Bengzon v.

Senate Blue Ribbon Committee

FACTS:

Petitioner was one of the defendants in a civil case filed by the government with the Sandiganbayan for the alleged
anomalous sale of Kokoy Romoaldez of several government corporations to the group of Lopa,  a brother-in-law of
Pres. Aquino.

By virtue of a privilege speech made by Sen. Enrile urging the Senate to look into the transactions, an investigation
was conducted by the Senate Blue Ribbon Committee. Petitioners and Ricardo Lopa were subpoenaed by the
Committee to appear before it and testify on "what they know" regarding the "sale of thirty-six (36) corporations
belonging to Benjamin "Kokoy" Romualdez."

At the hearing, Lopa declined to testify on the ground that his testimony may "unduly prejudice" the defendants in
civil case before the Sandiganbayan.

Petitioner filed for a TRO and/or injunctive relief claiming that the inquiry was beyond the jurisdiction of the
Senate. He contended that the Senate Blue Ribbon Committee acted in excess of its jurisdiction and legislative
purpose.   One of the defendants in the case before the Sandiganbayan, Sandejas, filed with the Court of motion
for intervention. The Court granted it and required the respondent Senate Blue Ribbon Committee to comment on
the petition in intervention.

ISSUES:

Whether or not the Blue Ribbon inquiry was in aid of legislation

RULING:

NO.
There appears to be no intended legislation involved. The purpose of the inquiry to be conducted is not related to
a purpose within the jurisdiction of Congress, it was conducted to find out whether or not the relatives of
President Aquino, particularly Mr. Lopa had violated RA 3019 in connection with the alleged sale of the 36 or 39
corporations belonging to Benjamin "Kokoy" Romualdez to the Lopa Group.  

The power of both houses of Congress to conduct inquiries in aid of legislation is not absolute or unlimited. Its
exercise is circumscribed by the Constitution. As provided therein, the investigation must be "in aid of legislation in
accordance with its duly published rules of procedure" and that "the rights of persons appearing in or affected by
such inquiries shall be respected." It follows then that the rights of persons under the Bill of Rights must be
respected, including the right to due process and the right not to be compelled to testify against one's self.

The civil case was already filed in the Sandiganbayan and for the Committee to probe and inquire into the same
justiciable controversy would be an encroachment into the exclusive domain of judicial jurisdiction that had
already earlier set in. The issue sought to be investigated has already been pre-empted by the Sandiganbayan. To
allow the inquiry to continue would not only pose the possibility of conflicting judgments between the legislative
committee and a judicial tribunal.

Finally, a congressional committee’s right to inquire is subject to all relevant limitations placed by the Constitution
on governmental action ‘including the relevant limitations of the Bill of Rights. One of these rights is the right of an
individual to against self-incrimination. The right to remain silent is extended to respondents in administrative
investigations but only if it partakes of the nature of a criminal proceeding or analogous to a criminal proceeding.

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Hence, the petitioners may not be compelled by respondent Committee to appear, testify and produce evidence
before it only because the inquiry is not in aid of legislation and if pursued would be violative of the principle of
separation of powers between the legislative and the judicial departments of the government as ordained by the
Constitution. 

In the Matter of the Petition for Issuance of Writ of Habeas Corpus of Camilo L. Sabio

FACTS:

 Then Pres. Aquino installed during her regime EO No. 1 creating Presidential Commission on Good
Government (PCGG). She entrusted upon this Commission the herculean task of recovering the ill-gotten
wealth accumulated by the deposed President Ferdinand E. Marcos, his family, relatives, subordinates and
close associates. Section 4 (b) of E.O. No. 1 provides that: "No member or staff of the Commission shall be
required to testify or produce evidence in any judicial, legislative or administrative proceeding concerning
matters within its official cognizance." Apparently, the purpose is to ensure PCGG's unhampered
performance of its task.
 On Feb. 20, 2006, an inquiry in aid of legislation on the anomalous losses incurred by the POTC,
PHILCOMSAT and PHC. Senate Res. No. 455 is then thereby transferred to the Committee on Government
Corporations and Public Enterprises.
 On May 8, 2006, Chairman Sabio of the PCGG was invited to be one of the resource persons in the public
meeting. However, he declined the invitation and two other subsequent invitations invoking that Sec. 4(b)
constitutes a limitation on the power of legislative inquiry and is still not repealed.
 Unconvinced with the explanation of petitioner, the Committee on Government Corporations and Public
Enterprises issued an order placing Chariman Sabio and his commissioners under arrest for contempt of
the Senate. The Order bears the approval of Senate President Villar and the majority of the Committees'
members.
 Hence, Chairman Sabio filed with this Court a petition for habeas corpus against the Senate Committee on
Government Corporations and Public Enterprises and Committee on Public Services, their Chairmen,
Senators Richard Gordon and Joker P. Arroyo and Members. The case was docketed as G.R. No. 174340.

ISSUES:

1. Whether or not Section 4(b) of E.O. No.1 is repealed is unconstitutional.

2. Whether or not the Senate Committees have power to punish Chairman Sabio and his Commissioners for
contempt of the Senate.

RULING:

1. Yes, Sec. 4(b) of E.O. No. 1 is unconstitutional.

The Constitution is the highest law of the land. It is "the basic and paramount law to which all other laws
must conform and to which all persons, including the highest officials of the land, must defer. No act shall
be valid, however noble its intentions, if it conflicts with the Constitution.”

Section 4(b) limits or obstructs the power of Congress to secure from PCGG members and staff
information and other data in aid of its power to legislate.

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 “To the extent that investigations in aid of legislation are generally conducted in public, however, any
executive issuance tending to unduly limit disclosures of information in such investigations necessarily
deprives the people of information which, being presumed to be in aid of legislation, is presumed to be a
matter of public concern.”

A statute may be declared unconstitutional because it is not within the legislative power to enact; or it
creates or establishes methods or forms that infringe constitutional principles; or its purpose or effect
violates the Constitution or its basic principles.

2. Yes, the Senate Committees have power to punish Chairman Sabio and his Commissioners for contempt
of the Senate.

Article VI, Section 21 provides: The Senate or the House of Representatives or any of its respective
committees may conduct inquiries in aid of legislation in accordance with its duly published rules of
procedure. The rights of persons appearing in or affected by such inquiries shall be respected.

Article VI, Section 21 grants the power of inquiry not only to the Senate and the House of Representatives,
but also to any of their respective committees. Clearly, there is a direct conferral of power to the
committees. Father Bernas, in his Commentary on the 1987 Constitution, correctly pointed out its
significance:

It should also be noted that the Constitution explicitly recognizes the power of investigation not just of
Congress but also of "any of its committees." This is significant because it constitutes a direct conferral of
investigatory power upon the committees and it means that the means which the Houses can take in
order to effectively perform its investigative function are also available to the Committees.

This is a reasonable conclusion. The conferral of the legislative power of inquiry upon any committee of
Congress must carry with it all powers necessary and proper for its effective discharge. Otherwise, Article
VI, Section 21 will be meaningless. The indispensability and usefulness of the power of contempt in a
legislative inquiry is underscored in a catena of cases, foreign and local.

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 Negros Oriental II Electric Cooperative v. Sangguniang Panlungsod of Dumaguete

FACTS:

In 1985, the SP of Dumaguete sought to conduct an investigation in connection with pending legislation related to
the operations of public utilities. Invited in the hearing are the heads of NORECO II – Paterio Torres and Arturo
Umbac. NORECO II is alleged to have installed inefficient power lines in the said city. Torres and Umbac refused to
appear before the Sangguniang Panlungsod (SP) and they alleged that  the power to investigate, and to order the
improvement of, alleged inefficient power lines to conform to standards is lodged exclusively with the National
Electrification Administration; and neither the Charter of the City of Dumaguete nor the [old] Local Government
Code (LGC – BP 337) grants the SP. The SP averred that inherent in the legislative functions performed by the
respondent SP is the power to conduct investigations in aid of legislation and with it, the power to punish for
contempt in inquiries on matters within its jurisdiction.

ISSUE: Whether or not LGUs can issue contempt.

RULING:

There is no express provision either in the 1973 Constitution or in the LGC (BP 337) granting local legislative bodies,
the power to subpoena witnesses and the power to punish non-members for contempt. Absent a constitutional or
legal provision for the exercise of these powers, the only possible justification for the issuance of a subpoena and
for the punishment of non-members for contumacious behavior would be for said power to be deemed implied in
the statutory grant of delegated legislative power. But, the contempt power and the subpoena power partake of a
judicial nature. They cannot be implied in the grant of legislative power. Neither can they exist as mere incidents of
the performance of legislative functions. To allow local legislative bodies or administrative agencies to exercise
these powers without express statutory basis would run afoul of the doctrine of separation of powers. There being
no provision in the LGC explicitly granting local legislative bodies, the power to issue compulsory process and the
power to punish for contempt, the SP of Dumaguete is devoid of power to punish the petitioners Torres and
Umbac for contempt. The Ad-Hoc Committee of said legislative body has even less basis to claim that it can
exercise these powers. Even assuming that the SP and the Ad-Hoc Committee had the power to issue the subpoena
and the order complained of, such issuances would still be void for being ultra vires. The contempt power (and the
subpoena power) if actually possessed, may only be exercised where the subject matter of the investigation is
within the jurisdiction of the legislative body.

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 Neri v. Senate Committee on Accountability of Public Officers

FACTS: 

This is a petition for certiorari with application for a temporary restraining order. In a letter dated November 22,
2007, Romulo Neri was cited in contempt for his failure to attend the Blue Ribbon Committee hearing. This is in
relation to the investigation of the National Broadband Network Project (NBN Project) wherein he invoked
executive privilege when was asked about what he and President Arroyo discussed in relation to the NBN Project.
When the Blue Ribbon Committee issued a subpoena for petitioner to appear before them, ExecutiveSecretary
Ermita addressed a letter that petitioners testimony should be dispensed with as he was invoking executive
privilege by order of thePresident on the following questions, to wit:
 
a) Whether the President followed up the (NBN) project?
 
b) Were you dictated to prioritize the ZTE?
 
c) Whether the President said to go ahead and approve the project after being told about the alleged bribe?
The context in which executive privilege is being invoked is that the information sought to be disclosed might
impair our diplomatic as well as economic relations with the Peoples Republic of China.  

ISSUE: 

Whether Executive Secretary Ermita correctly invoked executive privilege on the three questions mentioned in his
15 November 2007 letter to the Senate Blue Ribbon Committee;

RULING: 

YES. Jurisprudence teaches that for the claim to be properly invoked, there must be a formal claim of privilege,
lodged by the head of the department which has control over the matter."56 A formal and proper claim of
executive privilege requires a "precise and certain reason" for preserving their confidentiality. the Congress must
not require the executive to state the reasons for the claim with such particularity as to compel disclosure of the
information which the privilege is meant to protect. This is a matter of respect to a coordinate and co-equal
department. In addition, the court states that despite the revocation of EO 464, the executive privilege remains as
it is part of the constitution. 

Further, the court makes a distinction between this case and the Nixon case, it stated that the judicial department
has the power to compel persons to unveil confidential information  in the administration of justice while the
legislative does not even if it is in search for the truth. 

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 Senate v. Ermita

FACTS:

On September 21 to 23, 2005, the Committee of the Senate as a whole issued invitations to various officials of the
Executive Department for them to appear as resource speakers in a public hearing on the railway project of the
North Luzon Railways Corporation with the China National Machinery and Equipment Group (hereinafter North
Rail Project).

On September 28, 2005, the President then issued Executive Order 464, “Ensuring Observance of the Principle of
Separation of Powers, Adherence to the Rule on Executive Privilege and Respect for the Rights of Public Officials
Appearing in Legislative Inquiries in Aid of Legislation Under the Constitution, and For Other Purposes,” which,
pursuant to Section 6 thereof, took effect immediately.

ISSUES:

1. Whether E.O. 464 contravenes the power of inquiry vested in Congress;

2. Whether E.O. 464 violates the right of the people to information on matters of public concern; and
3. Whether respondents have committed grave abuse of discretion when they implemented E.O. 464 prior
to its publication in a newspaper of general circulation.

RULING:

1. The Congress power of inquiry is expressly recognized in Section 21 of Article VI of the Constitution. This
power of inquiry is broad enough to cover officials of the executive branch; it is co-extensive with the
power to legislate. The matters which may be a proper subject of legislation and those which may be a
proper subject of investigation are one. It follows that the operation of government, being a legitimate
subject for legislation, is a proper subject for investigation.
2. Yes. Although there are clear distinctions between the right of Congress to information which underlies
the power of inquiry and the right of the people to information on matters of public concern, any
executive issuance tending to unduly limit disclosures of information in investigations in Congress
necessarily deprives the people of information which, being presumed to be in aid of legislation, is
presumed to be a matter of public concern.
3. Yes. While E.O. 464 applies only to officials of the executive branch, it does not follow that the same is
exempt from the need for publication. It has a direct effect on the right of the people to information on
matters of public concern. Due process requires that the people should have been apprised of its issuance
before it was implemented.

Validity of Sections 1 and 2(a)

• The Supreme Court declared Section 1 and Section 2(a) of Executive Order 464 valid while Sections 2(b)
and 3 are void.

• Section 1 specifically applies to department heads. The requirement then to secure presidential consent
under Section 1 is limited only to appearances in the question hour. Under Section 22, Article VI of the
Constitution, the appearance of department heads in the question hour is discretionary on their part.

• Section 1 cannot, however, be applied to appearances of department heads in inquiries in aid of

legislation. Congress is not bound in such instances to respect the refusal of the department head to

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 appear in such inquiry, unless a valid claim of privilege is subsequently made, either by the President
herself or by the Executive Secretary

• On Section 2(a) No infirmity, can be imputed to as it merely provides guidelines, binding only on the heads
of office mentioned in Section 2(b), on what is covered by executive privilege. It does not purport to be
conclusive on the other branches of government. It may thus be construed as a mere expression of
opinion by the President regarding the nature and scope of executive privilege.

Unconstitutionality of Sections 2 (b) and 3

• Section 3 requires all the public officials enumerated in Section 2(b) to secure the consent of the President
prior to appearing before either house of Congress.

• Whenever an official invokes E.O. 464 to justify his failure to be present, such invocation must be
construed as a declaration to Congress that the President, or a head of office authorized by the President,
has determined that the requested information is privileged, and that the President has not reversed such
determination. There is an implied claim of privilege, which implied claim is not accompanied by any
specific allegation of the basis thereof.

• The claim of privilege under Section 3 of E.O. 464 in relation to Section 2(b) is invalid as it is merely
implied. It does not provide for precise and certain reasons for the claim, which deprives the Congress to
determine whether the withholding of information is justified under the circumstances of each case.

The salient provisions of the Executive Order 464 are as follows:

SECTION 1. Appearance by Heads of Departments Before Congress. – In accordance with Article VI, Section 22 of
the Constitution and to implement the Constitutional provisions on the separation of powers between co-equal
branches of the government, all heads of departments of the Executive Branch of the government shall secure the
consent of the President prior to appearing before either House of Congress.

When the security of the State or the public interest so requires and the President so states in writing, the
appearance shall only be conducted in executive session.

SECTION. 2. Nature, Scope and Coverage of Executive Privilege. –

(a) Nature and Scope. – The rule of confidentiality based on executive privilege is fundamental to the operation of
government and rooted in the separation of powers under the Constitution (Almonte vs. Vasquez, G.R. No. 95367,
23 May 1995). Further, Republic Act No. 6713 or the Code of Conduct and Ethical Standards for Public Officials and
Employees provides that Public Officials and Employees shall not use or divulge confidential or classified
information officially known to them by reason of their office and not made available to the public to prejudice the
public interest.

Executive privilege covers all confidential or classified information between the President and the public officers
covered by this executive order, including:

Conversations and correspondence between the President and the public official covered by this executive order
(Almonte vs. Vasquez G.R. No. 95367, 23 May 1995; Chavez v. Public Estates Authority, G.R. No. 133250, 9 July
2002);

Military, diplomatic and other national security matters which in the interest of national security should not be
divulged (Almonte vs. Vasquez, G.R. No. 95367, 23 May 1995; Chavez v. Presidential Commission on Good
Government, G.R. No. 130716, 9 December 1998).

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Information between inter-government agencies prior to the conclusion of treaties and executive agreements
(Chavez v. Presidential Commission on Good Government, G.R. No. 130716, 9 December 1998);

Discussion in close-door Cabinet meetings (Chavez v. Presidential Commission on Good Government, G.R. No.
130716, 9 December 1998);

Matters affecting national security and public order (Chavez v. Public Estates Authority, G.R. No. 133250, 9 July
2002).

(b) Who are covered. – The following are covered by this executive order:

Senior officials of executive departments who in the judgment of the department heads are covered by the
executive privilege;

Generals and flag officers of the Armed Forces of the Philippines and such other officers who in the judgment of
the Chief of Staff are covered by the executive privilege;

Philippine National Police (PNP) officers with rank of chief superintendent or higher and such other officers who in
the judgment of the Chief of the PNP are covered by the executive privilege;

Senior national security officials who in the judgment of the National Security Adviser are covered by the executive
privilege; and

Such other officers as may be determined by the President.

SECTION 3. Appearance of Other Public Officials Before Congress. – All public officials enumerated in Section 2 (b)
hereof shall secure prior consent of the President prior to appearing before either House of Congress to ensure the
observance of the principle of separation of powers, adherence to the rule on executive privilege and respect for
the rights of public officials appearing in inquiries in aid of legislation.

Standard Chartered Bank v. Senate Committee on Banks

FACTS:

Indeed, the mere filing of a criminal or an administrative complaint before a court or a quasi-judicial body should
not automatically bar the conduct of legislative investigation. Otherwise, it would be extremely easy to subvert any
intended inquiry by Congress through the convenient ploy of instituting a criminal or an administrative complaint.
Surely, the exercise of sovereign legislative authority, of which the power of legislative inquiry is an essential
component, cannot be made subordinate to a criminal or an administrative investigation.

Standard Chartered Bank Philippines (SCB) is engaged in banking, trust and other related activities in the
Philippines. Respondent Senate Committee on Banks, Financial Institutions and Currencies, on the other hand, is
one of the committees of the Senate of the Philippines.

Senator Juan Ponce Enrile, Vice-Chairman of respondent committee, accused SCB of violating the Securities
Regulation Code (R.A. 8799) for selling unregistered foreign securities. This has led the Senate, through respondent
Committee, to conduct investigation in aid of legislation. Petitioner SCB refused to attend the investigation
proceedings on the ground that criminal and civil cases involving the same issues were pending in courts.

8
ISSUES:

Whether or not the Senate Committee on Banks, Financial Institutions and Currencies can conduct investigation
against SCB despite criminal and civil cases against the latter pending in courts

RULING:

Petition DENIED.

Citing Bengzon, Jr. v. Senate Blue Ribbon Committee, the petitioners claim that since the issue of whether or not
SCB-Philippines illegally sold unregistered foreign securities is already preempted by the courts that took
cognizance of the foregoing cases, the Senate Committee, by this investigation, would encroach upon the judicial
powers vested solely in these courts.

The argument is misplaced. Bengzon does not apply squarely to this case.

It is true that in Bengzon, the Court declared that the issue to be investigated was one over which jurisdiction had
already been acquired by the Sandiganbayan, and to allow the [Senate Blue Ribbon] Committee to investigate the
matter would create the possibility of conflicting judgments; and that the inquiry into the same justiciable
controversy would be an encroachment on the exclusive domain of judicial jurisdiction that had set in much
earlier.

To the extent that, in the case at bench, there are a number of cases already pending in various courts and
administrative bodies involving the petitioners, relative to the alleged sale of unregistered foreign securities, there
is a resemblance between this case and Bengzon.

However, the similarity ends there.

Central to the Court’s ruling in Bengzon—that the Senate Blue Ribbon Committee was without any constitutional
mooring to conduct the legislative investigation—was the Court’s determination that the intended inquiry was
not in aid of legislation. The Court found that the speech of Senator Enrile, which sought such investigation
contained no suggestion of any contemplated legislation; it merely called upon the Senate to look into possible
violations of Section 5, Republic Act No. 3019.

Unfortunately for the petitioners, this distinguishing factual milieu in Bengzon does not obtain in the
instant case. P.S. Resolution No. 166 is explicit on the subject and nature of the inquiry to be (and
already being) conducted by the respondent Committee, as found in the last three Whereas clauses.

The unmistakable objective of the investigation, as set forth in the said resolution, exposes the error in
petitioners’ allegation that the inquiry, as initiated in a privilege speech by the very same Senator Enrile, was
simply “to denounce the illegal practice committed by a foreign bank in selling unregistered foreign securities x x
x.” This fallacy is made more glaring when we consider that, at the conclusion of his privilege speech, Senator
Enrile urged the Senate “to immediately conduct an inquiry, in aid of legislation, so as to prevent the occurrence
of a similar fraudulent activity in the future.”

Indeed, the mere filing of a criminal or an administrative complaint before a court or a quasi-judicial body should
not automatically bar the conduct of legislative investigation. Otherwise, it would be extremely easy to subvert
any intended inquiry by Congress through the convenient ploy of instituting a criminal or an administrative
complaint. Surely, the exercise of sovereign legislative authority, of which the power of legislative inquiry is an
essential component, cannot be made subordinate to a criminal or an administrative investigation.

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 Tolentino v. Secretary of Finance

FACTS:

Petitioners (Tolentino, Kilosbayan, Inc., Philippine Airlines, Roco, and Chamber of Real Estate and Builders
Association) seek reconsideration of the Court’s previous ruling dismissing the petitions filed for the declaration of
unconstitutionality of R.A. No. 7716, the Expanded Value-Added Tax Law. Petitioners contend that the R.A. did not
“originate exclusively” in the HoR as required by Article 6, Section 24 of the Constitution. The Senate allegedly did
not pass it on second and third readings, instead passing its own version. Petitioners contend that it should have
amended the House bill by striking out the text of the bill and substituting it with the text of its own bill, so as to
conform with the Constitution.

ISSUES:

Whether or not the R.A. is unconstitutional for having “originated” from the Senate, and not the House of
Representatives.
 

RULING:

Petition is unmeritorious. The enactment of the Senate bill has not been the first instance where the Senate, in the
exercise of its power to propose amendments to bills (required to originate in the House), passed its own version.
An amendment by substitution (striking out the text and substituting it), as urged by petitioners, concerns a mere
matter of form, and considering the petitioner has not shown what substantial difference it would make if Senate
applied such substitution in the case, it cannot be applied to the case at bar. While the aforementioned
Constitutional provision states that bills must “originate exclusively in the HoR,” it also adds, “but the Senate may
propose or concur with amendments.” The Senate may then propose an entirely new bill as a substitute measure.
Petitioners erred in assuming the Senate version to be an independent and distinct bill. Without the House bill,
Senate could not have enacted the Senate bill, as the latter was a mere amendment of the former. As such, it did
not have to pass the Senate on second and third readings.

Petitioners question the signing of the President on both bills, to support their contention that such are separate
and distinct. The President certified the bills separately only because the certification had to be made of the
version of the same revenue bill which AT THE MOMENT was being considered.

Petitioners question the power of the Conference Committee to insert new provisions. The jurisdiction of the
conference committee is not limited to resolving differences between the Senate and the House. It may propose
an entirely new provision, given that such are germane to the subject of the conference, and that the respective
houses of Congress subsequently approve its report.

Petitioner PAL contends that the amendment of its franchise by the withdrawal of its exemption from VAT is not
expressed in the title of the law, thereby violating the Constitution. The Court believes that the title of the R.A.
satisfies the Constitutional Requirement.

Petitioners claim that the R.A. violates their press freedom and religious liberty, having removed them from the
exemption to pay VAT. Suffice it to say that since the law granted the press a privilege, the law could take back the
privilege anytime without offense to the Constitution. By granting exemptions, the State does not forever waive
the exercise of its sovereign prerogative.

Lastly, petitioners contend that the R.A. violates due process, equal protection and contract clauses and the rule on
taxation. Petitioners fail to take into consideration the fact that the VAT was already provided for in E.O. No. 273

10
long before the R.A. was enacted. The latter merely EXPANDS the base of the tax. Equality and uniformity in
taxation means that all taxable articles or kinds of property of the same class be taxed at the same rate, the taxing
power having authority to make reasonable and natural classifications for purposes of taxation. It is enough that
the statute applies equally to all persons, forms and corporations placed in s similar situation.

Bolinao Electronics Corporation v. Valencia

FACTS:

 Petitioners applied for a renewal of their station and operator licenses

 Act 3846 (An Act Providing for the Regulation of Radio Stations and Radio Communications in the
Philippine Islands), amended by RA 584
 Act 3846, Sec 3 – Powers and duties of DPWC Secretary – he/she may approve or disapprove any
application for renewal of station or operator license: Provided, however, that no application for renewal
shall be disapproved without giving the licensee a hearing
 Respondents held an investigation intending to find out whether there is ground to disapprove the
applications for renewal – just because of the alleged late filing of the petitions for renewal. (One
violation merits disapproval.)
 Republic of the Philippines, as operator of Philippine Broadcasting System (PBS), = intervenor.

ISSUES:
1. W the investigation being conducted by respondents, in connection with petitioners' applications for
renewal of their station licenses, has any legal basis;
2. W/N there was abandonment or renunciation by CBN of Channel 9 in favor of PBS;
3. W/N PBS can legally operate Channel 9 and is entitled to damages, for CBN's refusal to give up operations
thereof. (VETO-RELATED ISSUE)

RULING:
1. Respondents exercise Act 3846, Sec 3 (as amended) to conduct an investigation/hearing on the
applications for renewal. Notices of hearing were sent to the petitioners.

Petitioners aver that the violation ceased to exist after the act of late filing has been condoned or
pardoned by respondents by virtue of a July 24, 1962 Circular:

Late filing of petitions for renewal, among others, was condoned if the necessary steps were taken to
correct their records and practices before August 10, 1962

Supreme Court: Apparently, all applications for renewal were made before said date, or even before the
issuance of the circular itself on July 24, 1962. The lone reason given for the investigation of petitioners'
application (that is, the late filing) is therefore no longer tenable.

Respondents aver that they have no authority to condone or pardon violations

Supreme Court: We don’t think so.

DPWC Secretary is given the discretion either to "bring criminal action against violators of the radio laws
or the regulations and confiscate the radio apparatus in case of illegal operation; or simply suspend or
revoke the offender's station or operator licenses or refuse to renew such licenses; or just reprimand and
warn the offenders."

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 The cited circular specifically approved by the DPWC Undersecretary (who has not been shown to have acted
beyond his powers as such in representation of the Secretary of the Department) warning the offenders, is an
act authorized under the law.

The circular having been issued by respondents themselves, they can no longer claim its illegality just to evade
the effect of its enforcement.

2. Respondents: The statement "Channel 10 assigned in lieu of Channel 9", appearing in the construction permit
to transfer television station DZXL-TV (Channel 9) from Quezon City to Baguio City implies a renunciation.

Supreme Court: No basis. It does not establish any agreement between the radio control authority and the
station operator, on the switch or change of operations of CBN from Channel 9 to Channel 10

This was necessary to avoid interference of its broadcast with that of the Clark Air Force base station in
Pampanga which is operating on Channel 8

Channel 10 would be assigned to petitioner only when the Baguio station starts to operate.

Hence, there is no abandonment of rights to operate or broadcast.

Respondents aver that construction permit No. 793, bearing a remark that construction of the station shall
begin after Channel 9 CBN’s permit to transfer, upon approval, would deem an abandonment of Channel 9

Supreme Court: Not again.

Respondents actually admitted that they placed “CBN” in the said construction permit. (It should just be
“Channel 9” as opposed to “CBN”; and a channel (number 9) is different from its operator (CBN)), and also:

CBN had no participation in making/preparing the permit! (inter alios acta = a non-party cannot be adversely
affected by a contract between two other parties)

Hence, there is no abandonment.

3. It cannot claim for damages because, since the intervenor have failed to prove the alleged agreement between
CBN and said intervenor on the exchange of use of Channels 9 and 10, no right belonging to said intervenor
had been violated by petitioner's refusal to give up its present operation of Channel 9.

However, it may also be added that as the records show, the appropriation to operate the Philippine
Broadcasting Service as approved by Congress and incorporated in the 1962-1963 Budget of the Republic of
the Philippines, was provided as follows:

Appropriations Act: Item – Philippine Broadcasting Service General Fund

o Sec IV (1) (Special Purposes): For contribution to the operation of the Philippine Broadcasting
Service, including promotion, programming, operations and general administration; Provided, That
no portion of this appropriation shall be used for the operation of television stations in Luzon or any
part of the Philippines where there are television stations . . . PhP30,000
o Sec VI (5) (Special Provisions): No amount appropriated for televisions under Special Fund and
General Fund shall be used for the operation of television stations in Luzon or any part of the
Philippines where there are television stations."

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The President vetoed the conditions mentioned by each provision (not each provision as a whole).

SC: The President can’t do that.

When a provision of an appropriation bill affects one or more items of the same, the President cannot veto the
provision without at the same time vetoing the particular item or items to which it relates. (Art. VI, Sec. 20).

What was vetoed was a condition (see underscores above) attached to the appropriation, not the item itself

Executive's veto power does not carry with it the power to strike out conditions or restrictions (State v. Holder –
adhered to in subsequent cases)

Hence, the veto is unconstitutional.

Demetria v. Alba
FACTS:

 Petitioners filed as concerned citizens of the country, as members of the National Assembly/Batasan
Pambansa representing their millions of constituents, as parties with general interest common to all the
people of the Philippines, and as taxpayers whose vital interests may be affected by the outcome of the
reliefs

 Petitioners assailed the constitutionality of the first paragraph of Section 44 of Presidential Decree No.
1177, otherwise known as the “Budget Reform Decree of 1977” on the ff. grounds:

- It infringes upon the fundamental law by authorizing the illegal transfer of public moneys

- It is repugnant to the constitution as it fails to specify the objectives and purposes for which the
proposed transfer of funds are to be made

- It allows the President to override the safeguards, form and procedure prescribed by the
Constitution in approving appropriations

- it amounts to undue delegation of legislative powers on the transfer of funds by the President
and the implementation thereof by the Budget Minister and the Treasurer are without or in
excess of their authority and jurisdiction

- The threatened and continuing transfer of funds by the president and the implementation thereof
by the budget minister and the treasurer of the Philippines are without or in excess of their
authority and jurisdiction.

 Solicitor General, for the public respondents, questioned the legal standing of petitioners. He further
contended that:

 -The provision under consideration was enacted pursuant to Section 16(5), Art.VIII of the 1973
Constitution

 -Prohibition will not lie from one branch of the government to a coordinate branch to enjoin the
performance of duties within the latter’s sphere of responsibility

 On February 27, the Court required petitioners to file a Reply to the Comment. Petitioners stated that as a
result of the change in the administration, there is a need to hold the resolution of the present case in
abeyance.

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  The Solicitor General filed a rejoinder with a motion to dismiss setting forth as ground therefore,
abrogation of Section 16(5), Art.VIII of the 1973 Constitution by the Freedom Constitution, which has
allegedly rendered the petition moot and academic

ISSUES:

1. Whether or not the case is justiciable.

2. Whether or not the Paragraph 1 of Section 44 of Presidential Decree No. 1177 is unconstitutional.

RULING:

1. The case is justiciable. The court cited Ecelio Javier v. COMELEC where it said that: “This Court will not disregard
and in effect condone wrong on the simplistic and tolerant pretext that the case has become moot and academic.”
- According to Pascual v Secretary of Public Works, “... taxpayers have sufficient interest in preventing the illegal
expenditures of moneys raised by taxation and may therefore question the constitutionality of statutes requiring
expenditure of public moneys.” As regards taxpayers’ suit, this Court enjoys that open discretion to entertain the
same or not (Tan v Macapagal).

- Where the legislature or the executive branch acts beyond the scope of its constitutional powers, it becomes the
duty of the judiciary to declare what the other branches of the government had assumed to do, as void. This is the
essence of judicial power conferred by the Constitution “in one Supreme Court and in such lower courts as may be
established by law.”

2. YES. Paragraph 1 of Section 44 of Presidential Decree No. 1177, being repugnant to Section 16(5) Article VIII of
the 1973 Constitution is null and void.

- Paragraph 1 of Section 44 provides: “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.”

- Section 16(5) Article VIII reads as follows: “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.”

- Prohibition to transfer was explicit and categorical. For flexibility in the use of public funds, the Constitution
provided a leeway in which the purpose and condition for which funds may be transferred were specified.

- The constitution allows 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

- Paragraph 1 of Section 44 unduly over-extends the privilege granted under Section 16(5), and empowers the
President to indiscriminately transfer funds from one department, bureau, office or agency 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, without
regard to whether or not the funds to be transferred are savings, or whether or not the transfer is for the purpose
of augmenting the item to which the transfer is to be made.

- It completely disregards the standards set in the fundamental law, amounting to an undue delegation of
legislative power

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 PhilConsa v. Enriquez

FACTS:

 House Bill No. 10900, the General Appropriation Bill of 1994 (GAB of 1994), was passed and approved by
both houses of Congress on December 17, 1993.
 It imposed conditions and limitations on certain items of appropriations in the proposed budget
previously submitted by the President. It also authorized members of Congress to propose and identify
projects in the "pork barrels" allotted to them and to realign their respective operating budgets.
 On December 30, 1993, the President signed the bill into law, making it as Republic Act No. 7663, entitled
"AN ACT APPROPRIATING FUNDS FOR THE OPERATION OF THE GOVERNMENT OF THE PHILIPPINES FROM
JANUARY ONE TO DECEMBER THIRTY ONE, NINETEEN HUNDRED AND NINETY-FOUR, AND FOR OTHER
PURPOSES" (GAA of 1994). On the same day, the President delivered his Presidential Veto Message,
specifying the provisions of the bill he vetoed and on which he imposed certain conditions.

4 cases questioning the GAB 1994

1.) In G.R. No. 113105, Philippine Constitution Association (PHILCONSA) et al. prayed for a writ of prohibition
to declare as unconstitutional and void: (a) Article 41 on the Countrywide Development Fund or “pork
barrels,” the special provision in Article I entitled Realignment of Allocation for Operational Expenses, (b)
Article 48 on the Appropriation for Debt Service or the amount appropriated under said Article 48 in
excess of the P37.9 B allocated for the DECS; and (c) the veto of the President of the Special Provision of
Article 48 of the GAA of 1994

2.) In G.R. No. 113174, 16 Senators question: (1) the constitutionality of the conditions imposed by the
President in the items of the GAA of 1994: (a) for the Supreme Court, (b) Commission on Audit (COA), (c)
Ombudsman, (d) Commission on Human Rights, (CHR), (e) Citizen Armed Forces Geographical Units
(CAFGU's) and (f) State Universities and Colleges (SUC's); and (2) the constitutionality of the veto of the
special provision in the appropriation for debt service.

3.) In G.R. No. 113766, Senators Romulo and Tañada together with the Freedom from Debt Coalition, a non-
stock domestic corporation, sued as taxpayers, challenging the constitutionality of the Presidential veto of
the special provision in the appropriations for debt service and the automatic appropriation of funds
therefor.

4.) In G.R. No. 113888, Senators Romulo and Tañada contest the constitutionality of: (1) the veto on four
special provisions added to items in the GAA of 1994 for the Armed Forces of the Philippines (AFP) and
the Department of Public Works and Highways (DPWH); and (2) the conditions imposed by the President
in the implementation of certain appropriations for the CAFGU's, the DPWH, and the National Housing
Authority (NHA).

ISSUES:

1. Whether or not petitioners have locus standi

2. Whether or not GAA of 1994 is unconstitutional
a. Countrywide Development Fund / pork barrels (Article 48) – encroachment by legislature on
executive power; power of appropriation is implementation of the law
b. Realignment of Operating Expenses (Special Provision 1) – contrary to Article 6 Section 25(5)

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 c. Highest Priority for Debt Service (Article 48) – and not education in allocation of budget

3. Whether or not the veto of the president on four special provisions of Article 48 of the GAA 1994 is
unconstitutional and void?
a. Provision on debt ceiling
b. Funds of State Universities and Colleges (SUC’s)
c. Road Maintenance ratio (70% administrative/ 30% contract)
d. AFP medicines
e. Military Equipment
f. AFP pension funds
g. Condition on the deactivation of CAGFU’s
h. Conditions on the appropriation for SC, Ombudsman, COA, CHR

RULING:

1. Yes. Petitioners have locus standi

The Court held that the members of Congress have the legal standing to question the validity of acts of the
Executive which injures them in their person or the institution of Congress to which they belong. In the latter
case, the acts cause derivative but nonetheless substantial injury which can be questioned by members of
Congress. In the absence of a claim that the contract in question violated the rights of petitioners or
impermissibly intruded into the domain of the Legislature, petitioners have no legal standing to institute the
instant action in their capacity as members of Congress.

2. Whether or not GAA of 1994 is unconstitutional

a. Countrywide Development Fund / pork barrels (Article 48) – constitutional; not encroachment of
executive power

 The power of appropriation lodged in Congress carries with it the power to specify the project or
activity to be funded under the appropriation law. It can be as detailed and as broad as Congress wants
it to be.
 The CDF is explicit that it shall be used "for infrastructure, purchase of ambulances and computers and
other priority projects and activities and credit facilities to qualified beneficiaries…"
 It was Congress itself that determined the purposes for the appropriation. Executive function under the
CDF involves implementation of the priority projects specified in the law. The authority given to the
members of Congress is only to propose and identify projects to be implemented by the President.
 Hence, under Article 48 of the GAA of 1994, if the proposed projects qualify for funding under the CDF,
it is the President who shall implement them. In short, the proposals and identifications made by the
members of Congress are merely recommendatory.

b. Realignment of Operating Expenses (Special Provision 1)

 The members only determine the necessity of the realignment of the savings in the allotments for their
operating expenses but it is the Senate President and the Speaker of the House of Representatives who
shall approve the realignment.

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c. Highest Priority for Debt Service (Article 48) – constitutional; exercises its power to respond to the
imperatives of the national interest and for the attainment of other state policies or objectives.

 The constitutional provision which directs the State shall assign the highest budgetary priority to
education is merely directory.
 As stated in Guingona, Jr. v. Carague: While it is true that under Section 5(5), Article XIV of the
Constitution, Congress is mandated to “assign the highest budgetary priority to education” it does not
thereby follow that Congress is deprived of its power to respond to the imperatives of the national
interest and for the attainment of other state policies or objectives.

3. Whether or not the veto of the president on four special provisions of Article 48 of the GAA 1994 is
unconstitutional and void?

Any provision which does not relate to any particular item, or which extends in its operation beyond an
item of appropriation, is considered “an inappropriate provision” which can be vetoed separately from an
item.

Any provision blocking an administrative action in implementing a law requiring legislative approval of
executive acts must be incorporated in a separate substantive bill.

a. Provision on debt ceiling – VOID

Special Provision on Debt Ceiling – Congress provided for a debt-ceiling. Vetoed by the Pres. w/o
vetoing the entire appropriation for debt service. The said provisions are germane to & have direct
relation w/ debt service. They are appropriate provisions & cannot be vetoed w/o vetoing the entire
item/appropriation.

b. Funds of State Universities and Colleges (SUC’s) - VALID

Special Provision on Revolving Funds for SCU’s – said provision allows for the use of income &
creation of revolving fund for SCU’s. Provision for Western Visayas State Univ. & Leyte State Colleges
vetoed by Pres. Other SCU’s enjoying the privilege do so by existing law. Pres. merely acted in
pursuance to existing law.

c. Road Maintenance ratio (70% administrative/ 30% contract) - VOID

Special Provision on Road Maintenance – Congress specified 30% ratio for works for maintenance of
roads be contracted according to guidelines set forth by DPWH. Vetoed by the Pres. w/o vetoing the
entire appropriation. It is not an inappropriate provision; it is not alien to the subj. of road
maintenance & cannot be veoted w/o vetoing the entire appropriation.

d. AFP medicines - VOID

Special Provision on AFP Medicines - Being directly related to and inseparable from the appropriation
item on purchases of medicines by the AFP, the special provision cannot be vetoed by the President
without also vetoing the said item.

e. Military Equipment – VALID

Special Provision on Purchase of Military Equip. – AFP modernization, prior approval of Congress
required before release of modernization funds. It is the so-called legislative veto. Any prov. blocking

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 an admin. action in implementing a law or requiring legislative approval must be subj. of a separate
law.

f. AFP pension funds- VALID

Special Provision on Use of Savings for AFP Pensions – allows Chief of Staff to augment pension funds
through the use of savings. According to the Constitution, only the Pres. may exercise such power
pursuant to a specific law. Properly vetoed. VETO VALID.

g. Condition on the deactivation of CAGFU’s – VALID

Special Provision on Conditions for de-activation of CAFGU’s – use of special fund for the
compensation of the said CAFGU’s. Vetoed, Pres. requires his prior approval. It is also an amendment
to existing law (PD No. 1597 & RA No. 6758). A provision in an appropriation act cannot be used to
repeal/amend existing laws.

h. Conditions on the appropriation for SC, Ombudsman, COA, CHR - VALID

By setting guidelines or conditions in his veto, the President is simply exercising his constitutional
duty to implement the laws faithfully.

Belgica v. Ochoa

FACTS:

“Pork Barrel” refers to than appropriation of government spending meant localized projects and secured solely and
primarily to bring money to a representative’s district. It is also refers to legislative control of local appropriations.
In the Philippines, “Pork Barrel” has been commonly referred to as lump-sum, discretionary funds of Members of
the Legislature. The earliest form of “Congressional Pork Barrel in the Philippines is Act 3044 or the Public Works
Act of 1922. When martial law was declared pork barrel system was temporarily discontinued. The "Support for
Local Development Projects" (SLDP) under the article on "National Aid to Local Government Units" was the new
item in the General Appropriations Act (GAA) that was introduced by the Batasang Pambansa. “Congressional Pork
Barrel” was revived in the form of the “Mindanao Development Fund, and “Visayas Development Fund” under
Corazon Aquino Administration. The Senators and Luzon Legislators created “Countrywide Development Fund”
(CDF). There is other form of “Congressional Pork Barrel” called “Congressional Insertions” (CI) under Ramos
Administration. Under Estrada Administration, The CDF was removed and replaced with three separate forms of
CIs, namely, the "Food Security Program Fund," the "Lingap Para Sa Mahihirap Program Fund," and the
"Rural/Urban Development Infrastructure Program Fund. Also the "Priority Development Assistance Fund" (PDAF)
appeared in the GAA. Under Arroyo Administration, The 2005 GAA was re-enacted in 2006. The PDAF Articles from
2002 to 2010 were silent with respect to the specific amounts allocated for the individual legislators, and their
participation in the proposal and identification of PDAF projects to be funded. The Government Procurement
Policy Board (GPPB) issued Resolution No. 12-2007 (GPPB Resolution 12-2007), amending the implementing rules
and regulations of the Government Procurement Reform Act “RA 9184”. The PDAF Article in the GAA contained an
express statement on lump-sum amounts allocated for individual legislators and the Vice-President in 2011. LGUs
are now allowed to be identified as implementing agencies if they have the technical capability to implement the
projects because of the 2013 PDAF Article. The Malampaya Funds was created under Section 8 of Presidential
Decree No. 910 and the Presidential Social Fund under Section 12, Title IV of PD 1869 were both issued by
President Marcos. He issued PD 1993 amending Section 12 of PD 1869. Greco Belgica and other petitioners are
questioning the constitutionality of the pork barrel system.

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ISSUES:

1. Whether or not (a) the issues raised in the consolidated petitions involve an actual and justiciable
controversy, (b) the issues raised are matters of policy not subject to judicial review, (c) petitioners have legal
standing to sue.

2. Whether the 2013 PDAF Article and all other Congressional Pork Barrel laws are unconstitutional for violating
the constitutional provisions on (a)separation of powers, (b) non-delegability of legislative power, (c) checks and
balances, (d) accountability.

RULING:

The petitions are partly granted.

1. a. Yes, the petitions involve an actual and justiciable controversy. The requirement of contrariety of legal rights
is clearly satisfied by the antagonistic positions of the parties on the constitutionality of the "Pork Barrel System."
The questions in these cases are ripe for adjudication since the challenged funds and the provisions allowing for
their utilization are currently existing and operational; therefore, there exists an immediate or threatened injury to
petitioners as a result of the unconstitutional use of these public funds. The Court must dispel the notion that the
issues related to PDAF, had been rendered moot and academic by the reforms undertaken by respondents. The
annulment or nullification of a law may be done either by Congress, through the passage of a repealing law, or by
the Court, through a declaration of unconstitutionality and that the President does not have constitutional
authority to do so. The Court will decide if the case is considered moot and academic by using the moot and
academic principle: (1) petitioners allege grave violation of the constitution, (2)  the constitutionality of the pork
barrel system presents a situation of exceptional character and is a matter of paramount public interest, (3)  there
is a practical need for a definitive ruling on the system’s constitutionality to guide the bench, the bar and the
public, but more importantly, so that the government may be guided on how public funds should be utilized in
accordance with constitutional principles and (4) the preparation and passage of the national budget is an annual
occurrence.

b. Yes, the issue raised is subject to judicial review because the issue is about the constitutionality of the law. The
expanded the concept of the power of the Judicial Department is the power to determine whether there has been
grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality
on the part of the government as stated in Section 1, Article VIII of the Constitution.

c. Yes, Petitioners have legal standing. As taxpayers, they are bound to suffer from the unconstitutional usage of
public funds. As citizens, the issues they have raised are matters of transcendental importance, of overreaching
significance to society, or of paramount public interest.

2. Yes, the 2013 PDAF Article and all other Congressional Pork Barrel laws are unconstitutional for violating the
constitutional provisions on:

 (a)separation of powers – The power of the Congress is to make laws, the power of the President is to enforce
laws, and the power of the Court is to interpret laws. The principle of separation of power is to avoid concentration
of these powers in any one branch and unduly encroaches on the domain of another. The Legislative department
formulates an appropriation act and in implementing the national budget the role of the Executive department.
Based on the findings and recommendations in the Report made by CoA "an illustration of how absolute and
definitive the power of legislators wield over project implementation in complete violation of the constitutional

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[principle of separation of powers.]” the provisions under 2013 PDAF Article showed the legislators have been
accorded post-enactment authority to identify PDAF projects. The Court 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.

(b)  non-delegability of legislative power - Section 1, Article VI of the 1987 Constitution states that such power shall
be vested in the Congress of the Philippines which shall consist of a Senate and a House of Representatives, except
to the extent reserved to the people by the provision on initiative and referendum. The Court observes that the
2013 PDAF Article confers post-enactment identification authority to individual legislators violates the principle of
non-delegability since said legislators are effectively allowed to individually exercise the power of appropriation,
which is lodged in Congress.

That the power to appropriate must be exercised only through legislation is clear from Section 29 (1), Article VI of
the 1987 Constitution. Under the 2013 PDAF Article, the power of appropriation, individual legislators are given a
personal lump-sum fund from which they are able to dictate (a) how much from such fund would go to (b) a
specific project or beneficiary that they themselves also determine. The 2013 PDAF Article authorizes individual
legislators to perform the power of appropriation the Constitution does not allow the congress to delegate the
power to the individual member of Congress.

(c) checks and balances – Under Section 27 (2), Article VI of the 1987 Constitution, the President has a power to
veto an item written into an appropriation, revenue or tariff bill submitted to him by Congress for approval through
a process known as "bill presentment. After the GAA is passed the intermediate appropriations are made by
legislators. It means that the actual items of PDAF appropriation would not have been written into the General
Appropriations Bill and thus effectuated without veto consideration. The appropriation law leaves the actual
amounts and purposes of the appropriation for further determination and, therefore, does not readily indicate a
discernible item which may be subject to the President's power of item veto.

(d) accountability - The post-enactment features dilute congressional oversight and violate Section 14, Article VI of
the 1987 Constitution, therefore impairing public accountability.

Araullo v. Aquino III

FACTS:

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

The DAP was seen as a remedy to speed up the funding of government projects. DAP enables the Executive to
realign funds from slow moving projects to priority projects instead of waiting for next year’s appropriation. So
what happens under the DAP was that if a certain government project is being undertaken slowly by a certain
executive agency, the funds allotted therefore will  be withdrawn by the Executive. 

Once withdrawn, these funds are declared as “savings” by the Executive and said funds will then be re-allotted to

other priority projects. The DAP program did work to stimulate the economy as economic growth was in fact
reported and portion of such growth was attributed to the DAP (as noted by the Supreme Court).Other sources of
the DAP include the unprogrammed funds from the General Appropriations Act(GAA).

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Unprogrammed funds are standby appropriations made by Congress in the GAA. Meanwhile, in September 2013,
Senator Jinggoy Estrada made an exposé claiming that he, and other Senators, received Php50M from the
President as an incentive for voting in favor of the impeachment of then Chief Justice Renato Corona.
Secretary Abad claimed that the money was taken from the DAP but was disbursed upon the request of the
Senators. This apparently opened a can of worms as it turns out that the DAP does not only realign funds within
the Executive. It turns out that some non-Executive projects were also funded; to name a
few:
o Php1.5B for the CPLA (Cordillera People’s Liberation Army)
o Php1.8B for the MNLF(Moro National Liberation Front)
o P700M for the Quezon Province
o P50-P100M for certain Senators each
o P10B for Relocation Projects, etc.

This prompted Maria Carolina Araullo, Chairperson of the Bagong  Alyansang  Makabayan, and several other
concerned citizens to file various petitions with the Supreme Court questioning the validity of the DAP. Among
their contentions was:

DAP is unconstitutional because it violates the constitutional rule which provides that “no money  shall be paid out
of the Treasury except in pursuance of an appropriation made by law.”
 Secretary Abad argued that the DAP is based on certain laws particularly the GAA (savings and augmentation
provisions thereof), Sec. 25(5), Art. VI of the Constitution (power of the President to augment), Secs. 38 and 49 of
Executive Order 292 (power of the President to suspend expenditures and authority to use savings, respectively).

ISSUES:

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

RULING:

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

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

3.  No, the transfers made through the DAP were unconstitutional. It is true that the President (and even the heads
of the other branches of the government) are allowed by the Constitution to make realignment of funds, however,
such transfer or realignment should only be made “within their respective offices”. Thus, no cross-border

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transfers/augmentations may be allowed. But under the DAP, this was violated because funds appropriated by the
GAA for the Executive were being transferred to the Legislative and other non-Executive agencies. Further,
transfers “within their respective offices” also contemplate realignment of funds to anexisting project in the GAA.
Under the DAP, even though some projects were within the Executive, these projects are non-existent insofar as
the GAA is concerned because no funds were appropriated to them in the GAA. Although some of these projects
may be legitimate, they are still non-existent under the GAA because they were not provided for by the GAA. As
such ,transfer to such projects is unconstitutional and is without legal basis.

On the issue of what are “savings”

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

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

5.  Yes. The Doctrine of Operative Fact, which recognizes the legal effects of an act prior to it  being declared as
unconstitutional by the Supreme Court, is applicable. The DAP has definitely helped stimulate the economy. It has
funded numerous projects. If the Executive is ordered to reverse all actions under the DAP, then it may cause more
harm than good. The DAP effects can no longer be undone. The beneficiaries of the DAP cannot be asked to return
what they received especially so that they relied on the validity of the DAP. However, the Doctrine of Operative
Fact may not be applicable to the authors, implementers, and proponents of the DAP if it is so found in the
appropriate tribunals (civil, criminal, or administrative) that they have not acted in good faith.

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