Roldan, Mitch L.

JD – 1
Llb111 – Constitutional Law 1 – 7003

Subject: Constitutional Law 1

Topic: On DAP Issue
Title: ARAULLO vs. AQUINO
Citation: GR No. 209287

Facts:
On September 3, 2013, Belgica and Villegas filed an Urgent Petition for
Certiorari and Prohibition with Prayer for the Immediate issuance of a Temporary
Restraining Order and/or Writ of Preliminary Injunction seeking that the annual
“Pork Barrel System,” presently embodied in the provisions of the GAA of 2013
which provided for the 2013 PDAF, and the Executive’s lump-sum, discretionary
funds, such as the Malampaya Funds and the Presidential Social Fund, be
declared unconstitutional and null and void for being acts constituting grave
abuse of discretion.

On September 25, 2013, Senator Jinggoy Estrada delivered his privilege speech
stating that some senators received Php 50 Million each as incentives for
impeaching Chief Justice Corona. Secretary Abad then responded through a
public statement explaining that the funds released were based on the Senator’s
letters of request for funding and explained further that these funds were part of
the DAP designed by the DBM to ramp up spending to accelerate economic
expansion.

DBM cited the following as legal bases for DAP’s use for the savings:
a. Section 25(5) Article VI, 1987 Constitution
b. Section 39 (Authority to use Savings for Certain Purposes) and Section
38 (Suspension of Expenditure Appropriations) Chapter 5, Book VI of
EO292 Administrative Code of 1987
c. General Appropriations Acts of 2011, 2012, and 2013 provisions on the
following:
i. Use of savings
ii. Meaning of savings
iii. Priority in the use of savings
d. For the use of the unprogrammed funds, DBM cited provisions in the
GAA 2011-2013 as legal bases

Oral arguments were held on November 19, 2013 and the Court directed DBM
Secretary Abad to submit the following:
a. List of savings brought under DAP sourced from:
i. Completed programs
ii. Discontinued or abandoned programs
iii. Unpaid appropriations for compensation
b. Certified copy of the President’s directive dated June 27, 2012 referred
to in NBC 541
c. All circulars and orders issued in relation to DAP

Issue/s:
1. Whether the DAP violates Section 29, Article VI of the 1987 Constitution.
2. Whether the DAP, NBC 541 and all other executive issuances implementing
DAP violate Section 25(5), Article VI of the 1987 Constitution.
3. Whether the release of unprogrammed funds under DAP was in accord with
the GAAS.
4. Whether the DAP violates the following:
a. Equal protection clause
b. System of checks and balances
c. Principle of public accountability
Ruling/s:
1. No. DAP was not an appropriation measure hence, no appropriation law was
required to adopt or implement it.
DAP was only a program or an administrative system of prioritizing spending
the adoption of which was by virtue of the authority of the President to ensure
laws are properly executed. It is the Executive playing its role as the main
actor during the Budget Execution Stage under its constitutional mandate to
faithfully execute laws including GAAs. The Congress did not need to
legislate to adopt or implement DAP thus, Executive did not usurp the power
vested in Congress under Section 29(1), Article VI of the Constitution.

2. Yes. DAP, NBC 541 and all other executive issuances implementing DAP
violate Section 25(5), Article VI of the constitution.
There are three (3) requisites set out in Section 25(5) of Article VI:
1. There is a law authorizing the President, the President of the
Senate, the Speaker of the House of Representatives, the Chief
Justice of the Supreme Court, and the heads of the Constitutional
Commissions to transfer funds within their respective offices.
2. The funds to be transferred are savings generated from the
appropriations of their respective offices; and
3. The purpose of the transfer is to augment an item in the general
appropriations law for their respective offices.
The first requisite is not met. GAA of 2011 and 2012 lacked valid (faithful to
the constitution) provisions to authorize transfer of funds under the DAP,
hence the transfers were unconstitutional.
Section 25(5) is not a self-executing provision and must have a law
implementing it. Generally, this is the GAA.
The second requisite is not met. The definitions of savings in the GAA’s
reflected this interpretation. Savings are any programmed appropriation in
the GAA free from any obligation which are:
1. Still available after the completion/final discontinuance/abandonment
for which the appropriation is authorized
2. Appropriation balances from unpaid compensation and vacant
positions/LOA without pay
3. Appropriations balances realized from improved systems/measures in
implementation
The Court says that these items have not yet ripened into categories of items
from which savings can be generated – they haven’t even reached the
agency to which they were allotted to under the GAA. These do not fall under
the definition of savings reflected in the GAA.
The third requisite is not met as some of the savings pooled under DAP were
allocated to PAPs that were not covered by any appropriation in the pertinent
GAA. This means that the Executive seemed to be specifying the PAPs
where the money shall be spent – which is the power of the purse that
resides in the Congress alone. Proof of non-compliance to this requisite are
the cross border augmentations from savings which are clearly prohibited by
the constitution. Section 25(5) article vi only allows augmentation within the
respective offices stated therein.

3. No. The release of unprogrammed funds were not in accord with the GAAs.
The Court rules that there are only two instances when the unprogrammed
funds can be released (which are bolstered by the texts in the 2011 and
2012 GAA and more clearly by GAA 2013). This requirement should be
construed in light of the purpose of the unprogrammed funds – as standby
appropriations to support additional expenditures. In the event that the
revenue collections exceed targets, the government shall have more than
enough to cover additional expenditures – thus the unprogrammed funds can
be dispensed with and disbursed. Following the DBM’s definition would
create “fake surplus” since exceeding targets in one revenue stream did not
necessarily mean that the government indeed had exceeded revenue targets
as a whole.
4. A. The Court says this allegation lacks factual basis. Claims are unsupported
with relevant data. On the discrimination against legislators: cannot warrant a
finding of contravention of the equal protection clause.
B. The Court earlier discussions on the infringement of the Doctrine of
Separation of Powers have resolved this issue.
C. The Court held that DAP and it implementing issuances were policies and
acts that the executive could properly adopt and do in the execution of GAAs
to the extent that they sought to implement strategies to ramp up and
accelerate the economy of the country.