LEGAL MEMORANDUM

TO: ATTY SUZETTE A. MAMON

FROM: FRANCES ANGELIE Q. NACEPO
RE: Resultant effects of the decisions of the following: G.R. No. 199802/G.R. No.
208488. April 10, 2019 Mandanas, et al. Vs. Executive Secretary Paquito N. Ochoa,
Jr., et al and G.R. No. 208566 November 19, 2013, GRECO ANTONIOUS BEDA B.
BELGICA JOSE M. VILLEGAS JR. JOSE L. GONZALEZ REUBEN M. ABANTE and
QUINTIN PAREDES SAN DIEGO, Petitioners, vs. HONORABLE EXECUTIVE
SECRETARY PAQUITO N. OCHOA et al on local fiscal management and effective
and efficient governance
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ISSUE/S
1. Whether or not mandamus is the proper vehicle to assail the constitutionality of
the relevant provisions of the GAA and the LGC;
2. Whether or not Section 284 of the LGC is unconstitutional for being repugnant to
Section 6, Article X of the 1987 Constitution;
3. Whether or not the existing shares given to the LGUs by virtue of the GAA is
consistent with the constitutional mandate to give LGUs a "just share" to national
taxes following Article X, Section 6 of the 1987 Constitution;
4. Whether or not the petitioners are entitled to the reliefs prayed for.

ANSWER/DISCUSSION
1. Mandamus is an improper remedy. Mandamus only lies to compel a ministerial
act. The burden of proof is on the mandamus petitioner to show that he is entitled
to the performance of a legal right, and that the respondent has a corresponding
duty to perform the act. Determination of what constitutes the just share of the
LGUs in the national taxes under the 1987 Constitution is an entirely
discretionary power. The discretion of Congress thereon, being exclusive, is not
subject to external direction; otherwise, the delicate balance underlying our
system of government may be unduly disturbed (Violation of Doctrine of
Separation of Powers).
2. Section 284 of the LGC deviates from the plain language of Section 6 of Article X
of the 1987 Constitution. The phrase national internal revenue taxes engrafted in
Section 284 is undoubtedly more restrictive than the term national taxes written
in Section 6. Verba legis non est recedendum (from the words of a statute there
should be no departure). According to Garcia v. Executive Secretary, customs
duties is the nomenclature given to taxes imposed on the importation and
exportation of commodities and merchandise to or from a foreign country.
Although customs duties have either or both the generation of revenue and the
regulation of economic or social activity as their moving purposes, it is often
difficult to say which of the two is the principal objective in a particular instance,
 for, verily, customs duties, much like internal revenue taxes, are rarely designed
to achieve only one policy objective. Strictly speaking, customs duties are also
taxes because they are exactions whose proceeds become public funds. Further,
Section 102 (oo) of R.A. No. 10863 (Customs Modernization and Tariff Act)
expressly includes all fees and charges imposed under the Act under the blanket
term of taxes.
3. Section 6, Article X of the 1987 Constitution commands that the just share of the
LGUs in national taxes shall be automatically released to them. The term
automatic connotes something mechanical, spontaneous and perfunctory; and, in
the context of this case, the LGUs are not required to perform any act or thing in
order to receive their just share in the national taxes. Section 6 does not mention
of appropriation as a condition for the automatic release of the just share to the
LGUs. This is because Congress not only already determined the just share
through the LGC's fixing the percentage of the collections of the NIRTs to
constitute such fair share subject to the power of the President to adjust the
same in order to manage public sector deficits subject to limitations on the
adjustments, but also explicitly authorized such just share to be "automatically
released" to the LGUs in the proportions and regularity set under Section 285 of
the LGC without need of annual appropriation. The 1987 Constitution is
forthright and unequivocal in ordering that the just share of the LGUs in the
national taxes shall be automatically released to them. With Congress having
established the just share through the LGC, it seems to be beyond debate that
the inclusion of the just share of the LGUs in the annual GAAs is unnecessary, if
not superfluous. Hence, the just share of the LGUs in the national taxes shall be
released to them without need of yearly appropriation.
4. The petitioners' prayer for the payment of the arrears of the LGUs' just share on
the theory that the computation of the base amount had been unconstitutional all
along cannot be granted. IRA is not in accordance with the constitutional
determination of the just share of the LGUs in the national taxes, logic demands
that the LGUs should receive the difference between the just share they should
have received had the LGC properly reckoned such just share from all national
taxes, on the one hand, and the share – represented by the IRA – the LGUs
have actually received since the effectivity of the IRA under the LGC, on the
other. This puts the National Government in arrears as to the just share of the
LGUs. A legislative or executive act declared void for being unconstitutional
cannot give rise to any right or obligation.
Yet, the Court has conceded in Araullo v. Aquino III[74] that:
x x x the generality of the rule makes us ponder whether rigidly applying the
rule may at times be impracticable or wasteful. Should we not recognize the need
to except from the rigid application of the rule the instances in which the void law
or executive act produced an almost irreversible result?
 The need is answered by the doctrine of operative fact. The doctrine, definitely
not a novel one, has been exhaustively explained in De Agbayani v. Philippine
National Bank.
Such a view has support in logic and possesses the merit of simplicity. It
may not however be sufficiently realistic. It does not admit of doubt that prior to
the declaration of nullity such challenged legislative or executive act must have
been in force and had to be complied with. This is so as until after the judiciary, in
an appropriate case, declares its invalidity, it is entitled to obedience and respect.
Parties may have acted under it and may have changed their positions. What
could be more fitting than that in a subsequent litigation regard be had to what
has been done while such legislative or executive act was in operation and
presumed to be valid in all respects. It is now accepted as a doctrine that prior to
its being nullified, its existence as a fact must be reckoned with. This is merely to
reflect awareness that precisely because the judiciary is the governmental organ
which has the final say on whether or not a legislative or executive measure is
valid, a period of time may have elapsed before it can exercise the power of
judicial review that may lead to a declaration of nullity. It would be to deprive the
law of its quality of fairness and justice then, if there be no recognition of what
had transpired prior to such adjudication.
Conformably with the foregoing pronouncements in Araullo v. Aquino III, the
effect of our declaration through this decision of the unconstitutionality of Section
284 of the LGC and its related laws as far as they limited the source of the just
share of the LGUs to the NIRTs is prospective. It cannot be otherwise.

STATEMENT OF FACTS
One of the key features of the 1987 Constitution is its push towards
decentralization of government and local autonomy. Local autonomy has two facets, the
administrative and the fiscal. Implementing the constitutional mandate for
decentralization and local autonomy, Congress enacted Republic Act No. 7160,
otherwise known as the Local Government Code (LGC). The share of the LGUs,
heretofore known as the Internal Revenue Allotment (IRA), has been regularly released
to the LGUs. According to the implementing rules and regulations of the LGC, the IRA is
determined on the basis of the actual collections of the National Internal Revenue Taxes
(NIRTs) as certified by the Bureau of Internal Revenue (BIR). Mandanas, et al. allege
herein that certain collections of NIR Ts by the Bureau of Customs (BOC) - specifically:
excise taxes, value added taxes (VATs) and documentary stamp taxes (DSTs) - have
not been included in the base amounts for the computation of the IRA; that such taxes,
albeit collected by the BOC, should form part of the base from which the IRA should be
computed because they constituted NIRTs; that, consequently, the release of the
additional amount of ₱60,750,000,000.00 to the LGUs as their IRA for FY 2012 should
be ordered; and that for the same reason the LGUs should also be released their
unpaid IRA for FY 1992 to FY 2011, inclusive, totaling ₱438,103,906,675.73.

APPLICABLE LAWS/JURISPRUDENCE/CITATIONS
Sec. 6, Art. X, 1987 Constitution.
Local government units shall have a just share, as determined by law, in the national
taxes which shall be automatically released to them.
Sec. 284, Local Government Code. Allotment of Internal Revenue Taxes.
Local government units shall have a share in the national internal revenue taxes based
on the collection of the third fiscal year preceding the current Fiscal year
Sec. 21, National Internal Revenue Code, as amended. Sources of Revenue.
The following taxes, fees and charges are deemed to be national internal revenue
taxes:
a) Income tax;
b) Estate and donor's taxes;
c) Value-added tax;
d) Other percentage taxes;
e) Excise taxes;
f) Documentary stamp taxes; and
g) Such other taxes as are or hereafter may be imposed and collected by the Bureau of
Internal Revenue.
Section 286, Local Government Code. Automatic Release of Shares.
(a) The share of each local government unit shall be released, without need of any
further action, directly to the provincial, city, municipal or barangay treasurer, as the
case may be, on a quarterly basis within five (5) days after the end of each quarter, and
which shall not be subject to any lien or holdback that may be imposed by the National
Government for whatever purpose.

Araullo v. Aquino III

Phrase: “the generality of the rule makes us ponder whether rigidly applying the rule
may at times be impracticable or wasteful. Should we not recognize the need to except
from the rigid application of the rule the instances in which the void law or executive act
produced an almost irreversible result?”

De Agbayani v. Philippine National Bank.

Doctrine of operative fact

 LEGAL MEMORANDUM

TO: ATTY SUZETTE A. MAMON

FROM: FRANCES ANGELIE Q. NACEPO
RE: Resultant effects of the decisions of the following: G.R. No. 208566
November 19, 2013, GRECO ANTONIOUS BEDA B. BELGICA JOSE M. VILLEGAS
JR. JOSE L. GONZALEZ REUBEN M. ABANTE and QUINTIN PAREDES SAN
DIEGO, Petitioners, vs. HONORABLE EXECUTIVE SECRETARY PAQUITO N.
OCHOA JR. SECRETARY OF BUDGET AND MANAGEMENT FLORENCIO B.
ABAD, NATIONAL TREASURER ROSALIA V. DE LEON SENATE OF THE
PHILIPPINES represented by FRANKLIN M. DRILON m his capacity as SENATE
PRESIDENT and HOUSE OF REPRESENTATIVES represented by FELICIANO S.
BELMONTE, JR. in his capacity as SPEAKER OF THE HOUSE, Respondents and
G.R. No. 208493, SOCIAL JUSTICE SOCIETY (SJS) PRESIDENT SAMSON S.
ALCANTARA, Petitioner, vs. HONORABLE FRANKLIN M. DRILON in his capacity
as SENATE PRESIDENT and HONORABLE FELICIANO S. BELMONTE, JR., in his
capacity as SPEAKER OF THE HOUSE OF REPRESENTATIVES, Respondents
G.R. No. 209251, PEDRITO M. NEPOMUCENO, Former Mayor-Boac, Marinduque
Former Provincial Board Member -Province of Marinduque, Petitioner, vs.
PRESIDENT BENIGNO SIMEON C. AQUINO III* and SECRETARY FLORENCIO
BUTCH ABAD, DEPARTMENT OF BUDGET AND MANAGEMENT, Respondents.

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ISSUE/S
1. Whether or not the 2013 PDAF Article and all other Congressional Pork
Barrel Laws similar thereto are unconstitutional considering that they violate
the principles of/constitutional provisions on (a) separation of powers; (b) non-
delegability of legislative power; (c) checks and balances; (d) accountability;
(e) political dynasties; and (f) local autonomy.
2. Whether or not the phrases (under Section 8 of PD 910,116 relating to the
Malampaya Funds, and under Section 12 of PD 1869, as amended by PD
1993, relating to the Presidential Social Fund, are unconstitutional insofar as
they constitute undue delegations of legislative power.

ANSWER/DISCUSSION
1. Yes, the PDAF article is unconstitutional. The post-enactment measures which
govern the areas of project identification, fund release and fund realignment are
not related to functions of congressional oversight and, hence, allow legislators to
intervene and/or assume duties that properly belong to the sphere of budget
execution. This violates the principle of separation of powers. Congress ‘role
must be confined to mere oversight that must be confined to: (1) scrutiny and (2)
investigation and monitoring of the implementation of laws. Any action or step
 beyond that will undermine the separation of powers guaranteed by the
constitution. Thus, 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.
2. Yes. Sec 8 of PD 910- the phrase “and for such other purposes as may be
hereafter directed by the President”‖ constitutes an undue delegation of
legislative power insofar as it does not lay down a sufficient standard to
adequately determine the limits of the President‘s authority with respect to the
purpose for which the Malampaya Funds may be used. It gives the President
wide latitude to use the Malampaya Funds for any other purpose he may direct
and, in effect, allows him to unilaterally appropriate public funds beyond the
purview of the law.”
Section 12 of PD 1869, as amended by PD 1993- the phrases:
(b) "to finance the priority infrastructure development projects” was declared
constitutional. IT INDICATED PURPOSE ADEQUATELY CURTAILS THE
AUTHORITY OF THE PRESIDENT TO SPEND THE PRESIDENTIAL SOCIAL
FUND ONLY FOR RESTORATION PURPOSES WHICH ARISE FROM
CALAMITIES.
(b)” and to finance the restoration of damaged or destroyed facilities due to
calamities, as may be directed and authorized by the Office of the President of
the Philippines” was declared unconstitutional.

STATEMENT OF FACTS
The NBI Investigation was spawned by sworn affidavits of six (6) whistle-blowers who
declared that JLN Corporation (Janet Lim Napoles) had swindled billions of pesos from
the public coffers for "ghost projects" using dummy NGOs. Thus, Criminal complaints
were filed before the Office of the Ombudsman, charging five (5) lawmakers for Plunder,
and three (3) other lawmakers for Malversation, Direct Bribery, and Violation of the Anti-
Graft and Corrupt Practices Act. Also recommended to be charged in the complaints are
some of the lawmakers’ chiefs -of-staff or representatives, the heads and other officials
of three (3) implementing agencies, and the several presidents of the NGOs set up by
Napoles. Whistle-blowers alleged that" at least P900 Million from royalties in the
operation of the Malampaya gas project off Palawan province intended for agrarian
reform beneficiaries has gone into a dummy NGO. Several petitions were lodged before
the Court similarly seeking that the "Pork Barrel System" be declared unconstitutional.
G.R. No. 208493 – SJS filed a Petition for Prohibition seeking that the "Pork Barrel
System" be declared unconstitutional, and a writ of prohibition be issued permanently
G.R. No. 208566 - Belgica, et al filed an Urgent Petition For Certiorari and Prohibition
With Prayer For The Immediate Issuance of 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. Also, they pray that the Court issue a TRO
against respondents
UDK-14951 – A Petition filed seeking that the PDAF be declared unconstitutional, and a
cease and desist order be issued restraining President Benigno Simeon S. Aquino III
(President Aquino) and Secretary Abad from releasing such funds to Members of
Congress.

APPLICABLE LAWS/JURISPRUDENCE/CITATIONS
Sec 8 of PD 910
xxx“and for such other purposes as may be hereafter directed by the President”‖
constitutes an undue delegation of legislative power insofar as it does not lay down a
sufficient standard to adequately determine the limits of the President‘s authority with
respect to the purpose for which the Malampaya Funds may be used. It gives the
President wide latitude to use the Malampaya Funds for any other purpose he may
direct and, in effect, allows him to unilaterally appropriate public funds beyond the
purview of the law.”
Section 12 of PD 1869, as amended by PD 1993
(b) "to finance the priority infrastructure development projects” was declared
constitutional. IT INDICATED PURPOSE ADEQUATELY CURTAILS THE
AUTHORITY OF THE PRESIDENT TO SPEND THE PRESIDENTIAL SOCIAL
FUND ONLY FOR RESTORATION PURPOSES WHICH ARISE FROM
CALAMITIES.
(b)” and to finance the restoration of damaged or destroyed facilities due to
calamities, as may be directed and authorized by the Office of the President of
the Philippines”