DENSING, Angelica Czarina M.

I - Arellano October 11, 2022

LAW106 - Legal Research & Bibliography Atty. Sittie Jehan A. Tabao

ARAULLO vs. AQUINO III

728 SCRA 2, July 1, 2014
Bersamin, J.

FACTS
For resolution are the consolidated petitions assailing the constitutionality of the
Disbursement Acceleration Program (DAP), National Budget Circular (NBC) No. 541, and
related issuances of the Department of Budget and Management (DBM) implementing the DAP.

At the core of the controversy is Section 29(1) of Article VI of the 1987 Constitution, a
provision of the fundamental law that firmly ordains that “[n]o money shall be paid out of the
Treasury except in pursuance of an appropriation made by law.” The tenor and context of the
challenges posed by the petitioners against the DAP indicate that the DAP contravened this
provision by allowing the Executive to allocate public money pooled from programmed and
unprogrammed funds of its various agencies in the guise of the President exercising his
constitutional authority under Section 25(5) of the 1987 Constitution to transfer funds out of
savings to augment the appropriations of offices within the Executive Branch of the Government.

The controversy precipitated from when Sen. Jinggoy Ejercito Estrada delivered a
privilege speech in the Senate of the Philippines to reveal that some Senators, including himself,
had been allotted an additional P50 Million each as “incentive” for voting in favor of the
impeachment of Chief Justice Renato C. Corona. Responding to Sen. Estrada’s revelation,
Secretary Florencio Abad of the DBM issued a public statement explaining that the funds
released to the Senators had been part of the DAP, a program designed by the DBM to ramp up
spending to accelerate economic expansion.

ISSUE/S
1. Whether or not certiorari, prohibition, and mandamus are proper remedies to assail the
constitutionality and validity of the DAP, NBC No. 541, and all other executive issuances
allegedly implementing the DAP.
2. Whether or not DAP is unconstitutional.

RULING
1. YES. The petitions under Rule 65 of the Rules of Court are the proper remedies.

2. YES. The Court partially grants the petitions for certiorari and prohibition; and declares
the following acts and practices under the DAP, NBC No. 541 and related executive
issuances unconstitutional for being in violation of Section 25(5), Art. VI of the 1987
Constitution and the doctrine of separation of powers, namely:

(a) The withdrawal of unobligated allotments from the implementing agencies, and the
declaration of the withdrawn unobligated allotments and unreleased appropriations as savings
prior to the end of the fiscal year and without complying with the statutory definition of savings
contained in the General Appropriations Acts;

(b) The cross-border transfers of the savings of the Executive to augment the appropriations of
other offices outside the Executive; and

(c) The funding of projects, activities and programs that were not covered by any appropriation
in the General Appropriations Act.

The Court further declares void the use of unprogrammed funds despite the absence of a
certification by the National Treasurer that the revenue collections exceeded the revenue targets
for noncompliance with the conditions provided in the relevant General Appropriations Acts.

Petitions partially granted and certain acts and practices under DAP, NBC No. 541 and
related executive issuances declared unconstitutional.