constitution. acADIT

Under the reenacted General Appropriations Act for Fiscal Year 2000, for FY 2001,
the Civil Service Commission (CSC) had the total allotment of P270,343,318.86. As shown
by the Notice of Cash Allocation (NCA) and the withheld Tax Remittance Advice (TRA), the
Department of Budget and Management (DBM) released only P263,972.204.43 of the
total allotment for the CSC thereby leaving an unfunded allotment of P6,371,024.43, which
the DBM did not release to the CSC during FY 2001. Only after six months into FY 2002 or
on 12 July 2002 did the DBM release P1,324,930.00 of the unfunded allotment of the CSC;
the DBM released the balance of P5,046,095.00 on 14 October 2002 or on the last quarter
of the following fiscal year.
For FY 2002, the CSC had a total allotment of P285,660,790.44 but the total amount
released, as shown by the NCA and the TRA, was only P279,853,398.14. The DBM did not
release the unfunded amount of P5,807,392.30, even as the instant petition was filed on 16
July 2003.
Petitioner CSC alleges in its petition for mandamus that the DBM would not release
allotments without its having complied with National Budget Circular No. 478 dated 5
February 2002 that sets the guidelines on the release of funds for FY 2002. Item No. 13 of
the circular states that one of its purposes is "[t]o prescribe the required reports prior to
release of funds." The same circular requires all agencies to submit an Annual Cash
Program (ACP) and reiterates the policy of "no report, no release" of funds. Aside from the
ACP, the following reports must be submitted: (1) summary list of checks issued and
cancelled [SLCIC]; (2) statement of allotment, obligation and balances; (3) monthly
statement of charges to accounts payable; (4) quarterly report of actual income; (5)
quarterly nancial report of operations; (6) quarterly physical report of operations; (7)
CD Technologies Asia, Inc. 2019 cdasiaonline.com
 preliminary and final trial balance; and (8) statement of accounts payable.
The CSC asserts that these "tedious" requirements of the DBM undermine scal
autonomy because budgetary appropriations could not be released without complying
therewith. Moreover, since it enjoys scal autonomy, the CSC must not be made to defend
its budget during deliberations thereon in Congress, as the reduction of its budget as
compared to that of the previous scal year would defeat the purpose of scal autonomy,
which precludes undue pressure from Congress when it deliberates on the bill for the
General Appropriations Act.
Citing Santiago v. Vasquez, 1 the CSC adds that the issue of scal autonomy involves
"an exceptional and compelling circumstance" that justi es availment of a remedy within
the jurisdiction of this Court. More importantly, the far-reaching implications of the petition
demands that the questions raised should be judicially resolved. Like the CSC, other
constitutional bodies vested with scal autonomy are entitled to the automatic and regular
release of approved budget, both in terms of allotment and of cash allocation.
On the other hand, the DBM asserts that its reporting requirements are not intended
to defy the mandate of scal autonomy constitutionally vested on the CSC because those
were "meant to control the budget de cit and regulate cash ow." Fiscal autonomy does
not dispense with accountability. As such, the petition should be dismissed because the
CSC failed to exhaust administrative remedies and violated the doctrine of judicial
hierarchy.
Traversing the contentions of the DBM, the CSC argues that the rule on exhaustion
of administrative remedies and the principle of hierarchy of courts need not be observed
when legal questions are raised before this Court. The issue of whether the constitutional
provision on scal autonomy has been curtailed by reporting requirements imposed by the
DBM is a legal issue, which only this Court may decide with nality. By its reliance on the
principle of accountability, the DBM missed the point of the petition, as submission of
accounting reports and other documents are not the only means of determining
accountability. Under the concept of scal autonomy, the annual appropriations of
constitutional bodies vested with that mandate shall be automatically and regularly
released by the DBM, with or without the submission of accounting reports and other
documents, which the DBM requires as a condition for the release of budgetary
appropriations. TcaAID

The Court is thus faced with two basic issues: (1) the propriety of the remedy of
mandamus; and (2) whether the constitutionally mandated scal autonomy of the CSC has
been violated. Being interrelated, these issues will be discussed together.
The writ of mandamusis available as a remedy before this Court under these
circumstances:
When any tribunal, corporation, board, officer or person unlawfully neglects
the performance of an act which the law speci cally enjoins as a duty resulting
from an o ce, trust, or station, or unlawfully excludes another from the use and
enjoyment of a right or o ce to which such other is entitled, and there is no other
plain, speedy and adequate remedy in the ordinary course of law, the person
aggrieved thereby may le a veri ed petition in the proper court, alleging the facts
with certainty and praying that judgment be rendered commanding the
respondent, immediately or at some other time to be speci ed by the court, to do
the act required to be done to protect the rights of the petitioner, and to pay the
CD Technologies Asia, Inc. 2019 cdasiaonline.com
 damages sustained by the petitioner by reason of the wrongful acts of the
respondent. 2

As an extraordinary remedy, mandamus may be availed of only if the legal right to be

enforced is well-de ned, clear and certain. 3 It lies only to compel an o cer to perform a
ministerial duty, not a discretionary one. The duty is ministerial only when its discharge
requires neither the exercise of o cial discretion nor judgment. 4 The performance of a
duty which involves the exercise of discretion may be compelled by mandamus "in cases
where there is gross abuse of discretion, manifest injustice, or palpable excess of
authority." 5 The remedy of mandamus, over which this Court has original jurisdiction, is
proper "to enforce a public right and to compel the performance of a public duty, most
especially when mandated by the Constitution." 6
In this instance, what is sought to be observed and implemented by the DBM is the
constitutional mandate of scal autonomy, which is vested in the CSC under Article IX-A,
Section 5 of the Constitution, which explicitly states that
[t]he Commission shall enjoy scal autonomy. Their approved annual
appropriations shall be automatically and regularly released.

This provision is reiterated in Book II, Chapter 5, Section 26 of the Administrative Code
of 1987, and in Section 63 of the General Provisions of the General Appropriations Act
for FY 2000 (Republic Act No. 8760). 7
The DBM, as the agency statutorily vested with the responsibility of implementing
the National Budget, 8 is duty-bound to observe this constitutional provision. Exercise of
discretion is eschewed; what is required of the DBM is merely the ministerial act of
implementing scal autonomy. Its responsibility vis-à-vis the National Budget is
circumscribed only by its general responsibility to see to the "e cient and sound
utilization of government funds and revenues to effectively achieve our country's
development objectives." 9
When the DBM issued National Budget Circular No. 478 on 5 February 2002, it aimed
to apply the guidelines for the release of FY 2002 funds to "all heads of
departments/agencies/state universities and colleges and other o ces of the National
Government, government-owned or controlled corporations and local government units."
In other words, the circular would apply to all government agencies with no exceptions
whatsoever, and therefore, it subjects all government agencies, including those
constitutionally vested with scal autonomy , to reporting requirements "prior to the
release of funds." 1 0 This means that noncompliance with the requirements of the circular
would result not only in delay in the release of duly appropriated funds for any scal year
but even in the withholding thereof within the same fiscal year.
The DBM has failed to explain why National Budget Circular No. 478 is addressed to
all government agencies. All it states in its Comment on the Petition is that the "no report
no release of funds" policy is "not strictly applied to agencies belonging to the scal
autonomous group," which are allegedly placed under the Not Needing Clearance column
of the Agency Budget Matrix or Annex A of the circular. 1 1
However, the "disaggregation" of two types of government agencies into "Needing
Clearance" (NC) and "Not Needing Clearance" (NNC) in National Budget Circular No. 478
does not imply that scal autonomous agencies under the Constitution are included
among those with funds that can be released without clearances or documentary
supports. This is clear from this provision of the circular:
CD Technologies Asia, Inc. 2019 cdasiaonline.com
 3.2.2The NNC column refers to budgetary items not enumerated in Item 3.2.1
above including the following Special Purpose Funds (SPFs):

•Agriculture and Fisheries Modernization Program

•Internal Revenue Allotment
•Area Development Assistance Fund, and
•Local Government Empowerment Fund.

Paragraph 3.2.1 provides that the "NC column pertains to the portion of the agency
budget which can only be released upon compliance with certain documentary
requirements." Note should be taken of the fact that paragraph 3.2.2 speaks of Special
Purpose Funds and enumerates only funds prescribed statutorily. 1 2 By the principle of
ejusdem generis, funds intended for government agencies with scal autonomy, which
is provided by the Constitution and not by a statute, are excluded from the Special
Purpose Funds. While this will not necessarily imply that the National Budget Circular
No. 478 was issued to speci cally and singularly impose the submission of
documentary requirements upon the CSC, it ineluctably proves that the DBM may still
require the CSC to comply therewith, as it did require the CSC to submit the above-
mentioned reports. Indeed, the admission of the DBM that it does not strictly apply the
"no report no release of funds" policy is very revealing. ADCSEa

Article IX-A, Section 5 of the Constitution clearly provides that constitutional

commissions such as the CSC are entitled to automatic and regular release of duly
approved appropriations. In Province of Batangas v. Romulo 1 3 the Court explained the
meaning of the term "automatically released," as used in Article X, Section 6 of the
Constitution, which provides that "[l]ocal government units shall have a just share, as
determined by law, in the national taxes which shall be automatically released to them."
The Court said:
Webster's Third New international Dictionary de nes "automatic" as
"involuntary either wholly or to a major extent so that any activity of the will is
largely negligible; of a re ex nature; without volition; mechanical; like or
suggestive of an automaton." Further, the word "automatically" is de ned as "in
an automatic manner: without thought or conscious intention." Being "automatic,"
thus, connotes something mechanical, spontaneous and perfunctory." As such,
the LGUs are not required to perform any act to receive the just "share"
accruing to them from the national coffers. As emphasized by the Local
Government Code of 1991, the "just share" of the LGUs shall be released to
them "without need of further action." (Emphasis supplied.)

Province of Batangas also quotes this explanation of the Court, in another Decision,
on the term "automatic release" of LGU funds:
. . . A basic feature of local scal autonomy is the automatic release of the
shares of LGUs in the national internal revenue. This is mandated by no less than
the Constitution. The Local Government Code speci es further that the release
shall be made directly to the LGU concerned within ve (5) days after every
quarter of the year and "shall not be subject to any lien or holdback that may be
imposed by the national government for whatever purpose." As a rule, the term
"shall" is a word of command that must be given a compulsory meaning. The
provision is, therefore, imperative. 1 4

CD Technologies Asia, Inc. 2019 cdasiaonline.com

 Article IX-A, Section 6 of the Constitution mandating the automatic and regular
release of appropriations for the CSC being couched imperatively on account of the use of
the word "shall," the DBM gravely abused its discretion and exceeded its authority in
including the CSC in the coverage of its National Budget Circular No. 478 and by requiring
the CSC to comply with the "no report no release of funds" policy. Its abuse of discretion is
grave and gross, as no less than the Constitution commands the automatic and regular
release of funds appropriated by law for the CSC. DSEIcT

Moreover, the factual premises of this petition are by no means uncertain or

doubtful as to proscribe availment of the writ of mandamus as an extraordinary remedy
under the Rules of Court. The claims of the CSC that the unfunded balance of its
appropriation of P6,371.024.43 for FY 2000 was not released by the DBM during that
scal year, and that its unfunded balance of appropriations for FY 2001 of P5,046,095 was
likewise not released until after the ling of the instant petition on 11 July 2003, are not
rebutted by the DBM. There was then, clearly, failure on the part of the DBM to perform its
duty of automatically and regularly releasing appropriated funds for the CSC as required by
the Constitution. To reiterate, such failure cannot be anything but grave abuse of discretion
— the DBM violated not just a contractual provision 1 5 for which it could be called to task
but no less than a constitutional provision.
Assuming that the writ of mandamus has been rendered moot by the supervening
event of the release of the balance of funds appropriated for the CSC for scal years 2001
and 2002, albeit delayed and beyond those scal years, the issue raised in the petition is of
paramount importance to constitutional bodies vested with scal autonomy that it cries
out for resolution. On this matter, the Court has said:
Granting arguendo that, as contended by the respondents, the resolution of
the case had already been overtaken by supervening events as the IRA, including
the LGSEF, for 1999, 2000 and 2001, had already been released and the
government is now operating under a new appropriations law, still, there is
compelling reason for this Court to resolve the substantive issue raised by the
instant petition. Supervening events, whether intended or accidental,
cannot prevent the Court from rendering a decision if there is a grave
violation of the Consti tution . Even in cases where supervening events had
made the cases moot, the Court did not hesitate to resolve the legal or
constitutional issues raised to formulate controlling principles to guide the bench,
bar and public. 1 6 (Emphasis supplied.)

The issue of whether the constitutionally mandated scal autonomy of the CSC has
been violated must be resolved, and for that purpose, the rule on hierarchy of courts will
not prevent this Court from assuming jurisdiction over the petition. 1 7 With respect to the
allegation that the CSC should have exhausted administrative remedies before ling the
instant petition, that doctrine is not absolute. It admits of these exceptions when judicial
action may be validly resorted to immediately: (1) when the question raised is purely legal;
(2) when the administrative body is in estoppel; (3) when the act complained of is patently
illegal; (4) when there is urgent need for judicial intervention; (5) when the claim involved is
small; (6) when irreparable damage will be suffered; (7) when there is no other plain,
speedy and adequate remedy; (8) when strong public interest is involved; (9) when the
subject of the controversy is private land; and (10) in quo warranto proceedings. 1 8 At least
four of these exceptions are found in this instance: the question raised is purely legal; the
act complained of is patently illegal as it involves the violation of a constitutional provision;
CD Technologies Asia, Inc. 2019 cdasiaonline.com
 there is no other plain, speedy and adequate remedy available to the CSC, and strong
public interest is involved because a government agency is charged with no less than
violation of the Constitution. As this Court said in Province of Batangas, when the
application of a constitutional provision is involved, the relaxation of procedural rules to
resolve the controversy is warranted.
Moreover, the DBM erroneously invokes a Resolution of this Court to defend its
position of compliance with the mandate of scal autonomy of the CSC. According to the
DBM, the Resolution of 3 June 1993 in A.M. No. 92-9-029-SC (Constitutional Mandate on
the Judiciary's Fiscal Autonomy ) allegedly started a "healthy correspondence between the
Supreme Court and the DBM that eventually led to the crafting of guiding principles on
scal autonomy which presently governs the budget of the judiciary." 1 9 For a clear picture
of that "healthy correspondence," the said Resolution is quoted in full as follows:
A.M. No. 92-9-029-SC (Constitutional Mandate on the Judiciary's Fiscal
Autonomy).
The administrative matter at bar treats of Section 3, Article VIII of the
Constitution reading as follows:
"SEC. 3.The Judiciary shall enjoy scal autonomy. Appropriations
for the Judiciary may not be reduced by the legislature below the amount
appropriated for the previous year and, after approval shall be
automatically and regularly released."
In a letter dated August 27, 1992, addressed to Hon. Salvador M. Enriquez,
Jr., Secretary of Budget and Management, the Chief Justice made the following
statements as regards the budget of the Court and of the Presidential Electoral
Tribunal, and of the Judiciary in general, viz.:

"The Court wishes me to express to you its deep disappointment

upon its discovery that your Department revised the Court's budget for
1993 that it had asked you, through my letter to you of April 24, 1992,
simply to submit to the Congress for consideration and approval. The
Court has been informed that your Department made its own
determination of the Court's needs and plans as regards personal services
(including the creation of new court salas and new positions), capital
outlay (including the acquisition of equipment), and maintenance and
operating expenses.

It is to be regretted that this was done without prior consultation

with, or even advance notice to, the Court, much less a statement of the
reasons therefor, and despite the Court's having made known to you its
desire that the scal autonomy provisions of the Constitution be strictly
observed. You will recall that I had occasion to stress this in my letter to
you of February 14, 1992, and again in the letter dated May 22, 1992 which
in the Court's behalf I, together with the heads of the other independent
constitutional o ces, addressed to Her Excellency, then President Corazon
C. Aquino — of which you were doubtless made aware, and to which was
appended the 'Joint Resolution' on Fiscal Autonomy of all said o cers,
dated April 3, 1992. I once more intimated this in my letter to you of April
24, 1992 transmitting the Court's budget for 1993 to you 'for submission in
due course to the Congress of the Philippines and eventual inclusion in the
National Budget.' In any event, in its decision in G.R. No. 103524 ( Cesar
Bengzon, et al. v. Hon. Franklin N. Drilon, etc., et al. ) and Adm. No. 91-8-
CD Technologies Asia, Inc. 2019 cdasiaonline.com
 225-CA (Request of Retired Justices Manuel P. Barcelona, et al. ),
promulgated on April 15, 1992, the Court has made the meaning of scal
autonomy quite clear.

'What is fiscal autonomy?

As envisioned in the Constitution, the scal autonomy

enjoyed by the Judiciary, the Civil Service Commission, the
Commission on Audit, the Commission on Elections, and the O ce
of the Ombudsman contemplates a guarantee of full exibility to
allocate and utilize their resources with the wisdom and dispatch
that their needs require. It recognizes the power and authority to
levy, assess and collect fees, x rates of compensation not
exceeding the highest rates authorized by law for compensation
and pay plans of the government and allocate and disburse such
sums as may be provided by law or prescribed by them in the
course of the discharge of their functions.

Fiscal autonomy means freedom from outside control. If the

Supreme Court says it needs 100 typewriters but DBM rules we need
only 10 typewriters and sends its recommendations to Congress
without even informing us, the autonomy given by the Constitution
becomes an empty and illusory platitude.

The Judiciary, the Constitutional Commissions, and the

Ombudsman must have the independence and exibility needed in
the discharge of their constitutional duties. The imposition of
restrictions and constraints on the manner the independent
constitutional o ces allocate and utilize the funds appropriated for
their operations is anathema to scal 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 interest of comity and cooperation, the Supreme Court,
Constitutional Commissions, and the Ombudsman have so far
limited their objections to constant reminders. We now agree with
the petitioners that this grant of autonomy should cease to be a
meaningless provision.'

In my letter to you of February 14, 1992 above adverted to, I pointed

out that

'. . . the constitutional provision . . . is clear in what it

commands and implies: that within the bounds of its allotted
appropriations, the Judiciary, represented by the Supreme Court, is
the sole judge of how they are to be spent, and where and when; and
that the Court does not have to justify its programs of expenditures,
or be answerable in the ordering of its priorities, to any person or
agency. No lesser authority can be inferred from the cited provision,
no other meaning given to the term " scal autonomy" and the
unmistakable injunction that appropriations for the Judiciary "shall
be automatically and regularly released," i.e., even without
request therefor, and most certaintly without being
compelled to justify or explain its requirements .'
As one of the three great departments of Government, coordinate
CD Technologies Asia, Inc. 2019 cdasiaonline.com
 and co-equal vis-à-vis the Executive and the Legislative branches, the Court
feels that, under the circumstances, it is entitled to know why and by what
authority the unilateral revision of its budget has been done, and what
steps you believe might now be taken to ensure that any change in the
Court's 1993 budget be entrusted solely to the Congress to which, after all,
this function rightfully and exclusively belongs.

I hardly need add that much the same things may be said about the
action taken on the budget of the Presidential Electoral Tribunal by your
o ce which, regrettably, again appears to have substituted its own
judgment for that of the Tribunal as to some of its requirements."

The letter closed with the request that the Honorable Secretary give the
matter "preferential attention" and a reply be submitted in five (5) days.

The Hon. Secretary of Budget and Management having duly responded,

orally and in writing, with the assistance of the Solicitor General, the Chief Justice
had occasion to address another letter on the same subject to the latter, under
date of January 15, 1993, in which the following statements were made, viz.:

"Whatever past practice the Court might have put up with 'in the
interest of comity and cooperation,' as Bengzon so aptly states, there was
no agreement to subject budget proposals of the Judiciary as to what is
referred to as 'the standard preparation, review and evaluation process of
the DBM,' or to recognize in that department the capacity to raise issues on
the proposals for submission to Congress 'for arbitration.'

The Court recognizes that it is the duty of the DBM to

obtain as accurate a picture of total resources as possible for any
given year and suggest to Congress how essential services and
other programs of Government might be funded . In other words,
DBM studies priorities and proposes to the legislature how the expected
revenues should be apportioned among the various agencies and
instrumentalities of the Government. This function, however, in so far as
the Judiciary is concerned, is purely advisory and should address
nothing more speci c than general scal policy. It may not be
exercised in such a manner as, under the guise of budget
preparation, to infringe the Judiciary's independence and scal
autonomy .

To be very clear, the Court's position is that the scal autonomy

guaranteed by the Constitution makes it the sole judge of the requirements
of the Judiciary and how these are to be funded from monies appropriated
by law, and of the Judiciary's priorities and their ordering. This prerogative
is subject only to the constitutional authority vested in Congress over the
national budget. (Italics supplied.)

I do appreciate . . . your . . . intent to reduce the areas of irritation

and annoyance between the Court and the DBM on the question of how the
Judiciary's budget is to be dealt with. On the other hand, in light of
Bengzon, any accommodation that would to any extent dilute the Court's
authority on the matter would be out of the question."
Again the Honorable Secretary of Budget and Management made due
CD Technologies Asia, Inc. 2019 cdasiaonline.com
 response. In none of their responses above-mentioned did either the Secretary or
the Solicitor General manifest any serious objection to the Court's basic
postulates; indeed, both expressed substantial agreement therewith. cDACST

After deliberating on the matter, THE COURT RESOLVED TO ESTABLISH

THE FOLLOWING GUIDING PRINCIPLES GOVERNING THE BUDGET OF THE
JUDICIARY, INCLUDING THE PRESIDENTIAL ELECTORAL TRIBUNAL,
HENCEFORTH TO BE OBSERVED AND IMPLEMENTED BY ALL CONCERNED, to
wit:

1.The Court shall prepare the annual budget proposal for the judiciary and
itself submit it to Congress for approval. A copy thereof shall be submitted to the
Department of Budget and Management pursuant to Section 22 of Article VI of
the Constitution which provides that "[t]he President shall submit to the Congress
within thirty days from the opening of every regular session, as the basis of the
general appropriations bill a budget of expenditures and sources of nancing,
including receipts from existing and proposed revenue measures."

2.The budget proposal for the Judiciary, as prepared by the Supreme Court,
shall be incorporated in the draft national budget. The Department of Budget and
Management may make revisions thereon as it may deem appropriate provided
that the latter clearly indicate that the revisions are its own and not the Court's,
and provided further that each item as to which revision is sought by the
Department shall be indicated in brackets on the draft national budget for
consideration by the Congress.
3.The Department of Budget and Management shall consult with the
Supreme Court concerning its comments on and suggested revisions of the
proposed budget for the Judiciary.

4.After approval by Congress, the appropriations for the Judiciary

shall be automatically and regularly released subject to availability of
funds .

5.The Supreme Court may submit to the Department of Budget and

Management reports of operation and income, current plantilla of personnel,
work and nancial plans and similar reports only for recording purposes. The
submission thereof concerning funds previously released shall not be a
condition precedent for subsequent fund releases. (Emphasis supplied.)

The "healthy" exchange of communications between then Chief Justice Andres R.

Narvasa and DBM Secretary Salvador M. Enriquez, Jr. was occasioned by the practice of
the DBM of reducing the budget submitted by the Judiciary without consultation with the
Court; hence the third guideline prescribed in the Resolution that requires such
consultation with respect to any revisions of the budget proposed by the Judiciary.
In its Comment on the Petition, the DBM makes capital of the fourth guideline
prescribed in that Resolution, explaining as follows:
16.Even the Supreme Court recognizes the need to grant the Executive
Department some form of exibility during times when cash resources are scarce.
In setting the guiding principle that will govern budget execution, it has been
agreed that:
"After approval by Congress, the appropriations for the Judiciary
shall be automatically and regularly released subject to availability of
CD Technologies Asia, Inc. 2019 cdasiaonline.com
 funds." (Emphasis supplied.)
Consequently, every month, it behooves upon the department to coordinate
with the revenue collecting agencies and determine if total revenue collections
meets (sic) total projections, if the de cit ceiling has been surpassed, and if the
total disbursement program exceeds this ceiling. On the basis of these data, total
amount of cash to be released for the month is set. If the total disbursement
program is less than the ceiling, then allotments of agencies are released in full.
However, if total disbursement program exceeds the ceiling, agency allotments
are only partially released.

17.Although the amount to be released may vary depending upon cash

availability, there is no uncertainty with regard to the release schedule. Unfailingly,
respondent ensures that cash enters petitioner's coffers every month. Such
regularity is required because several mandatory expenditures, the most
important being salaries, are paid monthly. Consequently, despite the
implementation of a cash release program, respondent ensures that the approved
allotment of petitioner is regularly released. 2 0

By this explanation, the DBM lamely excuses itself from compliance with the
mandate of scal autonomy of the CSC on account of alleged lack of government funds.
Certainly, scal autonomy would be a meaningless term if there are no funds with which to
implement it. However, this simplistic approach to the issue, which focuses narrowly on
the regularity of releases of funds for basic expenditures such as monthly salaries,
appears to constitute the entirety of the DBM's total understanding of scal autonomy. It
betrays the DBM's lack of comprehension of the concept of scal autonomy; its adamant
refusal to abide by that constitutional mandate, a matter that was noted by the Court in
Bengzon v. Drilon , 2 1 and its undisguised admission that, in the releases of appropriated
funds, the CSC is treated similarly as other government agencies without fiscal autonomy.
Fiscal autonomy means more than automatic and regular release of appropriated
funds. This is the intent of the framers of the Constitution.
When the scal autonomy of constitutional commissions was discussed by the
Constitutional Commission, Commissioner Christian Monsod emphasized that scal
autonomy is broader than just the automatic release of appropriations. It includes other
rights in the sense that scal autonomy includes the non-imposition of any other
procedures like the pre-audit system in bodies that enjoy scal autonomy , although the
inclusion of pre-audit procedures would "defeat the objective of automatic and regular
release." By such explanation, Commissioner Crispino de Castro temporarily withdrew his
amendment that would have deleted the sentence "[t]he Commission shall enjoy scal
autonomy" 2 2 and hence, the provision has remained in the fundamental law.
The same concept of scal autonomy as not limited to automatic and regular
release of funds has been espoused by this Court. In Bengzon v. Drilon , the Court declared
that "[t]he imposition of restrictions and constraints on the manner the independent
constitutional o ces allocate and utilize the funds appropriated for their operations is
anathema to fiscal autonomy. . . ."
The same stand has been expressed by the Constitutional Fiscal Autonomy Group
(CFAG) composed of the Judiciary and the constitutional bodies granted scal autonomy
when, on 3 April 1992, it issued Joint Resolution No. 1 (Ensuring and Operationalizing the
Fiscal Autonomy Granted by the 1987 Constitution to the Judiciary, the Civil Service
Commission, the Commission on Audit, the Commission on Elections, and the O ce of the
CD Technologies Asia, Inc. 2019 cdasiaonline.com
 Ombudsman) under these premises:
Lest the constitutional grant of scal autonomy remain a meaningless,
illusory platitude, there is an imperative need to esh it out, operationalize it,
breathe life into it and give it substance and vigor by translating it into practical
realities. The mere automatic and regular release of the approved
appropriations does not su ce to ensure scal autonomy. In the very
real sense, the scal autonomy contemplated in the Consti tution is
"enjoyed" even before and, with more reasons, after the release of the
appropriations. There is still a need to institutionalize adequate safeguards
towards vitalizing the constitutional mandate of fiscal autonomy.

Thus, in keeping with the constitutional design, the formulation, execution

and implementation of the budgets of the Judiciary, the Constitutional
Commissions (CSC, COA and COMELEC) and the O ce of the Ombudsman
should be within the context of scal autonomy which they enjoy in order to
further safeguard, ensure and guarantee their independence. The present
budgetary policies and guidelines , as hereinabove outlined, insofar as they
apply to the Judiciary, the Constitutional Commissions (CSC, COA and COMELEC)
and the O ce of the Ombudsman tend to detract from the subject
constitutional vesture of scal autonomy. By virtue thereof, as earlier
seen, the DBM is able to exercise and wield a tight control over the
various phases of the budget process that the budgets of said agencies
undergo, thereby completely negating and impairing the independence
that is the very essence of fiscal autonomy.

Control is anathema to scal autonomy. Viewed from the

constitutional standpoint, it is an anachronism of sorts. More speci cally, as is
the present practice, the Judiciary, the Constitutional Commissions and
the O ce of the Ombudsman go through exactly the same budget
process as all the other regular agencies of government, particularly the
Executive Branch. Their budget proposals are subjected to close scrutiny by the
DBM or suffer reductions/cuts. DBM's strict imposition of restrictions,
limitations or constraints on fund allocation and utilization speci ed in
the General Appropriations Act, P.D. 1177 and administrative/executive
issuances denies these independent constitutional o ces the desired
exibility inherent in scal autonomy and considerably sti es their
initiative and effectiveness in the management of their resources.
Thereby, DBM assumes unwarranted authority over these o ces'
nancial operations. Fiscal autonomy is unduly infringed upon.
(Emphasis supplied.)

It has been more than 13 years since CFAG Joint Resolution No. 1 was issued.
Unfortunately, the same practices of the DBM that control the budget of scally
autonomous government agencies in de ance of the Constitution are still being
perpetrated. The instant petition is indeed an opportune time for the CSC to assert scal
autonomy.

The CSC appears to denounce only the irregular and controlled releases of
appropriated funds by the DBM in its petition for mandamus. Nonetheless, a reading of the
petition would show that it is actually aimed at compelling the DBM to respect, observe,
and implement the constitutional mandate of scal autonomy of the Judiciary, the
Constitutional Commissions, and the O ce of the Ombudsman, which, in exercising its
CD Technologies Asia, Inc. 2019 cdasiaonline.com
 statutory responsibilities, the DBM has cast aside. By imposing National Budget Circular
No. 478 on all government agencies without quali cation, the DBM has actually subverted
and weakened the very purpose for the grant of scal autonomy — the independence of
the grantees. Obviously, the DBM shrugged off and overlooked the very reason for the
grant of scal autonomy — constitutional bodies vested with "independent" powers must
be "insulated from interference by the political departments." 2 3
This is not to say that agencies vested with scal autonomy have no reporting
responsibility at all to the DBM. This is precisely the reason why guideline No. 5 under the
Resolution of 3 June 1992 states that the Supreme Court, or constitutional commissions
clothed with scal autonomy for that matter, may submit reports relative to its
appropriation "for records purposes only." The word "may" is permissive, 2 4 as it is an
auxiliary verb manifesting "opportunity or possibility" and, under ordinary circumstances,
"implies the possible existence of something." 2 5 It is therefore incorrect for the DBM to
state that "independence without interdependence is folly" with respect to reporting
requirements. Interdependence will work only if it is undertaken within the parameters
prescribed by the Constitution.
As correctly pointed out by the CSC, reporting its nancial status to the DBM is not
the end-all and be-all of accountability. As constitutional bodies, the agencies concerned
must know the consequences of unmitigated and reckless expenditure of public funds.
Article II, Section 27 of the Constitution adopts the State policy to "maintain honesty and
integrity in the public service and take positive and effective measures against graft and
corruption." 2 6 Article XI, Section 1 provides that "[p]ublic o ce is a public trust" and hence,
"[p]ublic o cers and employees must at all times be accountable to the people, serve
them with utmost responsibility, integrity, loyalty, and e ciency, act with patriotism and
justice, and lead modest lives." Surely, these constitutional provisions must mean more
than mere platitudes to constitutional o ces vested with scal autonomy, a privilege
denied other government agencies, because those o ces must be independent in the
exercise of their constitutional functions. It bears emphasis that the same constitutional
o ces and institutions themselves are not the only ones accountable for illegal
expenditures; the o cials running the institutions are equally and personally responsible
therefor. 2 7
With scal autonomy, the constitutional bodies may allocate and disburse funds "as
may be provided by law or prescribed by them in the course of the discharge of their
functions." 2 8 In this regard, the experience of the CSC in the manner by which the DBM
treated its constitutional mandate of scal autonomy is not unusual. This Court itself has
its share of experiences in asserting its scal autonomy. These are manifest in Resolutions
this Court has issued relative to the exercise of its mandate of administrative supervision
over courts and personnel thereof under Article VIII, Section 6 of the Constitution. 2 9 Worth
mentioning is one administrative matter where the DBM, claiming that the Court
erroneously interpreted the law, applied its own interpretation of the same law. 3 0 Indeed,
like the CSC, this Court has been at the receiving end of the DBM's arbitrary refusal to
release appropriated funds in derogation of the fiscal autonomy of the Judiciary. SIcTAC

In Bengzon v. Drilon , this Court has observed that constitutional bodies vested with
scal autonomy "have so far limited their objections" to the manner by which the DBM
interprets scal autonomy "to constant reminders" in the "interest of comity and
cooperation" that must pervade the relationship of government agencies. But, in the same
Decision, the Court agreed with the petitioners that the grant of scal autonomy "should
cease to be a meaningless provision." Again, more than 13 years have passed since the
CD Technologies Asia, Inc. 2019 cdasiaonline.com
 Court made that observation. Like recent admonitions of the Court for the DBM to pay
heed and implement the constitutional provision on scal autonomy, that pronouncement
"has apparently fallen on deaf ears." 3 1
This Court is not oblivious to the reality that there is a budget de cit and the country,
as it were, is performing a tight balancing act between economic recovery and nancial
collapse. However, that situation is no reason for the DBM to brush aside the
constitutionally prescribed scal autonomy of the CSC and the other constitutional bodies
vested with that mandate. The present scal situation of this country is in fact a challenge
to the capability of the DBM to e ciently and effectively exercise its responsibility of
managing government budget while according due respect to the Constitution and its
provisions on fiscal autonomy.
ACCORDINGLY, I vote to GRANT the petition. Respondent Department of Budget and
Management should be enjoined to respect and implement the constitutional provision
granting fiscal autonomy to the Civil Service Commission.

Footnotes
1.Rollo at 6.

2.Id. at 25-35.
3.Id. at 99-100.

4.Id. at 100.

5.C.N. Hodges v. City of Iloilo, 125 PHIL 442, 447-448 (1967).

6.Manalo v. Gloria, 236 SCRA 130, 138 (1994).

7.Rollo at 9.
8.429 SCRA 736 (2004).

9.Id. at 760.

10.Art. VIII, Section 3.

11.29 SCRA 617, 628 (1969).

12.Respondent states in its Comment: "Consequently, every month, it behooves upon the
department to coordinate with the revenue collecting agencies and determine if total
revenue collections meets total projections, if the de cit ceiling has been surpassed, and
if the total disbursement program exceeds this ceiling. On the basis of these data, total
amount of cash to be released for the month is set. If the total disbursement program is
less than the ceiling, then allotments of agencies are released in full. However, if total
disbursement program exceeds the ceiling, agency allotments are only partially
released." (Rollo at 100-101)
13.R.A. No. 9162, General Appropriations Act, FY 2002.

14.R.A. No. 9206, General Appropriations Act, FY 2003.

15.R.A. No. 9336, General Appropriations Act, FY 2005.

16.Article VIII, Section 3.
CD Technologies Asia, Inc. 2019 cdasiaonline.com
 DAVIDE, JR., C.J.:

1.G.R. Nos. 99289-90, 27 January 1993.

2.1997 RULES OF CIVIL PROCEDURE, Rule 65, Sec. 3.

3.See: COMELEC v. Judge Quijano-Padilla, 438 Phil. 72, 91 (2002).

4.Esquivel v. Ombudsman, 437 Phil. 702, 716 (2002).

5.Roque v. O ce of Ombudsman , 366 Phil. 568, 575 (1999) citing Angchangco, Jr. v.
Ombudsman, 335 Phil. 766 (1997).
6.Chavez v. PCGG, 366 Phil. 863, 871-872 (1999).
7.The GAA provision reads:

"Sec. 63. Appropriations of Agencies Vested with Fiscal Autonomy . Any provision of law to the
contrary notwithstanding, the appropriations authorized in this Act for the Judiciary,
Congress of the Philippines, the Commission on Human Rights, the O ce of the
Ombudsman, the Civil Service Commission, the Commission on Audit and the
Commission on Elections shall be automatically and regularly released."
This is now Sec. 70 of the General Provisions of the GAA for FY 2005 (Rep. Act No. 9336).

8.ADMINISTRATIVE CODE OF 1987, Book IV, Title XVII, Chapter 1, Sec. 2.

9.Id.

10.Paragraph 1.3 providing for the purpose(s) of the circular states: "To prescribe the required
reports prior to the release of funds."
11.Comment, p. 5.

12.The Agricultural and Fisheries Modernization plan is funded under Sec. 112 of Rep. Act No.
8435, as amended by Rep. Act No. 9281. The Internal Revenue Allotment is provided for
by Sec. 284, Chapter 1 of the Local Government Code (Rep. Act No. 7160). An example
of an area development assistance fund is that created on 25 July 1986 by Executive
Order No. 265 (Creating the Aurora Integrated Area Development Project Office, Providing
Funds Thereof and For Other Purposes). The Local Government Empowerment Fund is
provided for under the provisions on Allocations to Local Government Units under the
General Appropriations Act.

13.G.R. No. 152774, 27 May 2004.

14.Pimentel, Jr. v. Aguirre, 391 Phil. 84, 105-106 (2000).

15.See: COMELEC v. Judge Quijano-Padilla, 438 Phil. 72 (2002).

16.Province of Batangas v. Romulo, supra.

17.Id.

18.Castro v. Sec. Gloria , 415 Phil. 645, 651-652 (2001) citing Sunville Timber Products, Inc. v.
Abad, G.R. No. 85502, 24 February 1992.
19.Comment of DBM, p. 2.

20.Comment of the DBM, p. 6.

21.G.R. No. 103524, 15 April 1992. In that case, the Court observed:
CD Technologies Asia, Inc. 2019 cdasiaonline.com
 "The exercise of the veto power in this case may be traced back to the efforts of the Department
of Budget and Management (DBM) to ignore or overlook the plain mandate of the
Constitution on scal autonomy. The OSG Comment re ects the same truncated view of
the provision.

We have repeatedly in the past few years called the attention of DBM that not only does it
allocate less than one percent (1%) of the national budget annually for the 22,769
Justices, Judges, and court personnel all over the country but also examines with a ne-
toothed comb how we spend the funds appropriated by Congress based on DBM
recommendations."

22.1 RECORD OF THE CONSTITUTIONAL COMMISSION (15 July 1986) 559-561; 1 JOURNAL
OF THE CONSTITUTIONAL COMMISSION (15 July 1986) 258.
23.See: Concurring opinion of Justice Hugo E. Gutierrez, Jr. in Cojuangco, Jr. v. PCGG, G.R. Nos.
92319-20, 2 October 1990.

24.Dizon v. Encarnacion, 119 Phil. 20, 22 (1963).

25.Supangan, Jr. v. Santos, G.R. No. 84663, 24 August 1990.

26.CONST., Art. II, Sec. 27.

27.Chapter 5, Book VI of the Administrative Code of 1987 states:

"SEC. 43. Liability for Illegal Expenditures. — Every expenditure or obligation authorized or
incurred in violation of the provisions of this Code or of the general and special
provisions contained in the Annual General or other Appropriations Act shall be void.
Every payment made in violation of said provisions shall be illegal and every o cial or
employee authorizing or making such payment, or taking part therein, and every person
receiving such payment shall be jointly and severally liable to the Government for the full
amount so paid or received.

Any o cial or employee of the Government knowingly incurring any obligation, or authorizing
any expenditure in violation of the provisions herein, or taking part therein, shall be
dismissed from the service, after due notice and hearing by the duly authorized
appointing o cial. If the appointing o cial is other than the President and should he
fail to remove such o cial or employee, the President may exercise the power of
removal."

28.Bengzon v. Drilon, G.R. No. 103524, 15 April 1992.

29.See: Resolutions in A.M. No. 02-12-01-SC (Re: Resolution Granting Automatic Permanent
Total Disability Bene ts to Heirs of Justices and Judges who Die in Actual Service)
dated 24 November 2004; A.M. No. 04-7-05-SC (Re: Properties Proposed to be Purchased
by Associate Justice Jose C. Vitug) dated 30 September 2004; and A.M. No. 11238-Ret.
(Re: Expiration of the Fixed Term of O ce of Atty. Saaduddin A. Alauya, O ce of the
Jurisconsult, Zamboanga City).
30.In the Resolution of 3 August 2004 in A.M. No. 11238-Ret., the Court held that "the mandate
of scal autonomy, read with Section 6, Article VIII of the Constitution providing that the
Supreme Court shall have 'administrative supervision over all courts and personnel
thereof,' is the foundation of the authority of the Supreme Court to prescribe
compensation or vest judicial ranking upon o cials of the Judiciary." It added that
"neither has the DBM the authority to implement its own interpretation of the law in
CD Technologies Asia, Inc. 2019 cdasiaonline.com
 disparagement of Resolutions issued by the Court in the exercise of its constitutional
powers, without so much as a request for a reconsideration of such Resolutions. By such
unilateral acts, the DBM has unfortunately but effectively forti ed itself as a tribunal on
nancial matters higher than this Court. By reviewing the Resolutions of the Court,
passing judgment on legal issues therein, and implementing its own conclusions in
blatant disregard of the principle of separation of powers, the DBM unwittingly trampled
on dangerous territory."
31.Resolution of 24 November 2004 in A.M. No. 02-12-01-SC, supra.

CD Technologies Asia, Inc. 2019 cdasiaonline.com