EN BANC
, and THE HOUSE OF REPRESENTATIVES ELECTORAL
G.R. No. 83767 October 27, 1988
FIRDAUSI SMAIL ABBAS, HOMOBONO A. ADAZA, ALEJANDRO D. ALMENDRAS, ABUL KAHYR D. ALONTO, JUAN PONCE ENRILE, RENE
G. ESPINA, WILSON P. GAMBOA, ROILO S. GOLEZ, ROMEO G. JALOSJOS EVA R. ESTRADA-KALAW, WENCESLAO R. LAGUMBAY,
VICENTE P. MAGSAYSAY, JEREMIAS U. MONTEMAYOR, BLAS F. OPLE, RAFAEL P. PALMARES, ZOSIMO JESUS M. PAREDES, JR.,
VICENTE G. PUYAT, EDITH N. RABAT, ISIDRO S. RODRIGUEZ, FRANCISCO S. TATAD, LORENZO G. TEVES, ARTURO M. TOLENTINO, and
FERNANDO R. VELOSO, petitioners, vs.
THE SENATE ELECTORAL TRIBUNAL, respondent.
GANCAYCO, J.:
This is a Special Civil Action for certiorari to nullify and set aside the Resolutions of the Senate Electoral Tribunal dated February 12, 1988 and May 27,
1988, denying, respectively, the petitioners' Motion for Disqualification or Inhibition and their Motion for Reconsideration thereafter filed.
On October 9, 1987, the petitioners filed before the respondent Tribunal an election contest docketed as SET Case No. 002-87 against 22 candidates
of the LABAN coalition who were proclaimed senators-elect in the May 11, 1987 congressional elections by the Commission on Elections. The
respondent Tribunal was at the time composed of three (3) Justices of the Supreme Court and six (6) Senators, namely: Senior Associate Justice
Pedro L. Yap (Chairman). Associate Justices Andres R. Narvasa and Hugo E. Gutierrez, Jr., and Senators Joseph E. Estrada, Neptali A. Gonzales,
Teofisto T. Guingona, Jose Lina, Jr., Mamintal A.J. Tamano and Victor S. Ziga.
On November 17, 1987, the petitioners, with the exception of Senator Estrada but including Senator Juan Ponce Enrile (who had been designated
Member of the Tribunal replacing Senator Estrada, the latter having affiliated with the Liberal Party and resigned as the Opposition's representative in
the Tribunal) filed with the respondent Tribunal a Motion for Disqualification or Inhibition of the Senators-Members thereof from the hearing and
resolution of SET Case No. 002-87 on the ground that all of them are interested parties to said case, as respondents therein. Before that, Senator
Rene A.V. Saguisag, one of the respondents in the same case, had filed a Petition to Recuse and later a Supplemental Petition to Recuse the same
Senators-Members of the Tribunal on essentially the same ground. Senator Vicente T. Paterno, another respondent in the same contest, thereafter
filed his comments on both the petitions to recuse and the motion for disqualification or inhibition. Memoranda on the subject were also filed and oral
arguments were heard by the respondent Tribunal, with the latter afterwards issuing the Resolutions now complained of.
Senator Juan Ponce Enrile in the meantime had voluntarily inhibited himself from participating in the hearings and deliberations of the respondent
tribunal in both SET Case No. 00287 and SET Case No. 001-87, the latter being another contest filed by Augusto's Sanchez against him and Senator
Santanina T. Rasul as alternative respondents, citing his personal involvement as a party in the two cases.
The petitioners, in essence, argue that considerations of public policy and the norms of fair play and due process imperatively require the mass
disqualification sought and that the doctrine of necessity which they perceive to be the foundation petition of the questioned Resolutions does not rule
out a solution both practicable and constitutionally unobjectionable, namely; the amendment of the respondent Tribunal's Rules of procedure so as to
permit the contest being decided by only three Members of the Tribunal.
The proposed amendment to the Tribunal's Rules (Section 24)—requiring the concurrence of five (5) members for the adoption of resolutions of
whatever nature is a proviso that where more than four (4) members are disqualified, the remaining members shall constitute a quorum, if not less than
three (3) including one (1) Justice, and may adopt resolutions by majority vote with no abstentions. Obviously tailored to fit the situation created by the
petition for disqualification, this would, in the context of that situation, leave the resolution of the contest to the only three Members who would remain,
all Justices of this Court, whose disqualification is not sought.
We do not agree with petitioners' thesis that the suggested device is neither unfeasible nor repugnant to the Constitution. We opine that in fact the most
fundamental objection to such proposal lies in the plain terms and intent of the Constitution itself which, in its Article VI, Section 17, creates the Senate
Electoral Tribunal, ordains its composition and defines its jurisdiction and powers.
Sec. 17. The Senate and the House of Representatives shall each have an Electoral Tribunal which shall be the sole judge of all contests relating to
the election, returns, and qualifications of their respective Members. Each Electoral Tribunal shall be composed of nine Members, three of whom shall
be Justices of the Supreme Court to be designated by the Chief Justice, and the remaining six shall be Members of the Senate or the House of
Representatives, as the case may be, who shall be chosen on the basis of proportional representation from the political parties and the parties or
organizations registered under the party-list system represented therein. The senior Justice in the Electoral Tribunal hall be its Chairman.
It seems quite clear to us that in thus providing for a Tribunal to be staffed by both Justices of the Supreme Court and Members of the Senate, the
Constitution intended that both those "judicial' and 'legislative' components commonly share the duty and authority of deciding all contests relating to
the election, returns and qualifications of Senators. The respondent Tribunal correctly stated one part of this proposition when it held that said provision
"... is a clear expression of an intent that all (such) contests ... shall be resolved by a panel or body in which their (the Senators') peers in that Chamber
are represented." 1 The other part, of course, is that the constitutional provision just as clearly mandates the participation in the same process of
decision of a representative or representatives of the Supreme Court.
Said intent is even more clearly signalled by the fact that the proportion of Senators to Justices in the prescribed membership of the Senate Electoral
Tribunal is 2 to 1-an unmistakable indication that the "legislative component" cannot be totally excluded from participation in the resolution of senatorial
election contests, without doing violence to the spirit and intent of the Constitution.
Where, as here, a situation is created which precludes the substitution of any Senator sitting in the Tribunal by any of his other colleagues in the
Senate without inviting the same objections to the substitute's competence, the proposed mass disqualification, if sanctioned and ordered, would leave
the Tribunal no alternative but to abandon a duty that no other court or body can perform, but which it cannot lawfully discharge if shorn of the
participation of its entire membership of Senators.
To our mind, this is the overriding consideration—that the Tribunal be not prevented from discharging a duty which it alone has the power to perform,
the performance of which is in the highest public interest as evidenced by its being expressly imposed by no less than the fundamental law.
It is aptly noted in the first of the questioned Resolutions that the framers of the Constitution could not have been unaware of the possibility of an
election contest that would involve all 24 Senators-elect, six of whom would inevitably have to sit in judgment thereon. Indeed, such possibility might
surface again in the wake of the 1992 elections when once more, but for the last time, all 24 seats in the Senate will be at stake. Yet the Constitution
provides no scheme or mode for settling such unusual situations or for the substitution of Senators designated to the Tribunal whose disqualification
may be sought. Litigants in such situations must simply place their trust and hopes of vindication in the fairness and sense of justice of the Members of
the Tribunal. Justices and Senators, singly and collectively.
Let us not be misunderstood as saying that no Senator-Member of the Senate Electoral Tribunal may inhibit or disqualify himself from sitting in
judgment on any case before said Tribunal. Every Member of the Tribunal may, as his conscience dictates, refrain from participating in the resolution of
a case where he sincerely feels that his personal interests or biases would stand in the way of an objective and impartial judgment. What we are merely
saying is that in the light of the Constitution, the Senate Electoral Tribunal cannot legally function as such, absent its entire membership of Senators
and that no amendment of its Rules can confer on the three Justices-Members alone the power of valid adjudication of a senatorial election contest.
The charge that the respondent Tribunal gravely abused its discretion in its disposition of the incidents referred to must therefore fail. In the
circumstances, it acted well within law and principle in dismissing the petition for disqualification or inhibition filed by herein petitioners. The instant
petition for certiorari is DISMISSED for lack of merit.
SO ORDERED. Fernandez, C.J., Melencio-Herrera, Cruz, Padilla, Bidin, Sarmiento, Cortes, Griño-Aquino, Medialdea and Regalado JJ., concur.
Narvasa, Gutierrez, Jr. and Paras, JJ., took no part.
Separate Opinions FELICIANO, J.:, concurring:
I quite agree with what Mr. Justice Gancayco has written into his opinion for the Court. I would merely like to carry forward however slightly the analysis
found in the penultimate paragraph of his opinion.
Should any three (3) Senator-Members of the Senate Electoral Tribunal voluntarily inhibit or disqualify themselves from participating in the proceedings
in SET Case No. 002-87, a Tribunal would result that would be balanced between the three (3) Justice-Members and the three (3) Senator-Members
and still constitute more than a bare quorum. In such a Tribunal, both the considerations of public policy and fair play raised by petitioners and the
constitutional intent above noted concerning the mixed "judicial" and "legislative" composition of the Electoral Tribunals would appear to be
substantially met and served. This denouement, however, must be voluntarily reached and not compelled by certiorari.
EN BANC
G.R. No. 97710 September 26, 1991
DR. EMIGDIO A. BONDOC, petitioner,
vs.
REPRESENTATIVES MARCIANO M. PINEDA, MAGDALENO M. PALACOL, COL. JUANITO G. CAMASURA, JR., or any other representative
who may be appointed vice representative Juanita G. Camasura, Jr.
TRIBUNAL, respondents.
Estelito P. Mendoza, Romulo C. Felixmera and Horacio S.J. Apostol for petitioner.
Nicanor S. Bautista for respondent Marciano M. Pineda.
Benedicto R. Palacol for respondent M.M. Palacol.
GRIO-AQUIÑO, J.:p
This case involves a question of power. May the House of Representatives, at the request of the dominant political party therein, change that party's
representation in the House Electoral Tribunal to thwart the promulgation of a decision freely reached by the tribunal in an election contest pending
therein? May the Supreme Court review and annul that action of the House?
Even the Supreme Court of the United States over a century ago, in Marbury vs. Madison, 2 L. ed. 60 (1803), had hesitated to embark upon a legal
investigation of the acts of the other two branches of the Government, finding it "peculiarly irksome as well as delicate" because it could be considered
by some as "an attempt to intrude" into the affairs of the other two and to intermeddle with their prerogatives.
In the past, the Supreme Court, as head of the third and weakest branch of our Government, was all too willing to avoid a political confrontation with the
other two branches by burying its head ostrich-like in the sands of the "political question" doctrine, the accepted meaning of which is that 'where the
matter involved is left to a decision by the people acting in their sovereign capacity or to the sole determination by either or both the legislative or
executive branch of the government, it is beyond judicial cognizance. Thus it was that in suits where the party proceeded against was either the
President or Congress, or any of its branches for that matter, the courts refused to act." (Aquino vs. Ponce Enrile, 59 SCRA 183, 196.)
In time, however, the duty of the courts to look into the constitutionality and validity of legislative or executive action, especially when private rights are
affected came to be recognized. As we pointed out in the celebrated Aquino case, a showing that plenary power is granted either department of
government may not be an obstacle to judicial inquiry, for the improvident exercise or the abuse thereof may give rise to a justiciable controversy. Since
"a constitutional grant of authority is not usually unrestricted, limitations being provided for as to what may be done and how it is to be accomplished,
necessarily then, it becomes the responsibility of the courts to ascertain whether the two coordinate branches have adhered to the mandate of the
fundamental law. The question thus posed is judicial rather than political. The duty remains to assure that the supremacy of the Constitution is upheld"
(Aquino vs. Ponce Enrile, 59 SCRA 183, 196).
That duty is a part of the judicial power vested in the courts by an express grant under Section 1, Article VIII of the 1987 Constitution of the Philippines
which defines judicial power as both authority and duty of the courts 'to settle actual controversies involving rights which are legally demandable and
enforceable, and to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any
branch or instrumentality of the Government."
The power and duty of the courts to nullify in appropriate cases, the actions of the executive and legislative branches of the Government, does not
mean that the courts are superior to the President and the Legislature. It does mean though that the judiciary may not shirk "the irksome task" of
inquiring into the constitutionality and legality of legislative or executive action when a justiciable controversy is brought before the courts by someone
who has been aggrieved or prejudiced by such action, as in this case. It is —
a plain exercise of the judicial power, that power vested in courts to enable them to administer justice according to law. ... It is simply a necessary
concomitant of the power to hear and dispose of a case or controversy properly before the court, to the determination of which must be brought the test
and measure of the law. (Vera vs. Avelino, 77 Phil. 192, 203.)
In the local and congressional elections held on May 11, 1987, Marciano M. Pineda of the Laban ng Demokratikong Pilipino (LDP) and Dr. Emigdio A.
Bondoc of the Nacionalista Party (NP) were rival candidates for the position of Representative for the Fourth District of the province of Pampanga.
Each received the following votes in the canvass made by the Provincial Board of Canvassers of Pampanga:
Marciano M. Pineda.................... 31,700 votes
Emigdio A. Bondoc..................... 28,400 votes
Difference...................................... 3,300 votes
On May 19, 1987, Pineda was proclaimed winner in the election. In due time, Bondoc filed a protest (HRET Case No. 25) in the House of
Representatives Electoral Tribunal ( for short) which is composed of nine (9) members, three of whom are Justices of the Supreme Court and the
remaining six are members of the House of Representatives chosen on the basis of proportional representation from the political parties and the parties
or organizations registered under the party-list system represented therein (Sec. 17, Art. VI, 1987 Constitution) as follows:
AMEURFINA M. HERRERA Chairman
Associate Justice
Supreme Court
ISAGANI A. CRUZ Member
Associate Justice
Supreme Court
FLORENTINO P. FELICIANO Member
Associate Justice
Supreme Court
HONORATO Y. AQUINO Member
Congressman
1st District
Benguet LDP
 13 March 1991
DAVID A. PONCE DE LEON Member Honorable Justice Ameurfina Melencio-Herrera Chairman
House of Representatives Electoral Tribunal Constitution Hills Quezon City
Dear Honorable Justice Melencio-Herrera:
Congressman I have the honor to notify the House of Electoral Tribunal of the decision of the House of Representatives during its plenary session on 13 March
1991, to withdraw the nomination and to rescind the election of the Honorable Juanito G. Camasura, Jr. to the House Electoral Tribunal on the basis of
an LDP communication which is self-explanatory and copies of which are hereto attached.
Thank you.
1st District Palawan
For the Secretary-General
(SGD.) Josefina D. Azarcon Officer-in-charge Operations Department (p. 10, Rollo.)
Justices Herrera, Cruz, and Feliciano promptly apprised the Chief Justice and Associate Justices of the Supreme Court in writing, of this "distressing
LDP development' and asked to be relieved from their assignments in the HRET because —
By the above action (of the House) the promulgation of the decision of the Tribunal in the electoral protest entitled "Bondoc v. Pineda" (HRET Case No.
25), previously scheduled for 14 March 1991, is sought to be aborted (See the Consolidated Bank and Trust Corporation v. Hon. Intermediate Appellate
SIMEON E. GARCIA, JR. Member Court, G.R. No. 73777-78 promulgated 12 September 1990). Even if there were no legal impediment to its promulgation, the decision which was
reached on a 5 to 4 vote may now be confidently expected to be overturned on a motion for reconsideration by the party-litigant which would have been
defeated.
Congressman The decision in Bondoc v. Pineda was ready as early as October 1990 with a margin of 23 votes in favor of protestant Bondoc. Because some
members of the Tribunal requested re-appreciation of some ballots, the finalization of the decision had to be deferred by at least 4 months.
With the re-appreciation completed, the decision, now with a margin of 107 votes in favor of protestant Bondoc, and concurred in by Justices Ameurfina
2nd District Nueva Ecija A. Melencio-Herrera, Isagani A. Cruz and Florentino P. Feliciano, and Congressmen Juanita G. Camasura and Antonio H. Cerilles, is set for
promulgation on 14 March 1991, with Congressmen Honorato Y. Aquino, David A. Ponce de Leon Simeon E. Garcia, Jr. and Jose E. Calingasan,
dissenting.
Congressman Casamura's vote in the Bondoc v. Pineda case was, in our view, a conscience vote, for which he earned the respect of the Tribunal but
LDP also the loss of the confidence of the leader of his party.
Under the above circumstances an untenable situation has come about. It is extremely difficult to continue with membership in the Tribunal and for the
Tribunal to preserve it. 8 integrity and credibility as a constitutional body charged with a judicial task. It is clear to us that the unseating of an incumbent
JUANITO G. CAMASURA, JR. Member member of Congress is being prevented at all costs. We believe that the Tribunal should not be hampered in the performance of its constitutional
function by factors which have nothing to do with the merits of the cases before it.
In this connection, our own experience teaches that the provision for proportional representation in the Tribunal found in Article VI, Section 17 of the
Congressman 1987 Constitution, should be amended to provide instead for a return to the composition mandated in the 1935 Constitution, that is: three (3) members
chosen by the House or Senate upon nomination of the party having the largest number of votes and three (3) of the party having the second largest
number of votes: and a judicial component consisting of three (3) justices from the Supreme Court. Thereby, no party or coalition of parties can
1st District Davao del Sur dominate the legislative component in the Tribunal.
In the alternative, the Senate Electoral Tribunal could perhaps sit as the sole judge of all contests relating to the election, returns and qualifications of
members of the House of Representatives. Similarly, the House of Representatives Electoral Tribunal could sit as the sole judge of all such contests
involving members of the Senate. In this way, there should be lesser chances of non-judicial elements playing a decisive role in the resolution of
LDP
election contests.
We suggest that there should also be a provision in the Constitution that upon designation to membership in the Electoral Tribunal, those so designated
should divest themselves of affiliation with their respective political parties, to insure their independence and objectivity as they sit in Tribunal
JOSE E. CALINGASAN Member deliberations.
There are only three (3) remaining cases for decision by the Tribunal. Bondoc should have been promulgated today, 14 March 1991. Cabrera v.
Apacible (HRET Case No. 21) is scheduled for promulgation on 31 March 1991 and Lucman v. Dimaporo (HRET Case No. 45), after the Holy Week
Congressman recess.
But political factors are blocking the accomplishment of the constitutionally mandated task of the Tribunal well ahead of the completion of the present
congressional term.
4th District Batangas Under these circumstances, we are compelled to ask to be relieved from the chairmanship and membership in the Tribunal.
xxx xxx xxx
At the open session of the HRET in the afternoon of the same day, the Tribunal issued Resolution No. 91-0018 cancelling the promulgation of the
LDP decision in HRET Case No. 25. The resolution reads:
In view of the formal notice the Tribunal has received at 9:45 tills morning from the House of Representatives that at its plenary session held on March
13, 1991, it had voted to withdraw the nomination and rescind the election of Congressman Camasura to the House of Representatives Electoral
Tribunal,' the Tribunal Resolved to cancel the promulgation of its Decision in Bondoc vs. Pineda (HRET Case No. 25) scheduled for this afternoon. This
ANTONIO H. CERILLES Member
is because, without Congressman Camasura's vote, the decision lacks the concurrence of five members as required by Section 24 of the Rules of the
Tribunal and, therefore, cannot be validly promulgated.
The Tribunal noted that the three (3) Justices-members of the Supreme Court, being of the opinion that this development undermines the
Congressman independence of the Tribunal and derails the orderly adjudication of electoral cases, they have asked the Chief Justice, in a letter of even date, for their
relief from membership in the Tribunal.
The Tribunal further Noted that Congressman Cerilles also manifested his intention to resign as a member of the Tribunal.
2nd District Zamboanga del Sur The Tribunal further Noted that Congressmen Aquino, Ponce de Leon, Garcia, Jr., and Calingasan also manifested a similar intention. (p. 37, Rollo.)
On March 19, 1991, this Court, after deliberating on the request for relief of Justices Herrera, Cruz and Feliciano, resolved to direct them to return to
their duties in the Tribunal. The Court observed that:
(formerly GAD, now NP) ... in view of the sensitive constitutional functions of the Electoral Tribunals as the 'sole judge' of all contests relationship to the election, returns and
qualifications of the members of Congress, all members of these bodies are appropriately guided only by purely legal considerations in the decision of
After the revision of the ballots, the presentation of evidence, and submission of memoranda, Bondoc's protest was submitted for decision in July, the cases before them and that in the contemplation of the Constitution the members-legislators, thereof, upon assumption of their duties therein, sit in
1989. the Tribunal no longer as representatives of their respective political parties but as impartial judges. The view was also submitted that, to further bolster
By October 1990, a decision had been reached in which Bondoc won over Pineda by a margin of twenty-three (23) votes. At that point, the LDP the independence of the Tribunals, the term of office of every member thereof should be considered co-extensive with the corresponding legislative
members in the Tribunal insisted on a reappreciation and recount of the ballots cast in some precincts, thereby delaying by at least four (4) months the term and may not be legally terminated except only by death, resignation, permanent disability, or removal for valid cause, not including political
finalization of the decision in the case. disloyalty.
The reexamination and re-appreciation of the ballots resulted in increasing Bondoc's lead over Pineda to 107 votes. Congressman Camasura voted ACCORDINGLY, the Court Resolved: a) to DECLINE the request of justices Herrera, Cruz, and Feliciano to be relieved from their membership in the
with the Supreme Court Justices and Congressman Cerilles to proclaim Bondoc the winner of the contest. House of Representatives Electoral Tribunal and instead to DIRECT them to resume their duties therein: b) to EXPRESS its concern over the intrusion
Moved by candor and honesty, Congressman Camasura revealed on March 4, 1991, to his 'Chief," Congressman Jose S. Cojuangco, Jr., LDP of non-judicial factors in the proceedings of the House of Representatives Electoral Tribunal, which performs functions purely judicial in character
Secretary General, not only the final tally in the Bondoc case but also that he voted for Bondoc "consistent with truth and justice and self- respect," and despite the inclusion of legislators in its membership; and c) to NOTE the view that the term of all the members of the Electoral Tribunals, including
to honor a "gentlemen's agreement" among the members of the HRET that they would "abide by the result of the appreciation of the contested those from the legislature, is co-extensive with the corresponding legislative term and cannot be terminated at will but only for valid legal cause, and to
ballot1 Congressman Camasura's revelation stirred a hornets' nest in the LDP which went into a flurry of plotting appropriate moves to neutralize the REQUIRE the Justices-members of the Tribunal to submit the issue to the said Tribunal in the first instance.
pro-Bondoc majority in the Tribunal. Paras J. filed this separate concurring opinion: 'I concur, but I wish to add that Rep. Camasura should be allowed to cast his original vote in favor of
On March 5, 1991, the HRET issued a Notice of Promulgation of Decision on March 14, 1991 at 2:30 P.M. in HRET Case No. 25. A copy of the notice protestant Bondoc, otherwise a political and judicial travesty will take place.' Melencio-Herrera, Cruz and Feliciano, JJ., took no part. Gancayco, J., is
was received by Bondoc's counsel on March 6, 1991. on leave.
On March 13, 1991, the eve of the promulgation of the Bondoc decision, Congressman Cojuangco informed Congressman Camasura by letter2 that on On March 21, 1991, a petition for certiorari, prohibition and mandamus was filed by Dr. Emigdio A. Bondoc against Representatives Marciano M.
February 28, 1991 yet, the LDP Davao del Sur Chapter at Digos, Davao del Sur, by Resolution No. 03-91 had already expelled him and Congressman Pineda, Magdaleno M. Palacol, Juanita G. Camasura, Jr., or any other representative who may be appointed Vice Representative Juanita G.
Benjamin Bautista from the LDP for having allegedly helped to organize the Partido Pilipino of Eduardo "Danding" Cojuangco, and for allegedly having Camasura, Jr., and the House of Representatives Electoral Tribunal, praying this Court to:
invited LDP members in Davao del Sur to join said political party; and that as those acts are "not only inimical uncalled for, unethical and immoral, but 1. Annul the decision of the House of Representatives of March 13, 1991, 'to withdraw the nomination and to rescind the nomination of Representative
also a complete betrayal to (sic) the cause and objectives, and loyalty to LDP," in a meeting on March 12, 1991, the LDP Executive Committee Juanita G. Camasura, Jr. to the House of Representatives Electoral Tribunal;"
unanimously confirmed the expulsions. 3 2. Issue a wilt of prohibition restraining respondent Palacol or whomsoever may be designated in place of respondent Camasura from assuming,
At the same time, Congressman Cojuangco notified Speaker Ramon V. Mitra about the ouster of the two congressmen from the LDP, and asked the occupying and discharging functions as a member of the House of Representatives Electoral Tribunal;
House of Representatives, through the Speaker, to take note of it 'especially in matters where party membership is a prerequisite.4 3. Issue a writ of mandamus ordering respondent Camasura to immediately reassume and discharge his functions as a member of the House of
At 9:45 in the morning of March 4, 1991, the Chairman of the Tribunal, Mme. Justice Armeurfina M. Herrera, received the following letter dated March Representatives Electoral Tribunal; and
13, 1991, from the Office of the Secretary General of the House of Representatives, informing the Tribunal that on the basis of the letter from the LDP, 4. Grant such other relief as may be just and equitable.
the House of Representatives, during its plenary session on March 13, 1991, decided to withdraw the nomination and rescind the election of Upon receipt of the petition, the Court, without giving it due course, required the respondents to comment 5 on the petition within ten days from notice
Congressman Camasura, Jr. to the House of Electoral Tribunal. The letter reads as follows: and to enjoin the HRET 'from reorganizing and allowing participation in its proceedings of Honorable Magdaleno M. Palacol or whoever is designated to
replace Honorable Juanita G. Camasura in said House of Representatives Electoral Tribunal, until the issue of the withdrawal of the nomination and
rescission of the election of said Congressman Camasura as member of the HRET by the House of Representatives is resolved by this Court, or until
otherwise ordered by the Court." (p. 39, Rollo.)
Congressman Juanito G. Camasura, Jr. did not oppose the petition.
Congressman Marciano M. Pineda's plea for the dismissal of the petition is centered on Congress' being the sole authority that nominates and elects
from its members. Upon recommendation by the political parties therein, those who are to sit in the House of Representatives Electoral Tribunal (and in
the Commission on Appointments as well), hence, it allegedly has the sole power to remove any of them whenever the ratio in the representation of the
political parties in the House or Senate is materially changed on account of death, incapacity, removal or expulsion from the political party; 6 that a
Tribunal member's term of office is not co-extensive with his legislative term,7 for if a member of the Tribunal who changes his party affiliation is not
removed from the Tribunal, the constitutional provision mandating representation based on political affiliation would be completely nullified; 8 and that
the expulsion of Congressman Camasura from the LDP, is "purely a party affair" of the LDP 9 and the decision to rescind his membership in the House
Electoral Tribunal is the sole prerogative of the House-of-Representative Representatives, hence, it is a purely political question beyond the reach of
judicial review.10
In his comment, respondent Congressman Magdaleno M. Palacol alleged that the petitioner has no cause of action against him because he has not yet
been nominated by the LDP for membership in the HRET. 11 Moreover, the petition failed to implead the House of Representatives as an indispensable
party for it was the House, not the HRET that withdrew and rescinded Congressman Camasura's membership in the HRET. 12
The Solicitor General, as counsel for the Tribunal, argued in a similar vein; that the inclusion of the HETH as a party respondent is erroneous because
the petition states no cause of action against the Tribunal. The petitioner does not question any act or order of the HRET in violation of his rights. What
he assails is the act of the House of Representatives of withdrawing the nomination, and rescinding the election, of Congressman Juanita nito
Camasura as a member of the HRET.13
Replying to the Solicitor General's Manifestation, the petitioner argued that while the Tribunal indeed had nothing to do with the assailed decision of the
House of Representatives, it acknowledged that decision by cancelling the promulgation of its decision in HRET Case No. 25 to his (Bondoc's)
prejudice.14 Hence, although the Tribunal may not be an indispensable party, it is a necessary party to the suit, to assure that complete relief is
accorded to the petitioner for "in the ultimate, the Tribunal would have to acknowledge, give recognition, and implement the Supreme Court's decision
as to whether the relief of respondent Congressman Camasura from the Office of the Electoral Tribunal is valid." 15
In his reply to Congressman Palacol's Comment, the petitioner explained that Congressman Palacol was impleaded as one of the respondents in this
case because after the House of Representatives had announced the termination of Congressman Camasura's membership in the HETH several
newspapers of general circulation reported that the House of Representatives would nominate and elect Congressman Palacol to take Congressman
Camasura's seat in the Tribunal.16
Now, is the House of Representatives empowered by the Constitution to do that, i.e., to interfere with the disposition of an election contest in the House
Electoral Tribunal through the ruse of "reorganizing" the representation in the tribunal of the majority party?
Section 17, Article VI of the 1987 Constitution supplies the answer to that question. It provides:
Section 17. The Senate and the House of Representatives shall each have an Electoral Tribunal which shall be the sole judge of all contests relating to
the election, returns and qualifications of their respective members, Each Electoral Tribunal shall be composed of nine Members, three of whom shall
be Justices of the Supreme Court to be designated by the Chief Justice, and the remaining six shall be Members of the Senate or House of
Representatives, as the case may be, who shall be chosen on the basis of proportional representation from the political parties and the parties or
organizations registered under the party list system represented therein. The senior Justice in the Electoral Tribunal shall be its Chairman.
Section 17 reechoes Section 11, Article VI of the 1935 Constitution, except the provision on the representation of the main political parties in the
tribunal which is now based on proportional representation from all the political parties, instead of equal representation of three members from each of
the first and second largest political aggrupations in the Legislature. The 1935 constitutional provision reads as follows:
Sec. 11. The Senate and the House of Representatives shall have an Electoral Tribunal which shall be the sole judge of all contests relating to the
election, returns, and qualifications of their respective Members. Each Electoral Tribunal shall be composed of nine Members, three of whom shall be
Justices of the Supreme Court to be designated by the Chief Justice, and the remaining six shall be Members of the Senate or of the House of
Representatives, as the case may be, who shall be chosen by each House, three upon nomination of the party having the largest number of votes and
three of the party having the second largest member of votes therein. The senior Justice in each Electoral Tribunal shall be its Chairman. (1 935
Constitution of the Philippines.)
Under the above provision, the Justices held the deciding votes, aid it was impossible for any political party to control the voting in the tribunal.
The 1973 Constitution did not provide for an electoral tribunal in the Batasang Pambansa.
The use of the word "sole" in both Section 17 of the 1987 Constitution and Section 11 of the 1935 Constitution underscores the exclusive jurisdiction of
the House Electoral Tribunal as judge of contests relating to the election, returns and qualifications of the members of the House of Representatives
(Robles vs. House of Representatives Electoral Tribunal, G.R. No. 86647, February 5, 1990). The tribunal was created to function as
a nonpartisan court although two-thirds of its members are politicians. It is a non-political body in a sea of politicians. What this Court had earlier said
about the Electoral Commission applies as well to the electoral tribunals of the Senate and House of Representatives:
The purpose of the constitutional convention creating the Electoral Commission was to provide an independent and impartial tribunal for the
determination of contests to legislative office, devoid of partisan consideration, and to transfer to that tribunal all the powers previously exercised by the
legislature in matters pertaining to contested elections of its members.
The power granted to the electoral Commission to judge contests relating to the election and qualification of members of the National Assembly is
intended to be as complete and unimpaired as if it had remained in the legislature.
The Electoral Tribunals of the Senate and the House were created by the Constitution as special tribunals to be the sole judge of all contests relating to
election returns and qualifications of members of the legislative houses, and, as such, are independent bodies which must be permitted to select their
own employees, and to supervise and control them, without any legislative interference. (Suanes vs. Chief Accountant of the Senate, 81 Phil. 818.)
To be able to exercise exclusive jurisdiction, the House Electoral Tribunal must be independent. Its jurisdiction to hear and decide congressional
election contests is not to be shared by it with the Legislature nor with the Courts.
The Electoral Commission is a body separate from and independent of the legislature and though not a power in the tripartite scheme of government, it
is to all intents and purposes, when acting within the limits of its authority, an independent organ; while composed of a majority of members of the
legislature it is a body separate from and independent of the legislature.
xxx xxx xxx
The Electoral Commission, a constitutional organ created for the specific purpose of determining contests relating to election returns and qualifications
of members of the National Assembly may not be interfered with by the judiciary when and while acting within the limits of its authority, but the
Supreme Court has jurisdiction over the Electoral Commission for the purpose of determining the character, scope and extent of the constitutional grant
to the commission as sole judge of all contests relating to the election and qualifications of the members of the National Assembly. (Angara vs.
Electoral Commission, 63 Phil. 139.)
The independence of the electoral tribunal was preserved undiminished in the 1987 Constitution as the following exchanges on the subject between
Commissioners Maambong and Azcuna in the 1986 Constitutional Commission, attest:
MR. MAAMBONG. Thank you.
My questions will be very basic so we can go as fast as we can. In the case of the electoral tribunal, either of the House or of the Senate, is it correct to
say that these tribunals are constitutional creations? I will distinguish these with the case of the Tanodbayan and the Sandiganbayan which are created
by mandate of the Constitution but they are not constitutional creations. Is that a good distinction?
MR. AZCUNA. That is an excellent statement.
MR. MAAMBONG. Could we, therefore, say that either the Senate Electoral Tribunal or the House Electoral Tribunal is a constitutional body.?
MR. AZCUNA. It is, Madam President.
MR. MAAMBONG. If it is a constitutional body, is it then subject to constitutional restrictions?
MR. AZCUNA It would be subject to constitutional restrictions intended for that body.
MR. MAAMBONG. I see. But I want to find out if the ruling in the case of Vera vs. Avelino, 77 Phil. 192, will still be applicable to the present bodies we
are creating since it ruled that the electoral tribunals are not separate departments of the government. Would that ruling still be valid?
MR. AZCUNA. Yes, they are not separate departments because the separate departments are the legislative, the executive and the judiciary; but they
are constitutional bodies.
MR. MAAMBONG. Although they are not separate departments of government, I would like to know again if the ruling in Angara vs. Electoral
Commission, 53 Phil. 139, would still be applicable to the present bodies we are deciding on, when the Supreme court said that these electoral
tribunals are independent from Congress, devoid of partisan influence or consideration and, therefore, Congress has no power to regulate proceedings
of these electoral tribunals.
MR. AZCUNA. I think that is correct. They are independent although they are not a separate branch of government.
MR. MAAMBONG. There is a statement that in all parliaments of the world, the invariable rule is to leave unto themselves the determination of
controversies with respect to the election and qualifications of their members, and precisely they have this Committee on Privileges which takes care of
this particular controversy.
Would the Gentleman say that the creation of electoral tribunals is an exception to this rule because apparently we have an independent electoral
tribunal?
MR. AZCUNA. To the extent that the electoral tribunals are independent, but the Gentleman will notice that the wordings say: 'The Senate and the
House of Representatives shall each have an Electoral Tribunal. 'It is still the Senate Electoral Tribunal and the House Electoral Tribunal. So,
technically, it is the tribunal of the House and tribunal of the Senate although they are independent.
MR. MAAMBONG. But both of them, as we have agreed on, are independent from both bodies?
MR. AZCUNA. That is correct.
MR. MAAMBONG. This is the bottom line of my question. How can we say that these bodies are independent when we still have six politicians sitting in
both tribunals?
MR. AZCUNA. Politicians can be independent, Madam President.
MR. MAAMBONG. Madam President, when we discussed a portion of this in the Committee on the Executive, there was a comment by Chief Justice
Concepcion-Commissioner Concepcion-that there seems to be some incongruity in these electoral tribunals, considering that politicians still sit in the
tribunals in spite of the fact that in the ruling in the case of Sanidad vs. Vera, Senate Electoral tribunal Case No. 1, they are supposed to act in
accordance with law and justice with complete detachment from an political considerations. That is why I am asking now for the record how we could
achieve such detachment when there are six politicians sitting there.
MR. AZCUNA. The same reason that the Gentleman, while chosen on behalf of the opposition, has, with sterling competence, shown independence in
the proceedings of this Commission. I think we can also trust that the members of the tribunals will be independent. (pp. 111-112, Journal, Tuesday,
July 22, 1986, Emphasis supplied.)
Resolution of the House of Representatives violates the independence of the HRET. —
The independence of the House Electoral Tribunal so zealously guarded by the framers of our Constitution, would, however, by a myth and its
proceedings a farce if the House of Representatives, or the majority party therein, may shuffle and manipulate the political (as distinguished from the
judicial) component of the electoral tribunal, to serve the interests of the party in power.
The resolution of the House of Representatives removing Congressman Camasura from the House Electoral Tribunal for disloyalty to the LDP,
because he cast his vote in favor of the Nacionalista Party's candidate, Bondoc, is a clear impairment of the constitutional prerogative of the House
Electoral Tribunal to be the sole judge of the election contest between Pineda and Bondoc.
To sanction such interference by the House of Representatives in the work of the House Electoral Tribunal would reduce the tribunal to a mere tool for
the aggrandizement of the party in power (LDP) which the three justices of the Supreme Court and the lone NP member would be powerless to stop. A
minority party candidate may as well abandon all hope at the threshold of the tribunal.
Disloyalty to party is not a valid cause for termination of membership in the HRET. —
As judges, the members of the tribunal must be non-partisan. They must discharge their functions with complete detachment, impartiality, and
independence even independence from the political party to which they belong. Hence, "disloyalty to party" and "breach of party discipline," are not
valid grounds for the expulsion of a member of the tribunal. In expelling Congressman Camasura from the HRET for having cast a conscience vote" in
favor of Bondoc, based strictly on the result of the examination and appreciation of the ballots and the recount of the votes by the tribunal, the House of
Representatives committed a grave abuse of discretion, an injustice, and a violation of the Constitution. Its resolution of expulsion against
Congressman Camasura is, therefore, null and void.
Expulsion of Congressman Camasura violates his right to security of tenure. —
Another reason for the nullity of the expulsion resolution of the House of Representatives is that it violates Congressman Camasura's right to security of
tenure. Members of the HRET as "sole judge" of congressional election contests, are entitled to security of tenure just as members of the judiciary
enjoy security of tenure under our Constitution (Sec. 2, Art. VIII, 1987 Constitution). Therefore, membership in the House Electoral Tribunal may not be
terminated except for a just cause, such as, the expiration of the member's congressional term of office, his death, permanent disability, resignation
from the political party he represents in the tribunal, formal affiliation with another political party, or removal for other valid cause. A member may not be
expelled by the House of Representatives for "party disloyalty" short of proof that he has formally affiliated with another political group. As the records
of this case fail to show that Congressman Camasura has become a registered member of another political party, his expulsion from the LDP and from
the HRET was not for a valid cause, hence, it violated his right to security of tenure.
There is nothing to the argument of respondent Pineda that members of the House Electoral Tribunal are not entitled to security of tenure because, as
a matter of fact, two Supreme Court Justices in the Tribunal were changed before the end of the congressional term, namely: Chief Justice Marcelo B.
Fernan who, upon his elevation to the office of Chief Justice, was replaced by Justice Florentino P. Feliciano, and the latter, who was temporarily
replaced by Justice Emilio A. Gancayco, when he (J. Feliciano) took a leave of absence to deliver a lecture in Yale University. It should be stressed,
however, that those changes in the judicial composition to the HRET had no political implications at all unlike the present attempt to remove
Congressman Camasura. No coercion was applied on Chief Justice Fernan to resign from the tribunal, nor on Justice Feliciano to go on a leave of
absence. They acted on their own free will, for valid reasons, and with no covert design to derail the disposition of a pending case in the HRET.
The case of Congressman Camasura is different. He was expelled from, and by, the LDP to punish him for "party disloyalty" after he had revealed to
the Secretary-General of the party how he voted in the Bondoc case. The purpose of the expulsion of Congressman Camasura was to nullify his vote in
the Bondoc case so that the HRET's decision may not be promulgated, and so that the way could be cleared for the LDP to nominate a replacement for
Congressman Camasura in the Tribunal. That stratagem of the LDP and the House of Representatives is clearly aimed to substitute Congressman
Camasura's vote and, in effect, to change the judgment of the HRET in the Bondoc case.
The judicial power of this Court has been invoked by Bondoc for the protection of his rights against the strong arm of the majority party in the House of
Representatives. The Court cannot be deaf to his plea for relief, nor indifferent to his charge that the House of Representatives had acted with grave
abuse of discretion in removing Congressman Camasura from the House Electoral Tribunal. He calls upon the Court, as guardian of the Constitution, to
exercise its judicial power and discharge its duty to protect his rights as the party aggrieved by the action of the House. The Court must perform
its duty under the Constitution "even when the violator be the highest official of the land or the Government itself" (Concurring opinion of J. Antonio
Barredo in Aquino vs. Ponce-Enrile, 59 SCRA 183, 207).
Since the expulsion of Congressman Camasura from the House Electoral Tribunal by the House of Representatives was not for a lawful and valid
cause, but to unjustly interfere with the tribunal's disposition of the Bondoc case and to deprive Bondoc of the fruits of the Tribunal's decision in his
favor, the action of the House of Representatives is clearly violative of the constitutional mandate (Sec. 17, Art. VI, 1987 Constitution) which created the
House Electoral Tribunal to be the "sole judge" of the election contest between Pineda and Bondoc. We, therefore, declare null and void the resolution
dated March 13, 1991 of the House of Representatives withdrawing the nomination, and rescinding the election, of Congressman Camasura as a
member of the House Electoral Tribunal. The petitioner, Dr. Emigdio Bondoc, is entitled to the reliefs he prays for in this case.
WHEREFORE, the petition for certiorari, prohibition and mandamus is granted. The decision of the House of Representatives withdrawing the
nomination and rescinding the election of Congressman Juanita G. Camasura, Jr. as a member of the House Electoral Tribunal is hereby declared null
and void ab initio for being violative of the Constitution, and Congressman Juanita G. Camasura, Jr. is ordered reinstated to his position as a member
of the House of Representatives Electoral Tribunal. The HRET Resolution No. 91-0018 dated March 14, 1991, cancelling the promulgation of the
decision in HRET Case No. 25 ("Dr. Emigdio Bondoc vs. Marciano A. Pineda") is also set aside. Considering the unconscionable delay incurred in the
promulgation of that decision to the prejudice of the speedy resolution of electoral cases, the Court, in the exercise of its equity jurisdiction, and in the
interest of justice, hereby declares the said decision DULY PROMULGATED, effective upon service of copies thereof on the parties, to be done
immediately by the Tribunal. Costs against respondent Marciano A. Pineda.
SO ORDERED.
Narvasa, Paras, Bidin, Medialdea, Regalado and Davide, Jr., JJ., concur.
Gutierrez, Jr., J., concurs as certified to by the Chief Justice.
Fernan, C.J., Melencio-Herrera, Cruz and Feliciano, JJ., took no part.
Separate Opinions
PADILLA, J., dissenting:
Can the Supreme Court review and annul an act of the House of Representatives, assuming that said act were politically motiva ted, but well within the Like my distinguished colleague Justice Teodoro Padilla, I too am unable to agree with the majority. I believe that the questions as Justice Padilla
constitutional parameters of its authority? raised it — can the Court annul an act of Congress, revamping its House Electoral Tribunal? — is a political question and a question in which the Court
The majority would postulate that the Court is empowered to do so on the strength of the second paragraph, Section 1 of Art. VIII of the 1987 can not intervene.
Constitution which reads: It is true that under the Charter, the jurisdiction of this Court includes the power to strike down excesses of any agency of Government, but the Charter
Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable, did not alter or discard the principle principle of separation of powers.
and to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or Evidently, Congressman Camasura's ouster from the Tribunal was a result of political maneuvers within the lower house. This Court, however, is above
instrumentality of the government. politics and Justices should be the last persons to get involved in the "dirty" world of politics. If they do, they risk their independence.
The majority would even go as far as annul the action of the House of Representatives in withdrawing and rescinding its nomination to the House
Electoral Tribunal of Congressman Juanito J. Camasura, Jr. and order Camasura's reinstatement to said Tribunal. I regret I cannot join the majority's
posture which, I believe, is violative of the almost sacramental doctrine of separation of powers enshrined in the Constitution. It is for this reason that I
register my dissent.
A fundamental principle in our constitutional system is that the powers of government are distributed among three (3) great departments: legislative,
executive and judicial. Each of these departments is separate from, yet coordinate and co-equal with the others each one deriving its authority directly
from the fundamental law.1 As Mr. Justice Moreland summarized, "the three departments are not only coordinate, they are co-equal and co-important.
While interdependent, in the sense that each is unable to perform its functions fully and adequately without the other, they are nevertheless in many
senses independent of each other. That is to say, one department may not control or even interfere with another in the exercise of its particular
functions.2 (Emphasis supplied)
The completeness of their separation and mutual independence does not, however, extend to the point that those in authority in one department can
ignore and treat the acts of those in authority in the others, done pursuant to the authority vested in them, as nugatory and not binding in every other
department.3 In other words, one department must not encroach upon nor interfere with acts done within the constitutional competence of the other
where full discretionary authority has been delegated by the Constitution to said department. That department alone, to the exclusion of the others, has
both right and duty to exercise it free from any encroachment or interference of whomsoever. 4
This principle or doctrine of separation of powers is enforced by the judiciary through the exercise of its power of judicial review and prudent refusal to
assume jurisdiction over cases involving political questions.5
In the case at bar, one notes that the dispute emerged when the House of Representatives withdrew and rended the nomination of Congressman
Juanito J. Camasura, Jr. to the House Electoral Tribunal. This act was, it seems, precipitated by a letter of Congressman Jose S. Cojuangco, Jr.
informing the Speaker of the House of Representatives of the expulsion of Congressman Juanito J. Camasura, Jr. from the LDP for having allegedly
helped to organize the Partido Pilipino of Mr. Eduardo Cojuangco, Jr. and for allegedly having invited other LDP members to join the said political party.
As a result of this letter, the nomination of Camasura to the House Electoral Tribunal was withdrawn at a plenary session of the House of
Representatives and the House Electoral Tribunal was informed of such action of the House.
Petitioner assails the propriety of said action of the House of Representatives as it is, he alleges, but a employ to thwart the promulgation of a decision
in the electoral protest lodged by him (petitioner Bondoc) against Marciano M. Pineda, a member of the Laban ng Demokratikong Pilipino (LDP), and
which decision would be favorable to him (Bontoc). Petitioner contends that not only does the action of the House of Representatives violate the
independence of the House Electoral Tribunal but that it also violates the security of tenure of Congressman Camasura, Jr. in said electoral tribunal.
Congressman (respondent) Pineda, on the other hand, submits that the House of Representatives has the sole authority to nominate and select from
among its members who are to sit in the House Electoral Tribunal, upon recommendation of the political parties therein, hence, it also has the sole
power to remove any of them from the electoral tribunal whenever the ratio in the representation of the political parties in the House is materially
changed on account of death, incapacity, removal or expulsion of a House member from a political party. A Tribunal member's term of office in said
electoral tribunal is not, Congressman Pineda argues, co-extensive with his legislative term. Were that the fact, the constitutional provision mandating
representation in the electoral tribunal based on political affiliation may be completely nullified in the event that a member of the Tribunal changes party
affiliation.
As provided for in the Constitution, there are nine (9) members of the House Electoral Tribunal. Three (3) of the members of the tribunal are Justices of
the Supreme Court as designated by the Chief Justice of the Supreme Court. The remaining six (6) members come from the members of the House
chosen on the basis of proportional representation from the political parties and the parties or organizations registered under the partylist system. 6 The
House of Representatives has the power to nominate the members of the House Electoral Tribunal (representing the House) provided, of course, that
the proportional representation of parties is maintained.
Can the House of Representatives withdraw the nomination extended to a member of the electoral tribunal (representing the House of
Representatives) after the majority party in the House has expelled him from its ranks? I believe it can. The power to appoint or designate a member of
the House of Representatives to be a member of the House Electoral Tribunal must, to my mind, necessarily include the power to remove said
member. A withdrawal of the nomination of a member of the Tribunal where such withdrawal will maintain the proportional representation of the political
parties, mandated by the Constitution, must be recognized and respected, no matter how politically motivated it might be. Constitutional law, it is said,
is concerned with power not with policy, wisdom or expediency.7The question that must be asked in testing the validity of such legislative act is, does
the House of Representatives have the power to do what it has done and not whether the House of Representatives should have done what it has
done.
Corollary to the above is, can the Judiciary question a legislative act done within the constitutional authority to the legislature? I believe not, in the same
way that, for instance, the House cannot question the act of the Chief Justice, should he deem it proper to change the Justices who sit as members of
the House Electoral Tribunal. Matters such as who will be designated or nominated as members of the electoral tribunal, how they should vote —
surely are matters that not merely concern political action as far as members of the House are concerned, but are the very essence of political action, if
political life has any connotation at all. To open courts of justice to such political controversies would have courts sit in judgment over the manifold
disputes engendered by political manuevers and skirmishes. This would drag the courts into the political arena which in the long run could undermine
and destroy their independence.
The judicial department, in my opinion, has no power to review even the most arbitrary and unfair action of the legislative department, taken in the
exercise of power committed exclusively to it by the Constitution.8 It is not within the province of this Court to supervise legislation or oversee legislative
acts as to keep them within the bounds of propriety, fairness and common sense. Such acts, like the one at bar, are exclusively of legislative
concern.9 To hold otherwise would be to invalidate the principle of separation of powers. As Judge Learned Hand so aptly observed, "one cannot find
among the powers granted to courts any authority to pass upon the validity of the decisions of another 'Department' as to the scope of that
'Department's' powers. Indeed, it is to be understood that the three (3), Departments' were separate and co-equal, each being, as it were, a Leibnizian
monad, looking up to the Heaven of the Electorate, but without any mutual dependence. What could be better evidence of complete dependence than
to subject the validity of the decision of one 'Department' as to its authority on a given occasion to review and reversal by another? Such a doctrine
makes supreme the Department that has the last word. "10 (Emphasis supplied)
The Court should not lose sight of the fact that "sometimes the division of power tacitly accepted by society runs counter to its own Ideology and to the
constitutional commandments. This may be because the society is still unsure of what the best division of power would be and so temporarily accepts
the existing one, or because the society has vacated its decisionmaking function and special interest groups have stepped in to fill the vacuum. In
either case, the Court can neither validate a clearly unconstitutional distribution, and thereby subject its role as guardian to claims of fraud, nor
invalidate a functioning system with an order which would be ignored. To do either would be to sacrifice the popular prestige which is the Court's
primarily source of power."11
Even assuming that the act of the House of Representatives in withdrawing and rescinding the nomination of Congressman Camasura, Jr. as a
member of the House Electoral Tribunal is politically motivated, precipitated as it is by the knowledge of how Camasura, Jr. is to vote in one of the
electoral protests before said Tribunal, this, to me, is not sufficient reason to invalidate said act of the House of Representatives, since it is done within
the limits of its constitutional power. Besides, what other act of the House (or Senate) is there that is not politically motivated? After all, that branch of
government is a political branch and necessarily or pragmatically all of its acts are and will always be politically motivated.
The environmental facts of this case do not, in my considered opinion, bring it within the Court's power to strike down the legislative act in question, it is
the people of this nation — not this court — who should ultimately judge the act when they cast their ballots. The Court cannot arrogate unto itself the
power to institute what it perceives to be political reforms, for in the last analysis on which all else depend, the vitality of a political system would be
greatly weakened by reliance on the judiciary for any and all political reforms and, in time, a complacent body politic will result. It is the responsibility of
the people and none other, to remain ever vigilant about their government to the end that they can continue to live under a regime of justice, liberty and
democracy. To leave this task to the Court, would in the long run be inimical to and destructive of democratic government itself
ACCORDINGLY, I vote to DISMISS the petition. EN BANC
[G.R. No. 150605. December 10, 2002]
SARMIENTO, J., disssenting:
EUFROCINO M. CODILLA, SR., petitioner, vs. HON. JOSE DE VENECIA, ROBERTO P. NAZARENO, in their official capacities as Speaker and
Secretary-General of the House of Representatives, respectively, and MA. VICTORIA L. LOCSIN, respondents.
DECISION
PUNO, J.:
In a democracy, the first self-evident principle is that he who has been rejected by the people cannot represent the people. Respondent Ma. Victoria L.
Locsin lost to petitioner Eufrocino M. Codilla, Sr. by 17,903 votes in the May 14, 2001 elections as Representative of the 4 th legislative district of Leyte.
The most sophisticated legal alchemy cannot justify her insistence that she should continue governing the people of Leyte against their will. The
enforcement of the sovereign will of the people is not subject to the discretion of any official of the land.
This is a Petition for Mandamus and Quo Warranto directed against respondents Speaker Jose De Venecia and Secretary-General Roberto P.
Nazareno of the House of Representatives to compel them to implement the decision of the Commission on Elections en banc by (a) administering the
oath of office to petitioner as the duly-elected Representative of the 4th legislative district of Leyte, and (b) registering the name of the petitioner in the
Roll of Members of the House of Representatives, and against respondent Ma. Victoria L. Locsin for usurping, intruding into, and unlawfully holding and
exercising the said public office on the basis of a void proclamation.
The facts are uncontroverted. Petitioner and respondent Locsin were candidates for the position of Representative of the 4 th legislative district of Leyte
during the May 14, 2001 elections. At that time, petitioner was the Mayor of Ormoc City while respondent Locsin was the sitting Representative of the
4th legislative district of Leyte. On May 8, 2001, one Josephine de la Cruz, a registered voter of Kananga, Leyte, filed directly with the COMELEC main
office a Petition for Disqualification[1] against the petitioner for indirectly soliciting votes from the registered voters of Kananga and Matag-ob, Leyte, in
violation of Section 68 (a) of the Omnibus Election Code. It was alleged that the petitioner used the equipments and vehicles owned by the City
Government of Ormoc to extract, haul and distribute gravel and sand to the residents of Kananga and Matag-ob, Leyte, for the purpose of inducing,
influencing or corrupting them to vote for him. Attached to the petition are the (a) Affidavits of Basilio Bates, [2] Danilo D. Maglasang,[3] Cesar A.
Laurente;[4] (b) Joint Affidavit of Agripino C. Alferez and Rogelio T. Salvera;[5] (c) Extract Records from the Police Blotter executed by Police
Superintendent Elson G. Pecho;[6] and (d) Photographs showing government dump trucks, haulers and surfacers and portions of public roads allegedly
filled-in and surfaced through the intercession of the respondent.[7]The case was docketed as SPA No. 01-208 and assigned to the COMELECs
Second Division.
On May 10, 2001, the COMELEC Second Division issued an Order delegating the hearing and reception of evidence on the disqualification case to the
Office of the Regional Director of Region VIII. [8] On May 11, 2001, the COMELEC Second Division sent a telegram informing the petitioner that a
disqualification case was filed against him and that the petition was remanded to the Regional Election Director for investigation.[9]
At the time of the elections on May 14, 2001, the Regional Election Director had yet to hear the disqualification case. Consequently, petitioner
was included in the list of candidates for district representative and was voted for. The initial results showed that petitioner was the winning candidate.
On May 16, 2001, before the counting could be finished, respondent Locsin joined as intervenor in SPA No. 128 and filed a Most Urgent Motion to
Suspend Proclamation of Respondent [herein petitioner] with the COMELEC Second Division. [10] Respondent Locsin alleged that the evidence on
record against respondent is very strong and unless rebutted remains. She urged the Commission to set the hearing of the disqualification case and
prayed for the suspension of the proclamation of the respondent so as not to render the present disqualification case moot and academic. A copy of
the Motion was allegedly served on petitioner by registered mail but no registry receipt was attached thereto.[11]
On May 18, 2001, respondent Locsin filed a Second Most Urgent Motion to Suspend Proclamation of Respondent stating there is clear and
convincing evidence showing that the respondent is undoubtedly guilty of the charges against him and this remains unrebutted by the respondent. A
copy of the Motion was sent to the petitioner and the corresponding registry receipt was attached to the pleading. [12] The records, however, do not
show the date the petitioner received the motion.
On the same day, May 18, 2001, the COMELEC Second Division issued an Ex-Parte Order[13] directing the Provincial Board of Canvassers of Leyte
to suspend the proclamation of petitioner in case he obtains the highest number of votes by reason of the seriousness of the allegations in the petition
for disqualification.[14] It also directed the Regional Election Director to speed up the reception of evidence and to forward immediately the complete
records together with its recommendation to the Office of the Clerk of the Commission.[15] As a result, petitioner was not proclaimed as winner even
though the final election results showed that he garnered 71,350 votes as against respondent Locsins 53,447 votes. [16]
At the time that the COMELEC Second Division issued its Order suspending his proclamation, the petitioner has yet to be summoned to answer the
petition for disqualification. Neither has said petition been set for hearing. It was only on May 24, 2001 that petitioner was able to file an Answer to the
petition for his disqualification with the Regional Election Director, alleging that: (a) he has not received the summons together with the copy of the
petition; (b) he became aware of the matter only by virtue of the telegram sent by the COMELEC Second Division informing him that a petition was filed
against him and that the Regional Election Director was directed to investigate and receive evidence therewith; and (c) he obtained a copy of the
petition from the COMELEC Regional Office No. 8 at his own instance. [17] Petitioner further alleged that the maintenance, repair and rehabilitation of
barangay roads in the municipalities of Matag-ob and Kananga were undertaken without his authority, participation or directive as City Mayor of Ormoc.
He attached in his Answer the following: (a) Affidavit of Alex B. Borinaga; [18] (b) Copy of the Excerpt from the Minutes of the Regular Session of
Barangay Monterico;[19] (c) Affidavit of Wilfredo A. Fiel;[20] (d) Supplemental Affidavit of Wilfredo A. Fiel; [21] and (e) Affidavit of Arnel Y. Padayao.[22]
On May 25, 2001, petitioner filed a Motion to Lift Order of Suspension,[23] alleging that (a) he did not receive a copy of the Motion to Suspend his
Proclamation and hence, was denied the right to rebut and refute the allegations in the Motion; (b) that he did not receive a copy of the summons on
the petition for disqualification and after personally obtaining a copy of the petition, filed the requisite answer only on May 24, 2001; and (c) that he
received the telegraph Order of the COMELEC Second Division suspending his proclamation only on May 22, 2001. He attached documentary
evidence in support of his Motion to Lift the Suspension of his proclamation, and requested the setting of a hearing on his Motion. [24]
On May 30, 2001, an oral argument was conducted on the petitioners Motion and the parties were ordered to submit their respective
memoranda.[25] On June 4, 2001, petitioner submitted his Memorandum[26] in support of his Motion assailing the suspension of his proclamation on the
grounds that: (a) he was not afforded due process; (b) the order has no legal and factual basis; and (c) evidence of his guilt is patently inexistent for the
purpose of suspending his proclamation. He prayed that his proclamation as winning congressional candidate be expediently made, even while the
disqualification case against him continue upon due notice and hearing. He attached the following additional evidence in his Memorandum: (a) Copy of
certification issued by PNP Senior Inspector Benjamin T. Gorre; [27] (b) Certification issued by Elena S. Aviles, City Budget Officer; [28] (c) Copy of
certification issued by Wilfredo A. Fiel, City Engineer of Ormoc;[29] (d) Joint Affidavit of Antonio Patenio and Pepito Restituto;[30] and (e) Affidavits of
Demetrio Brion,[31]Igmedio Rita[32] and Gerardo Monteza.[33] Respondent Locsins memorandum also contained additional affidavits of his witnesses. [34]
Petitioners Motion to Lift the Order of Suspension, however, was not resolved. Instead, on June 14, 2001, the COMELEC Second Division
promulgated its Resolution[35] in SPA No. 01-208 which found the petitioner guilty of indirect solicitation of votes and ordered his disqualification. It
directed the immediate proclamation of the candidate who garnered the highest number of votes xxx. A copy of said Resolution was sent by
fax to the counsel of petitioner in Cebu City in the afternoon of the following day. [36]
By virtue of the said Resolution, the votes cast for petitioner, totaling 71,350, were declared stray even before said Resolution could gain
finality. On June 15, 2001, respondent Locsin was proclaimed as the duly elected Representative of the 4 th legislative district of Leyte by the Provincial
Board of Canvassers of Leyte. It issued a Certificate of Canvass of Votes and Proclamation of the Winning Candidates for Member of the House of
Representatives stating that MA. VICTORIA LARRAZABAL LOCSIN obtained a total of FIFTY THREE THOUSAND FOUR HUNDRED FORTY SEVEN
(53,447) votes representing the highest number of votes legally cast in the legislative district for said office. [37] Respondent Locsin took her oath of
office on June 18, 2001 and assumed office on June 30, 2001.
On June 20, 2001, petitioner seasonably filed with the COMELEC en banc a Motion for Reconsideration[38] from the June 14, 2001 Resolution of
the COMELEC Second Division which ordered his disqualification, as well as an Addendum to the Motion for Reconsideration.[39] Petitioner alleged in
his Motion for Reconsideration that the COMELEC Second Division erred: (1) in disqualifying petitioner on the basis solely of the dubious declaration
of the witnesses for respondent Locsin; (2) in adopting in toto the allegations of the witnesses for respondent Locsin; and (3) in promulgating the
resolution in violation of its own rules of procedure and in directing therein the immediate proclamation of the second highest vote getter. Respondent
Locsin and her co-petitioner in SPA No. 01-208 filed a joint Opposition to the Motion for Reconsideration. [40]
On June 21, 2001, petitioner filed with the COMELEC en banc a Petition for Declaration of Nullity of Proclamation,[41] docketed as SPC No. 01-
324, assailing the validity of the proclamation of respondent Locsin who garnered only the second highest number of votes. Respondent Locsin filed
her Answer alleging that: (1) the Commission lost jurisdiction to hear and decide the case because of the proclamation of Locsin and that any question
on the election, returns, and qualification of Locsin can only be taken cognizance of by the House of Representatives Electoral Tribunal (HRET); (2) the
case should be filed and heard in the first instance by a Division of the Commission and not directly by the Commission en banc; and (3) the
proclamation of Locsin was valid because she received the highest number of valid votes cast, the votes of Codilla being stray.
On June 28, 2001, petitioner filed an Urgent Manifestation[42] stating that he was deprived of a fair hearing on the disqualification case because while
the documentary evidence adduced in his Memorandum was in support of his Motion for the lifting of the suspension of his proclamation,
the COMELEC Second Division instead ruled on the main disqualification case. In consonance with his prayer that a full-dress hearing be
conducted on the disqualification case, he submitted Affidavits of additional witnesses[43] which he claims would refute and substantially belie the
allegations of petitioners/intervenors witnesses. A Reply,[44] Rejoinder[45] and Sur-Rejoinder[46] were respectively filed by the parties. Consequently, the
motion for reconsideration in SPA No. 01-208 and the petition for declaration of nullity in SPC No. 01-324 were submitted for resolution.
From the records, it appears that initially, a Resolution penned by Commissioner Rufino S.B. Javier, dated July 24, 2001, was submitted to the Office of
the Chairman, dismissing the petition for declaration of nullity for lack of jurisdiction and denying the motion for reconsideration filed by petitioner
Codilla.[47] Commissioners Florentino A. Tuason, Jr. and Resurreccion Z. Borra submitted their respective dissenting opinions [48] to the Javier
resolution. It bears emphasis that Commissioner Tuason, Jr. was the ponente of the Resolution of the COMELEC Second Division which ordered the
disqualification of petitioner but after considering the additional evidence presented by the latter, he concluded that the totality of the evidence was
clearly in petitioners favor. Equally worth mentioning is the fact that Commissioner Ralph C. Lantion, who was the Presiding Commissioner of the
Second Division, also dissented and voted to grant Codillas motion for reconsideration on the ground that [T]he people of Leyte have spoken and I
respect the electorates will.x x x. [49]
On August 29, 2001, then COMELEC Chairman Alfredo L. Benipayo issued a Vote and Opinion and Summary of Votes reversing the resolution of
the Second Division and declaring the proclamation of respondent Locsin as null and void. The dispositive portion reads:
JUDGMENT
WHEREFORE, in view of all the foregoing considerations, I concur with Commissioner Resurreccion Z. Borra, Commissioner Florentino A. Tuason, Jr.
and Commissioner Ralph C. Lantion, in SPA No. 01-208, to GRANT the motion for reconsideration and to REVERSE the resolution of the Commission
(Second Division) promulgated on June 1, 2001, disqualifying Codilla; and subsequently, in SPC No. 01-324, to GRANT the petition of Eufrocino M.
Codilla, Sr., and declare as null and void the proclamation of losing candidate Locsin.
Accordingly:
1. On the Motion for Reconsideration of the disqualification resolution against Codilla, promulgated by the Commission (Second Division) on June 14,
2001 (SPA No. 01-208), I vote:
(a) to GRANT the Motion for Reconsideration of respondent-movant Eufrocino M. Codilla, Sr., and to REVERSE the Resolution of the Commission
(Second Division) promulgated on June 14, 2001, for insufficiency of evidence;
(b) to lift the order of suspension of proclamation of petitioner Codilla, issued by the Commission (Second Division) on May 18, 2001, having been
issued without hearing and without any finding that the evidence of guilt of petitioner Codilla is strong and, thus, null and void;
(c) to nullify the order contained in the Resolution of the Commission (Second Division) promulgated on June 14, 2001, for (t)he immediate
proclamation of the candidate who garnered the highest number of votes, to the exclusion of respondent and the concurrent order for the Provincial
Board of Canvasser (sic) of Leyte to immediately reconvene and thereafter proclaim forthwith the candidate who obtained the highest number of votes
counting out the Respondent the same being violative of election laws, established jurisprudence, and resolutions of the Commission;
(d) to nullify the ruling contained in the Resolution of the Commission (Second Division) promulgated o June 14, 2001, that the votes of respondent
Codilla are considered stray and invalid said ruling being issued on the basis of an inapplicable decision, and contrary to established jurisprudence;
(e) to order the Provincial Board of Canvassers of Leyte, upon the finality of this resolution, to reconvene and proclaim petitioner Codilla as the winning
candidate for Representative of the Fourth Legislative district of Leyte to comply with its ministerial duty to proclaim the candidate who garnered the
highest number of votes in the elections for that position; and
(f) to order intervenor-oppositor Locsin, upon the finality of this resolution, to vacate the office of Representative of the House of Representatives
representing the Fourth legislative district of Leyte and, for this purpose, to inform the House of Representatives through the Honorable Speaker of this
resolution for its attention and guidance; and
2. On the petition for Declaration of Nullity of proclamation of respondent Ma. Victoria L. Locsin (SPC No. 01-324), I vote:
(a) to GRANT the petition of Eufrocino M. Codilla, Sr., and declare as null and void the proclamation of losing candidate Locsin, the proclamation being
violative of election laws, established jurisprudence, and resolutions of the Commission on Elections;
(b) to lift the order of suspension of proclamation of petitioner Codilla, issued by the Commission (Second Division) on May 18, 2001, in SPA No. 01-
208, having been issued without hearing and without any finding that the evidence of guilt of petitioner Codilla is strong and, thus, null and void;
(c) to nullify the order contained in the Resolution of the Commission (Second Division) promulgated on June 14, 2001, in SPA No. 01-208, for (t)he
immediate proclamation of the candidate who garnered the highest number of votes, to the exclusion of respondent and the concurrent order for the
provincial Board of Canvasser (sic) of Leyte to immediately reconvene and thereafter proclaim forthwith the candidate who obtained the highest
number of votes counting out the Respondent the same being violative of election laws, established jurisprudence, and resolutions of the Commission;
(d) to nullify the ruling contained in the Resolution of the Commission (Second Division) promulgated on June 14, 2001, in SPA No. 01-208, that the
votes of respondent Codilla are considered stray and invalid said ruling being issued on the basis of an inapplicable decision, and contrary to
established jurisprudence;
(e) to order the provincial Board of Canvassers of Leyte, upon the finality of this resolution, to reconvene and proclaim petitioner Codilla as the winning
candidate for Representative of the Fourth legislative district of Leyte he (sic) having garnered the highest number of votes in the elections for the
position; and
(f) to order respondent Locsin, upon the finality of this resolution, to vacate the office of Representative of the House of Representatives representing
the Fourth Legislative district of Leyte and, for this purpose, to inform the House of Representatives through the Honorable Speaker of this resolution
for its attention and guidance.
Summary of Votes
Considering the FOUR (4) VOTES of the Chairman and Commissioners Resurreccion Z. Borra, Florentino A. Tuason, Jr., and Ralph C. Lantion, to
grant the Motion for Reconsideration of Codilla and reverse the disqualification Resolution of the Commission (Second Division) in SPA No. 01-208,
promulgated on June 14, 2001, and as an inevitable consequence, in voting to grant the petition for declaration of nullity of the proclamation of Ma.
Victoria L. Locsin in SPC No. 01-324, the verdict/opinion of the Chairman and the three (3) Commissioners taken together now stands, as it is, the
MAJORITY DECISION of the Commission En Banc in both cases; and the Resolution submitted by three (3) Commissioners, namely, Commissioner
Rufino S.B. Javier, Commissioner Luzviminda G. Tancangco, and Commissioner Mehol K. Sadain, is considered, as it is, the MINORITY DECISION of
the Commission En Banc in both cases.
The MAJORTIY DECISION was arrived at after proper consultation with those who joined the majority. The Chairman and the three (3) Commissioners
comprising the majority decided that no one will be assigned to write a Majority Decision. Instead, each one will write his own separate
opinion. Commissioners Borra, Tuason, Jr. and the undersigned Chairman submitted separate opinions. Commissioner Lantion wrote an explanation
on his vote.[50]
The aforequoted judgment was adopted in a Vote of Adoption signed by Commissioners Ralph C. Lantion, Resurreccion Z. Borra and Florentino A.
Tuason, Jr.[51]
Respondent Locsin did not appeal from this decision annulling her proclamation. Instead, she filed a Comment and Manifestation[52] with the
COMELEC en banc questioning the procedure and the manner by which the decision was issued. In addition, respondent Locsin requested and was
issued an opinion by House of Representatives Executive Director and Chief Legal Counsel Leonardo B. Palicte III declaring that the COMELEC has
no jurisdiction to nullify the proclamation of respondent Locsin after she had taken her oath and assumed office since it is the HRET which is the sole
judge of election, returns and qualifications of Members of the House.[53] Relying on this opinion, respondent Locsin submitted a written privileged
speech to the House during its regular session on September 4, 2001, where she declared that she will not only disregard but will openly defy and
disobey the COMELEC en banc resolution ordering her to vacate her position.[54]
On September 6, 2001, the COMELEC en banc issued an Order[55] constituting the members of the Provincial Board of Canvassers of Leyte to
implement the aforesaid decision. It likewise ordered the Board to reconvene and proclaim the candidate who obtained the highest number of votes in
the district, as the duly-elected Representative of the Fourth Legislative district of Leyte, and accordingly issue a Certificate of Canvass and
Proclamation of Winning Candidate for Member of the House of Representatives x x x, based on the city/municipal certificates of canvass submitted
beforehand to the previous Provincial Board of Canvassers of Leyte x x x.
On September 12, 2001, petitioner Codilla was proclaimed by the Provincial Board of Canvassers as the duly-elected Representative of the
4th legislative district of Leyte, having obtained a total of 71,350 votes representing the highest number of votes cast in the district. [56] On the same
day, petitioner took his oath of office before Executive Judge Fortunito L. Madrona of the Regional Trial Court of Ormoc City.[57]
On September 14, 2001, petitioner wrote the House of Representatives, thru respondent Speaker De Venecia, informing the House of the August 29,
2001 COMELEC en banc resolution annulling the proclamation of respondent Locsin, and proclaiming him as the duly-elected Representative of the
4th legislative district of Leyte.[58] Petitioner also served notice that I am assuming the duties and responsibilities as Representative of the fourth
legislative district of Leyte to which position I have been lawfully elected and proclaimed. On behalf of my constituents, I therefore expect that all rights
and privileges intended for the position of Representative of the fourth legislative district of Leyte be accorded to me, including all physical facilities and
staff support. On the basis of this letter, a Memorandum[59] dated October 8, 2001 was issued by Legal Affairs Deputy Secretary-General Gaudencio A.
Mendoza, Jr., for Speaker De Venecia, stating that there is no legal obstacle to complying with the duly promulgated and now final and executory
COMELEC Decision of August 29, 2001 x x x.
These notwithstanding, and despite receipt by the House of Representatives of a copy of the COMELEC en banc resolution on September 20,
2001,[60] no action was taken by the House on the letter-appeal of petitioner. Hence, petitioner sought the assistance of his party, LAKAS-NUCD-
UMDP, which sent a letter[61] addressed to respondent Speaker De Venecia, dated October 25, 2001, and signed by Party President Teofisto T.
Guingona, Jr., Secretary-General Heherson T. Alvarez, and Region VIII Party Chairman Sergio Antonio F. Apostol, requesting the House of
Representatives to act decisively on the matter in order that petitioner can avail of whatever remedy is available should their action remain unfavorable
or otherwise undecisive.
In response, Speaker De Venecia sent a letter[62] dated October 30, 2001, stating that:
We recognize the finality of the COMELEC decision and we are inclined to sustain it. However, Rep. Locsin has officially notified the HOUSE in her
privilege speech, inserted in the HOUSE Journal dated September 4, 2001, that she shall openly defy and disobey the COMELEC ruling. This
ultimately means that implementing the decision would result in the spectacle of having two (2) legislators occupying the same congressional seat, a
legal situation, the only consideration, that effectively deters the HOUSEs liberty to take action.
In this light, the accepted wisdom is that the implementation of the COMELEC decision is a matter that can be best, and with finality,
adjudicated by the Supreme Court, which, hopefully, shall act on it most expeditiously. (emphases supplied)
Hence, the present petition for mandamus and quo warranto.
Petitioner submits that by virtue of the resolution of the COMELEC en banc which has become final and executory for failure of respondent Locsin to
appeal therefrom, it has become the ministerial duty: (1) of the Speaker of the House of Representatives, as its Administrative Head and Presiding
Officer, to implement the said resolution of the COMELEC en banc by installing him as the duly-elected Representative of the 4th legislative district of
Leyte; and (2) of the Secretary-General, as official custodian of the records of the House, to formally register his name in the Roll of Members of the
House and delete the name of respondent Locsin therefrom. Petitioner further contends that respondent Locsin has been usurping and unlawfully
holding the public office of Representative of the 4th legislative district of Leyte considering that her premature proclamation has been declared null and
void by the COMELEC en banc. He alleges that the action or inaction of public respondents has deprived him of his lawful right to assume the office of
Representative of the 4th legislative district of Leyte.
In his Comment,[63] public respondent Speaker De Venecia alleged that mandamus will not lie to compel the implementation of the COMELEC decision
which is not merely a ministerial duty but one which requires the exercise of discretion by the Speaker of the House considering that: (1) it affects the
membership of the House; and (2) there is nothing in the Rules of the House of Representatives which imposes a duty on the House Speaker to
implement a COMELEC decision that unseats an incumbent House member.
In his Comment,[64] public respondent Secretary-General Nazareno alleged that in reading the name of respondent Locsin during the roll call, and in
allowing her to take her oath before the Speaker-elect and sit as Member of the House during the Joint Session of Congress, he was merely performing
official acts in compliance with the opinions [65]rendered by House of Representatives Chief Counsel and Executive Director Leonardo C. Palicte III
stating that the COMELEC has no jurisdiction to declare the proclamation of respondent Locsin as null and void since it is the HRET which is the sole
judge of all election, returns and qualifications of Members of the House. He also contends that the determination of who will sit as Member of the
House of Representatives is not a ministerial function and cannot, thus, be compelled by mandamus.
Respondent Locsin, in her Comment,[66] alleged that the Supreme Court has no original jurisdiction over an action for quo warranto involving a member
of the House of Representatives for under Section 17, Article VI of the Constitution it is the HRET which is the sole judge of all contests relating to the
election, returns and qualifications of Members of the House of Representatives. She likewise asserts that this Court cannot issue the writ of
mandamus against a co-equal legislative department without grossly violating the principle of separation of powers. She contends that the act of
recognizing who should be seated as a bona fide member of the House of Representatives is not a ministerial function but a legislative prerogative, the
performance of which cannot be compelled by mandamus. Moreover, the prayer for a writ of mandamus cannot be directed against the Speaker and
Secretary-General because they do not have the authority to enforce and implement the resolution of the COMELEC.
Additionally, respondent Locsin urges that the resolution of the COMELEC en banc is null and void for lack of jurisdiction. First, it should have
dismissed the case pending before it after her proclamation and after she had taken her oath of office. Jurisdiction then was vested in the HRET to
unseat and remove a Member of the House of Representatives. Second, the petition for declaration of nullity is clearly a pre-proclamation controversy
and the COMELEC en banc has no original jurisdiction to hear and decide a pre-proclamation controversy. It must first be heard by a COMELEC
Division. Third, the questioned decision is actually a hodge-podge decision because of the peculiar manner in which the COMELEC disposed of the
case.
Finally, respondent Locsin asserts that the matter of her qualification and eligibility has been categorically affirmed by the HRET when it dismissed
the quo warranto case filed against her, docketed as HRET Case No. 01-043, entitled Paciano Travero vs. Ma. Victoria Locsin, on the ground that
the allegations stated therein are not proper grounds for a petition for quo warranto against a Member of the House of Representatives under section
253 of the Omnibus Election Code and Rule 17 of the HRET Rules, and that the petition was filed late.[67]
In his Reply,[68] petitioner asserts that the remedy of respondent Locsin from the COMELEC decision was to file a petition for certiorari with the
Supreme Court, not to seek an opinion from the Chief Legal Counsel of the House of Representatives; that the HRET has no jurisdiction over a petition
for declaration of nullity of proclamation which is based not on ineligibility or disloyalty, but by reason that the candidate proclaimed as winner did not
obtain the highest number of votes; that the petition for annulment of proclamation is a pre-proclamation controversy and, hence, falls within the
exclusive jurisdiction of the COMELEC pursuant to section 242 of B.P. Blg. 881[69] and section 3, Article IX (C) of the Constitution; that respondent
Speaker De Venecia himself recognizes the finality of the COMELEC decision but has decided to refer the matter to the Supreme Court for
adjudication; that the enforcement and implementation of a final decision of the COMELEC involves a ministerial act and does not encroach on the
legislative power of Congress; and that the power to determine who will sit as Member of the House does not involve an exercise of legislative power
but is vested in the sovereign will of the electorate.
The core issues in this case are: (a) whether the proclamation of respondent Locsin by the COMELEC Second Division is valid; (b) whether said
proclamation divested the COMELEC en banc of jurisdiction to review its validity; and (c) assuming the invalidity of said proclamation, whether it is the
ministerial duty of the public respondents to recognize petitioner Codilla, Sr. as the legally elected Representative of the 4th legislative district of
Leyte vice respondent Locsin.
I Urgent Motion to the petitioner but it does not appear when the petitioner received a copy thereof. That same day, the COMELEC Second Division
Whether the proclamation of respondent Locsin is valid.
After carefully reviewing the records of this case, we find that the proclamation of respondent Locsin is null and void for the following reasons:
First. The petitioner was denied due process during the entire proceedings leading to the proclamation of respondent Locsin.
COMELEC Resolution Nos. 3402[70] sets the procedure for disqualification cases pursuant to section 68 of the Omnibus Election Code, viz:
C. PETITION TO DISQUALIFY A CANDIDATE PURSUANT TO SEC. 68 OF THE OMNIBUS ELECTION CODE AND PETITION TO DISQUALIFY
FOR LACK OF QUALIFICATIONS OR POSSESSING SAME GROUNDS FOR DISQUALIFICATION
(1) The verified petition to disqualify a candidate pursuant to Sec. 68 of the Omnibus Election Code and the verified petition to disqualify a candidate for
lack of qualifications or possessing same grounds for disqualification, may be filed any day after the last day for filing of certificates of candidacy but not
later than the date of proclamation.
(2) The petition to disqualify a candidate pursuant to Sec. 68 of the Omnibus Election Code shall be filed in ten (10) legible copies by any citizen of
voting age, or duly registered political party, organization or coalition of political parties against any candidate who in an action or protest in which he is
a party is declared by final decision of a competent court guilty of, or found by the Commission of:
2.a having given money or other material consideration to influence, induce or corrupt the voters or public officials performing electoral functions;
2.b having committed acts of terrorism to enhance his candidacy;
2.c having spent in his election campaign an amount in excess of that allowed by the Omnibus Election Code;
2.d having solicited, received or made any contribution prohibited under Sections 89, 95, 96, 97 and 104 of the Omnibus Election Code;
2.e having violated any of Sections 80, 83, 85, 86 and 261, paragraphs d, e, k, v, and cc, sub-paragraph 6 of the Omnibus Election Code, shall be
disqualified from continuing as a candidate, or if he has been elected, from holding the office.
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(4) Upon payment of the filing fee of P1,000.00 and legal research fee of P20.00, the offices concerned shall docket the petition and assign to it a
docket number which must be consecutive, according to the order of receipt and must bear the year and prefixed as SPA with the corresponding initial
of the name of the office, i.e. SPA (RED) No. C01-001; SPA (PES) No. C01-001;
(5) Within three (3) days from filing of the petitions, the offices concerned shall issue summons to the respondent candidate together with a copy of the
petition and its enclosures, if any;
(6) The respondent shall be given three (3) days from receipt of summons within which to file his verified answer (not a motion to dismiss) to the
petition in ten (10) legible copies, serving a copy thereof upon the petitioner. Grounds for Motion to Dismiss may be raised as an affirmative defense;
(7) The proceeding shall be summary in nature. In lieu of the testimonies, the parties shall submit their affidavits or counter-affidavits and other
documentary evidences including their position paper;
(8) The hearing must be completed within ten (10) days from the date of the filing of the answer. The hearing officer concerned shall submit to the Clerk
of the Commission through the fastest means of communication, his findings, reports and recommendations within five (5) days from the completion of
the hearing and reception of evidence together with the complete records of the case;
(9) Upon receipt of the records of the case of the findings, reports and recommendation of the hearing officer concerned, the Clerk of the Commission
shall immediately docket the case consecutively and calendar the same for raffle to a division;
(10) The division to whom the case is raffled, shall after consultation, assign the same to a member who shall pen the decision, within five (5) days from
the date of consultation.
Resolution No. 3402 clearly requires the COMELEC, through the Regional Election Director, to issue summons to the respondent candidate together
with a copy of the petition and its enclosures, if any, within three (3) days from the filing of the petition for disqualification. Undoubtedly, this is to afford
the respondent candidate the opportunity to answer the allegations in the petition and hear his side. To ensure compliance with this requirement, the
COMELEC Rules of Procedure requires the return of the summons together with the proof of service to the Clerk of Court of the COMELEC when
service has been completed, viz:
Rule 14. Summons
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Section 5. Return.- When the service has been completed by personal service, the server shall give notice thereof, by registered mail, to the protestant
or his counsel and shall return the summons to the Clerk of Court concerned who issued it, accompanied with the proof of service.
Section 6. Proof of Service.- Proof of service of summons shall be made in the manner provided for in the Rules of Court in the Philippines.
Thereafter, hearings, to be completed within ten (10) days from the filing of the Answer, must be conducted. The hearing officer is required to submit to
the Clerk of the Commission his findings, reports and recommendations within five (5) days from the completion of the hearing and reception of
evidence together with the complete records of the case.
(a) Petitioner was not notified of the petition for his disqualification through the service of summons nor of the Motions to suspend his
proclamation.
The records of the case do not show that summons was served on the petitioner. They do not contain a copy of the summons allegedly served on the
petitioner and its corresponding proof of service. Furthermore, private respondent never rebutted petitioners repeated assertion that he was not
properly notified of the petition for his disqualification because he never received summons. [71] Petitioner claims that prior to receiving a telegraphed
Order from the COMELEC Second Division on May 22, 2001, directing the District Board of Canvassers to suspend his proclamation, he was never
summoned nor furnished a copy of the petition for his disqualification. He was able to obtain a copy of the petition and the May 22 Order of the
COMELEC Second Division by personally going to the COMELEC Regional Office on May 23, 2001. Thus, he was able to file his Answer to the
disqualification case only on May 24, 2001.
More, the proclamation of the petitioner was suspended in gross violation of section 72 of the Omnibus Election Code which provides:
Sec. 72. Effects of disqualification cases and priority.- The Commission and the courts shall give priority to cases of disqualification by reason of
violation of this Act to the end that a final decision shall be rendered not later than seven days before the election in which the disqualification
is sought.
Any candidate who has been declared by final judgment to be disqualified shall not be voted for, and the votes cast for him shall not be
counted. Nevertheless, if for any reason, a candidate is not declared by final judgment before an election to be disqualified and he is voted
for and receives the winning number of votes in such election, his violation of the provisions of the preceding sections shall not prevent his
proclamation and assumption to office. (emphases supplied)
In the instant case, petitioner has not been disqualified by final judgment when the elections were conducted on May 14, 2001. The Regional Election
Director has yet to conduct hearing on the petition for his disqualification. After the elections, petitioner was voted in office by a wide margin of 17,903.
On May 16, 2001, however, respondent Locsin filed a Most Urgent Motion for the suspension of petitioners proclamation. The Most Urgent Motion
contained a statement to the effect that a copy was served to the petitioner through registered mail. The records reveal that no registry receipt was
attached to prove such service.[72] This violates COMELEC Rules of Procedure requiring notice and service of the motion to all parties, viz:
Section 4. Notice.- Notice of a motion shall be served by the movant to all parties concerned, at least three (3) days before the hearing thereof,
together with a copy of the motion. For good cause shown, the motion may be heard on shorter notice, especially on matters which the Commission or
the Division may dispose of on its own motion.
The notice shall be directed to the parties concerned and shall state the time and place of the hearing of the motion.
Section 5. Proof of Service.- No motion shall be acted upon by the Commission without proof of service of notice thereof, except when the
Commission or a Division is satisfied that the rights of the adverse party or parties are not affected.
Respondents Most Urgent Motion does not fall under the exceptions to notice and service of motions. First, the suspension of proclamation of a
winning candidate is not a matter which the COMELEC Second Division can dispose of motu proprio. Section 6 of R.A. No. 6646[73] requires that the
suspension must be upon motion by the complainant or any intervenor, viz:
Section 6. Effect of Disqualification Case.- Any candidate who has been declared by final judgment to be disqualified shall not be voted for, and the
votes cast for him shall not be counted. If for any reason, a candidate is not declared by final judgment before an election to be disqualified and he is
voted for and receives the winning number of votes in such election, the Court or Commission (COMELEC) shall continue with the trial or hearing
of the action, inquiry, or protest and, upon motion of the complainant or any intervenor, may during the pendency thereof order the
suspension of the proclamation of such candidate whenever the evidence of his guilt is strong. (emphases supplied)
Second, the right of an adverse party, in this case, the petitioner, is clearly affected. Given the lack of service of the Most Urgent Motion to the
petitioner, said Motion is a mere scrap of paper. [74] It cannot be acted upon by the COMELEC Second Division.
On May 18, 2001 at exactly 5:00 p.m.,[75] respondent Locsin filed a Second Most Urgent Motion for the suspension of petitioners proclamation.
Petitioner was served a copy of the Second Motion again by registered mail. A registry receipt [76] was attached evidencing service of the Second Most
issued an Order suspending the proclamation of petitioner. Clearly, the petitioner was not given any opportunity to contest the allegations contained in
the petition for disqualification. The Order was issued on the very same day the Second Most Urgent Motion was filed. The petitioner could not have
received the Second Most Urgent Motion, let alone answer the same on time as he was served a copy thereof by registered mail.
Under section 6 of R.A. No. 6646, the COMELEC can suspend proclamation only when evidence of the winning candidates guilt is strong. In the case
at bar, the COMELEC Second Division did not make any specific finding that evidence of petitioners guilt is strong. Its only basis in
suspending the proclamation of the petitioner is the seriousness of the allegations in the petition for disqualification. Pertinent portion of the Order
reads:
Without giving due course to the petition xxx the Commission (2 nd Division), pursuant to Section 72 of the Omnibus Election Code in relation to Section
6, Republic Act No. 6646 xxx and considering the serious allegations in the petition, hereby directs the Provincial Board of Canvassers of
Leyte to suspend the proclamation of respondent, if winning, until further orders.[77] (emphases supplied)
We hold that absent any finding that the evidence on the guilt of the petitioner is strong, the COMELEC Second Division gravely abused its power when
it suspended his proclamation.
(b) The COMELEC Second Division did not give ample opportunity to the petitioner to adduce evidence in support of his defense in the
petition for his disqualification.
All throughout the proceeding, no hearing was conducted on the petition for disqualification in gross violation of section 6 of R.A. No. 6646 which
specifically enjoins the COMELEC to continue with the trial or hearing of the action, inquiry, or protest. This is also in violation of COMELEC
Resolution No. 3402 requiring the Regional Election Director to complete the hearing and reception of evidence within ten (10) days from the filing
of the Answer, and to submit his findings, reports, and recommendations within the five (5) days from completion of the hearing and the reception of
evidence.
Petitioner filed a Motion to Lift the Order of Suspension of his proclamation on May 25, 2001. Although an oral argument on this Motion was held,
and the parties were allowed to file their respective memoranda, the Motion was not acted upon. Instead, the COMELEC Second Division issued a
Resolution on the petition for disqualification against the petitioner. It was based on the following evidence: (a) the affidavits attached to the Petition for
Disqualification; (b) the affidavits attached to the Answer; and (c) the respective memoranda of the parties.
On this score, it bears emphasis that the hearing for Motion to Lift the Order of Suspension cannot be substituted for the hearing in the disqualification
case. Although intrinsically linked, it is not to be supposed that the evidence of the parties in the main disqualification case are the same as those in the
Motion to Lift the Order of Suspension.The parties may have other evidence which they may deem proper to present only on the hearing for the
disqualification case. Also, there may be evidence which are unavailable during the hearing for the Motion to Lift the Order of Suspension but which
may be available during the hearing for the disqualification case.
In the case at bar, petitioner asserts that he submitted his Memorandum merely to support his Motion to Lift the Order of Suspension. It was not
intended to answer and refute the disqualification case against him. This submission was sustained by the COMELEC en banc. Hence, the members of
the COMELEC en banc concluded, upon consideration of the additional affidavits attached in his Urgent Manifestation, that the evidence to disqualify
the petitioner was insufficient. More specifically, the ponente of the challenged Resolution of the COMELEC Second Division held:
Indeed, I find from the records that the May 30, 2001 hearing of the COMELEC (Second Division) concerns only the incident relating to the Motion to
Lift Order of Suspension of Proclamation. It also appears that the order for the submission of the parties respective memoranda was in lieu of the
parties oral argument on the motion. This would explain the fact that Codillas Memorandum refers mainly to the validity of the issuance of the order of
suspension of proclamation. There is, however, no record of any hearing on the urgent motion for the suspension of proclamation. Indeed, it was only
upon the filing of the Urgent Manifestation by Codilla that the Members of the Commission (Second Division) and other Members of the
Commission en banc had the opportunity to consider Codillas affidavits. This time, Codilla was able to present his side, thus, completing
the presentation of evidentiary documents from both sides.[78] (emphases supplied)
Indeed, careful reading of the petitioners Memorandum shows that he confined his arguments in support of his Motion to Lift the Order of Suspension.
In said Memorandum, petitioner raised the following issues: (a) he was utterly deprived of procedural due process, and consequently, the order
suspending his proclamation is null and void; (b) the said order of suspension of proclamation has no legal and factual basis; and (c) evidence of guilt
on his part is patently inexistent for the purpose of directing the suspension of his proclamation. [79] He urged the COMELEC Second Division to conduct
a full dress hearing on the main disqualification case should the suspension be lifted. [80]
(c) the Resolution of the COMELEC Second Division disqualifying the petitioner is not based on substantial evidence.
The Resolution of the COMELEC Second Division cannot be considered to be based on substantial evidence. It relied merely on affidavits of witnesses
attached to the petition for disqualification. As stressed, the COMELEC Second Division gave credence to the affidavits without hearing the affiants. In
reversing said Resolution, the COMELEC en banccorrectly observed:
Lacking evidence of Codilla, the Commission (Second Division) made its decisions based mainly on the allegation of the petitioner and the supporting
affidavits. With this lopsided evidence at hand, the result was predictable. The Commission (Second Division) had no choice. Codilla was
disqualified.[81]
Worse, the Resolution of the COMELEC Second Division, even without the evidence coming from the petitioner, failed to prove the gravamen of the
offense for which he was charged.[82]
Petitioner allegedly violated section 68 (a) of the Omnibus Election Code which reads:
Section 68. Disqualifications.- Any candidate who, in action or protest in which he is a party is declared by final decision of a competent court guilty of,
or found by the Commission of having (a) given money or other material consideration to influence, induce or corrupt the voters or public officials
performing official functions, xxx shall be disqualified from continuing as candidate, or if he has been elected, from holding office
To be disqualified under the above-quoted provision, the following elements must be proved: (a) the candidate, personally or through his instructions,
must have given money or other material consideration; and (b) the act of giving money or other material consideration must be for the purpose of
influencing, inducing, or corrupting the voters or public officials performing electoral functions.
In the case at bar, the petition for disqualification alleged that (a) petitioner ordered the extraction, hauling and distribution of gravel and sand, and (b)
his purpose was to induce and influence the voters of Kananga and Matag-ob, Leyte to vote for him. Pertinent portion of the petition reads:
[T]he respondent [herein petitioner], within the election period, took advantage of his current elective position as City Mayor of Ormoc City by illegally
and unlawfully using during the prohibited period, public equipments and vehicles belonging to and owned by the City Government of Ormoc City in
extracting, hauling and distributing gravel and sand to the residents and voters of the Municipalities of Kananga and Matag-ob Leyte, well within the
territorial limits of the 4th Congressional District of Leyte, which acts were executed without period, and clearly for the illicit purpose of unduly inducing
or directly corrupting various voters of Kananga and Matag-ob, within the 4th legislative district of Leyte, for the precise purpose of inducing and
influencing the voters/beneficiaries of Kananga and Matag-ob, Leyte to cast their votes for said respondent. [83]
The affidavits relied upon by the COMELEC Second Division failed to prove these allegations. For instance, Cesar A. Laurente merely stated that he
saw three (3) ten-wheeler dump trucks and a Hyundai Payloader with the markings Ormoc City Government extracting and hauling sand and gravel
from the riverbed adjacent to the property owned by the Codilla family. [84]
Agripino C. Alferez and Rogelio T. Sulvera in their Joint Affidavit merely stated that they saw white trucks owned by the City Government of Ormoc
dumping gravel and sand on the road of Purok 6, San Vicente, Matag-ob, Leyte. A payloader then scattered the sand and gravel unloaded by the white
trucks.[85]
On the other hand, Danilo D. Maglasang, a temporary employee of the City Government of Ormoc assigned to check and record the delivery of sand
and gravel for the different barangays in Ormoc, stated as follows:
3. That on April 20, 2001, I was ordered by Engr. Arnel Padayo, an employee of the City Engineering Office, Ormoc City to go to Tagaytay, Kangga
(sic), Leyte as that will be the source of the sand and gravel. I inquired why we had to go to Kananga but Engr. Padayao said that its not a problem as it
was Mayor Eufrocino M. Codilla, Sr. who ordered this and the property is owned by the family of Mayor Codilla. We were to deliver sand and gravel to
whoever requests from Mayor Codilla.[86]
Similarly, the Affidavit of Basilio Bates cannot prove the offense charged against the petitioner. He alleged that on April 18, 2001, a white truck with the
marking City Government of Ormoc came to his lot at Montebello, Kananga, Leyte and unloaded mixed sand and that the driver of the truck told him to
vote for Codilla as a (sic) congressman during election.[87] His statement is hearsay. He has no personal knowledge of the supposed order of the
petitioner to distribute gravel and sand for the purpose of inducing the voters to vote for him. The same could be said about the affidavits of Randy T.
Merin,[88] Alfredo C. De la Pea,[89] Miguel P. Pandac,[90] Paquito Bregeldo, Cristeta Alferez , Glicerio Rios, [91] Romulo Alkuino, Sr.,[92] Abner
Casas,[93] Rita Trangia,[94] and Judith Erispe[95] attached to respondent Locsins Memorandum on the Motion to Lift the Suspension of Proclamation.
Also valueless are the affidavits of other witnesses [96] of respondent Locsin, all similarly worded, which alleged that the petitioner ordered the repair of
the road in Purok 6, Barangay San Vicente, Matag-ob, Leyte and the flattening of the area where the cockfights were to be held. These allegations are
extraneous to the charge in the petition for disqualification. More importantly, these allegations do not constitute a ground to disqualify the petitioner
based on section 68 of the Omnibus Election Code.
To be sure, the petition for disqualification also ascribed other election offenses against the petitioner, particularly section 261 of the Omnibus Election
Code, viz:
Section 261. Prohibited Acts.- The following shall be guilty of an election offense:
(a) Vote-buying and vote-selling.- (1) Any person who gives, offers or promises money or anything of value, gives or promises any office or
employment, franchise or grant, public or private, or make or offers to make an expenditure, directly or indirectly, or cause an expenditure to be made
to any person, association, corporation, entity or community in order to induce anyone or the public in general, to vote for or against any candidate or
withhold his vote in the election, or to vote for or against any aspirant for the nomination or choice of a candidate in a convention or similar selection
process of a political party.
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(o) Use of public funds, money deposited in trust, equipment, facilities owned or controlled by the government for an election campaign.- Any person
who uses under any guise whatsoever directly or indirectly, xxx (3) any equipment, vehicle, facility, apparatus, or paraphernalia owned by the
government or by its political subdivisions, agencies including government-owned or controlled corporations, or by the Armed Forces of the Philippines
for any election campaign or for any partisan political activity x x x.
However, the jurisdiction of the COMELEC to disqualify candidates is limited to those enumerated in section 68 of the Omnibus Election Code. All other
election offenses are beyond the ambit of COMELEC jurisdiction.[97] They are criminal and not administrative in nature. Pursuant to sections 265 and
268 of the Omnibus Election Code, the power of the COMELEC is confined to the conduct of preliminary investigation on the alleged election offenses
for the purpose of prosecuting the alleged offenders before the regular courts of justice, viz:
Section 265. Prosecution.- The Commission shall, through its duly authorized legal officers, have the exclusive power to conduct preliminary
investigation of all election offenses punishable under this Code, and to prosecute the same. The Commission may avail of the assistance of other
prosecuting arms of the government: Provided, however, That in the event that the Commission fails to act on any complaint within four months from
his filing, the complainant may file the complaint with the office of the fiscal or with the Ministry of Justice for proper investigation and prosecution, if
warranted.
xxxxxxxxx
Section 268. Jurisdiction.- The regional trial court shall have the exclusive original jurisdiction to try and decide any criminal action or proceeding for
violation of this Code, except those relating to the offense of failure to register or failure to vote which shall be under the jurisdictions of metropolitan or
municipal trial courts. From the decision of the courts, appeal will lie as in other criminal cases.
The COMELEC Second Division grievously erred when it decided the disqualification case based on section 261 (a) and (o), and not on section 68 of
the Omnibus Election Code.
(d) Exclusion of the votes in favor of the petitioner and the proclamation of respondent Locsin was done with undue haste.
The COMELEC Second Division ordered the exclusion of the votes cast in favor of the petitioner, and the proclamation of the respondent Locsin,
without affording the petitioner the opportunity to challenge the same. In the morning of June 15, 2001, the Provincial Board of Canvassers convened,
and on the strength of the said Resolution excluding the votes received by the petitioner, certified that respondent Locsin received the highest number
of votes. On this basis, respondent Locsin was proclaimed.
Records reveal that the petitioner received notice of the Resolution of the COMELEC Second Division only through his counsel via a facsimile message
in the afternoon of June 15, 2001 [98] when everything was already fait accompli. Undoubtedly, he was not able to contest the issuance of the Certificate
of Canvass and the proclamation of respondent Locsin. This is plain and simple denial of due process.
The essence of due process is the opportunity to be heard. When a party is deprived of that basic fairness, any decision by any tribunal in prejudice of
his rights is void.
Second. The votes cast in favor of the petitioner cannot be considered stray and respondent cannot be validly proclaimed on that basis.
The Resolution of the COMELEC Second Division in SPA No. 01-208 contains two dispositions: (1) it ruled that the petitioner was disqualified as a
candidate for the position of Congressman of the Fourth District of Leyte; and (2) it ordered the immediate proclamation of the candidate who garnered
the highest number of votes, to the exclusion of the respondent [herein petitioner].
As previously stated, the disqualification of the petitioner is null and void for being violative of due process and for want of substantial factual basis.
Even assuming, however, that the petitioner was validly disqualified, it is still improper for the COMELEC Second Division to order the immediate
exclusion of votes cast for the petitioner as stray, and on this basis, proclaim the respondent as having garnered the next highest number of votes.
(a) The order of disqualification is not yet final, hence, the votes cast in favor of the petitioner cannot be considered stray.
Section 6 of R.A. No. 6646 and section 72 of the Omnibus Election Code require a final judgment before the election for the votes of a disqualified
candidate to be considered stray. Hence, when a candidate has not yet been disqualified by final judgment during the election day and was voted for,
the votes cast in his favor cannot be declared stray. To do so would amount to disenfranchising the electorate in whom sovereignty resides.[99] For in
voting for a candidate who has not been disqualified by final judgment during the election day, the people voted for him bona fide, without any intention
to misapply their franchise, and in the honest belief that the candidate was then qualified to be the person to whom they would entrust the exercise of
the powers of government.[100]
This principle applies with greater force in the case at bar considering that the petitioner has not been declared by final judgment to be
disqualified not only before but even after the elections. The Resolution of the COMELEC Second Division disqualifying the petitioner did not attain
finality, and hence, could not be executed, because of the timely filing of a Motion for Reconsideration. Section 13, Rule 18 of the COMELEC Rules of
Procedure on Finality of Decisions and Resolutions reads:
Sec. 13. Finality of Decisions or Resolutions.- (a) In ordinary actions, special proceedings, provisional remedies and special reliefs, a decision or
resolution of the Commission en banc shall become final and executory after thirty (30) days from its promulgation.
(b) In Special Actions and Special Cases a decision or resolution of the Commission en banc shall become final and executory after five (5) days in
Special Actions and Special Cases and after fifteen (15) days in all other proceedings, following their promulgation.
(c) Unless a motion for reconsideration is seasonably filed, a decision or resolution of a Division shall become final and executory after the
lapse of five (5) days in Special Actions and Special Cases and after fifteen (15) days in all other actions or proceedings, following its
promulgation. (emphasis supplied)
In this wise, COMELEC Resolution No. 4116,[101] issued in relation to the finality of resolutions or decisions in disqualification cases, provides:
This pertains to the finality of decisions or resolutions of the Commission en banc or division, particularly on Special Actions (Disqualification Cases).
Special Action cases refer to the following:
(a) Petition to deny due course to a certificate of candidacy;
(b) Petition to declare a candidate as a nuisance candidate;
(c) Petition to disqualify a candidate; and
(d) Petition to postpone or suspend an election.
Considering the foregoing and in order to guide field officials on the finality of decisions or resolutions on special action cases (disqualification cases)
the Commission, RESOLVES, as it is hereby RESOLVED, as follows:
(1) the decision or resolution of the En Banc of the Commission on disqualification cases shall become final and executory after five (5) days from its
promulgation unless restrained by the Supreme Court;
(2) the decision or resolution of a Division on disqualification cases shall become final and executory after the lapse of five (5) days unless a motion for
reconsideration is seasonably filed;
(3) where the ground for disqualification case is by reason of non-residence, citizenship, violation of election laws and other analogous cases and on
the day of the election the resolution has not become final and executory the BEI shall tally and count the votes for such disqualified candidate;
(4) the decision or resolution of the En Banc on nuisance candidates, particularly whether the nuisance candidate has the same name as the bona fide
candidate shall be immediately executory;
(5) the decision or resolution of a DIVISION on nuisance candidate, particularly where the nuisance candidate has the same name as the bona fide
candidate shall be immediately executory after the lapse of five (5) days unless a motion for reconsideration is seasonably filed. In which case, the
votes cast shall not be considered stray but shall be counted and tallied for the bona fide candidate.
All resolutions, orders and rules inconsistent herewith are hereby modified or repealed.
Considering the timely filing of a Motion for Reconsideration, the COMELEC Second Division gravely abused its discretion in ordering the immediate
disqualification of the petitioner and ordering the exclusion of the votes cast in his favor. Section 2, Rule 19 of the COMELEC Rules of Procedure is
very clear that a timely Motion for Reconsideration shall suspend the execution or implementation of the resolution, viz:
Section 2. Period for filing Motion for Reconsideration.- A motion to reconsider a decision, resolution, order, or ruling of a Division shall be filed within
five (5) days from the promulgation thereof. Such motion, if not pro forma, suspends the execution or implementation of the decision,
resolution, order or ruling. (emphases supplied)
(b) Respondent Locsin, as a mere second placer, cannot be proclaimed.
More brazen is the proclamation of respondent Locsin which violates the settled doctrine that the candidate who obtains the second highest number of
votes may not be proclaimed winner in case the winning candidate is disqualified. [102] In every election, the peoples choice is the paramount
consideration and their expressed will must at all times be given effect. When the majority speaks and elects into office a candidate by giving him the
highest number of votes cast in the election for the office, no one can be declared elected in his place. [103] In Domino v. COMELEC,[104] this Court
ruled, viz:
It would be extremely repugnant to the basic concept of the constitutionally guaranteed right to suffrage if a candidate who has not acquired the
majority or plurality of votes is proclaimed winner and imposed as representative of a constituency, the majority of which have positively declared
through their ballots that they do not choose him. To simplistically assume that the second placer would have received that (sic) other votes would be to
substitute our judgment for the mind of the voters. He could not be considered the first among the qualified candidates because in a field which
excludes the qualified candidate, the conditions would have substantially changed.
xxxxxxxxx
The effect of a decision declaring a person ineligible to hold an office is only that the election fails entirely, that the wreath of victory cannot be
transferred from the disqualified winner to the repudiated loser because the law then as now only authorizes a declaration in favor of the person who
has obtained a plurality of votes, and does not entitle the candidate receiving the next highest number of votes to be declared elected. In such case, the
electors have failed to make a choice and the election is a nullity. To allow the defeated and repudiated candidate to take over the elective position
despite his rejection by the electorate is to disenfranchise the electorate without any fault on their part and to undermine the importance and meaning of
democracy and the peoples right to elect officials of their choice. [105]
Respondent Locsin proffers a distinction between a disqualification based on personal circumstances such as age, residence or citizenship and
disqualification based on election offenses. She contends that the election of candidates later disqualified based on election offenses like those
enumerated in section 68 of the Omnibus Election Code should be invalidated because they violate the very essence of suffrage and as such, the
votes cast in his favor should not be considered. [106]
This contention is without merit. In the recent case of Trinidad v. COMELEC,[107] this Court ruled that the effect of a judgment disqualifying a In sum, the issue of who is the rightful Representative of the 4 th legislative district of Leyte has been finally settled by the COMELEC en banc, the
candidate, after winning the election, based on personal circumstances or section 68 of the Omnibus Election Code is the same: the second placer constitutional body with jurisdiction on the matter. The rule of law demands that its Decision be obeyed by all officials of the land. There is no
could not take the place of the disqualified winner. alternative to the rule of law except the reign of chaos and confusion.
II IN VIEW WHEREOF, the Petition for Mandamus is granted. Public Speaker of the House of Representatives shall administer the oath of petitioner
Whether the proclamation of respondent Locsin divested the COMELEC en banc of jurisdiction to review its validity. EUFROCINO M. CODILLA, SR., as the duly-elected Representative of the 4th legislative district of Leyte. Public respondent Secretary-General shall
Respondent Locsin submits that the COMELEC en banc has no jurisdiction to annul her proclamation. She maintains that the COMELEC en banc was likewise register the name of the petitioner in the Roll of Members of the House of Representatives after he has taken his oath of office. This decision
been divested of jurisdiction to review the validity of her proclamation because she has become a member of the House of Representatives. Thus, she shall be immediately executory.
contends that the proper forum to question her membership to the House of Representatives is the House of Representative Electoral Tribunal (HRET). SO ORDERED.
We find no merit in these contentions. Davide, Jr., C.J., Bellosillo, Vitug, Mendoza, Panganiban, Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, Austria-Martinez, Corona, Carpio-
First. The validity of the respondents proclamation was a core issue in the Motion for Reconsideration seasonably filed by the petitioner. Morales, Callejo, Sr., and Azcuna, JJ., concur.
In his timely Motion for Reconsideration with the COMELEC en banc, petitioner argued that the COMELEC Second Division erred thus: Carpio, J., no part.
(1) in disqualifying petitioner on the basis solely of the dubious declaration of the witnesses for respondent Locsin;
(2) in adopting in toto the allegations of the witnesses for respondent Locsin; and
(3) in promulgating the resolution in violation of its own rules of procedure and in directing therein the immediate proclamation of the
second highest vote getter. (emphases supplied)
In support of his third assignment of error, petitioner argued that the Second Divisions directive for the immediate proclamation of the second highest
vote-getter is premature considering that the Resolution has yet to become final and executory. [108] Clearly, the validity of respondent Locsins
proclamation was made a central issue in the Motion for Reconsideration seasonably filed by the petitioner. Without doubt, the COMELEC en banc has
the jurisdiction to rule on the issue.
The fact that the Petition for Nullity of Proclamation was filed directly with the COMELEC en banc is of no moment. Even without said Petition, the
COMELEC en banc could still rule on the nullity of respondents proclamation because it was properly raised in the Motion for Reconsideration.
Section 3, Article IX-C of the 1987 Constitution empowers the COMELEC en banc to review, on motion for reconsideration, decisions or resolutions
decided by a division, viz:
Sec. 3. The Commission on Elections may sit en banc or in two divisions, and shall promulgate its rules of procedure in order to expedite disposition of
election cases, including pre-proclamation controversies. All such election cases shall be heard and decided in division, provided that motions for
reconsideration of decision shall be decided by the Commission en banc.
Pursuant to this Constitutional mandate, the COMELEC Rules of Procedure provides:
Rule 19. Motions for Reconsideration.-
Section 1. Grounds for Motion for Reconsideration.- A motion for reconsideration may be filed on the grounds that the evidence is insufficient to justify
the decision, order or ruling, or that the said decision, order or ruling is contrary to law.
Section 2. Period for filing Motion for Reconsideration.- A motion to reconsider a decision, resolution, order, or ruling of a Division shall be filed within
five (5) days from the promulgation thereof. Such motion, if not pro forma, suspends the execution or implementation of the decision,
resolution, order or ruling.
Section 3. Form and Contents of Motion for Reconsideration.- The motion shall be verified and shall point out specifically the findings or conclusions of
the decision, resolution, order or ruling which are not supported by the evidence or which are contrary to law, making express reference to the
testimonial or documentary evidence or to the provisions of law alleged to be contrary to such findings or resolutions.
Section 4. Effect of Motion for Reconsideration on Period to Appeal.- A motion to reconsider a decision, resolution, order or ruling when not pro forma,
suspends the running of the period to elevate the matter to the Supreme Court.
Section 5. How Motion for Reconsideration Disposed Of.- Upon the filing of a motion to reconsider a decision, resolution, order or ruling of a Division,
the Clerk of Court concerned shall, within twenty-four (24) hours from the filing thereof, notify the Presiding Commissioner. The latter shall within two
(2) days thereafter certify the case to the Commission en banc.
Section 6. Duty of the Clerk of Court of the Commission to set Motion for Hearing.- The Clerk of Court concerned shall calendar the motion for
reconsideration for the resolution of the Commission en banc within ten (10) days from the certification thereof. (emphases supplied)
Since the petitioner seasonably filed a Motion for Reconsideration of the Order of the Second Division suspending his proclamation and disqualifying
him, the COMELEC en banc was not divested of its jurisdiction to review the validity of the said Order of the Second Division. The said Order of the
Second Division was yet unenforceable as it has not attained finality; the timely filing of the motion for reconsideration suspends its execution. It cannot,
thus, be used as the basis for the assumption in office of the respondent as the duly elected Representative of the 4 th legislative district of Leyte.
Second. It is the House of Representatives Electoral Tribunal (HRET) which has no jurisdiction in the instant case.
Respondent contends that having been proclaimed and having taken oath as representative of the 4 th legislative district of Leyte, any question relative
to her election and eligibility should be brought before the HRET pursuant to section 17 of Article VI of the 1987 Constitution.[109]
We reject respondents contention.
(a) The issue on the validity of the Resolution of the COMELEC Second Division has not yet been resolved by the COMELEC en banc.
To stress again, at the time of the proclamation of respondent Locsin, the validity of the Resolution of the COMELEC Second Division was seasonably
challenged by the petitioner in his Motion for Reconsideration. The issue was still within the exclusive jurisdiction of the COMELEC en banc to resolve.
Hence, the HRET cannot assume jurisdiction over the matter.
In Puzon vs. Cua,[110] even the HRET ruled that the doctrinal ruling that once a proclamation has been made and a candidate-elect has assumed
office, it is this Tribunal that has jurisdiction over an election contest involving members of the House of Representatives, could not have been
immediately applicable due to the issue regarding the validity of the very COMELEC pronouncements themselves. This is because the HRET
has no jurisdiction to review resolutions or decisions of the COMELEC, whether issued by a division or en banc.
(b) The instant case does not involve the election and qualification of respondent Locsin.
Respondent Locsin maintains that the proper recourse of the petitioner is to file a petition for quo warranto with the HRET.
A petition for quo warranto may be filed only on the grounds of ineligibility and disloyalty to the Republic of the Philippines. [111] In the case at bar,
neither the eligibility of the respondent Locsin nor her loyalty to the Republic of the Philippines is in question. There is no issue that she was qualified to
run, and if she won, to assume office.
A petition for quo warranto in the HRET is directed against one who has been duly elected and proclaimed for having obtained the highest number of
votes but whose eligibility is in question at the time of such proclamation. It is evident that respondent Locsin cannot be the subject of quo
warranto proceeding in the HRET. She lost the elections to the petitioner by a wide margin. Her proclamation was a patent nullity. Her premature
assumption to office as Representative of the 4 th legislative district of Leyte was void from the beginning. It is the height of absurdity for the respondent,
as a loser, to tell petitioner Codilla, Sr., the winner, to unseat her via a quo warranto proceeding.
III
Whether it is the ministerial duty of the public respondents to
recognize petitioner Codilla, Sr. as the legally elected Representative
of the 4th legislative district of Leyte vice respondent Locsin.
Under Rule 65, section 3 of the 1997 Rules of Civil Procedure, any person may file a verified petition for mandamus when any tribunal, corporation,
board, officer or person unlawfully neglects the performance of an act which the law specifically enjoins as a duty resulting from an office, trust, or
station, or unlawfully excludes another from the use and enjoyment of a right or office to which such other is entitled, and there is no other plain, speedy
and adequate remedy in the ordinary course of law. [112] For a petition for mandamus to prosper, it must be shown that the subject of the petition for
mandamus is a ministerial act or duty, and not purely discretionary on the part of the board, officer or person, and that the petitioner has a well-
defined, clear and certain right to warrant the grant thereof.
The distinction between a ministerial and discretionary act is well delineated. A purely ministerial act or duty is one which an officer or tribunal performs
in a given state of facts, in a prescribed manner, in obedience to the mandate of a legal authority, without regard to or the exercise of his own judgment
upon the propriety or impropriety of the act done. If the law imposes a duty upon a public officer and gives him the right to decide how or when the duty
shall be performed, such duty is discretionary and not ministerial. The duty is ministerial only when the discharge of the same requires neither the
exercise of official discretion or judgment.[113] EN BANC
In the case at bar, the administration of oath and the registration of the petitioner in the Roll of Members of the House of Representatives representing [G.R. No. 141489. November 29, 2002]
the 4th legislative district of Leyte is no longer a matter of discretion on the part of the public respondents. The facts are settled and beyond dispute: SENATOR AQUILINO Q. PIMENTEL, JR., REPRESENTATIVES MELVYN D. EBALLE, LEONARDO Q. MONTEMAYOR, CRESENTE C. PAEZ,
petitioner garnered 71,350 votes as against respondent Locsin who only got 53, 447 votes in the May 14, 2001 elections. The COMELEC Second LORETTA ANN P. ROSALES and PATRICIA M. SARENAS, petitioners, vs. HOUSE OF REPRESENTATIVES ELECTORAL TRIBUNAL,
Division initially ordered the proclamation of respondent Locsin; on Motion for Reconsideration the COMELEC en banc set aside the order of its JUSTICES JOSE A.R. MELO, VICENTE V. MENDOZA and JOSE C. VITUG, and REPRESENTATIVES ASANI S. TAMMANG, RAUL M.
Second Division and ordered the proclamation of the petitioner. The Decision of the COMELEC en banc has not been challenged before this Court by GONZALES, DIDAGEN P. DILANGALEN, DANTON Q. BUESER,[1] NAPOLEON R. BERATIO, SIMEON E. GARCIA and SPEAKER MANUEL B.
respondent Locsin and said Decision has become final and executory. VILLAR, JR., respondents.
[G.R. No. 141490 November 29, 2002]
SENATOR AQUILINO Q. PIMENTEL, JR. REPRESENTATIVES MELVYN D. EBALLE, LEONARDO Q. MONTEMAYOR, CRESENTE C. PAEZ,
LORETTA ANN P. ROSALES and PATRICIA M. SARENAS, petitioners, vs. COMMISSION ON APPOINTMENTS, its Chair, SENATE PRESIDENT
BLAS F. OPLE, and Members, namely: SENATORS FRANKLIN M. DRILON, RENATO L. CAYETANO, LOREN LEGARDA-LEVISTE, ROBERT Z.
BARBERS, ANNA DOMINIQUE M.L. COSETENG, GREGORIO HONASAN, RAMON B. MAGSAYSAY, JR., TERESA AQUINO-ORETA, RAUL S.
ROCO, FRANCISCO S. TATAD, VICENTE C. SOTTO III and REPRESENTATIVES LUIS A. ASISTIO, EMILIO R. ESPINOSA, JR., WIGBERTO E.
TAADA, MANUEL M. GARCIA, SIMEON A. DATUMANONG, ANTONIO M. DIAZ, FAUSTINO S. DY, JR., PACIFICO M. FAJARDO, ERNESTO F.
HERRERA, NUR G. JAAFAR, CARLOS M. PADILLA, ROGELIO M. SARMIENTO and SPEAKER MANUEL B. VILLAR, JR., respondents.
DECISION
CARPIO, J.:
The Case
Before this Court are two original petitions for prohibition and mandamus with prayer for writ of preliminary injunction. Petitioners assail the composition
of the House of Representatives Electoral Tribunal (HRET for brevity)[2] and the Commission on Appointments (CA for brevity). [3] Petitioners pray that
respondents be ordered to alter, reorganize, reconstitute and reconfigure the composition of the HRET and the CA to include party-list representatives
in accordance with Sections 17 and 18, Article VI of the 1987 Constitution and Republic Act No. 7941, otherwise known as the Party-List System Act.
Petitioners further pray that the HRET and the CA be enjoined from exercising their functions until they have been reorganized.
Antecedent Facts
Section 5, Article VI of the 1987 Constitution provides for a party-list system in the House of Representatives (House for brevity), as follows:
Sec. 5. (1) The House of Representatives shall be composed of not more than two hundred and fifty members, unless otherwise fixed by law, who shall
be elected from legislative districts apportioned among the provinces, cities, and the Metropolitan Manila area in accordance with the number of their
respective inhabitants, and on the basis of a uniform and progressive ratio, and those who, as provided by law, shall be elected through a party-list
system of registered national, regional and sectoral parties or organizations.
(2) The party-list representatives shall constitute twenty per centum of the total number of representatives including those under the party list. For three
consecutive terms after the ratification of this Constitution, one-half of the seats allocated to party-list representatives shall be filled, as provided by law,
by selection or election from the labor, peasant, urban poor, indigenous cultural communities, women, youth and such other sectors as may be
provided by law except the religious sector.
On March 3, 1995, the Party-List System Act took effect. The Act sought to promote proportional representation in the election of representatives, to
the House of Representatives through a party-list system of registered national, regional and sectoral parties or organizations or coalitions thereof,
which will enable Filipino citizens belonging to marginalized and underrepresented sectors, organizations and parties, and who lack well-defined
political constituencies but who could contribute to the formulation and enactment of appropriate legislation that will benef it the nation as a whole, to
become members of the House of Representatives.[4]
On May 11, 1998, in accordance with the Party-List System Act, national elections were held which included, for the first time, the election through
popular vote of party-list groups and organizations whose nominees would become members of the House. Proclaimed winners were 14 party-list
representatives from 13 organizations, including petitioners from party-list groups Association of Philippine Electric Cooperatives[5] (APEC), Alyansang
Bayanihan ng mga Magsasaka, Manggagawang Bukid at Mangingisda (ABA), NATCO Network Party (COOP-NATCCO), Akbayan! Citizens Action
Party (AKBAYAN), and Abanse! Pinay (ABANSE). Due to the votes it garnered, APEC was able to send 2 representatives to the House, while the 12
other party-list groups had one representative each. Also elected were district representatives belonging to various political parties.
Subsequently, the House constituted its HRET and CA contingent [6] by electing its representatives to these two constitutional bodies. In practice, the
procedure involves the nomination by the political parties of House members who are to occupy seats in the HRET and the CA. [7] From available
records, it does not appear that after the May 11, 1998 elections the party-list groups in the House nominated any of their representatives to the HRET
or the CA. As of the date of filing of the instant petitions, the House contingents to the HRET and the CA were composed solely of district
representatives belonging to the different political parties.
On January 18, 2000, Senator Aquilino Q. Pimentel, Jr. wrote two letters addressed to then Senate President Blas F. Ople, [8] as Chairman of the CA,
and to Associate Justice of the Supreme Court Jose A. R. Melo (now retired), [9] as Chairman of the HRET. The letters requested Senate President Ople
and Justice Melo to cause the restructuring of the CA and the HRET, respectively, to include party-list representatives to conform to Sections 17 and
18, Article VI of the 1987 Constitution.
In its meeting of January 20, 2000, the HRET resolved to direct the Secretary of the Tribunal to refer Senator Pimentels letter to the Secretary-General
of the House of Representatives.[10] On the same day, HRET Secretary Daisy B. Panga-Vega, in an Indorsement[11] of even date, referred the letter to
House of Representatives Secretary General Roberto P. Nazareno.
On February 2, 2000, petitioners filed with this Court their Petitions for Prohibition, Mandamus and Preliminary Injunction (with Prayer for Temporary
Restraining Order) against the HRET, its Chairman and Members, [12] and against the CA, its Chairman and Members. [13] Petitioners contend that, under
the Constitution and the Party-List System Act, party-list representatives should have 1.2 or at least 1 seat in the HRET, [14] and 2.4 seats in the
CA.[15] Petitioners charge that respondents committed grave abuse of discretion in refusing to act positively on the letter of Senator Pimentel. In its
Resolution of February 8, 2000,[16] the Court en banc directed the consolidation of G.R. No. 141490 with G.R. No. 141489.
On February 11, 2000, petitioners filed in both cases a motion [17] to amend their petitions to implead then Speaker Manuel B. Villar, Jr. as an additional
respondent, in his capacity as Speaker of the House and as one of the members of the CA. The Court granted both motions and admitted the amended
petitions.
Senator Pimentel filed the instant petitions on the strength of his oath to protect, defend and uphold the Constitution and in his capacity as taxpayer and
as a member of the CA. He was joined by 5 party-list representatives from APEC, ABA, ABANSE, AKBAYAN and COOP-NATCCO as co-petitioners.
Petitioners cite as basis Sections 17 and 18, Article VI of the 1987 Constitution, to wit:
Sec. 17. The Senate and the House of Representatives shall each have an Electoral Tribunal which shall be the sole judge of all contests relating to
the election, returns and qualifications of their respective Members. Each Electoral Tribunal shall be composed of nine Members, three of whom shall
be Justices of the Supreme Court to be designated by the Chief Justice, and the remaining six shall be Members of the Senate or the House of
Representatives, as the case may be, who shall be chosen on the basis of proportional representation from the political parties and the parties or
organizations registered under the party-list system represented therein. The senior Justice in the Electoral Tribunal shall be its Chairman.
Sec. 18. There shall be a Commission on Appointments consisting of the President of the Senate, as ex officio Chairman, twelve Senators and twelve
Members of the House of Representatives, elected by each House on the basis of proportional representation from the political parties and parties or
organizations registered under the party-list system represented therein. The Chairman of the Commission shall not vote, except in case of a tie. The
Commission shall act on all appointments submitted to it within thirty session days of the Congress from their submission. The Commission shall rule
by a majority vote of all the Members,[18] (Emphasis supplied)
Petitioners also invoke the following provision of Section 11 of Republic Act No. 7941:
Sec. 11. Number of Party-List Representatives. - The party-list representatives shall constitute twenty per centum (20%) of the total number of the
members of the House of Representatives including those under the party-list. xxx[19]
According to the Solicitor Generals Consolidated Comment, [20] at the time petitioners filed the instant petitions the House had 220 members, 14 of
whom were party-list representatives, constituting 6.3636% of the House. Of the remaining 206 district representatives affiliated with different political
parties, 151 belonged to LAMP (68.6354%), 36 belonged to LAKAS (16.3636%), 13 to the Liberal Party (5.9090%), 1 member (0.4545%) each to KBL,
PDRLM, Aksyon Demokratiko, Reporma and PROMDI, and 1 representative was an independent.
In their Reply to Consolidated Comment, [21] petitioners alleged that, following the Solicitor Generals computation, the LP and LAKAS were over-
represented in the HRET and the CA. Petitioners particularly assail the presence of one LP representative each in the HRET and the CA, and maintain
that the LP representatives should be ousted and replaced with nominees of the 14 party-list representatives.
The Issues
Petitioners raise the following issues:
1. WHETHER THE PRESENT COMPOSITION OF THE HOUSE ELECTORAL TRIBUNAL VIOLATES THE CONSTITUTIONAL REQUIREMENT OF
PROPORTIONAL REPRESENTATION BECAUSE THERE ARE NO PARTY-LIST REPRESENTATIVES IN THE HRET.
2. WHETHER THE PRESENT MEMBERSHIP OF THE HOUSE IN THE COMMISSION ON APPOINTMENTS VIOLATES THE CONSTITUTIONAL
REQUIREMENT OF PROPORTIONAL REPRESENTATION BECAUSE THERE ARE NO PARTY-LIST REPRESENTATIVES IN THE CA.
3. WHETHER THE REFUSAL OF THE HRET AND THE CA TO RECONSTITUTE THEMSELVES TO INCLUDE PARTY-LIST REPRESENTATIVES
CONSTITUTES GRAVE ABUSE OF DISCRETION.
On the other hand, the Solicitor General argues that the instant petitions are procedurally defective and substantially lacking in merit for having been
filed prematurely, thus:
It is a generally accepted principle that the averments in the pleading determine the existence of a cause of action. In the instant petitions, petitioners
failed to aver that they or any one of them was elected by a party or organization registered under the party-list system as a Member of the HRET or
CA to represent said party or organization under the party-list system of the House of Representatives. [22]
The Ruling of the Court
Petitioners urge the Court to rule on the issues raised in the petitions under review, citing the following pronouncement in Guingona Jr. v.
Gonzales :[23]
Where constitutional issues are properly raised in the context of the alleged facts, procedural questions acquire a relatively minor significance, and the
transcendental importance to the public of the case demands that they be settled promptly and definitely brushing aside xxx technicalities of procedure.
Petitioners reliance on Guingona, Jr. v. Gonzales is misplaced. The procedural questions that petitioners want the Court to brush aside are not mere
technicalities but substantive matters that are specifically provided for in the constitutional provisions cited by petitioners.
The Constitution expressly grants to the House of Representatives the prerogative, within constitutionally defined limits, to choose from among its
district and party-list representatives those who may occupy the seats allotted to the House in the HRET and the CA. Section 18, Article VI of the
Constitution[24] explicitly confers on the Senate and on the House the authority to elect among their members those who would fill the 12 seats for
Senators and 12 seats for House members in the Commission on Appointments. Under Section 17, Article VI of the Constitution, [25] each chamber of
Congress exercises the power to choose, within constitutionally defined limits, who among their members would occupy the allotted 6 seats of each
chambers respective electoral tribunal.
These constitutional provisions are reiterated in Rules 3 and 4 (a) of the 1998 Rules of the House of Representatives Electoral Tribunal, to wit:
Rule 3. Composition. - The Tribunal shall be composed of nine Members, three of whom shall be Justices of the Supreme Court to be designated by
the Chief Justice, and the remaining six shall be Members of the House of Representatives who shall be chosen on the basis of proportional
representation from the political parties and the parties or organizations registered under the party-list system represented therein. The Senior Justice
in the Tribunal shall be its Chairman.
Rule 4. Organization. - (a) Upon the designation of the Justices of the Supreme Court and the election of the Members of the House of Representatives
who are to compose the House of Representatives Electoral Tribunal pursuant to Sections 17 and 19 of Article VI of the Constitution, the Tribunal shall
meet for its organization and adoption of such resolutions as it may deem proper. (Emphasis supplied)
Likewise, Section 1 of the Rules of the Commission on Appointments provides:
Section 1. Composition of the Commission On Appointments. Within thirty (30) days after both Houses of Congress shall have organized themselves
with the election of the Senate President and the Speaker of the House of Representatives, the Commission on Appointments shall be constituted. It
shall be composed of twelve (12) Senators and twelve (12) members of the House of Representatives, elected by each House on the basis of
proportional representation from the political parties and parties or organizations registered under the party-list system represented herein.
(Emphasis supplied)
Thus, even assuming that party-list representatives comprise a sufficient number and have agreed to designate common nominees to the HRET and
the CA, their primary recourse clearly rests with the House of Representatives and not with this Court. Under Sections 17 and 18, Article VI of the
Constitution, party-list representatives must first show to the House that they possess the required numerical strength to be entitled to seats in the
HRET and the CA. Only if the House fails to comply with the directive of the Constitution on proportional representation of political parties in the HRET
and the CA can the party-list representatives seek recourse to this Court under its power of judicial review. Under the doctrine of primary jurisdiction,
prior recourse to the House is necessary before petitioners may bring the instant case to the court. Consequently, petitioners direct recourse to this
Court is premature.
The discretion of the House to choose its members to the HRET and the CA is not absolute, being subject to the mandatory constitutional rule on
proportional representation.[26] However, under the doctrine of separation of powers, the Court may not interfere with the exercise by the House of this
constitutionally mandated duty, absent a clear violation of the Constitution or grave abuse of discretion amounting to lack or excess of
jurisdiction.[27] Otherwise, the doctrine of separation of powers calls for each branch of government to be left alone to discharge its duties as it sees
fit.[28] Neither can the Court speculate on what action the House may take if party-list representatives are duly nominated for membership in the HRET
and the CA.
The instant petitions are bereft of any allegation that respondents prevented the party-list groups in the House from participating in the election of
members of the HRET and the CA. Neither does it appear that after the May 11, 1998 elections, the House barred the party-list representatives from
seeking membership in the HRET or the CA. Rather, it appears from the available facts that the party-list groups in the House at that time simply
refrained from participating in the election process. The party-list representatives did not designate their nominees even up to the time they filed the
instant petitions, with the predictable result that the House did not consider any party-list representative for election to the HRET or the CA. As the
primary recourse of the party-list representatives lies with the House of Representatives, the Court cannot resolve the issues presented by petitioners
at this time.
Moreover, it is a well-settled rule that a constitutional question will not be heard and resolved by the courts unless the following requirements of judicial
inquiry concur: (1) there must be an actual controversy; (2) the person or party raising the constitutional issue must have a personal and substantial
interest in the resolution of the controversy; (3) the controversy must be raised at the earliest reasonable opportunity; and (4) the resolution of the
constitutional issue must be indispensable to the final determination of the controversy. [29]
The five party-list representatives who are petitioners in the instant case have not alleged that they are entitled to, and have been unlawf ully deprived
of, seats in the HRET or the CA. Neither have they claimed that they have been nominated by the party-list groups in the House to the HRET or the
CA. As such, they do not possess the personal and substantial interest required to confer them with locus standi. The party raising the constitutional
issue must have such personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of
issues upon which the court depends for illumination of difficult constitutional questions. [30]
We likewise find no grave abuse in the action or lack of action by the HRET and the CA in response to the letters of Senator Pimentel. Under Sections
17 and 18 of Article VI of the 1987 Constitution and their internal rules, the HRET and the CA are bereft of any power to reconstitute themselves.
Finally, the issues raised in the petitions have been rendered academic by subsequent events. On May 14, 2001, a new set of district and party-list
representatives were elected to the House. The Court cannot now resolve the issue of proportional representation in the HRET and the CA based on
the present composition of the House of Representatives as presented by petitioners and the Solicitor General. With the May 14, 2001 elections, it is
certain that the composition of the House has changed. In the absence of a proper petition assailing the present composition of the HRET and the CA,
the instant petitions must fail. Otherwise, for the Court to rule on the instant petitions at this time would be tantamount to rendering an advisory opinion,
which is outside our jurisdiction.[31]
WHEREFORE, the consolidated petitions for prohibition and mandamus are DISMISSED.
SO ORDERED.
Davide, Jr., C.J., Bellosillo, Puno, Panganiban, Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, Corona, Carpio-Morales, Callejo, Sr., and Azcuna,
JJ., concur.
Vitug and Mendoza, J., no part; a respondent in G.R. No. 141489.
Austria-Martinez,J., on leave.
G.R. No. 86344 December 21, 1989
REP. RAUL A. DAZA, petitioner, vs.
REP. LUIS C. SINGSON and HON. RAOUL V. VICTORINO IN THE LATTER'S CAPACITY AS SECRETARY OF THE COMMISSION ON
APPOINTMENTS, respondent.
CRUZ, J.:
After the congressional elections of May 11, 1987, the House of Representatives proportionally apportioned its twelve seats in the Commission on
Appointments among the several political parties represented in that chamber, including the Lakas ng Bansa, the PDP-Laban, the NP-Unido, the
Liberal Party, and the KBL, in accordance with Article VI, Section 18, of the Constitution. Petitioner Raul A. Daza was among those chosen and was
listed as a representative of the Liberal Party. 1
On September 16, 1988, the Laban ng Demokratikong Pilipino was reorganized, resulting in a political realignment in the House of Representatives.
Twenty four members of the Liberal Party formally resigned from that party and joined the LDP, thereby swelling its number to 159 and correspondingly
reducing their former party to only 17 members. 2
On the basis of this development, the House of Representatives revised its representation in the Commission on Appointments by withdrawing the seat
occupied by the petitioner and giving this to the newly-formed LDP. On December 5, 1988, the chamber elected a new set of representatives consisting
of the original members except the petitioner and including therein respondent Luis C. Singson as the additional member from the LDP. 3
The petitioner came to this Court on January 13, 1989, to challenge his removal from the Commission on Appointments and the assumption of his seat
by the respondent. Acting initially on his petition for prohibition and injunction with preliminary injunction, we issued a temporary restraining order that
same day to prevent both the petitioner and the respondent from serving in the Commission on Appointments. 4
Briefly stated, the contention of the petitioner is that he cannot be removed from the Commission on Appointments because his election thereto is
permanent under the doctrine announced in Cunanan v. Tan. 5 His claim is that the reorganization of the House representation in the said body is not
based on a permanent political realignment because the LDP is not a duly registered political party and has not yet attained political stability.
For his part, the respondent argues that the question raised by the petitioner is political in nature and so beyond the jurisdiction of this Court. He also
maintains that he has been improperly impleaded, the real party respondent being the House of Representatives which changed its representation in
the Commission on Appointments and removed the petitioner. Finally, he stresses that nowhere in the Constitution is it required that the political party
be registered to be entitled to proportional representation in the Commission on Appointments.
In addition to the pleadings filed by the parties, a Comment was submitted by the Solicitor General as amicus curiae in compliance with an order from
the Court.
At the core of this controversy is Article VI, Section 18, of the Constitution providing as follows:
Sec. 18. There shall be a Commission on Appointments consisting of the President of the Senate, as ex officio Chairman, twelve Senators and twelve
Members of the House of Representatives, elected by each House on the basis of proportional representation from the political parties and parties or
organizations registered under the party-list system represented therein. The Chairman of the Commission shall not vote, except in case of a tie. The
Commission shall act on all appointments submitted to it within thirty session days of the Congress from their submission. The Commission shall rule
by a majority vote of all the Members.
Ruling first on the jurisdictional issue, we hold that, contrary to the respondent's assertion, the Court has the competence to act on the matter at bar.
Our finding is that what is before us is not a discretionary act of the House of Representatives that may not be reviewed by us because it is political in
nature. What is involved here is the legality, not the wisdom, of the act of that chamber in removing the petitioner from the Commission on
Appointments. That is not a political question because, as Chief Justice Concepcion explained in Tanada v. Cuenco. 6
... the term "political question" connotes, in legal parlance, what it means in ordinary parlance, namely, a question of policy. In other words, ... it refers
"to those questions which, under the Constitution, are to be decided by the people in their sovereign capacity, or in regard to which full discretionary
authority has been delegated to the Legislature or executive branch of the Government." It is concerned with issues dependent upon the wisdom, not
legality, of a particular measure.
In the aforementioned case, the Court was asked by the petitioners therein to annul the election of two members of the Senate Electoral Tribunal of
that chamber, on the ground that they had not been validly nominated. The Senate then consisted of 23 members from the Nacionalista Party and the
petitioner as the lone member of the Citizens Party. Senator Lorenzo M. Tanada nominated only himself as the minority representative in the Tribunal,
whereupon the majority elected Senators Mariano J. Cuenco. and Francisco Delgado, from its own ranks, to complete the nine-man composition of the
Tribunal as provided for in the 1935 Constitution. The petitioner came to this Court, contending that under Article VI, Section 11, of that Charter, the six
legislative members of the Tribunal were to be chosen by the Senate, "three upon nomination of the party having the largest number of votes and three
of the party having the second largest number of votes therein." As the majority party in the Senate, the Nacionalista Party could nominate only three
members and could not also fill the other two seats pertaining to the minority.
By way of special and affirmative defenses, the respondents contended inter alia that the subject of the petition was an internal matter that only the
Senate could resolve. The Court rejected this argument, holding that what was involved was not the wisdom of the Senate in choosing the respondents
but the legality of the choice in light of the requirement of the Constitution. The petitioners were questioning the manner of filling the Tribunal, not the
discretion of the Senate in doing so. The Court held that this was a justiciable and not a political question, thus:
Such is not the nature of the question for determination in the present case. Here, we are called upon to decide whether the election of Senators
Cuenco and Delgado by the Senate, as members of the Senate Electoral Tribunal, upon nomination by Senator Primicias-member and spokesman of
the party having the largest number of votes in the Senate-behalf of its Committee on Rules, contravenes the constitutional mandate that said members
of the Senate Electoral Tribunal shall be chosen "upon nomination ... of the party having the second largest number of votes" in the Senate and hence,
is null and void. The Senate is not clothed with "full discretionary authority" in the choice of members of the Senate Electoral Tribunal. The exercise of
its power thereon is subject to constitutional limitations which are claimed to be mandatory in nature. It is clearly within the legitimate province of the
judicial department to pass upon the validity of the proceeding in connection therewith.
... whether an election of public officers has been in accordance with law is for the judiciary. Moreover, where the legislative department has by statute
prescribed election procedure in a given situation, the judiciary may determine whether a particular election has been in conformity with such statute,
and particularly, whether such statute has been applied in a way to deny or transgress on constitutional or statutory rights ...' (1 6 C.J.S., 439;
emphasis supplied)
It is, therefore, our opinion that we have, not only jurisdiction but also the duty, to consider and determine the principal issue raised by the parties
herein." Although not specifically discussed, the same disposition was made in Cunanan v. Tan as it likewise involved the manner or legality of the
organization of the Commission on Appointments, not the wisdom or discretion of the House in the choice of its representatives.
In the case now before us, the jurisdictional objection becomes even less tenable and decisive. The reason is that, even if we were to assume that the
issue presented before us was political in nature, we would still not be precluded from resolving it under the expanded jurisdiction conferred upon us
that now covers, in proper cases, even the political question. Article VII, Section 1, of the Constitution clearly provides:
Section 1. The judicial power shall be vested in one Supreme Court and in such lower courts as may be established by law.
Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable,
and to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or
instrumentality of the Government.
The respondent's contention that he has been improperly impleaded is even less persuasive. While he may be technically correct in arguing that it is
not he who caused the petitioner's removal, we feel that this objection is also not an insuperable obstacle to the resolution of this controversy. We may,
for one thing, treat this proceeding as a petition for quo warranto as the petitioner is actually questioning the respondent's right to sit as a member of
the Commission on Appointments. For another, we have held as early as in the Emergency Powers Cases 7 that where serious constitutional questions
are involved, "the transcendental importance to the public of these cases demands that they be settled promptly and definitely brushing aside, if we
must, technicalities of procedure." The same policy has since then been consistently followed by the Court, as in Gonzales v. Commission on
Elections, 8 where we held through Chief Justice Fernando:
In the course of the deliberations, a serious procedural objection was raised by five members of the Court. It is their view that respondent Commission
on Elections not being sought to be restrained from performing any specific act, this suit cannot be characterized as other than a mere request for an
advisory opinion. Such a view, from the remedial law standpoint, has much to recommend it. Nonetheless, a majority would affirm the original stand
that under the circumstances, it could still rightfully be treated as a petition for prohibition.
The language of justice Laurel fits the case: "All await the decision of this Court on the constitutional question. Considering, therefore, the importance
which the instant case has assumed and to prevent multiplicity of suits, strong reasons of public policy demand that [its] constitutionality ... be now
resolved.' It may likewise be added that the exceptional character of the situation that confronts us, the paramount public interest, and the undeniable
necessity for ruling, the national elections being barely six months away, reinforce our stand. It would appear undeniable, therefore, that before us is an
appropriate invocation of our jurisdiction to prevent the enforcement of an alleged unconstitutional statute. We are left with no choice then; we must act
on the matter.
Coming now to the more crucial question, the Court notes that both the petitioner and the respondent are invoking the case of Cunanan v. Tan to
support their respective positions. It is best, therefore, to make a quick review of that case for a proper disposition of this one.
In the election for the House of Representatives held in 1961, 72 seats were won by the Nacionalista Party, 29 by the Liberal Party and 1 by an
independent. Accordingly, the representation of the chamber in the Commission on Appointments was apportioned to 8 members from the Nacionalista
Party and 4 from the Liberal Party. Subsequently, 25 members of the Nacionalista Party, professing discontent over the House leadership, made
common cause with the Liberal Party and formed what was called the Allied Majority to install a new Speaker and reorganize the chamber. Included in
this reorganization was the House representation in the Commission on appointments where three of the Nacionalista congressmen originally chosen
were displaced by three of their party colleagues who had joined the Allied Majority.
Petitioner Carlos Cunanan's ad interim appointment as Deputy Administrator of the Reforestration Administration was rejected by the Commission on
Appointments as thus reorganized and respondent Jorge Tan, Jr. was thereafter designated in his place. Cunanan then came to this Court, contending
that the rejection of his appointment was null and void because the Commission itself was invalidly constituted.
The Court agreed. It noted that the Allied Majority was a merely temporary combination as the Nacionalista defectors had not disaffiliated from their
party and permanently joined the new political group. Officially, they were still members of the Nacionalista Party. The reorganization of the
Commission on Appointments was invalid because it was not based on the proportional representation of the political parties in the House of
Representatives as required by the Constitution. The Court held:
... In other words, a shifting of votes at a given time, even if du to arrangements of a more or less temporary nature, like the one that has led to the
formation of the so-called "Allied Majority," does not suffice to authorize a reorganization of the membership of the Commission for said House.
Otherwise the Commission on Appointments may have to be reorganized as often as votes shift from one side to another in the House. The framers of
our Constitution could not have intended to thus place a constitutional organ, like the Commission on Appointments, at the mercy of each House of
Congress.
The petitioner vigorously argues that the LDP is not the permanent political party contemplated in the Constitution because it has not been registered in
accordance with Article IX-B, Section 2(5), in relation to the other provisions of the Constitution. He stresses that the so-called party has not yet
achieved stability and suggests it might be no different from several other political groups that have died "a-bornin'," like the LINA, or have
subsequently floundered, like the UNIDO.
The respondent also cites Cunanan but from a different viewpoint. According to him, that case expressly allows reorganization at any time to reflect
changes in the political alignments in Congress, provided only that such changes are permanent. The creation of the LDP constituting the bulk of the
former PDP-Laban and to which no less than 24 Liberal congressmen had transferred was a permanent change. That change fully justified his
designation to the Commission on Appointments after the reduction of the LP representation therein. Thus, the Court held:
Upon the other hand, the constitutional provision to the effect that "there shall be a Commission on Appointments consisting of twelve (12) Senators
and twelve (12) members of the House of Representatives elected by each House, respectively, on the basis of proportional REPRESENTATION OF
THE POLITICAL PARTIES THEREIN," necessarily connotes the authority of each House of Congress to see to it that this requirement is duly complied
with. As a consequence, it may take appropriate measures, not only upon the initial organization of the Commission, but also, subsequently thereto. If
by reason of successful election protests against members of a House, or of their expulsion from the political party to which they belonged and/or of
their affiliation with another political party, the ratio in the representation of the political parties in the House is materially changed, the House is clothed
with authority to declare vacant the necessary number of seats in the Commission on Appointments held by members of said House belonging to the
political party adversely affected by the change and then fill said vacancies in conformity with the Constitution.
In the course of the spirited debate on this matter between the petitioner and the respondent (who was supported by the Solicitor General) an important
development has supervened to considerably simplify the present controversy. The petitioner, to repeat, bases his argument heavily on the non-
registration of the LDP which, he claims has not provided the permanent political realignment to justify the questioned reorganization. As he insists: (c)
Assuming that the so-called new coalesced majority is actually the LDP itself, then the proposed reorganization is likewise illegal and ineffectual,
because the LDP, not being a duly registered political party, is not entitled to the "rights and privileges granted by law to political parties' (See. 160, BP
No. 881), and therefore cannot legally claim the right to be considered in determining the required proportional representation of political parties in the
House of Representatives. 9
xxx xxx xxx ... the clear constitutional intent behind Section 18, Article VI, of the 1987 Constitution, is to give the right of representation in the
Commission on Appointment only to political parties who are duly registered with the Comelec. 10
On November 23, 1989, however, that argument boomeranged against the petitioner. On that date, the Commission on Elections in an en banc
resolution affirmed the resolution of its First Division dated August 28, 1989, granting the petition of the LDP for registration as a political party. 11 This
has taken the wind out of the sails of the petitioner, so to speak, and he must now limp to shore as best he can.
The petitioner's contention that, even if registered, the party must still pass the test of time to prove its permanence is not acceptable. Under this
theory, a registered party obtaining the majority of the seats in the House of Representatives (or the Senate) would still not be entitled to representation
in the Commission on Appointments as long as it was organized only recently and has not yet "aged." The Liberal Party itself would fall in such a
category. That party was created in December 1945 by a faction of the Nacionalista Party that seceded therefrom to support Manuel A. Roxas's bid for
the Presidency of the Philippines in the election held on April 23, 1946. 12 The Liberal Party won. At that time it was only four months old. Yet no
question was raised as to its right to be represented in the Commission on Appointments and in the Electoral Tribunals by virtue of its status as the
majority party in both chambers of the Congress.
The LDP has been in existence for more than one year now. It now has 157 members in the House of Representatives and 6 members in the Senate.
Its titular head is no less than the President of the Philippines and its President is Senator Neptali A. Gonzales, who took over recently from Speaker
Ramon V. Mitra. It is true that there have been, and there still are, some internal disagreements among its members, but these are to be expected in
any political organization, especially if it is democratic in structure. In fact even the monolithic Communist Party in a number of socialist states has
undergone similar dissension, and even upheavals. But it surely cannot be considered still temporary because of such discord.
If the petitioner's argument were to be pursued, the 157 members of the LDP in the House of Representatives would have to be denied representation
in the Commission on Appointments and, for that matter, also the Electoral Tribunal. By the same token, the KBL, which the petitioner says is now
"history only," should also be written off. The independents also cannot be represented because they belong to no political party. That would virtually
leave the Liberal Party only with all of its seventeen members to claim all the twelve seats of the House of Representatives in the Commission on
Appointments and the six legislative seats in the House Electoral Tribunal.
It is noteworthy that when with 41 members the Liberal Party was alloted two of the seats in the Commission on Appointments, it did not express any
objection. 13 Inconsistently, the petitioner is now opposed to the withdrawal from it of one seat although its original number has been cut by more than
half.
As for the other condition suggested by the petitioner, to wit, that the party must survive in a general congressional election, the LDP has doubtless
also passed that test, if only vicariously. It may even be said that as it now commands the biggest following in the House of Representatives, the party
has not only survived but in fact prevailed. At any rate, that test was never laid down in Cunanan.
To summarize, then, we hold, in view of the foregoing considerations, that the issue presented to us is justiciable rather political, involving as it does the
legality and not the wisdom of the act complained of, or the manner of filling the Commission on Appointments as prescribed by the Constitution. Even
if the question were political in nature, it would still come within our powers of review under the expanded jurisdiction conferred upon us by Article VIII,
Section 1, of the Constitution, which includes the authority to determine whether grave abuse of discretion amounting to excess or lack of jurisdiction
has been committed by any branch or instrumentality of the government. As for the alleged technical flaw in the designation of the party respondent,
assuming the existence of such a defect, the same may be brushed aside, conformably to existing doctrine, so that the important constitutional issue
raised may be addressed. Lastly, we resolve that issue in favor of the authority of the House of Representatives to change its representation in the
Commission on Appointments to reflect at any time the changes that may transpire in the political alignments of its membership. It is understood that
such changes must be permanent and do not include the temporary alliances or factional divisions not involving severance of political loyalties or
formal disaffiliation and permanent shifts of allegiance from one political party to another.
The Court would have preferred not to intervene in this matter, leaving it to be settled by the House of Representatives or the Commission on
Appointments as the bodies directly involved. But as our jurisdiction has been invoked and, more importantly, because a constitutional stalemate had to
be resolved, there was no alternative for us except to act, and to act decisively. In doing so, of course, we are not imposing our will upon the said
agencies, or substituting our discretion for theirs, but merely discharging our sworn responsibility to interpret and apply the Constitution. That is a duty
we do not evade, lest we ourselves betray our oath. WHEREFORE, the petition is DISMISSED. The temporary restraining order dated January 13,
1989, is LIFTED. The Court holds that the respondent has been validly elected as a member of the Commission on Appointments and is entitled to
assume his seat in that body pursuant to Article VI, Section 18, of the Constitution. No pronouncement as to costs. SO ORDERED.
EN BANC
G.R. No. 86649 July 12, 1990
ANNA DOMINIQUE M.L. COSETENG and KABABAIHAN PARA SA INANG BAYAN, petitioners,
vs.
HON. RAMON V. MITRA, JR., as speaker of the House of Representatives of the Congress of the Philippines; HON. FRANCISCO SUMULONG,
as Majority Floor Leader of the House of Representatives of the Congress of the Philippines; HON. JOVITO SALONGA, as Ex-Oficio
Chairman of the Commission on Appointments; HON. ROQUE R. ABLAN, JR., HON. LORNA L. VERANO-YAP, HON. MIGUEL ROMERO, HON.
ANTONIO V. CUENCO, HON. ROGACIANO M. MERCADO, HON. ALAWADIN T. BANDON, JR., HON. JOSE L. CABOCHAN, HON. CARLOS R.
IMPERIAL, HON. MA. CLARA L. LOBREGAT, HON. NATALIO M. BELTRAN, JR., HON. CARMELO J. LOCSIN & HON. LUIS C. SINGSON, as
Members of the Commission on Appointments for the House of Representatives of the CONGRESS OF THE PHILIPPINES, respondents.
Perfecto V. Fernandez, Jose P. Fernandez and Cristobal P. Fernandez for petitioners.
Panganiban, Benitez, Barinaga & Bautista Law Offices for Lorna L. Verano-Yap.
GRIÑO-AQUINO, J.: The composition of the House membership in the Commission on Appointments was based on proportional representation of the political parties in the
The congressional elections of May 11, 1987 resulted in the election to the House of Representatives of the candidates of diverse political parties such House. There are 160 members of the LDP in the House. They represent 79% of the House membership (which may be rounded out to 80%). Eighty
as the PDP-Laban, Lakas ng Bansa (LB), Liberal Party (LP), NP-Unido, Kilusan ng Bagong Lipunan (KBL), Panaghiusa, Kababaihan Para sa Inang percent (80%) of 12 members in the Commission on Appointments would equal 9.6 members, which may be rounded out to ten (10) members from the
Bayan (KAIBA), and some independents. Petitioner Anna Dominique M.L. Coseteng was the only candidate elected under the banner of KAIBA. LDP. The remaining two seats were apportioned to the LP (respondent Lorna Verano-Yap) as the next largest party in the Coalesced Majority and the
On August 26, 1987, the House of Representatives, upon nomination by the Majority Floor Leader, Cong. Francisco Sumulong, elected from the KBL (respondent Roque Ablan) as the principal opposition party in the House. There is no doubt that this apportionment of the House membership in
Coalesced Majority, eleven (11) out of twelve (12) congressmen to represent the House in the Commission on Appointments. They were: the Commission on Appointments was done "on the basis of proportional representation of the political parties therein."
1. Hon. Miguel Romero LP (Liberal Party) The other political parties or groups in the House, such as petitioner's KAIBA (which is presumably a member also of the Coalesced Majority), are
2. Hon. Antonio V. Cuenco LB-Panaghiusa bound by the majority's choices. Even if KAIBA were to be considered as an opposition party, its lone member (petitioner Coseteng) represents only
3. Hon. Rogaciano Mercado LB (Lakas ng Bayan) .4% or less than 1% of the House membership, hence, she is not entitled to one of the 12 House seats in the Commission on Appointments. To be able
4. Hon. Raul Daza LP to claim proportional membership in the Commission on Appointments, a political party should represent at least 8.4% of the House membership, i.e., it
5. Hon. Alawadin T. Bandon Jr. PDP-Laban should have been able to elect at least 17 congressmen or congresswomen.
6. Hon. Jose Cabochan PDP-Laban The indorsements of the nine (9) congressmen and congresswomen in favor of the petitioner's election to the Commission are inconsequential
7. Hon. Lorna L. Verano-Yap LP because they are not members of her party and they signed identical indorsements in favor of her rival, respondent Congresswoman Verano-Yap.
8. Hon. Carlos R. Imperial IND There is no merit in the petitioner's contention that the House members in the Commission on Appointments should have been nominated and elected
9. Hon. Ma. Clara L. Lobregat IND by their respective political parties. The petition itself shows that they were nominated by their respective floor leaders in the House. They were elected
10. Hon Natalio M. Beltran, Jr. LB/Unido/NP by the House (not by their party) as provided in Section 18, Article VI of the Constitution. The validity of their election to the Commission on
11. Hon. Carmelo J. Locsin PDP-Laban/LB Appointments — eleven (11) from the Coalesced Majority and one from the minority — is unassailable.
(pp. 115-116, Rollo.) WHEREFORE, the petition is dismissed for lack of merit. Costs against the petitioner.
On September 22, 1987, upon nomination of the Minority Floor Leader, the House elected Honorable Roque Ablan, Jr., KBL, as the twelfth member of SO ORDERED.
the Commission on Appointments, representing the Coalesced Minority in the House. Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin, Cortes, Medialdea and Regalado, JJ.,
A year later, on September 16, 1988, the "Laban ng Demokratikong Pilipino" (LDP, for brevity) was organized as a political party. As 158 out of 202 concur.
members of the House of Representatives formally affiliated with the LDP, the House committees, including the House representation in the Sarmiento, J., took no part.
Commission on Appointments, had to be reorganized.
On October 8, 1988, petitioner Coseteng wrote a letter to Speaker Ramon Mitra requesting that as representative of KAIBA, she be appointed as a
member of the Commission on Appointments and House Electoral Tribunal (p. 15, Rollo). Her request was endorsed by nine (9) congressmen, namely,
Hon. Lally Laurel-Trinidad, Bonifacio Gillego, Luz Reyes Bakunawa, Gerardo Cabochan, Jose D. Aspiras, Oscar Santos, Eduardo N. Joson, Antonio H.
Cerilles and Isacio Pelaez.
On December 5, 1988, the House of Representatives, on motion of the Majority Floor Leader and over the objection of Cong. Raul A. Daza, LP, revised
the House majority membership in the Commission on Appointments to conform with the new political alignments by replacing Rep. Raul A. Daza, LP,
with Rep. Luis C. Singson, LDP, as follows:
1. Hon. Miguel L. Romero LDP
2. Hon. Antonio V. Cuenco LDP
3. Hon. Rogaciano M. Mercado LDP
4. Hon. Alawadin T. Bandon, Jr. LDP
5. Hon. Jose L. Cabochan LDP
6. Hon. Carlos R. Imperial LDP
7. Hon. Maria Clara L. Lobregat LDP
8. Hon. Natalio M. Beltran, Jr. LDP
9. Hon. Carmelo J. Locsin LDP
10. Hon. Luis C. Singson LDP
11. Hon. Lorna L. Verano-Yap LP
(p. 122, Rollo.)
Congressman Ablan, KBL, was retained as the 12th member representing the House minority.
On February 1, 1989, Congresswoman Coseteng and her party, the KAIBA, filed this Petition for Extraordinary Legal Writs (which may be considered
as a petition for quo warranto and injunction) praying this Court to declare as null and void the election of respondent Ablan, Verano-Yap, Romero,
Cuenco, Mercado, Bandon, Cabochan, Imperial, Lobregat, Beltran, Locsin, and Singson, as members of the Commission on Appointments, to enjoin
them from acting as such and to enjoin also the other respondents from recognizing them as members of the Commission on Appointments on the
theory that their election to that Commission violated the constitutional mandate of proportional representation because:
1) the New Majority (158 LDP members out of the 202 members of the House) is entitled to only nine (9) seats out of the twelve to be filled by the
House (p. 29, Rollo);
2) the members representing the political parties, or coalitions thereof, must be nominated by their respective political parties or coalitions;
3) the nomination and election of respondent Verano-Yap by the respondents as representative of the minority was clearly invalid (p. 31, Rollo); and
4) that similarly invalid was the retention of respondent Ablan as Minority member in the Commission because he was neither nominated nor elected as
such by the minority party or parties in the House (p. 31, Rollo).
Petitioner Coseteng further alleged that she is qualified to sit in the Commission on Appointments as a representative of the Minority because she has
the support of nine (9) other congressmen and congresswomen of the Minority (p. 31, Rollo).
In their collective Comment, the respondents House of Representatives, the Speaker, the Majority Floor Leader, the members of the Commission on
Appointments including Congressman Roque R. Ablan, but excluding Congresswoman Lorna Verano-Yap (who filed a separate Comment), alleged: (1)
that the legality of the reorganization of the Commission on Appointments is a political question, hence, outside the jurisdiction of this Court to decide,
and (2) that in any case, the reorganization was "strictly in consonance with Section 18, Article VI of the 1987 Constitution" i.e., on the basis of
proportional representation of the political parties, considering the majority coalition "as a form of a political party" (pp. 115, 118, Rollo). They further
alleged that as of March 3, 1989, 160 members of the House (including 26 former Liberals) had expressly renounced in writing their respective political
party affiliations and formally affiliated with the LDP leaving only 15 Liberals in the House (p. 119, Rollo).i•t•c-aüslAfter its petition for registration as a
political party was granted on August 28, 1989 by the First Division of the COMELEC) and affirmed on November 23, 1989 by the COMELEC en banc,
the LDP become the new Majority in the House. They finally argued that as KAIBA is part of the Coalesced Majority which supports the administration
of President Corazon C. Aquino, not of the minority, petitioner is bound by the choice of the Coalesced Majority of the members who would sit in the
Commission on Appointments.
Representative Lorna Verano-Yap, in her comment alleged that the petitioner has no better light than those already selected, to be chosen as a
member of the Commission on Appointments because: (1) the Constitution was not violated in electing Yap and eleven (11) other House members to
the Commission on Appointments; (2) respondent Yap is a rightful incumbent; and (3) petitioner's claim to a seat on the Commission on Appointments
is without legal and factual basis (pp. 217-218, Rollo).
The Commission on Appointments took a neutral stand on the petition as the issues involved may touch on the validity of its organization and the
legality of the entitlement of the LDP or the LP to representation, which are raised in the case of Daza vs. Singson, G.R. No. 86344, then pending
before this Court (pp. 195-198, Rollo).
The issue here is whether the members of the House in the Commission on Appointments were chosen on the basis of proportional representation
from the political parties therein as provided in Section 18, Article VI of the 1987 Constitution which reads: EN BANC
Sec. 18. There shall be a Commission on Appointments consisting of the President of the Senate, as ex oficio Chairman, twelve Senators, and twelve
Members of the House of Representatives elected by each House on the basis of proportional representation from the political parties and parties or G.R. No. 106971 October 20, 1992
organizations registered under the party-list system represented therein. The chairman of the Commission shall not vote, except in case of a tie. The TEOFISTO T. GUINGONA, JR., AND LAKAS-NATIONAL UNION OF CHRISTIAN DEMOCRATS (LAKAS-NUCD), petitioners,
Commission shall act on all appointments submitted to it within thirty session days of the Congress from their submission. The commission shall rule by vs.
a majority vote of all the Members. (Art. VI, 1987 Constitution.) NEPTALI A. GONZALES, ALBERTO ROMULO and WIGBERTO E. TAÑADA, respondents.
After deliberating on the petition and the comments of the respondents, we hold that the petition should be dismissed, not because it raises a political NATIONALIST PEOPLE'S COALITION, petitioner-in-intervention.
question, which it does not, but because the revision of the House representation in the Commission on Appointments is based on proportional
representation of the political parties therein as provided in Section 18, Article VI of the 1987 Constitution. CAMPOS, JR., J.:
The "political question" issue was settled in Daza vs. Singson, G.R. No. 86344, December 21, 1989, where this Court ruled that "the legality, and not This is a petition for Prohibition to prohibit respondents Senator Alberto Romulo and Wigberto Tañada from sitting and assuming the position of
the wisdom, of the manner of filling the Commission on Appointments as prescribed by the Constitution" is justiciable, and, "even if the question were members of the Commission on Appointments and to prohibit Senators Neptali Gonzales, as ex-officio Chairman, of said Commission from recognizing
political in nature, it would still come within our powers of review under the expanded jurisdiction conferred upon us by Article VIII, Section 1, of the and allowing the respondent senators to sit as members thereof.
Constitution, which includes the authority to determine whether grave abuse of discretion amounting to excess or lack of jurisdiction has been As a result of the national elections held last May 11, 1992, the Senate is composed of the following members or Senators representing the respective
committed by any branch or instrumentality of the government." political affiliations:
LDP –– 15 senators
NPC –– 5 senators
LAKAS-NUCD –– 3 senators
LP-PDP-LABAN –– 1 senator
Applying the mathematical formula agreed to by the parties as follow as:
No. of senators of a political party x 12 seats
––––––––––––––––––––––––––
Total no. of senators elected
the resulting composition of the senate based on the rule of proportional representation of each political party with elected representatives in the
Senate, is as follows:
Political Party/ Proportional
Political Coalition Membership Representatives
LDP 15 7.5 members
NPC 5 2.5 members
LAKAS-NUCD 3 1.5 members
LP-PDP-LABAN 1 .5 members
At the organization meeting of the Senate held on August 27, 1992, Senator Romulo in his capacity as Majority Floor Leader nominated, for and in his
behalf of the LDP, eight (8) senators for membership in the Commission on Appointments, namely Senators Angara, Herrera, Alvarez, Aquino,
Mercado, Ople, Sotto and Romulo. The nomination of the eight senators 2 was objected to by Petitioner, Senator Guingona, as Minority Floor Leader,
and Senator John Osmeña, in representation of the NPC. To resolve the impasse, Senator Arturo Tolentino proposed a compromise to the effect that
Senate elect 3
. . . 12 members to the Commission on Appointments, eight coming from the LDP, two coming from NPC, one coming from the Liberal Party, with the
understanding that there are strong reservations against this proportion of these numbers so that if later on in action in the Supreme Court, if any party
is found to have an excess in representation, and if any party is found to have a deficiency in representation, that party will be entitled to nominate and
have elected by this body its additional representatives.
The proposed compromise above stated was a temporary arrangement and, inspite of the objections of Senator Guingona and Osmeña, to enable the
Commission on Appointments to be organized by the election of its members, it was approved. The elected members consisted of eight LDP, one LP-
PDP-LABAN, two NPC and one LAKAS-NUCD.
On September 23, 1992, Senator Teofisto Guingona. Jr., in his behalf and in behalf of Lakas-National Union of Christian Democrats (LAKAS-NUCD),
filed a petition for the issuance of a writ of prohibition to prohibit the respondent Senate President Neptali Gonzales, as ex-officio Chairman of the
Commission on Appointments, from recognizing the membership of Senators Alberto Romulo as the eight senator elected by the LDP, and Wigberto E.
Tañada, as the lone member representing the LP-PDP-LABAN, in the Commission on Appointments, on the ground that the proposed compromise of
Senator Tolentino was violative of the rule of proportional representation, and that it is the right of the minority political parties in the Senate, consistent
with the Constitution, 4 to combine their fractional representation in the Commission on Appointments to complete one seat therein, and to decide who,
among the senators in their ranks, shall be additionally nominated and elected thereto.
Section 18 Article VI of the Constitution of 1987 provides fro the creation of a Commission on Appointments and the allocation of its membership, as
follows:
Sec. 18. There shall be a Commission on Appointments consisting of the President of the Senate as ex-officio Chairman, twelve members of the House
of Representatives, elected by each house on the basis of proportional representation from the political parties or organizations registered under the
party list system represented therein. The Chairman of the Commission shall not vote except in case of a tie. The Commission shall act on all
appointments submitted to it within the session days of the Congress from their submission of all the members. (Emphasis supplied.)
Based on the mathematical computation of proportional representation of the various political parties with elected senators in the senators in the
Senate, each of these political parties is entitled to a fractional membership in the Commission on Appointments as stated in the first paragraph of this
decision.5 Each political party has a claim to an extra half seat, and the election of respondents Senator Romulo and Senator Tañada to the
Commission on Appointments by the LDP majority is precisely questioned by the petitioners because, according to them, it unduly increased the
membership of LDP and LP-PDP-LABAN in the commission and reduced the membership of the LAKAS-NUCD and NPC correspondingly. In view of
the conflicting claims of each of the political parties/coalition duly represented in the Senate to a fractional membership in the Commission on
Appointments, the election of respondents Senator Romulo and Senator Tañada has become controversial and its validity questionable. Hence, this
petition. It has been established that the legality of filling up the membership of the Commission on Appointments is a justiciable issue and not a
political question. 6
We deem it necessary to resolve the respondents' argument as to the nature of the instant petition. There is no doubt that the issues involved herein
are constitutional in nature and are of vital importance to our nation. They involve the interpretation of Section 18, Article VI of the Constitution which
creates a Commission on Appointments. Where constitutional issues are properly raised in the context of the alleged facts, procedural questions
acquire a relatively minor significance 7 and the "transcendental importance to the public of the case demands that they be settled promptly and
definitely brushing aside . . . technicalities of procedure". 8
For the purpose of resolving the case at bar, the instant petition may be regarded as one of prohibition 9 wherein the Senate is claimed to have acted
without or in excess of its jurisdiction when it designated respondent Senator Romulo as eighth member of the Commission on Appointments, upon
nomination by the LDP, and respondent Senator Tañada as LP nominee, notwithstanding, that, in both instance, LDP and LP are each entitled only to
"half a member". In the alternative, the petition may be regarded as one for mandamus, 10 in which it is claimed that the LAKAS-NUCD and NPC were
unlawfully excluded from the use and enjoyment of a right or office to which each is entitled. Considering the importance of the case at bar and in
keeping with the Court's duty under the Constitution to keep the other branches of the government within the limits of the Constitution and the laws of
the land, this Court has decided to brush aside legal technicalities of procedure and take cognizance of this case.
The issues for determination by this Court may be stated as follows:
1) Whether the election of Senators Alberto Romulo and Wigberto E. Tañada as members of the Commission on Appointments is in accordance with
the provision of Section 18 of Article VI of the 1987 Constitution.
2) If said membership of the respondent senators in the Commission is violative of the Constitutional provision, did the respondent Senate act in grave
abuse of discretion in electing the respondent Senators?
3) If there was grave abuse of discretion by respondent Senate, acting through the LDP majority, should a writ of prohibition enjoining, prohibiting and
restraining respondent Senators from sitting as members of and participating in the proceeding of the Commission on Appointments be issued?
It is an established fact to which all the parties agree that the mathematical representation of each of the political parties represented in the Senate is
as follows:
LDP –– 7.5
NPC –– .5
LAKAS-NUCD –– 2.5
LP-PDP-LABAN –– 1.5
It is also a fact accepted by all such parties that each of them entitled to a fractional membership on the basis of the rule on proportional representation
of each of the political parties. A literal interpretation of Section 18 of Article VI of the Constitution leads to no other manner of application than as
above. The problem is what to do with the fraction of .5 or 1/2 to which each of the parties is entitled. The LDP majority in the Senate converted a
fractional half membership into a whole membership of one senator by adding one half or .5 to 7.5 to be able to elect Senator Romulo. In so doing one
other party's fractional membership was correspondingly reduced leaving the latter's representation in the Commission on Appointments to less than
their proportional representation in the Senate. This is clearly a violation of Section 18 because it is no longer in compliance with its mandate that
membership in the Commission be based on the proportional representation of the political parties. The election of Senator Romulo gave more
representation to the LDP and reduced the representation of one political party — either the LAKAS-NUCD or the NPC.
On the claim of Senator Tañada that under the ruling in the case of Senator Lorenzo Tañada, 11 and the cases of Senator Juan Ponce Enrile, he has a
right to be elected as a member of the Commission on Appointments because of: (a) the physical impossibility of dividing a person, so that the
fractional membership must be rounded up into one senator; (b) being the sole elected senator of his party, his party is entitled to be represented in the
Commission on Appointments; (c) having been elected senator, rounding up into one full senator his fractional membership is consistent with the
provision and spirit of the Constitution and would be in full accord with the principle of republicanism that emphasizes democracy.
The cases of the two former senators mentioned cannot be invoked as a precedent in support of incumbent Senator Tañada's claim to a membership
in the present Commission on Appointments. In the time of his illustrious father, out of 24 elected senators in the upper chamber of Congress, 23
belonged to the Nacionalista Party, while Senator Lorenzo Tañada, who belonged to the Citizen's Party, was the lone opposition. By force of
circumstance, he became a member of the Commission on Appointments because he alone represented the minority party. Had there been another
senator belonging to a party other than the Citizens' Party, this problem of who should sit as the sole representative of the opposition party would have
arisen. In the case of Senator Ponce Enrile, there were two senators elected from the opposition party, namely, he and Senator Estrada. Applying the
rule of proportional representation mentioned earlier (see formula), the opposition was entitled to full member (not a fractional membership). Senator
Enrile was thus legally nominated and elected as the minority representative in the Senate. In the present case, if there were a political parties in the
Senate, and We follow Senators Tañada's claim that he is entitled to full membership as lone representative of his party, We the anomaly of having 13
senators, where the Constitution allows only twelve (12) in the Commission on Appointments.
We find the respondents' claim to membership in the Commission on Appointments by nomination and election of the LDP majority in the Senate as
not in accordance with Section 18 of Article VI of the 1987 Constitution and therefore violative of the same because it is not in compliance with the
requirements that twelve senators shall be elected on the basis of proportional representation of the resulting fractional membership of the political
parties represented therein. To disturb the resulting fractional membership of the political parties in the Commission on Appointments by adding
together two halves to make a whole is a breach of the rule on proportional representation because it will give the LDP an added member in the
Commission by utilizing the fractional membership of the minority political party, who is deprived of half a representation.
The provision of Section 18 on proportional representation is mandatory in character and does not leave any discretion to the majority party in the
Senate to disobey or disregard the rule on proportional representation; otherwise, the party with a majority representation in the Senate or the House of
Representatives can by sheer force of number impose its will on the hapless minority. By requiring a proportional representation in the Commission on
Appointments, Section 18 in effect works as a check on the majority party in the Senate and helps to maintain the balance of power. No party can claim
more than what it is entitled to under such rule. To allow it to elect more than its proportional share of members is to confer upon such a party a greater
share in the membership in the Commission on Appointments and more power to impose its will on the minority, who by the same token, suffers a
diminution of its rightful membership in the Commission.
Section 18, also assures representation in the Commission on Appointments of any political party who succeeds in electing members to the Senate,
provided that the number of senators so elected enables it to put a representative in the Commission on Appointments. Drawing from the ruling in the
case of Coseteng vs. Mitra, Jr., 12 a political party must have at least two senators in the Senate to be able to have a representatives in the
Commission on Appointments, so that any number less than 2 will not entitle such a party a membership in the Commission on Appointments. This
applies to the respondent Senator Tañada.
We lay down the following guidelines accordingly:
1) In the Senate, political party or coalition must have at least two duly elected senators for every seat in the Commission on Appointments.
2) Where there are more than two political parties represented in the Senate, a political party/coalition with a single senator in the Senate cannot
constitutionally claims seat in the Commission.
We do not agree with respondents' claim that it is mandatory to elect 12 Senators to the Commission on Appointments. The Constitution does not
contemplate that the Commission on Appointments must necessarily include twelve (12) senators and twelve (12) members of the House of
Representatives. What the Constitution requires is that there be at least a majority of the entire membership. Under Section 18, the Commission shall
rule by majority vote of all the members and in Section 19, the Commission shall meet only while congress is in session, at the call of its Chairman or a
majority of all its members "to discharge such powers and functions herein conferred upon it". Implementing the above provisions of the Constitution,
Section 10 Chapter 3 of the Rules of the Commission on Appointments, provides as follows:
Sec. 10. — Place of Meeting and Quorum: The Commission shall meet at either the session hall of the Senate or the House of Representatives upon
call of the Chairman or as the Commission may designate. The presence of at least thirteen (13) members is necessary to constitute a quorum.
Provided, however, that at least four (4) of the members constituting the quorum should come from either house. . . .
It is quite evident that the Constitution does not require the election and presence of twelve (12) senators and twelve (12) members of the House of
Representatives in order that the Commission may function. Other instances may be mentioned of Constitutional collegial bodies which perform their
composition is expressly specified by the Constitution. Among these are the Supreme
Court, 13 Civil Service Commission, 14 Commission on Election, 15 Commission on Audit. 16 They perform their function so long and there is the
required quorum, usually a majority of its membership. The Commission on Appointments may perform its functions and transact it s business even if
only ten (10) senators are elected thereto as long as a quorum exists.
It may also be mentioned that while the Constitution provides for equal membership from the Senate and the House of Representatives in the
Commission on Appointments, the senators on the one hand, and the representatives, on the other, do not vote separately but jointly, and usually
along party lines. Even if Senator Tañada would not be able sit in the Commission on Appointments, the LP-LDP-LABAN would still be represented in
the Commission by congressman Ponce Enrile who has become a member of the LP. On the other hand, there is nothing to stop any of the political
party in order to fill up the two vacancies resulting from this decision.
Assuming that the Constitution intended that there be always twelve (12) senators in the Commission on Appointments, the instant situation cannot be
rectified by the Senate in disregard of the rule on proportional representation. The election of senator Romulo and Senator Tañada as members of the
Commission on Appointments by the LDP majority in the Senate was clearly a violation of Section 18 of Article VI of the 1987 Constitution. Their
nomination and election by the LDP majority by sheer force of superiority in numbers during the Senate organization meeting of August 27, 1992 was
done in grave abuse of discretion. Where power is exercised in a manner inconsistent with the command of the Constitution, and by reason of
numerical strength, knowingly and not merely inadvertently, said exercise amounts to abuse of authority granted by law and grave abuse of discretion
is properly found to exist.
In the light of the foregoing and on the basis of the applicable rules and jurisprudence on the matter before this Court, We declare the election of
Senator Alberto Romulo and Senator Wigberto Tañada as members of the Commission on Appointments as null and void for being in violation of the
rule on proportional representation under Section 18 of Article VI of the 1987 Constitution of the Philippines. Accordingly, a writ of prohibition is hereby
issued ordering the said respondents Senator Romulo and Senator Tañada to desist from assuming, occupying and discharging the functions of
members of the Commission on Appointments; and ordering the respondents Senate President Neptali Gonzales, in his capacity as ex-officio
Chairman of the Commission on Appointments, to desist from recognizing the membership of the respondent Senators and from allowing and
permitting them from sitting and participating as members of said Commission.
SO ORDERED.
Narvasa C.J., Gutierrez, Jr., Cruz, Feliciano, Padilla, Bidin, Griño-Aquino, Regalado, Davide, Romero, Nocon and Bellosillo, JJ., concur.
Medialdea, J., is on leave,
EN BANC
FRANKLIN M. DRILON as President and in G.R. No. 180055
representation of the LIBERAL PARTY OF THE
PHILIPPINES (LP), AND HON. JOSEPH EMILIO A. Present:
ABAYA, HON. WAHAB M. AKBAR, HON. MARIA
EVITA R. ARAGO, HON. PROCESSO J. ALCALA, PUNO, C.J.,
HON. ROZZANO RUFINO BIAZON, HON. MARY QUISUMBING,
MITZI CAJAYON, HON. FREDENIL H. CASTRO, HON. YNARES-SANTIAGO,
GLENN ANG CHONG, HON. SOLOMON R. CARPIO,
CHUNGALAO, HON. PAUL RUIZ DAZA, HON. CORONA,
ANTONIO A. DEL ROSARIO, HON. CECILIA S. LUNA, CARPIO MORALES,
HON. MANUEL M. MAMBA, HON. HERMILANDO I. CHICO-NAZARIO,
MANDANAS, HON. ALVIN SANDOVAL, HON. VELASCO, JR.,
LORENZO R. TAADA III, HON. REYNALDO S. UY, NACHURA,
HON. ALFONSO V. UMALI JR., HON. LIWAYWAY LEONARDO-DE CASTRO, Constitution.[6] Representative Taada also brought the matter to the attention of then Speaker De Venecia, reiterating the position that since there were
VINZONS-CHATO, BRION,* at least 20 members of the Liberal Party in the 14 th Congress, the party should be represented in the CA. [7]
Petitioners, PERALTA, and
BERSAMIN, JJ. As of October 15, 2007, however, no report or recommendation was proffered by the Legal Department, drawing Representative Taada to request a
-versus- Promulgated: report or recommendation on the matter within three days. [8]

HON. JOSE DE VENECIA JR. in his official capacity
as Speaker of the House of Representatives; HON.
ARTHUR D. DEFENSOR, SR., in his official capacity
as Majority Floor Leader of the House of
Representatives, HON. MANUEL B. VILLAR, in his
official capacity as ex-officio Chairman of the
Commission on Appointments, ATTY. MA. GEMMA
D. ASPIRAS, in her official capacity as Secretary of
the Commission on Appointments, HON.
PROSPERO C. NOGRALES, HON. EDGARDO C.
ZIALCITA, HON. ABDULLAH D. DIMAPORO, HON.
JOSE CARLOS V. LACSON, HON. EILEEN R.
ERMITA-BUHAIN, HON. JOSE V. YAP, HON.
RODOLFO T. ALBANO III, HON. EDUARDO R.
GULLAS, HON. CONRADO M. ESTRELLA III, HON.
RODOLFO OMPONG PLAZA, HON. EMMYLOU J.
TALIO-MENDOZA and HON. EMMANUEL JOEL J.
VILLANUEVA, in their individual official capacities
as elected members of the Commission on
Appointments,
Respondents.
x----------------------x
SENATOR MA. ANA CONSUELO A.S. MADRIGAL,
Petitioner,
- versus -
SENATOR MANUEL VILLAR in his capacity as
Senate President and Ex-Officio Chairman of the
Commission on Appointments, REPRESENTATIVE
PROSPERO NOGRALES in his capacity as the
Speaker of the House of Representatives, and THE
COMMISSION ON APPOINTMENTS,
Respondents.
July 31, 2009 In reply, Atty. Grace Andres of the Legal Affairs Bureau of the House of Representatives informed Representative Taada that the department was
constrained to withhold the release of its legal opinion because the handling lawyer was directed to secure documents necessary to establish some of
the members party affiliations.[9]
Hence spawned the filing on October 31, 2007 of the first petition by petitioner former Senator Franklin M. Drilon (in representation of the Liberal
Party), et al., for prohibition, mandamus, and quo warranto with prayer for the issuance of writ of preliminary injunction and temporary restraining order,
against then Speaker De Venecia, Representative Arthur Defensor, Sr. in his capacity as Majority Floor Leader of the House of Representatives,
Senator Manuel B. Villar in his capacity as ex officio chairman of the CA, Atty. Ma. Gemma D. Aspiras in her capacity as Secretary of the CA, and the
individual members of the House of Representatives contingent to the CA. [10] The petition in G.R. No. 180055 raises the following issues:
a. WHETHER THE LIBERAL PARTY WITH AT LEAST TWENTY (20) MEMBERS WHO SIGNED HEREIN AS PETITIONERS, IS
CONSTITUTIONALLY ENTITLED TO ONE (1) SEAT IN THE COMMISSION ON APPOINTMENTS.
b. WHETHER THE HOUSE OF REPRESENTATIVES RESPONDENTS HAVE COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN CONSTITUTING THE COMMISSION ON APPOINTMENTS IN CONTRAVENTION OF
THE REQUIRED PROPORTIONAL CONSTITUTION BY DEPRIVING THE LIBERAL PARTY OF ITS CONSTITUTIONAL ENTITLEMENT TO ONE (1)
SEAT THEREIN.
c. WHETHER AS A RESULT OF THE GRAVE ABUSE OF DISCRETION COMMITTED BY THE HOUSE OF REPRESENTATIVES
RESPONDENTS, THE WRITS PRAYED FOR IN THIS PETITION BE ISSUED NULLIFYING THE CURRENT COMPOSITION OF THE COMMISSION
ON APPOINTMENTS, RESTRAINING THE CURRENT HOUSE OF REPRESENTATIVE MEMBERS FROM SITTING AND PARTICIPATING IN THE
PROCEEDINGS OF THE COMMISSION ON APPOINTMENTS, OUSTING THE AFFECTED RESPONDENTS WHO USURPED, INTRUDED INTO
AND UNLAWFULLY HELD POSITIONS IN THE COMMISSION ON APPOINTMENTS AND REQUIRING THE RESPONDENTS TO RECONSTITUTE
AND/OR REELECT THE MEMBERS OF SAID COMMISSION.[11] (Italics in the original)
And it prays that this Court:
a. Immediately upon the filing of the instant Petition, issue a Temporary Restraining Order and/or a Writ of Preliminary Prohibitory and
Mandatory Injunction, enjoining all Respondents and all persons under their direction, authority, supervision, and control from further proceeding with
their actions relating to the illegal and unconstitutional constitution of the Commission on Appointments and to the unlawful exercise of its members
functions, contrary to the rule on proportional representation of political parties with respect to the House of Representatives contingent in the said
Commission;
b. After careful consideration of the merits of the case, render judgment making the injunction permanent and ordering Respondents and all
persons under their direction, authority, supervision, and control;

xxxx
G.R. No. 183055
c. Declare Respondents action in not allotting one (1) seat to Petitioners null and void for being a direct violation of Section 18, Article VI of the
Constitution;
DECISION
d. Declare the proceedings of the Commission on Appointments null and void, insofar as they violate the rule on proportional representation of
CARPIO MORALES, J.: political parties in said Commission;

In August 2007, the Senate and the House of Representatives elected their respective contingents to the Commission on Appointments (CA). e. Oust the affected respondents, whoever they are, who usurped, intruded into and have unlawfully held positions in the Commission on
The contingent in the Senate to the CA was composed of the following senators with their respective political parties: Appointments and

Sen. Maria Ana Consuelo A.S. Madrigal PDP-Laban f. Require Respondents to alter, reorganize, reconstitute and reconfigure the composition of the Commission on Appointments in accordance
Sen. Joker Arroyo KAMPI with proportional representation based on the actual numbers of members belonging to duly accredited and registered political parties who were
Sen. Alan Peter Cayetano Lakas-CMD elected into office during the last May 14, 2007 Elections by, at the very least, respecting and allowing Congressman Alfonso V. Umali, Jr. as the duly
Sen. Panfilo Lacson UNO nominated Commission on Appointments member of the Liberal Party of the Philippines to sit therein as such. [12]
Sen. Jinggoy Ejercito Estrada PMP
Sen. Juan Ponce Enrile PMP
Sen. Loren Legarda NPC Respondents Senator Villar and CA Secretary Aspiras filed their Comment [13] on December 6, 2007, moving for the dismissal of the petition on these
Sen. Richard Gordon Lakas-CMD grounds:
Sen. Mar Roxas LP I. THE POWER TO ELECT MEMBERS TO THE COMMISSION ON APPOINTMENTS BELONGS TO EACH HOUSE OF CONGRESS
Sen. Lito Lapid Lakas-CMD PURSUANT TO THE CONSTITUTION. AS SUCH, THE PETITION IS NOT DIRECTED AT THE HEREIN RESPONDENTS.
Sen. Miriam Defensor-Santiago PRP II. THE CONSTITUTION DOES NOT REQUIRE THAT THE COMMISSION MUST HAVE COMPLETE MEMBERSHIP IN ORDER THAT IT
CAN FUNCTION.WHAT THE CONSTITUTION REQUIRES IS THAT THERE MUST AT LEAST BE A MAJORITY OF ALL THE MEMBERS OF THE
The members of the contingent of the House of Representatives in the CA and their respective political parties were as follows: COMMISSION FOR IT TO VALIDLY CONDUCT ITS PROCEEDINGS AND TRANSACT ITS BUSINESS. [14] (Emphasis in the original)

Rep. Prospero C. Nograles Lakas-CMD Then Speaker De Venecia and Representative Defensor filed their Comment and Opposition[15] on February 18, 2008, moving too for the dismissal of
Rep. Eduardo C. Zialcita Lakas-CMD the petition on these grounds:
Rep. Abdullah D. Dimaporo Lakas-CMD I. THE ACTS COMPLAINED OF DO NOT CONSTITUTE GRAVE ABUSE OF DISCRETION THAT WILL JUSTIFY THE GRANT OF THE
Rep. Jose Carlos V. Lacson Lakas-CMD EXTRAORDINARY WRIT OF MANDAMUS.[16]
Rep. Eileen R. Ermita-Buhain Lakas-CMD II. THE LIBERAL PARTY DOES NOT POSSESS THE REQUISITE NUMBER OF MEMBERS THAT WOULD ENTITLE THE PARTY TO A
Rep. Jose V. Yap Lakas-CMD SEAT IN THE COMMISSION ON APPOINTMENTS. IT IS, THEREFORE, NOT THE PROPER PARTY TO INSTITUTE THE INSTANT PETITION FOR
Rep. Rodolfo T. Albano III KAMPI QUO WARRANTO.[17]
Rep. Eduardo R. Gullas KAMPI III. THE PETITIONERS FAILED TO EXHAUST THE REMEDIES AVAILABLE TO THEM. [18]
Rep. Rodolfo Ompong G. Plaza NPC IV. THE CONFLICTING CLAIMS OF THE PARTIES AS TO THE AFFILIATION OF THE MEMBERS NEED TO BE SETTLED IN A
[19]
Rep. Conrado M. Estrella NPC TRIAL. (Emphasis in the original)
Rep. Emmylou J. Talio-Mendoza NP
Rep. Emmanuel Joel J. Villanueva CIBAC Party List Meantime, Senator Ma. Ana Consuelo A.S. Madrigal of PDP-Laban, by separate letters of April 17, 2008 to Senator Villar and Speaker Prospero
Nograles, claimed that the composition of the Senate contingent in the CA violated the constitutional requirement of proportional representation for the
In the second week of August 2007, petitioners in the first petition, G.R. No. 180055, went to respondent then Speaker Jose de Venecia to ask for one following reasons:
seat for the Liberal Party in the CA. Speaker Jose de Venecia merely said that he would study their demand. [1] 1. PMP has two representatives in the CA although it only has two members in the Senate and thus [is] entitled only to one (1) seat.
2. KAMPI has only one (1) member in the Senate and thus is not entitled to a CA seat and yet it is represented in the CA.
During the session of the House of Representatives on September 3, 2007, petitioner in the first petition, Representative Taada, requested from the 3. PRP has only one (1) member in the Senate and thus is not entitled to a CA seat and yet it is represented in the CA.
House of Representatives leadership [2] one seat in the CA for the Liberal Party.[3] To his request, Representative Neptali Gonzales II[4] begged the 4. If Senators Richard Gordon and Pilar Juliana Cayetano are Independents, then Sen. Gordon cannot be a member of the CA as Independents
indulgence of the Liberal Party to allow the Legal Department to make a study on the matter. [5] cannot be represented in the CA even though there will be three Independents in the CA.
5. If Sen. Alan Peter Cayetano is now NP, he still can sit in the CA representing NP.[20]
In a separate move, Representative Taada, by letter of September 10, 2007, requested the Secretary General of the House of Representatives the
reconstitution of the House contingent in the CA to include one seat for the Liberal Party in compliance with the provision of Section 18, Article VI of the She also claimed that the composition of the House of Representatives contingent in the CA violated the constitutional requirement of proportional
representation for the following reasons:
1. Lakas-CMD currently has five (5) members in the Commission on Appointments although it is entitled only to four (4) representatives and thus
[is] in excess of a member;
2. KAMPI currently has three (3) members in the Commission on Appointments although it is entitled only to two (2) representatives and thus is
excess of a member;
3. Liberal Party is not represented in the Commission on Appointments although it is entitled to one (1) nominee; and
4. Party-List CIBAC has a representative in the Commission on Appointments although it only has two members in the House of
Representatives and therefore [is] not entitled to any seat. [21]
Senator Madrigal thus requested the reorganization of the membership of the CA and that, in the meantime, all actions of [the] CA be held in abeyance
as the same may be construed as illegal and unconstitutional.[22]
By letter of May 13, 2008, Senator Madrigal again wrote Senator Villar as follows:
Today, I was advised that the Committee on Budget and Management of Senator Mar Roxas has endorsed the ad interim appointment of Rolando G.
Andaya as Secretary of the Department of Budget and Management for approval by the CA in the plenary. I believe it is imperative that the serious
constitutional questions that I have raised be settled before the plenary acts on this endorsement by the Committee on Budget and
Management. Otherwise, like Damocles sword, a specter of doubt continues to be raised on the validity of actions taken by the CA and its
committees.[23]
Still later or on May 19, 2008, Senator Madrigal sent another letter to Senator Villar declaring that she cannot in good conscience continue to
participate in the proceedings of the CA, until such time as [she] get[s] a response to [her] letters and until the constitutional issue of the CAs
composition is resolved by the leadership of the Commission, [24] and that without any such resolution, she would be forced to invoke Section 20 of the
CA rules against every official whose confirmation would be submitted to the body for deliberation. [25]
The CA Committee on Rules and Resolutions, by letter-comment of May 26, 2008, opined that the CA has neither the power nor the discretion to reject
a member who is elected by either House, and that any complaints about the election of a member or members should be addressed to the body that
elected them.[26]
By letter of May 28, 2008, Senator Villar advised Senator Madrigal as follows:
Noting your position that you will not continue to participate in the proceedings of the CA until the constitutional issue of the CAs composition is
resolved by the leadership of the Commission x x x, the Secretary of the Commission, upon my instructions, transmitted the same to the CA Committee
on Rules and Resolutions. It was my intention to have the Committee study and deliberate on the matter and to recommend what step/s to take on your
request that all actions of the Commission be held in abeyance x x x.
In view however, of your manifestation during the May 26, 2008 meeting of the CA Committee on Rules and Resolutions, and of the written comment
of Sen. Arroyo that If there is a complaint in the election of a member or members, it shall be addressed to the body that elected them, namely the
Senate and/or the House, I have given instructions to transmit the original copies of your letters to the Senate Secretary for their immediate inclusion in
the Order of Business of the Session of the Senate so that your concerns may be addressed by the Senate in caucus and/or in plenary. [27] (Emphasis
and underscoring supplied)
Undaunted, Senator Madrigal, by letter of June 2, 2008 addressed to Senator Villar, reiterated her request that all actions of the CA be held in
abeyance pending the reorganization of both the Senate and House of Representatives contingents. [28]
Senator Madrigal thereafter filed on June 13, 2008 the second petition, G.R. No. 183055, for prohibition and mandamus with prayer for issuance of
temporary restraining order/writ of preliminary injunction against Senator Villar in his capacity as Senate President and Ex-Officio Chairman of the CA,
Speaker Nograles, and the CA,[29] alleging that respondents committed grave abuse of discretion amounting to lack or excess of jurisdiction
A. . . . IN FAILING TO COMPLY WITH THE CONSTITUTIONALLY REQUIRED PROPORTIONAL PARTY REPRESENTATION OF THE
MEMBERS OF THE COMMISSION ON APPOINTMENTS;
B. . . . IN CONTINUOUSLY CONDUCTING HEARINGS AND PROCEEDINGS ON THE APPOINTMENTS DESPITE THE COMMISSION ON
APPOINTMENTS UNCONSTITUTIONAL COMPOSITION WHICH MUST BE PROHIBITED BY THIS HONORABLE COURT; and
C. . . . IN FAILING, DESPITE REPEATED DEMANDS FROM PETITIONER, TO RE-ORGANIZE THE COMMISSION ON APPOINTMENTS IN
ACCORDANCE WITH THE MANDATED PROPORTIONAL PARTY REPRESENTATION OF THE 1987 CONSTITUTION, WHICH REQUIREMENT
MUST BE ENFORCED BY THIS HONORABLE COURT.[30] (Emphasis in the original)
She thus prayed for the
1. . . . issu[ance of] a temporary restraining order/a writ of preliminary injunction to enjoin Respondents from proceeding with their illegal and
unlawful actions as officials and members of the Commission on Appointments which composition is unconstitutional, pending resolution of the instant
Petition;
2. Declar[ation that] the composition of the Commission on Appointments [is] null and void insofar as it violates the proportional party
representation requirement mandated by Article VI, Section 18 of the 1987 Philippine Constitution;
3. Issu[ance of] a Writ of Prohibition against respondents Senate President Manuel Villar, Speaker Prospero Nograles and Secretary Gemma
Aspiras to desist from further proceeding with their illegal and unlawful actions as officers of the Commission on Appointments, the composition of
which is null and void for being violative of the proportional party representation requirement under Article VI, Section 18 of the 1987 Philippine
Constitution; and
4. Issu[ance of] a Writ of Mandamus commanding respondents Senate President Manuel Villar, Speaker Prospero Nograles and Secretary
Gemma Aspiras to reorganize and reconstitute the Commission on Appointments in accordance with the 1987 Constitution. [31]
The Court consolidated G.R. No. 180055 [32] and G.R. No. 183055 on July 1, 2008.
Petitioners in the first petition, G.R. No. 180055, later filed on August 15, 2008 a Motion with Leave of Court to Withdraw the Petition, [33] alleging that
with the designation of Representative Alfonso V. Umali, Jr. of the Liberal Party as a member of the House of Representatives contingent in the CA in
replacement of Representative Eduardo M. Gullas of KAMPI, their petition had become moot and academic.
In his Comment of August 19, 2008 on the second petition, respondent Senator Villar proffered the following arguments:
I. Petitioner has no standing to file [the] petition.
II. Petitioner failed to observe the doctrine of primary jurisdiction or prior resort. Each House of Congress has the sole function of
reconstituting or changing the composition of its own contingent to the CA.
III. Petitioner is estopped.
IV. Presumption of regularity in the conduct of official functions.
V. The extraordinary remedies of Prohibition and Mandamus and the relief of a TRO are not available to the Petitioner.[34] (Emphasis in the
original; underscoring supplied)
In his Comment and Opposition[35] filed on September 3, 2008, Speaker Nograles proffered the following arguments:
A. WITH RESPECT TO THE HOUSE OF REPRESENTATIVES, THE PETITIONS HAVE ALREADY BECOME MOOT AND ACADEMIC UPON
THE ELECTION OF REPRESENTATIVE ALFONSO V. UMALI, JR., MEMBER OF THE LIBERAL PARTY, TO THE HOUSE CONTINGENT TO THE
COMMISSION ON APPOINTMENTS.[36]
B. THE ACTS COMPLAINED OF DO NOT CONSTITUTE GRAVE ABUSE OF DISCRETION THAT
WILL JUSTIFY THE ASSUMPTION OF JURISDICTION BY THE
HONORABLE COURT AND THE GRANT OF THE EXTRAORDINARY WRITS OF MANDAMUS AND PROHIBITION. [37]
C. THE REMEDY OF THOSE WHO SEEK TO RECONSTITUTE THE HOUSE CONTINGENT TO THE COMMISSION ON APPOINTMENTS
RESTS, IN THE FIRST INSTANCE, WITH THE HOUSE OF REPRESENTATIVES. [38]
D. CONSIDERING THE AFOREMENTIONED FACTS AND JURISPRUDENCE, IT IS SUBMITTED THAT SENATOR MADRIGAL HAS NO
STANDING TO PURSUE THE INSTANT CASE.
E. THE PETITION IS NOT ACCOMPANIED BY A VERIFICATION AND CERTIFICATION OF NON-FORUM SHOPPING AS REQUIRED BY
RULE 65 SECTIONS 2 AND 3 AND SUPREME COURT ADMINISTRATIVE CIRCULAR NO. 28-91. (Emphasis and underscoring in the original)
The first petition, G.R. No. 180055, has thus indeed been rendered moot with the designation of a Liberal Party member of the House contingent to the
CA, hence, as prayed for, the petition is withdrawn.
As for the second petition, G.R. No. 183055, it fails.
Senator Madrigal failed to show that she sustained direct injury as a result of the act complained of. [39] Her petition does not in fact allege that she or
her political party PDP-Laban was deprived of a seat in the CA, or that she or PDP-Laban possesses personal and substantial interest to confer on
her/it locus standi.
Senator Madrigals primary recourse rests with the respective Houses of Congress and not with this Court. The doctrine of primary
jurisdiction dictates that prior recourse to the House is necessary before she may bring her petition to court. [40] Senator Villars invocation of said
doctrine is thus well-taken, as is the following observation of Speaker Nograles, citing Sen. Pimentel, Jr. v. House of Representatives Electoral
Tribunal:[41]
In order that the remedies of Prohibition and Mandamus may be availed of, there must be no appeal, nor any plain, speedy and adequate remedy in
the ordinary course of law.
It is worth recalling that, in the 11 th Congress, Senator Aquilino Pimentel advocated the allocation of a position in the Commission on Appointments for
the Party-List Representatives. Just like the Petitioner in the instant case, Senator Pimentel first wrote to the Senate President, requesting that the
Commission on Appointments be restructured to conform to the constitutional provision on proportional representation. xxx Without awaiting final
determination of the question xxx, Pimentel filed a Petition for Prohibition and Mandamus with the Supreme Court. In the said case, the Honorable
Court ruled:
The Constitution expressly grants to the House of Representatives the prerogative, within constitutionally defined limits, to choose from among its
district and party-list representatives those who may occupy the seats allotted to the House in the HRET and the CA. Section 18, Article VI of the
Constitution explicitly confers on the Senate and on the House the authority to elect among their members those who would fill the 12 seats for
Senators and 12 seats for House members in the Commission on Appointments. Under Section 17, Article VI of the Constitution, each chamber
exercises the power to choose, within constitutionally defined limits, who among their members would occupy the allotted 6 seats of each chambers
respective electoral tribunal.
Thus, even assuming that party-list representatives comprise a sufficient number and have agreed to designate common nominees to the
HRET and the CA, their primary recourse clearly rests with the House of Representatives and not this Court. Under Sections 17 and 18, Article
VI of the Constitution, party-list representatives must first show to the House that they possess the required strength to be entitled to seats in the HRET
and the CA. Only if the House fails to comply with the directive of the Constitution on proportional representation of political parties in the HRET and the
CA can the party-list representatives seek recourse to this Court under its power of judicial review. Under the doctrine of primary jurisdiction, prior
recourse to the House is necessary before petitioners may bring the instant case to the court. Consequently, petitioners direct recourse to
this Court is premature.
Following the ruling in Pimentel, it cannot be said that recourse was already had in the House of Representatives. Furnishing a copy of Petitioners letter
to the Senate President and to the Speaker of the House of Representatives does not constitute the primary recourse required prior to the invocation of
the jurisdiction of the Supreme Court.Further, it is the Members of the House who claim to have been deprived of a seat in the Commission on
Appointments that must first show to the House that they possess the required numerical strength to be entitled to seats in the Commission on
Appointments. Just like Senator Pimentel, demanding seats in the Commission on Appointments for Congressmen, who have not even raised the issue
of its present composition in the House, is not Senator Madrigals affair. [42] (Italics, underscoring, and emphasis supplied by Representative Nograles)
It bears noting that Senator Villar had already transmitted original copies of Senator Madrigals letters to the Senate Secretary for inclusion in the Order
of Business of the Session of the Senate to address her concerns. Senator Madrigals filing of the second petition is thus premature.
Senator Madrigals suggestion that Senators Pilar Juliana Cayetano and Richard Gordon be considered independent senators such that the latter
should not be allowed to be a member of the CA, [43] and that Senator Alan Peter Cayetano be considered a member of the NP such that he may sit in
the CA as his inclusion in NP will entitle his party to one seat involves a determination of party affiliations, a question of fact which the Court does not
resolve. WHEREFORE, the Motion with Leave of Court to Withdraw the Petition in G.R. No. 180055 is GRANTED. The Petition is WITHDRAWN. The
Petition in G.R. No. 183055 is DISMISSED. SO ORDERED.
EN BANC
June 18, 1987
G.R. No. L-75697
VALENTIN TIO doing business under the name and style of OMI ENTERPRISES, petitioner,
vs.
VIDEOGRAM REGULATORY BOARD, MINISTER OF FINANCE, METRO MANILA COMMISSION, CITY MAYOR and CITY TREASURER OF
MANILA, respondents.
Nelson Y. Ng for petitioner.
The City Legal Officer for respondents City Mayor and City Treasurer.
MELENCIO-HERRERA, J.:
This petition was filed on September 1, 1986 by petitioner on his own behalf and purportedly on behalf of other videogram operators adversely affected.
It assails the constitutionality of Presidential Decree No. 1987 entitled "An Act Creating the Videogram Regulatory Board" with broad powers to regulate
and supervise the videogram industry (hereinafter briefly referred to as the BOARD). The Decree was promulgated on October 5, 1985 and took effect
on April 10, 1986, fifteen (15) days after completion of its publication in the Official Gazette.
On November 5, 1985, a month after the promulgation of the abovementioned decree, Presidential Decree No. 1994 amended the National Int ernal
Revenue Code providing, inter alia:
SEC. 134. Video Tapes. — There shall be collected on each processed video-tape cassette, ready for playback, regardless of length, an annual tax of
five pesos; Provided, That locally manufactured or imported blank video tapes shall be subject to sales tax.
On October 23, 1986, the Greater Manila Theaters Association, Integrated Movie Producers, Importers and Distributors Association of the Philippines,
and Philippine Motion Pictures Producers Association, hereinafter collectively referred to as the Intervenors, were permitted by the Court to intervene in
the case, over petitioner's opposition, upon the allegations that intervention was necessary for the complete protection of their rights and that their
"survival and very existence is threatened by the unregulated proliferation of film piracy." The Intervenors were thereafter allowed to file their Comment
in Intervention.
The rationale behind the enactment of the DECREE, is set out in its preambular clauses as follows:
1. WHEREAS, the proliferation and unregulated circulation of videograms including, among others, videotapes, discs, cassettes or any technical
improvement or variation thereof, have greatly prejudiced the operations of moviehouses and theaters, and have caused a sharp decline in theatrical
attendance by at least forty percent (40%) and a tremendous drop in the collection of sales, contractor's specific, amusement and other taxes, thereby
resulting in substantial losses estimated at P450 Million annually in government revenues;
2. WHEREAS, videogram(s) establishments collectively earn around P600 Million per annum from rentals, sales and disposition of videograms, and
such earnings have not been subjected to tax, thereby depriving the Government of approximately P180 Million in taxes each year;
3. WHEREAS, the unregulated activities of videogram establishments have also affected the viability of the movie industry, particularly the more than
1,200 movie houses and theaters throughout the country, and occasioned industry-wide displacement and unemployment due to the shutdown of
numerous moviehouses and theaters;
4. "WHEREAS, in order to ensure national economic recovery, it is imperative for the Government to create an environment conducive to growth and
development of all business industries, including the movie industry which has an accumulated investment of about P3 Billion;
5. WHEREAS, proper taxation of the activities of videogram establishments will not only alleviate the dire financial condition of the movie industry upon
which more than 75,000 families and 500,000 workers depend for their livelihood, but also provide an additional source of revenue for the Government,
and at the same time rationalize the heretofore uncontrolled distribution of videograms;
6. WHEREAS, the rampant and unregulated showing of obscene videogram features constitutes a clear and present danger to the moral and spiritual
well-being of the youth, and impairs the mandate of the Constitution for the State to support the rearing of the youth for civic efficiency and the
development of moral character and promote their physical, intellectual, and social well-being;
7. WHEREAS, civic-minded citizens and groups have called for remedial measures to curb these blatant malpractices which have flaunted our
censorship and copyright laws;
8. WHEREAS, in the face of these grave emergencies corroding the moral values of the people and betraying the national economic recovery program,
bold emergency measures must be adopted with dispatch; ... (Numbering of paragraphs supplied).
Petitioner's attack on the constitutionality of the DECREE rests on the following grounds:
1. Section 10 thereof, which imposes a tax of 30% on the gross receipts payable to the local government is a RIDER and the same is not germane to
the subject matter thereof;
2. The tax imposed is harsh, confiscatory, oppressive and/or in unlawful restraint of trade in violation of the due process clause of the Constitution;
3. There is no factual nor legal basis for the exercise by the President of the vast powers conferred upon him by Amendment No. 6;
4. There is undue delegation of power and authority;
5. The Decree is an ex-post facto law; and
6. There is over regulation of the video industry as if it were a nuisance, which it is not.
We shall consider the foregoing objections in seriatim.
1. The Constitutional requirement that "every bill shall embrace only one subject which shall be expressed in the title thereof" 1 is sufficiently complied
with if the title be comprehensive enough to include the general purpose which a statute seeks to achieve. It is not necessary that the title express each
and every end that the statute wishes to accomplish. The requirement is satisfied if all the parts of the statute are related, and are germane to the
subject matter expressed in the title, or as long as they are not inconsistent with or foreign to the general subject and title. 2An act having a single
general subject, indicated in the title, may contain any number of provisions, no matter how diverse they may be, so long as they are not inconsistent
with or foreign to the general subject, and may be considered in furtherance of such subject by providing for the method and means of carrying out the
general object." 3 The rule also is that the constitutional requirement as to the title of a bill should not be so narrowly construed as to cripple or impede
the power of legislation. 4 It should be given practical rather than technical construction. 5
Tested by the foregoing criteria, petitioner's contention that the tax provision of the DECREE is a rider is without merit. That section reads, inter alia:
Section 10. Tax on Sale, Lease or Disposition of Videograms. — Notwithstanding any provision of law to the contrary, the province shall collect a tax of
thirty percent (30%) of the purchase price or rental rate, as the case may be, for every sale, lease or disposition of a videogram containing a
reproduction of any motion picture or audiovisual program. Fifty percent (50%) of the proceeds of the tax collected shall accrue to the province, and the
other fifty percent (50%) shall acrrue to the municipality where the tax is collected; PROVIDED, That in Metropolitan Manila, the tax shall be shared
equally by the City/Municipality and the Metropolitan Manila Commission.
xxx xxx xxx
The foregoing provision is allied and germane to, and is reasonably necessary for the accomplishment of, the general object of the DECREE, which is
the regulation of the video industry through the Videogram Regulatory Board as expressed in its title. The tax provision is not inconsistent with, nor
foreign to that general subject and title. As a tool for regulation 6 it is simply one of the regulatory and control mechanisms scattered throughout the
DECREE. The express purpose of the DECREE to include taxation of the video industry in order to regulate and rationalize the heretofore uncontrolled
distribution of videograms is evident from Preambles 2 and 5, supra. Those preambles explain the motives of the lawmaker in presenting the measure.
The title of the DECREE, which is the creation of the Videogram Regulatory Board, is comprehensive enough to include the purposes expressed in its
Preamble and reasonably covers all its provisions. It is unnecessary to express all those objectives in the title or that the latter be an index to the body
of the DECREE. 7
2. Petitioner also submits that the thirty percent (30%) tax imposed is harsh and oppressive, confiscatory, and in restraint of trade. However, it is
beyond serious question that a tax does not cease to be valid merely because it regulates, discourages, or even definitely deters the activities
taxed. 8 The power to impose taxes is one so unlimited in force and so searching in extent, that the courts scarcely venture to declare that it is subject
to any restrictions whatever, except such as rest in the discretion of the authority which exercises it. 9 In imposing a tax, the legislature acts upon its
constituents. This is, in general, a sufficient security against erroneous and oppressive taxation. 10
The tax imposed by the DECREE is not only a regulatory but also a revenue measure prompted by the realization that earnings of videogram
establishments of around P600 million per annum have not been subjected to tax, thereby depriving the Government of an additional source of
revenue. It is an end-user tax, imposed on retailers for every videogram they make available for public viewing. It is similar to the 30% amusement tax
imposed or borne by the movie industry which the theater-owners pay to the government, but which is passed on to the entire cost of the admission
ticket, thus shifting the tax burden on the buying or the viewing public. It is a tax that is imposed uniformly on all videogram operators.
The levy of the 30% tax is for a public purpose. It was imposed primarily to answer the need for regulating the video industry, particularly because of
the rampant film piracy, the flagrant violation of intellectual property rights, and the proliferation of pornographic video tapes. And while it was also an
objective of the DECREE to protect the movie industry, the tax remains a valid imposition.
The public purpose of a tax may legally exist even if the motive which impelled the legislature to impose the tax was to favor one industry over
another. 11
It is inherent in the power to tax that a state be free to select the subjects of taxation, and it has been repeatedly held that "inequities which result from
a singling out of one particular class for taxation or exemption infringe no constitutional limitation". 12 Taxation has been made the implement of the
state's police power.13
At bottom, the rate of tax is a matter better addressed to the taxing legislature.
3. Petitioner argues that there was no legal nor factual basis for the promulgation of the DECREE by the former President under Amendment No. 6 of
the 1973 Constitution providing that "whenever in the judgment of the President ... , there exists a grave emergency or a threat or imminence thereof,
or whenever the interim Batasang Pambansa or the regular National Assembly fails or is unable to act adequately on any matter for any reason that in
his judgment requires immediate action, he may, in order to meet the exigency, issue the necessary decrees, orders, or letters of instructions, which
shall form part of the law of the land."
In refutation, the Intervenors and the Solicitor General's Office aver that the 8th "whereas" clause sufficiently summarizes the justification in that grave
emergencies corroding the moral values of the people and betraying the national economic recovery program necessitated bold emergency measures
to be adopted with dispatch. Whatever the reasons "in the judgment" of the then President, considering that the issue of the validity of the exercise of
legislative power under the said Amendment still pends resolution in several other cases, we reserve resolution of the question raised at the proper
time.
4. Neither can it be successfully argued that the DECREE contains an undue delegation of legislative power. The grant in Section 11 of the DECREE of
authority to the BOARD to "solicit the direct assistance of other agencies and units of the government and deputize, for a fixed and limited period, the
heads or personnel of such agencies and units to perform enforcement functions for the Board" is not a delegation of the power to legislate but merely
a conferment of authority or discretion as to its execution, enforcement, and implementation. "The true distinction is between the delegation of power to
make the law, which necessarily involves a discretion as to what it shall be, and conferring authority or discretion as to its execution to be exercised
under and in pursuance of the law. The first cannot be done; to the latter, no valid objection can be made." 14 Besides, in the very language of the
decree, the authority of the BOARD to solicit such assistance is for a "fixed and limited period" with the deputized agencies concerned being "subject to
the direction and control of the BOARD." That the grant of such authority might be the source of graft and corruption would not stigmatize the DECREE
as unconstitutional. Should the eventuality occur, the aggrieved parties will not be without adequate remedy in law.
5. The DECREE is not violative of the ex post facto principle. An ex post facto law is, among other categories, one which "alters the legal rules of
evidence, and authorizes conviction upon less or different testimony than the law required at the time of the commission of the offense." It is petitioner's
position that Section 15 of the DECREE in providing that:
All videogram establishments in the Philippines are hereby given a period of forty-five (45) days after the effectivity of this Decree within which to
register with and secure a permit from the BOARD to engage in the videogram business and to register with the BOARD all their inventories of
videograms, including videotapes, discs, cassettes or other technical improvements or variations thereof, before they could be sold, leased, or
otherwise disposed of. Thereafter any videogram found in the possession of any person engaged in the videogram business without the required proof
of registration by the BOARD, shall be prima facie evidence of violation of the Decree, whether the possession of such videogram be for private
showing and/or public exhibition.
raises immediately a prima facie evidence of violation of the DECREE when the required proof of registration of any videogram cannot be presented
and thus partakes of the nature of an ex post facto law.
The argument is untenable. As this Court held in the recent case of Vallarta vs. Court of Appeals, et al. 15
... it is now well settled that "there is no constitutional objection to the passage of a law providing that the presumption of innocence may be overcome
by a contrary presumption founded upon the experience of human conduct, and enacting what evidence shall be sufficient to overcome such
presumption of innocence" (People vs. Mingoa 92 Phil. 856 [1953] at 858-59, citing 1 COOLEY, A TREATISE ON THE CONSTITUTIONAL
LIMITATIONS, 639-641). And the "legislature may enact that when certain facts have been proved that they shall be prima facie evidence of the
existence of the guilt of the accused and shift the burden of proof provided there be a rational connection between the facts proved and the ultimate
facts presumed so that the inference of the one from proof of the others is not unreasonable and arbitrary because of lack of connection between the
two in common experience". 16
Applied to the challenged provision, there is no question that there is a rational connection between the fact proved, which is non-registration, and the
ultimate fact presumed which is violation of the DECREE, besides the fact that the prima facie presumption of violation of the DECREE attaches only
after a forty-five-day period counted from its effectivity and is, therefore, neither retrospective in character.
6. We do not share petitioner's fears that the video industry is being over-regulated and being eased out of existence as if it were a nuisance. Being a
relatively new industry, the need for its regulation was apparent. While the underlying objective of the DECREE is to protect the moribund movie
industry, there is no question that public welfare is at bottom of its enactment, considering "the unfair competition posed by rampant film piracy; the
erosion of the moral fiber of the viewing public brought about by the availability of unclassified and unreviewed video tapes containing pornographic
films and films with brutally violent sequences; and losses in government revenues due to the drop in theatrical attendance, not to mention the fact that
the activities of video establishments are virtually untaxed since mere payment of Mayor's permit and municipal license fees are required to engage in
business. 17
The enactment of the Decree since April 10, 1986 has not brought about the "demise" of the video industry. On the contrary, video establishments are
seen to have proliferated in many places notwithstanding the 30% tax imposed.
In the last analysis, what petitioner basically questions is the necessity, wisdom and expediency of the DECREE. These considerations, however, are
primarily and exclusively a matter of legislative concern.
Only congressional power or competence, not the wisdom of the action taken, may be the basis for declaring a statute invalid. This is as it ought to be.
The principle of separation of powers has in the main wisely allocated the respective authority of each department and confined its jurisdiction to such a
sphere. There would then be intrusion not allowable under the Constitution if on a matter left to the discretion of a coordinate branch, the judiciary
would substitute its own. If there be adherence to the rule of law, as there ought to be, the last offender should be courts of justice, to which rightly
litigants submit their controversy precisely to maintain unimpaired the supremacy of legal norms and prescriptions. The attack on the validity of the
challenged provision likewise insofar as there may be objections, even if valid and cogent on its wisdom cannot be sustained. 18
In fine, petitioner has not overcome the presumption of validity which attaches to a challenged statute. We find no clear violation of the Constitution
which would justify us in pronouncing Presidential Decree No. 1987 as unconstitutional and void.
WHEREFORE, the instant Petition is hereby dismissed.
No costs.
SO ORDERED.
Teehankee, (C.J.), Yap, Fernan, Narvasa, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin, Sarmiento and Cortes, JJ., concur.
EN BANC
G.R. No. L-28089 October 25, 1967
BARA LIDASAN, petitioner,
vs.
COMMISSION ON ELECTIONS, respondent.
Suntay for petitioner.
Barrios and Fule for respondent.
SANCHEZ, J.:
The question initially presented to the Commission on Elections, 1 is this: Is Republic Act 4790, which is entitled "An Act Creating the Municipality of
Dianaton in the Province of Lanao del Sur", but which includes barrios located in another province — Cotabato — to be spared from attack planted
upon the constitutional mandate that "No bill which may be enacted into law shall embrace more than one subject which shall be expressed in the title
of the bill"? Comelec's answer is in the affirmative. Offshoot is the present original petition for certiorari and prohibition.
On June 18, 1966, the Chief Executive signed into law House Bill 1247, known as Republic Act 4790, now in dispute. The body of the statute,
reproduced in haec verba, reads:
Sec. 1. Barrios Togaig, Madalum, Bayanga, Langkong, Sarakan, Kat-bo, Digakapan, Magabo, Tabangao, Tiongko, Colodan, Kabamakawan,
Kapatagan, Bongabong, Aipang, Dagowan, Bakikis, Bungabung, Losain, Matimos and Magolatung, in the Municipalities of Butig and Balabagan,
Province of Lanao del Sur, are separated from said municipalities and constituted into a distinct and independent municipalit y of the same province to
be known as the Municipality of Dianaton, Province of Lanao del Sur. The seat of government of the municipality shall be in Togaig.
Sec. 2. The first mayor, vice-mayor and councilors of the new municipality shall be elected in the nineteen hundred sixty-seven general elections for
local officials.
Sec. 3. This Act shall take effect upon its approval.
It came to light later that barrios Togaig and Madalum just mentioned are within the municipality of Buldon, Province of Cotabato, and that Bayanga,
Langkong, Sarakan, Kat-bo, Digakapan, Magabo, Tabangao, Tiongko, Colodan and Kabamakawan are parts and parcel of another municipality, the
municipality of Parang, also in the Province of Cotabato and not of Lanao del Sur.
Prompted by the coming elections, Comelec adopted its resolution of August 15, 1967, the pertinent portions of which are:
For purposes of establishment of precincts, registration of voters and for other election purposes, the Commission RESOLVED that pursuant to RA
4790, the new municipality of Dianaton, Lanao del Sur shall comprise the barrios of Kapatagan, Bongabong, Aipang, Dagowan, Bakikis, Bungabung,
Losain, Matimos, and Magolatung situated in the municipality of Balabagan, Lanao del Sur, the barrios of Togaig and Madalum situated in the
municipality of Buldon, Cotabato, the barrios of Bayanga, Langkong, Sarakan, Kat-bo, Digakapan, Magabo, Tabangao, Tiongko, Colodan and
Kabamakawan situated in the municipality of Parang, also of Cotabato.
Doubtless, as the statute stands, twelve barrios — in two municipalities in the province of Cotabato — are transferred to the province of Lanao del Sur.
This brought about a change in the boundaries of the two provinces.
Apprised of this development, on September 7, 1967, the Office of the President, through the Assistant Executive Secretary, recommended to Comelec
that the operation of the statute be suspended until "clarified by correcting legislation."
Comelec, by resolution of September 20, 1967, stood by its own interpretation, declared that the statute "should be implemented unless declared
unconstitutional by the Supreme Court."
This triggered the present original action for certiorari and prohibition by Bara Lidasan, a resident and taxpayer of the detached portion of Parang,
Cotabato, and a qualified voter for the 1967 elections. He prays that Republic Act 4790 be declared unconstitutional; and that Comelec's resolutions of
August 15, 1967 and September 20, 1967 implementing the same for electoral purposes, be nullified.
1. Petitioner relies upon the constitutional requirement aforestated, that "[n]o bill which may be enacted into law shall embrace more than one subject
which shall be expressed in the title of the bill."2
It may be well to state, right at the outset, that the constitutional provision contains dual limitations upon legislative power. First. Congress is to refrain
from conglomeration, under one statute, of heterogeneous subjects. Second. The title of the bill is to be couched in a language sufficient to notify the
legislators and the public and those concerned of the import of the single subject thereof.
Of relevance here is the second directive. The subject of the statute must be "expressed in the title" of the bill. This constitutional requirement "breathes
the spirit of command."3 Compliance is imperative, given the fact that the Constitution does not exact of Congress the obligation to read during its
deliberations the entire text of the bill. In fact, in the case of House Bill 1247, which became Republic Act 4790, only its title was read from its
introduction to its final approval in the House of Representatives 4 where the bill, being of local application, originated. 5
Of course, the Constitution does not require Congress to employ in the title of an enactment, language of such precision as to mirror, fully index or
catalogue all the contents and the minute details therein. It suffices if the title should serve the purpose of the constitutional demand that it inform the
legislators, the persons interested in the subject of the bill, and the public, of the nature, scope and consequences of the proposed law and its
operation. And this, to lead them to inquire into the body of the bill, study and discuss the same, take appropriate action thereon, and, thus, prevent
surprise or fraud upon the legislators.6
In our task of ascertaining whether or not the title of a statute conforms with the constitutional requirement, the following, we believe, may be taken as
guidelines:
The test of the sufficiency of a title is whether or not it is misleading; and, which technical accuracy is not essential, and the subject need not be stated
in express terms where it is clearly inferable from the details set forth, a title which is so uncertain that the average person reading it would not be
informed of the purpose of the enactment or put on inquiry as to its contents, or which is misleading, either in referring to or indicating one subject
where another or different one is really embraced in the act, or in omitting any expression or indication of the real subject or scope of the act, is bad.
xxx xxx xxx
In determining sufficiency of particular title its substance rather than its form should be considered, and the purpose of the constitutional requirement, of
giving notice to all persons interested, should be kept in mind by the court.7
With the foregoing principles at hand, we take a hard look at the disputed statute. The title — "An Act Creating the Municipality of Dianaton, in the
Province of Lanao del Sur"8 — projects the impression that solely the province of Lanao del Sur is affected by the creation of Dianaton. Not the
slightest intimation is there that communities in the adjacent province of Cotabato are incorporated in this new Lanao del Sur town. The phrase "in the
Province of Lanao del Sur," read without subtlety or contortion, makes the title misleading, deceptive. For, the known fact is that the legislation has a
two-pronged purpose combined in one statute: (1) it creates the municipality of Dianaton purportedly from twenty-one barrios in the towns of Butig and
Balabagan, both in the province of Lanao del Sur; and (2) it also dismembers two municipalities in Cotabato, a province different from Lanao del Sur.
The baneful effect of the defective title here presented is not so difficult to perceive. Such title did not inform the members of Congress as to the full
impact of the law; it did not apprise the people in the towns of Buldon and Parang in Cotabato and in the province of Cotabato itself that part of their
territory is being taken away from their towns and province and added to the adjacent Province of Lanao del Sur; it kept the public in the dark as to
what towns and provinces were actually affected by the bill. These are the pressures which heavily weigh against the constitutionality of Republic Act
4790.
Respondent's stance is that the change in boundaries of the two provinces resulting in "the substantial diminution of territorial limits" of Cotabato
province is "merely the incidental legal results of the definition of the boundary" of the municipality of Dianaton and that, therefore, reference to the fact
that portions in Cotabato are taken away "need not be expressed in the title of the law." This posture — we must say — but emphasizes the error of
constitutional dimensions in writing down the title of the bill. Transfer of a sizeable portion of territory from one province to another of necessity involves
reduction of area, population and income of the first and the corresponding increase of those of the other. This is as important as the creation of a
municipality. And yet, the title did not reflect this fact.
Respondent asks us to read Felwa vs. Salas, L-16511, October 29, 1966, as controlling here. The Felwa case is not in focus. For there, the title of the
Act (Republic Act 4695) reads: "An Act Creating the Provinces of Benguet, Mountain Province, Ifugao, and Kalinga-Apayao." That title was assailed as
unconstitutional upon the averment that the provisions of the law (Section, 8 thereof) in reference to the elective officials of the provinces thus created,
were not set forth in the title of the bill. We there ruled that this pretense is devoid of merit "for, surely, an Act creating said provinces must be expected
to provide for the officers who shall run the affairs thereof" — which is "manifestly germane to the subject" of the legislation, as set forth in its title. The
statute now before us stands altogether on a different footing. The lumping together of barrios in adjacent but separate provinces under one statute is
neither a natural nor logical consequence of the creation of the new municipality of Dianaton. A change of boundaries of the two provinces may be
made without necessarily creating a new municipality and vice versa.
As we canvass the authorities on this point, our attention is drawn to Hume vs. Village of Fruitport, 219 NW 648, 649. There, the statute in controversy
bears the title "An Act to Incorporate the Village of Fruitport, in the County of Muskegon." The statute, however, in its section 1 reads: "The people of
the state of Michigan enact, that the following described territory in the counties of Muskegon and Ottawa Michigan, to wit: . . . be, and the same is
hereby constituted a village corporate, by the name of the Village of Fruitport." This statute was challenged as void by plaintiff, a resident of Ottawa
county, in an action to restraint the Village from exercising jurisdiction and control, including taxing his lands. Plaintiff based his claim on Section 20,
Article IV of the Michigan State Constitution, which reads: "No law shall embrace more than one object, which shall be expressed in its title." The Circuit
Court decree voided the statute and defendant appealed. The Supreme Court of Michigan voted to uphold the decree of nullity. The following, said
in Hume, may well apply to this case:
It may be that words, "An act to incorporate the village of Fruitport," would have been a sufficient title, and that the words, "in the county of Muskegon"
were unnecessary; but we do not agree with appellant that the words last quoted may, for that reason, be disregarded as surplusage.
. . . Under the guise of discarding surplusage, a court cannot reject a part of the title of an act for the purpose of saving the act. Schmalz vs. Woody, 56
N.J. Eq. 649, 39 A. 539.
A purpose of the provision of the Constitution is to "challenge the attention of those affected by the act to its provisions." Savings Bank vs. State of
Michigan, 228 Mich. 316, 200 NW 262.
The title here is restrictive. It restricts the operation of the act of Muskegon county. The act goes beyond the restriction. As was said in Schmalz vs.
Wooly, supra: "The title is erroneous in the worst degree, for it is misleading." 9
Similar statutes aimed at changing boundaries of political subdivisions, which legislative purpose is not expressed in the title, were likewise declared
unconstitutional."10
We rule that Republic Act 4790 is null and void.
2. Suggestion was made that Republic Act 4790 may still be salvaged with reference to the nine barrios in the municipalities of Butig and Balabagan in
Lanao del Sur, with the mere nullification of the portion thereof which took away the twelve barrios in the municipalities of Buldon and Parang in the
other province of Cotabato. The reasoning advocated is that the limited title of the Act still covers those barrios actually in the province of Lanao del
Sur.
We are not unmindful of the rule, buttressed on reason and of long standing, that where a portion of a statute is rendered unconstitutional and the
remainder valid, the parts will be separated, and the constitutional portion upheld. Black, however, gives the exception to this rule, thus:
. . . But when the parts of the statute are so mutually dependent and connected, as conditions, considerations, inducements, or compensations for each
other, as to warrant a belief that the legislature intended them as a whole, and that if all could not be carried into effect, the legislature would not pass
the residue independently, then, if some parts are unconstitutional, all the provisions which are thus dependent, conditional, or connected, must fall with
them,11
In substantially similar language, the same exception is recognized in the jurisprudence of this Court, thus:
The general rule is that where part of a statute is void, as repugnant to the Organic Law, while another part is valid, the valid portion if separable from
the invalid, may stand and be enforced. But in order to do this, the valid portion must be so far independent of the invalid portion that it is fair to
presume that the Legislature would have enacted it by itself if they had supposed that they could not constitutionally enact the other. . . Enough must
remain to make a complete, intelligible, and valid statute, which carries out the legislative intent. . . . The language used in the invalid part of the statute
can have no legal force or efficacy for any purpose whatever, and what remains must express the legislative will independently of the void part, since
the court has no power to legislate, . . . .12
Could we indulge in the assumption that Congress still intended, by the Act, to create the restricted area of nine barrios in the towns of Butig and
Balabagan in Lanao del Sur into the town of Dianaton, if the twelve barrios in the towns of Buldon and Parang, Cotabato were to be excluded
therefrom? The answer must be in the negative.
Municipal corporations perform twin functions. Firstly. They serve as an instrumentality of the State in carrying out the functions of
government. Secondly. They act as an agency of the community in the administration of local affairs. It is in the latter character that they are a separate
entity acting for their own purposes and not a subdivision of the State. 13
Consequently, several factors come to the fore in the consideration of whether a group of barrios is capable of maintaining itself as an independent
municipality. Amongst these are population, territory, and income. It was apparently these same factors which induced the writing out of House Bill
1247 creating the town of Dianaton. Speaking of the original twenty-one barrios which comprise the new municipality, the explanatory note to House
Bill 1247, now Republic Act 4790, reads:
The territory is now a progressive community; the aggregate population is large; and the collective income is sufficient to maintain an independent
municipality.
This bill, if enacted into law, will enable the inhabitants concerned to govern themselves and enjoy the blessings of municipal autonomy.
When the foregoing bill was presented in Congress, unquestionably, the totality of the twenty-one barrios — not nine barrios — was in the mind of the
proponent thereof. That this is so, is plainly evident by the fact that the bill itself, thereafter enacted into law, states that the seat of the government is in
Togaig, which is a barrio in the municipality of Buldon in Cotabato. And then the reduced area poses a number of questions, thus: Could the
observations as to progressive community, large aggregate population, collective income sufficient to maintain an independent municipality, still apply
to a motley group of only nine barrios out of the twenty-one? Is it fair to assume that the inhabitants of the said remaining barrios would have agreed
that they be formed into a municipality, what with the consequent duties and liabilities of an independent municipal corporation? Could they stand on
their own feet with the income to be derived in their community? How about the peace and order, sanitation, and other corporate obligations? This
Court may not supply the answer to any of these disturbing questions. And yet, to remain deaf to these problems, or to answer them in the negative
and still cling to the rule on separability, we are afraid, is to impute to Congress an undeclared will. With the known premise that Dianaton was created
upon the basic considerations of progressive community, large aggregate population and sufficient income, we may not now say that Congress
intended to create Dianaton with only nine — of the original twenty-one — barrios, with a seat of government still left to be conjectured. For, this unduly
stretches judicial interpretation of congressional intent beyond credibility point. To do so, indeed, is to pass the line which circumscribes the judiciary
and tread on legislative premises. Paying due respect to the traditional separation of powers, we may not now melt and recast Republic Act 4790 to
read a Dianaton town of nine instead of the originally intended twenty-one barrios. Really, if these nine barrios are to constitute a town at all, it is the
function of Congress, not of this Court, to spell out that congressional will.
Republic Act 4790 is thus indivisible, and it is accordingly null and void in its totality. 14
3. There remains for consideration the issue raised by respondent, namely, that petitioner has no substantial legal interest adversely affected by the
implementation of Republic Act 4790. Stated differently, respondent's pose is that petitioner is not the real party in interest.
Here the validity of a statute is challenged on the ground that it violates the constitutional requirement that the subject of the bill be expressed in its title.
Capacity to sue, therefore, hinges on whether petitioner's substantial rights or interests are impaired by lack of notification in the title that the barrio in
Parang, Cotabato, where he is residing has been transferred to a different provincial hegemony.
The right of every citizen, taxpayer and voter of a community affected by legislation creating a town to ascertain that the law so created is not
dismembering his place of residence "in accordance with the Constitution" is recognized in this jurisdiction. 15
Petitioner is a qualified voter. He expects to vote in the 1967 elections. His right to vote in his own barrio before it was annexed to a new town is
affected. He may not want, as is the case here, to vote in a town different from his actual residence. He may not desire to be considered a part of
hitherto different communities which are fanned into the new town; he may prefer to remain in the place where he is and as it was constituted, and
continue to enjoy the rights and benefits he acquired therein. He may not even know the candidates of the new town; he may express a lack of desire
to vote for anyone of them; he may feel that his vote should be cast for the officials in the town before dismemberment. Since by constitutional direction
the purpose of a bill must be shown in its title for the benefit, amongst others, of the community affected thereby, 16 it stands to reason to say that when
the constitutional right to vote on the part of any citizen of that community is affected, he may become a suitor to challenge the constitutionality of the
Act as passed by Congress.
For the reasons given, we vote to declare Republic Act 4790 null and void, and to prohibit respondent Commission from implementing the same for
electoral purposes.
No costs allowed. So ordered.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Bengzon, J.P., Zaldivar, Castro and Angeles, JJ., concur.
Separate Opinions
FERNANDO, J., dissenting:
With regret and with due recognition of the merit of the opinion of the Court, I find myself unable to give my assent. Hence these few words to express
my stand.
Republic Act No. 4790 deals with one subject matter, the creation of the municipality of Dianaton in the province of Lanao del Sur. The title makes
evident what is the subject matter of such an enactment. The mere fact that in the body of such statute barrios found in two other municipalities of
another province were included does not of itself suffice for a finding of nullity by virtue of the constitutional provision invoked. At the most, the statute
to be free from the insubstantial doubts about its validity must be construed as not including the barrios, located not in the municipalities of Butig and
Balabagan, Lanao del Sur, but in Parang and Baldon, Cotabato.
The constitutional requirement is that no bill which may be enacted into law shall embrace more than one subject which shall be expressed in the title
of the bill.1 This provision is similar to those found in the Constitution of many American States. It is aimed against the evils, of the so-called omnibus
bills, and log-rolling legislation, and against surreptitious or unconsidered enactments. 2 Where the subject of a bill is limited to a particular matter, the
members of the legislature as well as the people should be informed of the subject of proposed legislative measures. This constitutional provision thus
precludes the insertion of riders in legislation, a rider being a provision not germane to the subject matter of the bill.
It is not to be narrowly construed though as to cripple or impede proper legislation. The construction must be reasonable and not technical. It is
sufficient if the title be comprehensive enough reasonably to include the general object which the statute seeks to effect without expressing each and
every end and means necessary for the accomplishment of that object. Mere details need not be set forth. The legislature is not required to make the
title of the act a complete index of its contents. The constitutional provision is satisfied if all parts of an act which relates to its subject find expression in
its title.3
The first decision of this Court, after the establishment of the Commonwealth of the Philippines, in 1938, construing a provision of this
nature, Government v. Hongkong & Shanghai Bank,4 held that the inclusion of Section 11 of Act No. 4007, the Reorganization Law, providing for the
mode in which the total annual expenses of the Bureau of Banking may be reimbursed through assessment levied upon all banking institutions subject
to inspection by the Bank Commissioner was not violative of such a requirement in the Jones Law, the previous organic act. Justice Laurel, however,
vigorously dissented, his view being that while the main subject of the act was reorganization, the provision assailed did not deal with reorganization
but with taxation. While the case of Government vs. Hongkong & Shanghai Bank was decided by a bare majority of four justices against three, the
present trend seems to be that the constitutional requirement is to be given the liberal test as indicated in the majority opinion penned by Justice Abad
Santos, and not the strict test as desired by the majority headed by Justice Laurel.
Such a trend has been reflected in subsequent decisions beginning with Sumulong v. Commission on Elections,5 up to and including Felwa vs. Salas, a
1966 decision,6 the opinion coming from Justice Concepcion.
It is true of course that in Philconsa v. Gimenez,7 one of the grounds on which the invalidity of Republic Act No. 3836 was predicated was the violation
of the above constitutional provision. This Retirement Act for senators and representatives was entitled "AN ACT AMENDING SUB-SECTION (c),
SECTION TWELVE OF COMMONWEALTH ACT NUMBERED ONE HUNDRED EIGHTY-SIX, AS AMENDED BY REPUBLIC ACT NUMBERED
THIRTY HUNDRED NINETY-SIX." As we noted, the paragraph in Republic Act No. 3836 deemed objectionable "refers to members of Congress and to
elective officers thereof who are not members of the Government Service Insurance System. To provide retirement benefits, therefore, for these
officials, would relate to a subject matter which is not germane to Commonwealth Act No. 186. In other words, this portion of the amendment ( re
retirement benefits for Members of Congress and appointive officers, such as the Secretary and Sergeants-at-arms for each house) is not related in
any manner to the subject of Commonwealth Act No. 186 establishing the Government Service Insurance System and which provides for both
retirement and insurance benefits to its members." Nonetheless our opinion was careful to note that there was no abandonment of the principle of
liberality. Thus: "we are not unmindful of the fact that there has been a general disposition in all courts to construe the constitutional provision with
reference to the subject and title of the Act, liberally."
It would follow therefore that the challenged legislation Republic Act No. 4790 is not susceptible to the indictment that the constitutional requirement as
to legislation having only one subject which should be expressed in his title was not met. The subject was the creation of the municipality of Dianaton.
That was embodied in the title.
It is in the light of the aforementioned judicial decisions of this Court, some of the opinions coming from jurists illustrious for their mastery of
constitutional law and their acknowledged erudition, that, with all due respect, I find the citation from Corpus Juris Secundum, unnecessary and far from
persuasive. The State decisions cited, I do not deem controlling, as the freedom of this Court to accept or reject doctrines therein announced cannot be
doubted.
Wherein does the weakness of the statute lie then? To repeat, several barrios of two municipalities outside Lanao del Sur were included in the
municipality of Dianaton of that province. That itself would not have given rise to a constitutional question considering the broad, well-high plenary
powers possessed by Congress to alter provincial and municipal boundaries. What justified resort to this Court was the congressional failure to make
explicit that such barrios in two municipalities located in Cotabato would thereafter form part of the newly created municipality of Dianaton, Lanao del
Sur.
To avoid any doubt as to the validity of such statute, it must be construed as to exclude from Dianaton all of such barrios mentioned in Republic Act No.
4790 found in municipalities outside Lanao del Sur. As thus interpreted, the statute can meet the test of the most rigid scrutiny. Nor is this to do
violence to the legislative intent. What was created was a new municipality from barrios named as found in Lanao del Sur. This construction assures
precisely that.
This mode of interpreting Republic Act No. 4790 finds support in basic principles underlying precedents, which if not precisely controlling, have a
persuasive ring. In Radiowealth v. Agregado,8 certain provisions of the Administrative Code were interpreted and given a "construction which would be
more in harmony with the tenets of the fundamental law." In Sanchez v. Lyon Construction,9 this Court had a similar ruling: "Article 302 of the Code of
Commerce must be applied in consonance with [the relevant] provisions of our Constitution." The above principle gained acceptance at a much earlier
period in our constitutional history. Thus in a 1913 decision, In re Guariña:10"In construing a statute enacted by the Philippine Commission we deem it
our duty not to give it a construction which would be repugnant to an Act of Congress, if the language of the statute is fairly susceptible of another
construction not in conflict with the higher law. In doing so, we think we should not hesitate to disregard contentions touching the apparent intention of
the legislator which would lead to the conclusion that the Commission intended to enact a law in violation of the Act of Congress. However specious the
argument may be in favor of one of two possible constructions, it must be disregarded if on examination it is found to rest on the contention that the
legislator designed an attempt to transcend the rightful limits of his authority, and that his apparent intention was to enact an invalid law."
American Supreme Court decisions are equally explicit. The then Justice, later Chief Justice, Stone, construed statutes "with an eye to possible
constitutional limitations so as to avoid doubts as to [their] validity."11 From the pen of the articulate jurist, Frankfurter: 12 "Accordingly, the phrase
"lobbying activities" in the resolution must be given the meaning that may fairly be attributed to it, having special regard for the principle of constitutional
adjudication which makes it decisive in the choice of fair alternatives that one construction may raise serious constitutional questions avoided by
another." His opinion in the Rumely case continues with the above pronouncement of Stone and two other former Chief Justices: "In the words of Mr.
Chief Justice Taft, '(i)t is our duty in the interpretation of federal statutes to reach conclusion which will avoid serious doubt of their constitutionality',
Richmond Screw Anchor Co. v. United States, 275 US 331, 346, 48 S. Ct. 194, 198, 72 L. ed. 303. . . . As phrased by Mr. Chief Justice Hughes, "if a
serious doubt of constitutionality is raised, it is a cardinal principle that this Court will first ascertain whether a construction of the statute is fairly
possible by which the question may be avoided.' Crowell v. Benson, 285, 296, 76 L. ed. 598, and cases cited." The prevailing doctrine then as set forth
by Justice Clark in a 1963 decision,13 is that courts "have consistently sought an interpretation which supports the constitutionality of legislation."
Phrased differently by Justice Douglas, the judiciary favors "that interpretation of legislation which gives it the greater change of surviving the test of
constitutionality."14
It would follow then that both Philippine and American decisions unite in the view that a legislative measure, in the language of Van Devanter "should
not be given a construction which will imperil its validity where it is reasonably open to construction free from such peril."15 Republic Act No. 4790 as
above construed incurs no such risk and is free from the peril of nullity.
So I would view the matter, with all due acknowledgment of the practical considerations clearly brought to light in the opinion of the Court.

EN BANC
G.R. No. L-42571-72 July 25, 1983
VICENTE DE LA CRUZ, RENATO ALIPIO, JOSE TORRES III, LEONCIO CORPUZ, TERESITA CALOT, ROSALIA FERNANDEZ, ELIZABETH
VELASCO, NANETTE VILLANUEVA, HONORATO BUENAVENTURA, RUBEN DE CASTRO, VICENTE ROXAS, RICARDO DAMIAN, DOMDINO
ROMDINA, ANGELINA OBLIGACION, CONRADO GREGORIO, TEODORO REYES, LYDIA ATRACTIVO, NAPOLEON MENDOZA, PERFECTO
GUMATAY, ANDRES SABANGAN, ROSITA DURAN, SOCORRO BERNARDEZ, and PEDRO GABRIEL, petitioners,
vs.
THE HONORABLE EDGARDO L. PARAS, MATIAS RAMIREZ as the Municipal Mayor, MARIO MENDOZA as the Municipal Vice-Mayor, and
THE MUNICIPAL COUNCIL OF BOCAUE, BULACAN, respondents.
Federico N. Alday for petitioners.
Dakila F. Castro for respondents.

FERNANDO, C.J.:
The crucial question posed by this certiorari proceeding is whether or not a municipal corporation, Bocaue, Bulacan, represented by
respondents, 1 can, prohibit the exercise of a lawful trade, the operation of night clubs, and the pursuit of a lawful occupation, such clubs employing
hostesses. It is contended that the ordinance assailed as invalid is tainted with nullity, the municipality being devoid of power to prohibit a lawful
business, occupation or calling, petitioners at the same time alleging that their rights to due process and equal protection of the laws were violated as
the licenses previously given to them was in effect withdrawn without judicial hearing. 2
The assailed ordinance 3 is worded as follows: "Section 1.— Title of Ordinance.— This Ordinance shall be known and may be cited as the [Prohibition
and Closure Ordinance] of Bocaue, Bulacan. Section 2. — Definitions of Terms — (a) 'Night Club' shall include any place or establishment selling to the
public food or drinks where customers are allowed to dance. (b) 'Cabaret' or 'Dance Hall' shall include any place or establishment where dancing is
permitted to the public and where professional hostesses or hospitality girls and professional dancers are employed. (c) 'Professional hostesses' or
'hospitality girls' shall include any woman employed by any of the establishments herein defined to entertain guests and customers at their table or to
dance with them. (d) 'Professional dancer' shall include any woman who dances at any of the establishments herein defined for a fee or remuneration
paid directly or indirectly by the operator or by the persons she dances with. (e) 'Operator' shall include the owner, manager, administrator or any
person who operates and is responsible for the operation of any night club, cabaret or dance hall. Section 3. — Prohibition in the Issuance and
Renewal of Licenses, Permits. — Being the principal cause in the decadence of morality and because of their other adverse effects on this community
as explained above, no operator of night clubs, cabarets or dance halls shall henceforth be issued permits/licenses to operate within the jurisdiction of
the municipality and no license/permit shall be issued to any professional hostess, hospitality girls and professional dancer for employment in any of the
aforementioned establishments. The prohibition in the issuance of licenses/permits to said persons and operators of said establishments shall include
prohibition in the renewal thereof. Section 4.— Revocation of Permits and Licenses.— The licenses and permits issued to operators of night clubs,
cabarets or dance halls which are now in operation including permits issued to professional hostesses, hospitality girls and professional dancers are
hereby revoked upon the expiration of the thirty-day period given them as provided in Section 8 hereof and thenceforth, the operation of these
establishments within the jurisdiction of the municipality shall be illegal. Section 5.— Penalty in case of violation. — Violation of any of the provisions of
this Ordinance shall be punishable by imprisonment not exceeding three (3) months or a fine not exceeding P200.00 or both at the discretion of the
Court. If the offense is committed by a juridical entity, the person charged with the management and/or operation thereof shall be liable for the penalty
provided herein. Section 6. — Separability Clause.— If, for any reason, any section or provision of this Ordinance is held unconstitutional or invalid, no
other section or provision hereof shall be affected thereby. Section 7.— Repealing Clause.— All ordinance, resolutions, circulars, memoranda or parts
thereof that are inconsistent with the provisions of this Ordinance are hereby repealed. Section 8.— Effectivity.— This Ordinance shall take effect
immediately upon its approval; provided, however, that operators of night clubs, cabarets and dance halls now in operation including professional
hostesses, hospitality girls and professional dancers are given a period of thirty days from the approval hereof within which to wind up their businesses
and comply with the provisions of this Ordinance." 4
On November 5, 1975, two cases for prohibition with preliminary injunction were filed with the Court of First Instance of Bulacan. 5 The grounds alleged
follow:
1. Ordinance No. 84 is null and void as a municipality has no authority to prohibit a lawful business, occupation or calling.
2. Ordinance No. 84 is violative of the petitioners' right to due process and the equal protection of the law, as the license previously given to petitioners
was in effect withdrawn without judicial hearing. 3. That under Presidential Decree No. 189, as amended, by Presidential Decree No. 259, the power to
license and regulate tourist-oriented businesses including night clubs, has been transferred to the Department of Tourism." 6 The cases were assigned
to respondent Judge, now Associate Justice Paras of the Intermediate Appellate Court, who issued a restraining order on November 7, 1975. The
answers were thereafter filed. It was therein alleged: " 1. That the Municipal Council is authorized by law not only to regulate but to prohibit the
establishment, maintenance and operation of night clubs invoking Section 2243 of the RAC, CA 601, Republic Acts Nos. 938, 978 and 1224. 2. The
Ordinance No. 84 is not violative of petitioners' right to due process and the equal protection of the law, since property rights are subordinate to public
interests. 3. That Presidential Decree No. 189, as amended, did not deprive Municipal Councils of their jurisdiction to regulate or prohibit night
clubs." 7 There was the admission of the following facts as having been established: "l. That petitioners Vicente de la Cruz, et al. in Civil Case No.
4755-M had been previously issued licenses by the Municipal Mayor of Bocaue-petitioner Jose Torres III, since 1958; petitioner Vicente de la Cruz,
since 1960; petitioner Renato Alipio, since 1961 and petitioner Leoncio Corpuz, since 1972; 2. That petitioners had invested large sums of money in
their businesses; 3. That the night clubs are well-lighted and have no partitions, the tables being near each other; 4. That the petitioners
owners/operators of these clubs do not allow the hospitality girls therein to engage in immoral acts and to go out with customers; 5. That these
hospitality girls are made to go through periodic medical check-ups and not one of them is suffering from any venereal disease and that those who fail
to submit to a medical check-up or those who are found to be infected with venereal disease are not allowed to work; 6. That the crime rate there is
better than in other parts of Bocaue or in other towns of Bulacan." 8 Then came on January 15, 1976 the decision upholding the constitutionality and
validity of Ordinance No. 84 and dismissing the cases. Hence this petition for certiorari by way of appeal.
In an exhaustive as well as scholarly opinion, the lower court dismissed the petitions. Its rationale is set forth in the opening paragraph thus: "Those
who lust cannot last. This in essence is why the Municipality of Bocaue, Province of Bulacan, stigmatized as it has been by innuendos of sexual
titillation and fearful of what the awesome future holds for it, had no alternative except to order thru its legislative machinery, and even at the risk of
partial economic dislocation, the closure of its night clubs and/or cabarets. This in essence is also why this Court, obedient to the mandates of good
government, and cognizant of the categorical imperatives of the current legal and social revolution, hereby [upholds] in the name of police power the
validity and constitutionality of Ordinance No. 84, Series of 1975, of the Municipal Council of Bocaue, Bulacan. The restraining orders heretofore issued
in these two cases are therefore hereby rifted, effective the first day of February, 1976, the purpose of the grace period being to enable the petitioners
herein to apply to the proper appellate tribunals for any contemplated redress."9 This Court is, however, unable to agree with such a conclusion and for
reasons herein set forth, holds that reliance on the police power is insufficient to justify the enactment of the assailed ordinance. It must be declared
null and void.
1. Police power is granted to municipal corporations in general terms as follows: "General power of council to enact ordinances and make regulations. -
The municipal council shall enact such ordinances and make such regulations, not repugnant to law, as may be necessary to carry into effect and
discharge the powers and duties conferred upon it by law and such as shall seem necessary and proper to provide for the health and safety, promote
the prosperity, improve the morals, peace, good order, comfort, and convenience of the municipality and the inhabitants thereof, and for the protection
of property therein." 10 It is practically a reproduction of the former Section 39 of Municipal Code. 11 An ordinance enacted by virtue thereof, according to
Justice Moreland, speaking for the Court in the leading case of United States v. Abendan 12 "is valid, unless it contravenes the fundamental law of the
Philippine Islands, or an Act of the Philippine Legislature, or unless it is against public policy, or is unreasonable, oppressive, partial, discriminating, or
in derogation of common right. Where the power to legislate upon a given subject, and the mode of its exercise and the details of such legislation are
not prescribed, the ordinance passed pursuant thereto must be a reasonable exercise of the power, or it will be pronounced invalid." 13 In another
leading case, United States v. Salaveria, 14 the ponente this time being Justice Malcolm, where the present Administrative Code provision was applied,
it was stated by this Court: "The general welfare clause has two branches: One branch attaches itself to the main trunk of municipal authority, and
relates to such ordinances and regulations as may be necessary to carry into effect and discharge the powers and duties conferred upon the municipal
council by law. With this class we are not here directly concerned. The second branch of the clause is much more independent of the specific functions
of the council which are enumerated by law. It authorizes such ordinances as shall seem necessary and proper to provide for the health and safety,
promote the prosperity, improve the morals, peace, good order, comfort, and convenience of the municipality and the inhabitants thereof, and for the
protection of property therein.' It is a general rule that ordinances passed by virtue of the implied power found in the general welfare clause must be
reasonable, consonant with the general powersand purposes of the corporation, and not inconsistent with the laws or policy of the State." 15 If night
clubs were merely then regulated and not prohibited, certainly the assailed ordinance would pass the test of validity. In the two leading cases above set
forth, this Court had stressed reasonableness, consonant with the general powers and purposes of municipal corporations, as well as consistency with
the laws or policy of the State. It cannot be said that such a sweeping exercise of a lawmaking power by Bocaue could qualify under the term
reasonable. The objective of fostering public morals, a worthy and desirable end can be attained by a measure that does not encompass too wide a
field. Certainly the ordinance on its face is characterized by overbreadth. The purpose sought to be achieved could have been attained by reasonable
restrictions rather than by an absolute prohibition. The admonition in Salaveria should be heeded: "The Judiciary should not lightly set aside legislative
action when there is not a clear invasion of personal or property rights under the guise of police regulation." 16 It is clear that in the guise of a police
regulation, there was in this instance a clear invasion of personal or property rights, personal in the case of those individuals desirous of patronizing
those night clubs and property in terms of the investments made and salaries to be earned by those therein employed.
2. The decision now under review refers to Republic Act No. 938 as amended. 17 It was originally enacted on June 20, 1953. It is entitled: "AN ACT
GRANTING MUNICIPAL OR CITY BOARDS AND COUNCILS THE POWER TO REGULATE THE ESTABLISHMENT, MAINTENANCE AND
OPERATION OF CERTAIN PLACES OF AMUSEMENT WITHIN THEIR RESPECTIVE TERRITORIAL JURISDICTIONS.' 18 Its first section insofar as
pertinent reads: "The municipal or city board or council of each chartered city shall have the power to regulate by ordinance the establishment,
maintenance and operation of night clubs, cabarets, dancing schools, pavilions, cockpits, bars, saloons, bowling alleys, billiard pools, and other similar
places of amusement within its territorial jurisdiction: ... " 19Then on May 21, 1954, the first section was amended to include not merely "the power to
regulate, but likewise "Prohibit ... " 20 The title, however, remained the same. It is worded exactly as Republic Act No. 938. It is to be admitted that as
thus amended, if only the above portion of the Act were considered, a municipal council may go as far as to prohibit the operation of night clubs. If that
were all, then the appealed decision is not devoid of support in law. That is not all, however. The title was not in any way altered. It was not changed
one whit. The exact wording was followed. The power granted remains that of regulation, not prohibition. There is thus support for the view advanced
by petitioners that to construe Republic Act No. 938 as allowing the prohibition of the operation of night clubs would give rise to a constitutional
question. The Constitution mandates: "Every bill shall embrace only one subject which shall be expressed in the title thereof. " 21 Since there is no
dispute as the title limits the power to regulating, not prohibiting, it would result in the statute being invalid if, as was done by the Municipality of Bocaue,
the operation of a night club was prohibited. There is a wide gap between the exercise of a regulatory power "to provide for the health and safety,
promote the prosperity, improve the morals, 22 in the language of the Administrative Code, such competence extending to all "the great public
needs, 23 to quote from Holmes, and to interdict any calling, occupation, or enterprise. In accordance with the well-settled principle of constitutional
construction that between two possible interpretations by one of which it will be free from constitutional infirmity and by the other tainted by such grave
defect, the former is to be preferred. A construction that would save rather than one that would affix the seal of doom certainly commends itself. We
have done so before We do so again. 24
3. There is reinforcement to the conclusion reached by virtue of a specific provision of the recently-enacted Local Government Code. 25 The general
welfare clause, a reiteration of the Administrative Code provision, is set forth in the first paragraph of Section 149 defining the powers and duties of
the sangguniang bayan. It read as follows: "(a) Enact such ordinances and issue such regulations as may be necessary to carry out and discharge the
responsibilities conferred upon it by law, and such as shall be necessary and proper to provide for the health, safety, comfort and convenience,
maintain peace and order, improve public morals, promote the prosperity and general welfare of the municipality and the inhabitants thereof, and insure
the protection of property therein; ..." 26 There are in addition provisions that may have a bearing on the question now before this Court. Thus
the sangguniang bayanshall "(rr) Regulate cafes, restaurants, beer-houses, hotels, motels, inns, pension houses and lodging houses, except travel
agencies, tourist guides, tourist transports, hotels, resorts, de luxe restaurants, and tourist inns of international standards which shall remain under the
licensing and regulatory power of the Ministry of Tourism which shall exercise such authority without infringing on the taxing or regulatory powers of the
municipality; (ss) Regulate public dancing schools, public dance halls, and sauna baths or massage parlors; (tt) Regulate the establishment and
operation of billiard pools, theatrical performances, circuses and other forms of entertainment; ..." 27 It is clear that municipal corporations cannot
prohibit the operation of night clubs. They may be regulated, but not prevented from carrying on their business. It would be, therefore, an exercise in
futility if the decision under review were sustained. All that petitioners would have to do is to apply once more for licenses to operate night clubs. A
refusal to grant licenses, because no such businesses could legally open, would be subject to judicial correction. That is to comply with the legislative
will to allow the operation and continued existence of night clubs subject to appropriate regulations. In the meanwhile, to compel petitioners to close
their establishments, the necessary result of an affirmance, would amount to no more than a temporary termination of their business. During such time,
their employees would undergo a period of deprivation. Certainly, if such an undesirable outcome can be avoided, it should be. The law should not be
susceptible to the reproach that it displays less than sympathetic concern for the plight of those who, under a mistaken appreciation of a municipal
power, were thus left without employment. Such a deplorable consequence is to be avoided. If it were not thus, then the element of arbitrariness enters
the picture. That is to pay less, very much less, than full deference to the due process clause with its mandate of fairness and reasonableness.
4. The conclusion reached by this Court is not to be interpreted as a retreat from its resolute stand sustaining police power legislation to promote public
morals. The commitment to such an Ideal forbids such a backward step. Legislation of that character is deserving of the fullest sympathy from the
judiciary. Accordingly, the judiciary has not been hesitant to lend the weight of its support to measures that can be characterized as falling within that
aspect of the police power. Reference is made by respondents to Ermita-Malate Hotel and Motel Operators Association, Inc. v. City Mayor of
Manila. 28 There is a misapprehension as to what was decided by this Court. That was a regulatory measure. Necessarily, there was no valid objection
on due process or equal protection grounds. It did not prohibit motels. It merely regulated the mode in which it may conduct business in order precisely
to put an end to practices which could encourage vice and immorality. This is an entirely different case. What was involved is a measure not embraced
within the regulatory power but an exercise of an assumed power to prohibit. Moreover, while it was pointed out in the aforesaid Ermita-Malate Hotel
and Motel Operators Association, Inc. decision that there must be a factual foundation of invalidity, it was likewise made clear that there is no need to
satisfy such a requirement if a statute were void on its face. That it certainly is if the power to enact such ordinance is at the most dubious and under
the present Local Government Code non-existent.
WHEREFORE, the writ of certiorari is granted and the decision of the lower court dated January 15, 1976 reversed, set aside, and nullied. Ordinance
No. 84, Series of 1975 of the Municipality of Bocaue is declared void and unconstitutional. The temporary restraining order issued by this Court is
hereby made permanent. No costs.
Teehankee, Aquino, Concepcion Jr., Guerrero, Abad Santos, Plana, Escolin Relova and Gutierrez, Jr., JJ., concur.
Makasiar, J, reserves his right to file a dissent.
De Castro, Melencio-Herrera and Vasquez, JJ., are on leave.
EN BANC G.R. No. L-114783 December 8, 1994
ROBERT V. TOBIAS, RAMON M. GUZMAN, TERRY T. LIM, GREGORIO D. GABRIEL, and ROBERTO R. TOBIAS, JR. petitioners, vs. HON. CITY
MAYOR BENJAMIN S. ABALOS, CITY TREASURER WILLIAM MARCELINO, and THE SANGGUNIANG PANLUNGSOD, all of the City of
Mandaluyong, Metro Manila, respondents. Estrella, Bautista & Associates for petitioners.
BIDIN, J.:
Invoking their rights as taxpayers and as residents of Mandaluyong, herein petitioners assail the constitutionality of Republic Act No. 7675, otherwise
known as "An Act Converting the Municipality of Mandaluyong into a Highly Urbanized City to be known as the City of Mandaluyong."
Prior to the enactment of the assailed statute, the municipalities of Mandaluyong and San Juan belonged to only one legislative district. Hon. Ronaldo
Zamora, the incumbent congressional representative of this legislative district, sponsored the bill which eventually became R.A. No. 7675. President
Ramos signed R.A. No. 7675 into law on February 9, 1994.
Pursuant to the Local Government Code of 1991, a plebiscite was held on April 10, 1994. The people of Mandaluyong were asked whether they
approved of the conversion of the Municipality of Mandaluyong into a highly urbanized city as provided under R.A. No. 7675. The turnout at the
plebiscite was only 14.41% of the voting population. Nevertheless, 18,621 voted "yes" whereas 7,911 voted "no." By virtue of these results, R.A. No.
7675 was deemed ratified and in effect.
Petitioners now come before this Court, contending that R.A. No. 7675, specifically Article VIII, Section 49 thereof, is unconstitutional for being violative
of three specific provisions of the Constitution.
Article VIII, Section 49 of R.A. No. 7675 provides:
As a highly-urbanized city, the City of Mandaluyong shall have its own legislative district with the first representative to be elected in the next national
elections after the passage of this Act. The remainder of the former legislative district of San Juan/Mandaluyong shall become the new legislative
district of San Juan with its first representative to be elected at the same election.
Petitioner's first objection to the aforequoted provision of R.A. No. 7675 is that it contravenes the "one subject-one bill" rule, as enunciated in Article VI,
Section 26(1) of the Constitution, to wit:
Sec. 26(1). Every bill passed by the Congress shall embrace only one subject which shall be expressed in the title thereof.
Petitioners allege that the inclusion of the assailed Section 49 in the subject law resulted in the latter embracing two principal subjects, namely: (1) the
conversion of Mandaluyong into a highly urbanized city; and (2) the division of the congressional district of San Juan/Mandaluyong into two separate
districts.
Petitioners contend that the second aforestated subject is not germane to the subject matter of R.A. No. 7675 since the said law treats of the
conversion of Mandaluyong into a highly urbanized city, as expressed in the title of the law. Therefore, since Section 49 treats of a subject distinct from
that stated in the title of the law, the "one subject-one bill" rule has not been complied with.
Petitioners' second and third objections involve Article VI, Sections 5(1) and (4) of the Constitution, which provide, to wit: Sec. 5(1). The House of
Representatives shall be composed of not more than two hundred and fifty members, unless otherwise fixed by law, who shall be elected from
legislative districts apportioned among the provinces, cities, and the Metropolitan Manila area in accordance with the number of their respective
inhabitants, and on the basis of a uniform and progressive ratio, and those who, as provided by law, shall be elected through a party list system of
registered national, regional and sectoral parties or organizations. Sec. 5(4). Within three years following the return of every census, the Congress shall
make a reapportionment of legislative districts based on the standard provided in this section.
Petitioners argue that the division of San Juan and Mandaluyong into separate congressional districts under Section 49 of the assailed law has resulted
in an increase in the composition of the House of Representatives beyond that provided in Article VI, Sec. 5(1) of the Constitution. Furthermore,
petitioners contend that said division was not made pursuant to any census showing that the subject municipalities have attained the minimum
population requirements. And finally, petitioners assert that Section 49 has the effect of preempting the right of Congress to reapportion legislative
districts pursuant to Sec. 5(4) as aforecited.
The contentions are devoid of merit.
Anent the first issue, we agree with the observation of the Solicitor General that the statutory conversion of Mandaluyong into a highly urbanized city
with a population of not less than two hundred fifty thousand indubitably ordains compliance with the "one city-one representative" proviso in the
Constitution:
. . . Each city with a population of at least two hundred fifty thousand, or each province, shall have at least one representative" (Article VI, Section 5(3),
Constitution).
Hence, it is in compliance with the aforestated constitutional mandate that the creation of a separate congressional district for the City of Mandaluyong
is decreed under Article VIII, Section 49 of R.A. No. 7675. Contrary to petitioners' assertion, the creation of a separate congressional district for
Mandaluyong is not a subject separate and distinct from the subject of its conversion into a highly urbanized city but is a natural and logical
consequence of its conversion into a highly urbanized city. Verily, the title of R.A. No. 7675, "An Act Converting the Municipality of Mandaluyong Into a
Highly Urbanized City of Mandaluyong" necessarily includes and contemplates the subject treated under Section 49 regarding the creation of a
separate congressional district for Mandaluyong.
Moreover, a liberal construction of the "one title-one subject" rule has been invariably adopted by this court so as not to cripple or impede legislation.
Thus, in Sumulong v. Comelec (73 Phil. 288 [1941]), we ruled that the constitutional requirement as now expressed in Article VI, Section 26(1) "should
be given a practical rather than a technical construction. It should be sufficient compliance with such requirement if the title expresses the general
subject and all the provisions are germane to that general subject."
The liberal construction of the "one title-one subject" rule had been further elucidated in Lidasan v. Comelec (21 SCRA 496 [1967]), to wit:
Of course, the Constitution does not require Congress to employ in the title of an enactment, language of such precision as to mirror, fully index or
catalogue all the contents and the minute details therein. It suffices if the title should serve the purpose of the constitutional demand that it inform the
legislators, the persons interested in the subject of the bill and the public, of the nature, scope and consequences of the proposed law and its
operation" (emphasis supplied).
Proceeding now to the other constitutional issues raised by petitioners to the effect that there is no mention in the assailed law of any census to show
that Mandaluyong and San Juan had each attained the minimum requirement of 250,000 inhabitants to justify their separation into two legislative
districts, the same does not suffice to strike down the validity of R.A. No. 7675. The said Act enjoys the presumption of having passed through the
regular congressional processes, including due consideration by the members of Congress of the minimum requirements for the establishment of
separate legislative districts. At any rate, it is not required that all laws emanating from the legislature must contain all relevant data considered by
Congress in the enactment of said laws.
As to the contention that the assailed law violates the present limit on the number of representatives as set forth in the Constitution, a reading of the
applicable provision, Article VI, Section 5(1), as aforequoted, shows that the present limit of 250 members is not absolute. The Constitution clearly
provides that the House of Representatives shall be composed of not more than 250 members, "unless otherwise provided by law." The inescapable
import of the latter clause is that the present composition of Congress may be increased, if Congress itself so mandates through a legislative
enactment. Therefore, the increase in congressional representation mandated by R.A. No. 7675 is not unconstitutional.
Thus, in the absence of proof that Mandaluyong and San Juan do not qualify to have separate legislative districts, the assailed Section 49 of R.A.
No. 7675 must be allowed to stand. As to the contention that Section 49 of R.A. No. 7675 in effect preempts the right of Congress to reapportion
legislative districts, the said argument borders on the absurd since petitioners overlook the glaring fact that it was Congress itself which drafted,
deliberated upon and enacted the assailed law, including Section 49 thereof. Congress cannot possibly preempt itself on a right which pertains to itself.
Aside from the constitutional objections to R.A. No. 7675, petitioners present further arguments against the validity thereof .
Petitioners contend that the people of San Juan should have been made to participate in the plebiscite on R.A. No. 7675 as the same involved a
change in their legislative district. The contention is bereft of merit since the principal subject involved in the plebiscite was the conversion of
Mandaluyong into a highly urbanized city. The matter of separate district representation was only ancillary thereto. Thus, the inhabitants of San Juan
were properly excluded from the said plebiscite as they had nothing to do with the change of status of neighboring Mandaluyong.
Similarly, petitioners' additional argument that the subject law has resulted in "gerrymandering," which is the practice of creating legislative districts to
favor a particular candidate or party, is not worthy of credence. As correctly observed by the Solicitor General, it should be noted that Rep. Ronaldo
Zamora, the author of the assailed law, is the incumbent representative of the former San Juan/Mandaluyong district, having consistently won in both
localities. By dividing San Juan/Mandaluyong, Rep. Zamora's constituency has in fact been diminished, which development could hardly be considered
as favorable to him. WHEREFORE, the petition is hereby DISMISSED for lack of merit.
SO ORDERED.

EN BANC
G.R. No. 71977 February 27, 1987
DEMETRIO G. DEMETRIA, M.P., AUGUSTO S. SANCHEZ, M.P., ORLANDO S. MERCADO, M.P., HONORATO Y. AQUINO, M.P., ZAFIRO L.
RESPICIO, M.P., DOUGLAS R. CAGAS, M.P., OSCAR F. SANTOS, M.P., ALBERTO G. ROMULO, M.P., CIRIACO R. ALFELOR, M.P., ISIDORO E.
REAL, M.P., EMIGDIO L. LINGAD, M.P., ROLANDO C. MARCIAL, M.P., PEDRO M. MARCELLANA, M.P., VICTOR S. ZIGA, M.P., and ROGELIO
V. GARCIA. M.P., petitioners,
vs.
HON. MANUEL ALBA in his capacity as the MINISTER OF THE BUDGET and VICTOR MACALINGCAG in his capacity as the TREASURER OF
THE PHILIPPINES, respondents.

FERNAN, J.:
Assailed in this petition for prohibition with prayer for a writ of preliminary injunction is the constitutionality of the first paragraph of Section 44 of
Presidential Decree No. 1177, otherwise known as the "Budget Reform Decree of 1977."
Petitioners, who filed the instant petition as concerned citizens of this 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 prayed for" 1 listed the grounds relied upon in this petition as follows:
A. SECTION 44 OF THE 'BUDGET REFORM DECREE OF 1977' INFRINGES UPON THE FUNDAMENTAL LAW BY AUTHORIZING THE ILLEGAL
TRANSFER OF PUBLIC MONEYS.
B. SECTION 44 OF PRESIDENTIAL DECREE NO. 1177 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.
C. SECTION 44 OF PRESIDENTIAL DECREE NO. 1177 ALLOWS THE PRESIDENT TO OVERRIDE THE SAFEGUARDS, FORM AND the public will. If an act of the legislature is held void, it is not because the judges have any control over the legislative power, but because the act is
PROCEDURE PRESCRIBED BY THE CONSTITUTION IN APPROVING APPROPRIATIONS. forbidden by the Constitution, and because the will of the people, which is therein declared, is paramount to that of their representatives expressed in
D. SECTION 44 OF THE SAME DECREE AMOUNTS TO AN UNDUE DELEGATION OF LEGISLATIVE POWERS TO THE EXECUTIVE. any law." [Lindsay v. Commissioners, & c., 2 Bay, 38, 61; People v. Rucker, 5 Col. 5; Russ v. Com., 210 Pa. St. 544; 60 Atl. 169, 1 L.R.A. [N.S.] 409,
E. THE THREATENED AND CONTINUING TRANSFER OF FUNDS BY THE PRESIDENT AND THE IMPLEMENTATION THEREOF BY THE 105 Am. St. Rep. 825] (pp. 332-334).
BUDGET MINISTER AND THE TREASURER OF THE PHILIPPINES ARE WITHOUT OR IN EXCESS OF THEIR AUTHORITY AND Indeed, where the legislature or the executive branch is acting within the limits of its authority, the judiciary cannot and ought not to interfere with the
JURISDICTION. 2 former. But where the legislature or the executive acts beyond the scope of its constitutional powers, it becomes the duty of the judiciary to declare
Commenting on the petition in compliance with the Court resolution dated September 19, 1985, the Solicitor General, for the public respondents, 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
questioned the legal standing of petitioners, who were allegedly merely begging an advisory opinion from the Court, there being no justiciable Supreme Court and in such lower courts as may be established by law" [Art. VIII, Section 1 of the 1935 Constitution; Art. X, Section 1 of the 1973
controversy fit for resolution or determination. He further contended that the provision under consideration was enacted pursuant to Section 16[5], Constitution and which was adopted as part of the Freedom Constitution, and Art. VIII, Section 1 of the 1987 Constitution] and which power this Court
Article VIII of the 1973 Constitution; and that at any rate, prohibition will not lie from one branch of the government to a coordinate branch to enjoin the has exercised in many instances. *
performance of duties within the latter's sphere of responsibility. Public respondents are being enjoined from acting under a provision of law which We have earlier mentioned to be constitutionally infirm. The general
On February 27, 1986, the Court required the petitioners to file a Reply to the Comment. This, they did, stating, among others, that as a result of the principle relied upon cannot therefore accord them the protection sought as they are not acting within their "sphere of responsibility" but without it.
change in the administration, there is a need to hold the resolution of the present case in abeyance "until developments arise to enable the parties to The nation has not recovered from the shock, and worst, the economic destitution brought about by the plundering of the Treasury by the deposed
concretize their respective stands." 3 dictator and his cohorts. A provision which allows even the slightest possibility of a repetition of this sad experience cannot remain written in our statute
Thereafter, We required public respondents to file a rejoinder. The Solicitor General filed a rejoinder with a motion to dismiss, setting forth as grounds books.
therefor the abrogation of Section 16[5], Article VIII of the 1973 Constitution by the Freedom Constitution of March 25, 1986, which has allegedly WHEREFORE, the instant petition is granted. Paragraph 1 of Section 44 of Presidential Decree No. 1177 is hereby declared null and void for being
rendered the instant petition moot and academic. He likewise cited the "seven pillars" enunciated by Justice Brandeis in Ashwander v. TVA, 297 U.S. unconstitutional.
288 (1936) 4 as basis for the petition's dismissal. SO ORDER RED.
In the case of Evelio B. Javier v. The Commission on Elections and Arturo F. Pacificador, G.R. Nos. 68379-81, September 22, 1986, We stated that: Teehankee, C.J., Yap, Narvasa, Melencio-Herrera, Alampay, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin, Sarmiento and Cortes,
The abolition of the Batasang Pambansa and the disappearance of the office in dispute between the petitioner and the private respondents — both of JJ., concur.
whom have gone their separate ways — could be a convenient justification for dismissing the case. But there are larger issues involved that must be
resolved now, once and for all, not only to dispel the legal ambiguities here raised. The more important purpose is to manifest in the clearest possible
terms 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.
The Supreme Court is not only the highest arbiter of legal questions but also the conscience of the government. The citizen comes to us in quest of law
but we must also give him justice. The two are not always the same. There are times when we cannot grant the latter because the issue has been
settled and decision is no longer possible according to the law. But there are also times when although the dispute has disappeared, as in this case, it
nevertheless cries out to be resolved. Justice demands that we act then, not only for the vindication of the outraged right, though gone, but also for the
guidance of and as a restraint upon the future.
It is in the discharge of our role in society, as above-quoted, as well as to avoid great disservice to national interest that We take cognizance of this
petition and thus deny public respondents' motion to dismiss. Likewise noteworthy is the fact that the new Constitution, ratified by the Filipino people in
the plebiscite held on February 2, 1987, carries verbatim section 16[5], Article VIII of the 1973 Constitution under Section 24[5], Article VI. And while
Congress has not officially reconvened, We see no cogent reason for further delaying the resolution of the case at bar.
The exception taken to petitioners' legal standing deserves scant consideration. The case of Pascual v. Secretary of Public Works, et al., 110 Phil. 331,
is authority in support of petitioners' locus standi. Thus:
Again, it is well-settled that the validity of a statute may be contested only by one who will sustain a direct injury in consequence of its enforcement. Yet,
there are many decisions nullifying at the instance of taxpayers, laws providing for the disbursement of public funds, upon the theory that the
expenditure of public funds by an officer of the state for the purpose of administering an unconstitutional actconstitutes a misapplication of such funds
which may be enjoined at the request of a taxpayer. Although there are some decisions to the contrary, the prevailing view in the United States is
stated in the American Jurisprudence as follows:
In the determination of the degree of interest essential to give the requisite standing to attack the constitutionality of a statute, the general rule is that
not only persons individually affected, but also 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. [ 11 Am. Jur. 761, Emphasis supplied. ]
Moreover, in Tan v. Macapagal, 43 SCRA 677 and Sanidad v. Comelec, 73 SCRA 333, We said that as regards taxpayers' suits, this Court enjoys that
open discretion to entertain the same or not.
The conflict between paragraph 1 of Section 44 of Presidential Decree No. 1177 and Section 16[5], Article VIII of the 1973 Constitution is readily
perceivable from a mere cursory reading thereof. Said 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.
On the other hand, the constitutional provision under consideration reads as follows:
Sec. 16[5]. 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 commis ions 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.
The prohibition to transfer an appropriation for one item to another was explicit and categorical under the 1973 Constitution. However, to afford the
heads of the different branches of the government and those of the constitutional commissions considerable flexibility in the use of public funds and
resources, the constitution allowed 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. The leeway granted was thus limited. The purpose and
conditions for which funds may be transferred were specified, i.e. transfer may be allowed for the purpose of augmenting an item and such transfer
may be made only if there are savings from another item in the appropriation of the government branch or constitutional body.
Paragraph 1 of Section 44 of P.D. No. 1177 unduly over extends the privilege granted under said Section 16[5]. It empowers the President to
indiscriminately transfer funds from one department, bureau, office or agency of the Executive Department 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 as to whether or not the funds
to be transferred are actually savings in the item from which the same are to be taken, or whether or not the transfer is for the purpose of augmenting
the item to which said transfer is to be made. It does not only completely disregard the standards set in the fundamental law, thereby amounting to an
undue delegation of legislative powers, but likewise goes beyond the tenor thereof. Indeed, such constitutional infirmities render the provision in
question null and void.
"For the love of money is the root of all evil: ..." and money belonging to no one in particular, i.e. public funds, provide an even greater temptation for
misappropriation and embezzlement. This, evidently, was foremost in the minds of the framers of the constitution in meticulously prescribing the rules
regarding the appropriation and disposition of public funds as embodied in Sections 16 and 18 of Article VIII of the 1973 Constitution. Hence, the
conditions on the release of money from the treasury [Sec. 18(1)]; the restrictions on the use of public funds for public purpose [Sec. 18(2)]; the EN BANC G.R. No. 94571 April 22, 1991
prohibition to transfer an appropriation for an item to another [See. 16(5) and the requirement of specifications [Sec. 16(2)], among others, were all TEOFISTO T. GUINGONA, JR. and AQUILINO Q. PIMENTEL, JR., petitioners,
safeguards designed to forestall abuses in the expenditure of public funds. Paragraph 1 of Section 44 puts all these safeguards to naught. For, as vs. HON. GUILLERMO CARAGUE, in his capacity as Secretary, Budget & Management, HON. ROZALINA S. CAJUCOM in her capacity as
correctly observed by petitioners, in view of the unlimited authority bestowed upon the President, "... Pres. Decree No. 1177 opens the floodgates for National Treasurer and COMMISSION ON AUDIT, respondents.
the enactment of unfunded appropriations, results in uncontrolled executive expenditures, diffuses accountability for budgetary performance and Ramon A. Gonzales for petitioners.
entrenches the pork barrel system as the ruling party may well expand [sic] public money not on the basis of development priorities but on political and
personal expediency." 5The contention of public respondents that paragraph 1 of Section 44 of P.D. 1177 was enacted pursuant to Section 16(5) of GANCAYCO, J.:
Article VIII of the 1973 Constitution must perforce fall flat on its face. This is a case of first impression whereby petitioners question the constitutionality of the automatic appropriation for debt service in the 1990 budget.
Another theory advanced by public respondents is that prohibition will not lie from one branch of the government against a coordinate branch to enjoin As alleged in the petition, the facts are as follows:
the performance of duties within the latter's sphere of responsibility. The 1990 budget consists of P98.4 Billion in automatic appropriation (with P86.8 Billion for debt service) and P155.3 Billion appropriated under
Thomas M. Cooley in his "A Treatise on the Constitutional Limitations," Vol. 1, Eight Edition, Little, Brown and Company, Boston, explained: Republic Act No. 6831, otherwise known as the General Appropriations Act, or a total of P233.5 Billion, 1 while the appropriations for the Department of
... The legislative and judicial are coordinate departments of the government, of equal dignity; each is alike supreme in the exercise of its proper Education, Culture and Sports amount to P27,017,813,000.00. 2
functions, and cannot directly or indirectly, while acting within the limits of its authority, be subjected to the control or supervision of the other, without an The said automatic appropriation for debt service is authorized by P.D. No. 81, entitled "Amending Certain Provisions of Republic Act Numbered Four
unwarrantable assumption by that other of power which, by the Constitution, is not conferred upon it. The Constitution apportions the powers of Thousand Eight Hundred Sixty, as Amended (Re: Foreign Borrowing Act)," by P.D. No. 1177, entitled "Revising the Budget Process in Order to
government, but it does not make any one of the three departments subordinate to another, when exercising the trust committed to it. The courts may Institutionalize the Budgetary Innovations of the New Society," and by P.D. No. 1967, entitled "An Act Strenghthening the Guarantee and Payment
declare legislative enactments unconstitutional and void in some cases, but not because the judicial power is superior in degree or dignity to the Positions of the Republic of the Philippines on Its Contingent Liabilities Arising out of Relent and Guaranteed Loan by Appropriating Funds For The
legislative. Being required to declare what the law is in the cases which come before them, they must enforce the Constitution, as the paramount law, Purpose.
whenever a legislative enactment comes in conflict with it. But the courts sit, not to review or revise the legislative action, but to enforce the legislative There can be no question that petitioners as Senators of the Republic of the Philippines may bring this suit where a constitutional issue is
will, and it is only where they find that the legislature has failed to keep within its constitutional limits, that they are at liberty to disregard its action; and raised.3 Indeed, even a taxpayer has personality to restrain unlawful expenditure of public funds.
in doing so, they only do what every private citizen may do in respect to the mandates of the courts when the judges assumed to act and to render The petitioner seek the declaration of the unconstitutionality of P.D. No. 81, Sections 31 of P.D. 1177, and P.D. No. 1967. The petition also seeks to
judgments or decrees without jurisdiction. "In exercising this high authority, the judges claim no judicial supremacy; they are only the administrators of restrain the disbursement for debt service under the 1990 budget pursuant to said decrees.
Respondents contend that the petition involves a pure political question which is the repeal or amendment of said laws addressed to the judgment,
wisdom and patriotism of the legislative body and not this Court.
In Gonzales,5 the main issue was the unconstitutionality of the presidential veto of certain provision particularly Section 16 of the General
Appropriations Act of 1990, R.A. No. 6831. This Court, in disposing of the issue, stated —
The political question doctrine neither interposes an obstacle to judicial determination of the rival claims. The jurisdiction to delimit constitutional
boundaries has been given to this Court. It cannot abdicate that obligation mandated by the 1987 Constitution, although said provision by no means
does away with the applicability of the principle in appropriate cases.
Sec. 1. The judicial power shad be vested in one Supreme Court and in such lower courts as may be established by law.
Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable,
and to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or
instrumentality of the Government.
With the Senate maintaining that the President's veto is unconstitutional and that charge being controverted, there is an actual case or justiciable
controversy between the Upper House of Congress and the executive department that may be taken cognizance of by this Court.
The questions raised in the instant petition are —
I. IS THE APPROPRIATION OF P86 BILLION IN THE P233 BILLION 1990 BUDGET VIOLATIVE OF SECTION 5, ARTICLE XIV OF THE
CONSTITUTION?
II. ARE PD No. 81, PD No. 1177 AND PD No. 1967 STILL OPERATIVE UNDER THE CONSTITUTION?
III. ARE THEY VIOLATIVE OF SECTION 29(l), ARTICLE VI OF THE CONSTITUTION? 6
There is thus a justiciable controversy raised in the petition which this Court may properly take cognizance of On the first issue, the petitioners aver —
According to Sec. 5, Art. XIV of the Constitution:
(5) The State shall assign the highest budgetary priority to education and ensure that teaching will attract and retain its rightful share of the best
available talents through adequate remuneration and other means of job satisfaction and fulfillment.
The reason behind the said provision is stated, thus:
In explaining his proposed amendment, Mr. Ople stated that all the great and sincere piety professed by every President and every Congress of the
Philippines since the end of World War II for the economic welfare of the public schoolteachers always ended up in failure and this failure, he stated,
had caused mass defection of the best and brightest teachers to other careers, including menial jobs in overseas employment and concerted actions by
them to project their grievances, mainly over low pay and abject working conditions.
He pointed to the high expectations generated by the February Revolution, especially keen among public schoolteachers, which at present exacerbate
these long frustrated hopes.
Mr. Ople stated that despite the sincerity of all administrations that tried vainly to respond to the needs of the teachers, the central problem that always
defeated their pious intentions was really the one budgetary priority in the sense that any proposed increase for public schoolteachers had to be
multiplied many times by the number of government employees in general and their equitable claims to any pay standardization such that the pay rate
of teachers is hopelessly pegged to the rate of government workers in general. This, he stated, foredoomed the prospect of a significant pay increase
for teachers.
Mr. Ople pointed out that the recognition by the Constitution of the highest priority for public schoolteachers, and by implication, for all teachers, would
ensure that the President and Congress would be strongly urged by a constitutional mandate to grant to them such a level of remuneration and other
incentives that would make teaching competitive again and attractive to the best available talents in the nation.
Finally, Mr. Ople recalled that before World War II, teaching competed most successfully against all other career choices for the best and the brightest
of the younger generation. It is for this reason, he stated, that his proposed amendment if approved, would ensure that teaching would be restored to its
lost glory as the career of choice for the most talented and most public-spirited of the younger generation in the sense that it would become the
countervailing measure against the continued decline of teaching and the wholesale desertion of this noble profession presently taking place. He
further stated that this would ensure that the future and the quality of the population would be asserted as a top priority against many clamorous and
importunate but less important claims of the present. (Journal of the Constitutional Commission, Vol. II, p. 1172)
However, as against this constitutional intention, P86 Billion is appropriated for debt service while only P27 Billion is appropriated for the Department of
Education in the 1990 budget. It plain, therefore, that the said appropriation for debt services is inconsistent with the Constitution, hence, viod (Art. 7,
New Civil Code).7
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" in
order to "insure that teaching will attract and retain its rightful share of the best available talents through adequate remuneration and other means of job
satisfaction and fulfillment," it does not thereby follow that the hands of Congress are so hamstrung as to deprive it the power to respond to the
imperatives of the national interest and for the attainment of other state policies or objectives.
As aptly observed by respondents, since 1985, the budget for education has tripled to upgrade and improve the facility of the public school system. The
compensation of teachers has been doubled. The amount of P29,740,611,000.00 8 set aside for the Department of Education, Culture and Sports under
the General Appropriations Act (R.A. No. 6831), is the highest budgetary allocation among all department budgets. This is a clear compliance with the
aforesaid constitutional mandate according highest priority to education.
Having faithfully complied therewith, Congress is certainly not without any power, guided only by its good judgment, to provide an appropriation, that
can reasonably service our enormous debt, the greater portion of which was inherited from the previous administration. It is not only a matter of honor
and to protect the credit standing of the country. More especially, the very survival of our economy is at stake. Thus, if in the process Congress
appropriated an amount for debt service bigger than the share allocated to education, the Court finds and so holds that said appropriation cannot be
thereby assailed as unconstitutional.
Now to the second issue. The petitioners made the following observations:
To begin with, Rep. Act 4860 entitled "AN ACT AUTHORIZING THE PRESIDENT OF THE PHILIPPINES TO OBTAIN SUCH FOREIGN LOANS AND
CREDITS, OR TO INCUR SUCH FOREIGN INDEBTEDNESS, AS MAY BE NECESSARY TO FINANCE APPROVED ECONOMIC DEVELOPMENT
PURPOSES OR PROJECTS, AND TO GUARANTEE, IN BEHALF OF THE REPUBLIC OF THE PHILIPPINES, FOREIGN LOANS OBTAINED OR
BONDS ISSUED BY CORPORATIONS OWNED OR CONTROLLED BY THE GOVERNMENT OF THE PHILIPPINES FOR ECONOMIC
DEVELOPMENT PURPOSES INCLUDING THOSE INCURRED FOR PURPOSES OF RELENDING TO THE PRIVATE SECTOR, APPROPRIATING
THE NECESSARY FUNDS THEREFOR, AND FOR OTHER PURPOSES, provides:
Sec. 2. The total amount of loans, credits and indebtedness, excluding interests, which the President of the Philippines is authorized to incur under this
Act shall not exceed one billion United States dollars or its equivalent in other foreign currencies at the exchange rate prevailing at the time the loans,
credits and indebtedness are incurred: Provided, however, That the total loans, credits and indebtedness incurred under this Act shall not exceed two
hundred fifty million in the fiscal year of the approval of this Act, and two hundred fifty million every fiscal year thereafter, all in United States dollars or
its equivalent in other currencies.
Sec. 5. It shall be the duty of the President, within thirty days after the opening of every regular session, to report to the Congress the amount of loans,
credits and indebtedness contracted, as well as the guarantees extended, and the purposes and projects for which the loans, credits and indebtedness
were incurred, and the guarantees extended, as well as such loans which may be reloaned to Filipino owned or controlled corporations and similar
purposes.
Sec. 6. The Congress shall appropriate the necessary amount out of any funds in the National Treasury not otherwise appropriated, to cover the
payment of the principal and interest on such loans, credits or indebtedness as and when they shall become due.
However, after the declaration of martial law, President Marcos issued PD 81 amending Section 6, thus:
Sec. 7. Section six of the same Act is hereby further amended to read as follows:
Sec. 6. Any provision of law to the contrary notwithstanding, and in order to enable the Republic of the Philippines to pay the principal, interest, taxes
and other normal banking charges on the loans, credits or indebtedness, or on the bonds, debentures, securities or other evidences of indebtedness
sold in international markets incurred under the authority of this Act, the proceeds of which are deemed appropriated for the projects, all the revenue
realized from the projects financed by such loans, credits or indebtedness, or on the bonds, debentures, securities or other evidences of indebtedness,
shall be turned over in full, after deducting actual and necessary expenses for the operation and maintenance of said projects, to the National Treasury
by the government office, agency or instrumentality, or government-owned or controlled corporation concerned, which is hereby appropriated for the
purpose as and when they shall become due. In case the revenue realized is insufficient to cover the principal, interest and other charges, such portion
of the budgetary savings as may be necessary to cover the balance or deficiency shall be set aside exclusively for the purpose by the government
office, agency or instrumentality, or government-owned or controlled corporation concerned: Provided, That, if there still remains a deficiency, such
amount necessary to cover the payment of the principal and interest on such loans, credit or indebtedness as and when they shall become due is
hereby appropriated out of any funds in the national treasury not otherwise appropriated: . . .
President Marcos also issued PD 1177, which provides:
Sec. 31. Automatic appropriations. –– All expenditures for (a) personnel retirement premiums, government service insurance, and other similar fixed
expenditures, (b) principal and interest on public debt, (c) national government guarantees of obligations which are drawn upon, are automatically
appropriated; Provided, that no obligations shall be incurred or payments made from funds thus automatically appropriated except as issued in the form
of regular budgetary allotments.
and PD 1967, which provides:
Sec. 1. There is hereby appropriated, out of any funds in the National Treasury not otherwise appropriated, such amounts as may be necessary to
effect payments on foreign or domestic loans, or foreign or domestic loans whereon creditors make a call on the direct and indirect guarantee of the
Republic of the Philippines, obtained by:
a. The Republic of the Philippines the proceeds of which were relent to government-owned or controlled corporations and/or government financial
institutions;
b. government-owned or controlled corporations and/or government financial institutions the proceeds of which were relent to public or private
institutions;
c. government-owned or controlled corporations and/or financial institutions and guaranteed by the Republic of the Philippines;
d. other public or private institutions and guaranteed by government-owned or controlled corporations and/or government financial institutions.
Sec. 2. All repayments made by borrower institutions on the loans for whose account advances were made by the National Treasury will revert to the
General Fund.
Sec. 3. In the event that any borrower institution is unable to settle the advances made out of the appropriation provided therein, the Treasurer of the
Philippines shall make the proper recommendation to the Minister of Finance on whether such advances shall be treated as equity or subsidy of the
National Government to the institution concerned, which shall be considered in the budgetary program of the Government.
In the "Budget of Expenditures and Sources of Financing Fiscal Year 1990," which accompanied her budget message to Congress, the President of the
Philippines, Corazon C. Aquino, stated:
Sources Appropriation
The P233.5 billion budget proposed for fiscal year 1990 will require P132.1 billion of new programmed appropriations out of a total P155.3 billion in new
legislative authorization from Congress. The rest of the budget, totalling P101.4 billion, will be sourced from existing appropriations: P98.4 billion from
Automatic Appropriations and P3.0 billion from Continuing Appropriations (Fig. 4).
And according to Figure 4, . . ., P86.8 billion out of the P98.4 Billion are programmed for debt service. In other words, the President had, on her own,
determined and set aside the said amount of P98.4 Billion with the rest of the appropriations of P155.3 Billion to be determined and fixed by Congress,
which is now Rep. Act 6831.9
Petitioners argue that the said automatic appropriations under the aforesaid decrees of then President Marcos became functus oficio when he was
ousted in February, 1986; that upon the expiration of the one-man legislature in the person of President Marcos, the legislative power was restored to
Congress on February 2, 1987 when the Constitution was ratified by the people; that there is a need for a new legislation by Congress providing for
automatic appropriation, but Congress, up to the present, has not approved any such law; and thus the said P86.8 Billion automatic appropriation in the
1990 budget is an administrative act that rests on no law, and thus, it cannot be enforced.
Moreover, petitioners contend that assuming arguendo that P.D. No. 81, P.D. No. 1177 and P.D. No. 1967 did not expire with the ouster of President
Marcos, after the adoption of the 1987 Constitution, the said decrees are inoperative under Section 3, Article XVIII which provides ––
Sec. 3. All existing laws, decrees, executive orders, proclamations, letters of instructions, and other executive issuances not inconsistent with this
Constitution shall remain operative until amended, repealed, or revoked." (Emphasis supplied.)
They then point out that since the said decrees are inconsistent with Section 24, Article VI of the Constitution, i.e.,
Sec. 24. All appropriation, revenue or tariff bills, bills authorizing increase of the public debt, bills of local application, and private bills shall originate
exclusively in the House of Representatives, but the Senate may propose or concur with amendments. (Emphasis supplied.)
whereby bills have to be approved by the President, 10 then a law must be passed by Congress to authorize said automatic appropriation. Further,
petitioners state said decrees violate Section 29(l) of Article VI of the Constitution which provides as follows ––
Sec. 29(l). No money shall be paid out of the Treasury except in pursuance of an appropriation made by law.
They assert that there must be definiteness, certainty and exactness in an appropriation, 11 otherwise it is an undue delegation of legislative power to
the President who determines in advance the amount appropriated for the debt service. 12
The Court is not persuaded.
Section 3, Article XVIII of the Constitution recognizes that "All existing laws, decrees, executive orders, proclamations, letters of instructions and other
executive issuances not inconsistent with the Constitution shall remain operative until amended, repealed or revoked."
This transitory provision of the Constitution has precisely been adopted by its framers to preserve the social order so that legislation by the then
President Marcos may be recognized. Such laws are to remain in force and effect unless they are inconsistent with the Constitution or, are otherwise
amended, repealed or revoked.
An examination of the aforecited presidential decrees show the clear intent that the amounts needed to cover the payment of the principal and interest
on all foreign loans, including those guaranteed by the national government, should be made available when they shall become due precisely without
the necessity of periodic enactments of separate laws appropriating funds therefor, since both the periods and necessities are incapable of
determination in advance.
The automatic appropriation provides the flexibility for the effective execution of debt management policies. Its political wisdom has been convincingly
discussed by the Solicitor General as he argues —
. . . First, for example, it enables the Government to take advantage of a favorable turn of market conditions by redeeming high-interest securities and
borrowing at lower rates, or to shift from short-term to long-term instruments, or to enter into arrangements that could lighten our outstanding debt
burden debt-to-equity, debt to asset, debt-to-debt or other such schemes. Second, the automatic appropriation obviates the serious difficulties in debt
servicing arising from any deviation from what has been previously programmed. The annual debt service estimates, which are usually made one year
in advance, are based on a mathematical set or matrix or, in layman's parlance, "basket" of foreign exchange and interest rate assumptions which may
significantly differ from actual rates not even in proportion to changes on the basis of the assumptions. Absent an automatic appropriation clause, the
Philippine Government has to await and depend upon Congressional action, which by the time this comes, may no longer be responsive to the
intended conditions which in the meantime may have already drastically changed. In the meantime, also, delayed payments and arrearages may have
supervened, only to worsen our debt service-to-total expenditure ratio in the budget due to penalties and/or demand for immediate payment even
before due dates.
Clearly, the claim that payment of the loans and indebtedness is conditioned upon the continuance of the person of President Marcos and his
legislative power goes against the intent and purpose of the law. The purpose is foreseen to subsist with or without the person of Marcos.13
The argument of petitioners that the said presidential decrees did not meet the requirement and are therefore inconsistent with Sections 24 and 27 of
Article VI of the Constitution which requires, among others, that "all appropriations, . . . bills authorizing increase of public debt" must be passed by
Congress and approved by the President is untenable. Certainly, the framers of the Constitution did not contemplate that existing laws in the statute
books including existing presidential decrees appropriating public money are reduced to mere "bills" that must again go through the legislative million
The only reasonable interpretation of said provisions of the Constitution which refer to "bills" is that they mean appropriation measures still to be passed
by Congress. If the intention of the framers thereof were otherwise they should have expressed their decision in a more direct or express manner.
Well-known is the rule that repeal or amendment by implication is frowned upon. Equally fundamental is the principle that construction of the
Constitution and law is generally applied prospectively and not retrospectively unless it is so clearly stated.
On the third issue that there is undue delegation of legislative power, in Edu vs. Ericta,14 this Court had this to say ––
What cannot be delegated is the authority under the Constitution to make laws and to alter and repeal them;the test is the completeness of the statute
in all its terms and provisions when it leaves the hands of the legislature. To determine whether or not there is an undue delegation of legislative power,
the inequity must be directed to the scope and definiteness of the measure enacted. The legislature does not abdicate its function when it describes
what job must be done, who is to do it, and what is the scope of his authority. For a complex economy, that may indeed be the only way in which
legislative process can go forward . . .
To avoid the taint of unlawful delegation there must be a standard, which implies at the very least that the legislature itself determines matters of
principle and lays down fundamental policy . . .
The standard may be either express or implied . . . from the policy and purpose of the act considered as whole . . .
In People vs. Vera,15 this Court said "the true distinction is between the delegation of power to make the law, which necessarily involves discretion as to
what the law shall be, and conferring authority or discretion as to its execution, to be exercised under and in pursuance of the law. The first cannot be
done; to the latter no valid objection can be made."
Ideally, the law must be complete in all its essential terms and conditions when it leaves the legislature so that there will be nothing left for the delegate
to do when it reaches him except enforce it. If there are gaps in the law that will prevent its enforcement unless they are f irst filled, the delegate will then
have been given the opportunity to step in the shoes of the legislature and exercise a discretion essentially legislative in order to repair the omissions.
This is invalid delegation.16
The Court finds that in this case the questioned laws are complete in all their essential terms and conditions and sufficient standards are indicated
therein.
The legislative intention in R.A. No. 4860, as amended, Section 31 of P.D. No. 1177 and P.D. No. 1967 is that the amount needed should be
automatically set aside in order to enable the Republic of the Philippines to pay the principal, interest, taxes and other normal banking charges on the
loans, credits or indebtedness incurred as guaranteed by it when they shall become due without the need to enact a separate law appropriating funds
therefor as the need arises. The purpose of these laws is to enable the government to make prompt payment and/or advances for all loans to protect
and maintain the credit standing of the country.
Although the subject presidential decrees do not state specific amounts to be paid, necessitated by the very nature of the problem being addressed, the
amounts nevertheless are made certain by the legislative parameters provided in the decrees. The Executive is not of unlimited discretion as to the
amounts to be disbursed for debt servicing. The mandate is to pay only the principal, interest, taxes and other normal banking charges on the loans,
credits or indebtedness, or on the bonds, debentures or security or other evidences of indebtedness sold in international markets incurred by virtue of
the law, as and when they shall become due. No uncertainty arises in executive implementation as the limit will be the exact amounts as shown by the
books of the Treasury.
The Government budgetary process has been graphically described to consist of four major phases as aptly discussed by the Solicitor General:
The Government budgeting process consists of four major phases:
1. Budget preparation. The first step is essentially tasked upon the Executive Branch and covers the estimation of government revenues, the
determination of budgetary priorities and activities within the constraints imposed by available revenues and by borrowing limits, and the translation of
desired priorities and activities into expenditure levels.
Budget preparation starts with the budget call issued by the Department of Budget and Management. Each agency is required to submit agency budget
estimates in line with the requirements consistent with the general ceilings set by the Development Budget Coordinating Council (DBCC).
With regard to debt servicing, the DBCC staff, based on the macro-economic projections of interest rates (e.g. LIBOR rate) and estimated sources of
domestic and foreign financing, estimates debt service levels. Upon issuance of budget call, the Bureau of Treasury computes for the interest and
principal payments for the year for all direct national government borrowings and other liabilities assumed by the same.
2. Legislative authorization. –– At this stage, Congress enters the picture and deliberates or acts on the budget proposals of the President, and
Congress in the exercise of its own judgment and wisdom formulatesan appropriation act precisely following the process established by the
Constitution, which specifies that no money may be paid from the Treasury except in accordance with an appropriation made by law.
Debt service is not included in the General Appropriation Act, since authorization therefor already exists under RA No. 4860 and 245, as amended and
PD 1967. Precisely in the fight of this subsisting authorization as embodied in said Republic Acts and PD for debt service, Congress does not concern
itself with details for implementation by the Executive, but largely with annual levels and approval thereof upon due deliberations as part of the whole
obligation program for the year. Upon such approval, Congress has spoken and cannot be said to have delegated its wisdom to the Executive, on
whose part lies the implementation or execution of the legislative wisdom.
3. Budget Execution. Tasked on the Executive, the third phase of the budget process covers the various operational aspects of budgeting. The
establishment of obligation authority ceilings, the evaluation of work and financial plans for individual activities, the continuing review of government
fiscal position, the regulation of funds releases, the implementation of cash payment schedules, and other related activities comprise this phase of the
budget cycle.
Release from the debt service fired is triggered by a request of the Bureau of the Treasury for allotments from the Department of Budget and
Management, one quarter in advance of payment schedule, to ensure prompt payments. The Bureau of Treasury, upon receiving off icial billings from
the creditors, remits payments to creditors through the Central Bank or to the Sinking Fund established for government security issues (Annex F).
4. Budget accountability. The fourth phase refers to the evaluation of actual performance and initially approved work targets, obligations incurred,
personnel hired and work accomplished are compared with the targets set at the time the agency budgets were approved.
There being no undue delegation of legislative power as clearly above shown, petitioners insist nevertheless that subject presidential decrees
constitute undue delegation of legislative power to the executive on the alleged ground that the appropriations therein are not exact,
certain or definite, invoking in support therefor the Constitution of Nebraska, the constitution under which the case of State v. Moore, 69 NW 974, cited
by petitioners, was decided. Unlike the Constitution of Nebraska, however, our Constitution does not require a definite, certain, exact
or "specific appropriation made by law." Section 29, Article VI of our 1987 Constitution omits any of these words and simply states:
Section 29(l). No money shall be paid out of the treasury except in pursuance of an appropriation made by law.
More significantly, there is no provision in our Constitution that provides or prescribes any particular form of words or religious recitals in which an
authorization or appropriation by Congress shall be made, except that it be "made by law," such as precisely the authorization or appropriation under
the questioned presidential decrees. In other words, in terms of time horizons, an appropriation may be made impliedly (as by past but subsisting
legislations) as well as expressly for the current fiscal year (as by enactment of laws by the present Congress), just as said appropriation may be made
in general as well as in specific terms. The Congressional authorization may be embodied in annual laws, such as a general appropriations act or in
special provisions of laws of general or special application which appropriate public funds for specific public purposes, such as the questioned decrees.
An appropriation measure is sufficient if the legislative intention clearly and certainly appears from the language employed (In re Continuing
Appropriations, 32 P. 272), whether in the past or in the present.17
Thus, in accordance with Section 22, Article VII of the 1987 Constitution, President Corazon C. Aquino submitted to Congress the Budget of
Expenditures and Sources of Financing for the Fiscal Year 1990. The proposed 1990 expenditure program covering the estimated obligation that will
be incurred by the national government during the fiscal year amounts to P233.5 Billion. Of the proposed budget, P86.8 is set aside for debt servicing
as follows:
1âwphi1
National Government Debt
Service Expenditures,
1990
(in million pesos)
Domestic Foreign Total
RA 245, as RA 4860
amended as amended,
PD 1967
Interest
Payments P36,861 P18,570 P55,431
Principal
Amortization 16,310 15,077 31,387
Total P53,171 P33,647 P86,818 18
======== ======== ========
as authorized under P.D. 1967 and R.A. 4860 and 245, as amended.
The Court, therefor, finds that R.A. No. 4860, as amended by P.D. No. 81, Section 31 of P.D. 1177 and P.D. No. 1967 constitute lawful authorizations
or appropriations, unless they are repealed or otherwise amended by Congress. The Executive was thus merely complying with the duty to implement
the same.
There can be no question as to the patriotism and good motive of petitioners in filing this petition. Unfortunately, the petition must fail on the
constitutional and legal issues raised. As to whether or not the country should honor its international debt, more especially the enormous amount that
had been incurred by the past administration, which appears to be the ultimate objective of the petition, is not an issue that is presented or proposed to
be addressed by the Court. Indeed, it is more of a political decision for Congress and the Executive to determine in the exercise of their wisdom and
sound discretion.
WHEREFORE, the petition is DISMISSED, without pronouncement as to costs.
SO ORDERED. Fernan, C.J., Narvasa, Melencio-Herrera, Feliciano, Bidin, Griño-Aquino, Medialdea, Regalado and Davide, Jr., JJ., concur.
Separate Opinions PARAS, J., dissenting: I dissent. Any law that undermines our economy and therefore our security is per se unconstitutional.
CRUZ, J., dissenting:
I regret I must dissent. One of the essential requirements of a valid appropriation is that the amount appropriated must be certain, which means that the
sum authorized to be released should either be determinate or at least determinable. As has been uniformly held:
It is essential to the validity of an appropriation law that it should state the exact amount appropriated or the maximum sum from which the authorized
expenses shall be paid, otherwise it would be void for uncertainty, since the legislative power over appropriation in effect could have been delegated in
such case to the recipient of the funds appropriated or to the official authorized to spend them. (State v. Eggers, 16 L.R.A., N.S. 630; State v. La Grave,
41 Pac. 1075).
Thus, a law which provided that there should be paid out of the State Treasury to any person, firm or corporation engaged in the manufacture of sugar
in that State the sum of five-eights of one per cent per pound upon each pound manufactured under the conditions and restrictions of the Act was held
as invalid appropriation for lack of certainty in the amount to be paid out of the Treasury, the legislature having failed to fix the amount to be
appropriated. (State of Nebraska v. Moore, 50 Neb. 88, cited in Gonzales, Phil. Political Law, p. 213). The presidential decrees on which the
respondents rely do not satisfy this requirement.1âvvphi1 Section 7 of P.D. 81 provides that "all the revenue realized from the projects financed by
such loans," after deducting the actual and necessary operating and maintenance expenses, is appropriated for servicing the foreign debts. The same
sections says that in case of deficiency, "such amount necessary to cover the payment of the principal and interest on such loans, credit or
indebteedness as and when they shall become due is hereby appropriated." Section 31 of P.D. 1717 provides that "all expenditures for the payment of
the principal and interest on public debt" are automatically appropriated. Section 1 of P.D. 1967 appropriates "such amounts as may be necessary to
effect payments on foreign or domestic loans." It is easy to see that in none of these decrees is the amount appropriated fixed, either by an exact figure
or by an indication at least of its maximum.
The ponencia says that "the amounts are made certain by the legislative parameters provided in the degree." I am afraid I do not see those
parameters. I see only the appropriation of "all the revenue derived from the projects financed by such loans" and "such amounts as may be
necessary to effect payment on foreign or domestic loans" or "the principal and interest on public debt, as and when they shall become due." All these
are uncertain. Even President Marcos as a legislator, did not know how much he was appropriating. The ponencia assures us that "no uncertainty
arises in executive implementation as the limit will be the exact amounts as shown by the books of the Treasury." That is cold comfort, indeed, if we
consider that it is the Treasury itself that is sought to be limited by the requirement for certainty. The intention precisely is to prevent the disbursement
of public funds by the Treasury itself from "running riot."
We surely cannot defend an appropriation, say, of "such amounts as may be necessary for the construction of a bridge across the Pasig River" even if
the exact cost may be shown later by the books of the Treasury. This would be no different from the uncertain appropriations the Court is here
sustaining.
I think it is a mistake for this government to justify its acts on the basis of the decrees of President Marcos. These are on the whole tainted with
authoritarianism and enfeebled by lack of proper study and draftmanship, let alone suspect motives. I suggest that these decrees must be reviewed
carefully and whenever proper, set aright by necessary modification or outright revocation. Instead, the respondents are invoking them blindly.
Sarmiento, J., concurs.
PADILLA, J., dissenting I join Mr. Justice Cruz in his dissent. I only wish to add the following:
Section 29(l), Article VI of the 1987 Constitution provides: Sec. 29(l). No money shall be paid out of the Treasury except in pursuance of an
appropriation made by law. It is quite obvious from this provision that there must first be a law enacted by Congress (and approved by the President)
appropriating a particular sum or sums before payment thereof from the Treasury can be made. If the above constitutional provision is to be meaningful
and effective at all, I believe that the law appropriating aparticular sum or sums for debt service, whether involving domestic or foreign loans of the
Government, should be enacted by the Congress, composed of the most recently elected representatives of the people. To construe the term "lay" in
the above provision to mean the decrees issued by then President Marcos would, in effect, be supporting a continuing governance of a large segment
of the Philippine economy by a past regime which, as every one knows, centralized for a good number of years legislative and executive powers in only
one person. Besides, these decrees issued by President Marcos relative to debt service were tailored for the periods covered by said decrees. Today it
is Congress that should determine and approve the proper appropriations for debt servicing, as this is a matter of policy that, in my opinion, pertains to
the legislative department, as the policy determining body of the Government.
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.
x-----------------------x
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.
x-----------------------x
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.
DECISION
PERLAS-BERNABE, J.:
"Experience is the oracle of truth."1
-James Madison
Before the Court are consolidated petitions 2 taken under Rule 65 of the Rules of Court, all of which assail the constitutionality of the Pork Barrel
System. Due to the complexity of the subject matter, the Court shall heretofore discuss the system‘s conceptual underpinnings before detailing the
particulars of the constitutional challenge.
The Facts
I. Pork Barrel: General Concept.
"Pork Barrel" is political parlance of American -English origin.3 Historically, its usage may be traced to the degrading ritual of rolling out a barrel stuffed
with pork to a multitude of black slaves who would cast their famished bodies into the porcine feast to assuage their hunger with morsels coming from
the generosity of their well-fed master.4 This practice was later compared to the actions of American legislators in trying to direct federal budgets in
favor of their districts.5 While the advent of refrigeration has made the actual pork barrel obsolete, it persists in reference to political bills that "bring
home the bacon" to a legislator‘s district and constituents. 6 In a more technical sense, "Pork Barrel" refers to an appropriation of government spending
meant for localized projects and secured solely or primarily to bring money to a representative's district. 7Some scholars on the subject further use it to
refer to legislative control of local appropriations. 8
In the Philippines, "Pork Barrel" has been commonly referred to as lump-sum, discretionary funds of Members of the Legislature, 9 although, as will be
later discussed, its usage would evolve in reference to certain funds of the Executive.
II. History of Congressional Pork Barrel in the Philippines.
A. Pre-Martial Law Era (1922-1972).
Act 3044,10 or the Public Works Act of 1922, is considered 11 as the earliest form of "Congressional Pork Barrel" in the Philippines since the utilization of
the funds appropriated therein were subjected to post-enactment legislator approval. Particularly, in the area of fund release, Section 3 12 provides that
the sums appropriated for certain public works projects 13 "shall be distributed x x x subject to the approval of a joint committee elected by the Senate
and the House of Representatives. "The committee from each House may also authorize one of its members to approve the distribution made by the
Secretary of Commerce and Communications."14 Also, in the area of fund realignment, the same section provides that the said secretary, "with the
approval of said joint committee, or of the authorized members thereof, may, for the purposes of said distribution, transfer unexpended portions of any
item of appropriation under this Act to any other item hereunder."
In 1950, it has been documented 15 that post-enactment legislator participation broadened from the areas of fund release and realignment to the area of
project identification. During that year, the mechanics of the public works act was modified to the extent that the discretion of choosing projects was
transferred from the Secretary of Commerce and Communications to legislators. "For the first time, the law carried a list of projects selected by
Members of Congress, they ‘being the representatives of the people, either on their own account or by consultation with local officials or civil
leaders.‘"16 During this period, the pork barrel process commenced with local government councils, civil groups, and individuals appealing to
Congressmen or Senators for projects. Petitions that were accommodated formed part of a legislator‘s allocation, and the amount each legislator would
eventually get is determined in a caucus convened by the majority. The amount was then integrated into the administration bill prepared by the
Department of Public Works and Communications. Thereafter, the Senate and the House of Representatives added their own provisions to the bill until
it was signed into law by the President – the Public Works Act.17 In the 1960‘s, however, pork barrel legislation reportedly ceased in view of the
stalemate between the House of Representatives and the Senate. 18
B. Martial Law Era (1972-1986).
While the previous" Congressional Pork Barrel" was apparently discontinued in 1972 after Martial Law was declared, an era when "one man controlled
the legislature,"19 the reprieve was only temporary. By 1982, the Batasang Pambansa had already introduced a new item in the General Appropriations
Act (GAA) called the" Support for Local Development Projects" (SLDP) under the article on "National Aid to Local Government Units". Based on
reports,20 it was under the SLDP that the practice of giving lump-sum allocations to individual legislators began, with each assemblyman receiving
₱500,000.00. Thereafter, assemblymen would communicate their project preferences to the Ministry of Budget and Management for approval. Then,
the said ministry would release the allocation papers to the Ministry of Local Governments, which would, in turn, issue the checks to the city or
municipal treasurers in the assemblyman‘s locality. It has been further reported that "Congressional Pork Barrel" projects under the SLDP also began
to cover not only public works projects, or so- called "hard projects", but also "soft projects", 21 or non-public works projects such as those which would
fall under the categories of, among others, education, health and livelihood. 22
C. Post-Martial Law Era:
Corazon Cojuangco Aquino Administration (1986-1992).
After the EDSA People Power Revolution in 1986 and the restoration of Philippine democracy, "Congressional Pork Barrel" was revived in the form of
the "Mindanao Development Fund" and the "Visayas Development Fund" which were created with lump-sum appropriations of ₱480 Million and ₱240
Million, respectively, for the funding of development projects in the Mindanao and Visayas areas in 1989. It has been documented23 that the clamor
raised by the Senators and the Luzon legislators for a similar funding, prompted the creation of the "Countrywide Development Fund" (CDF) which was
integrated into the 1990 GAA24 with an initial funding of ₱2.3 Billion to cover "small local infrastructure and other priority community projects."
Under the GAAs for the years 1991 and 1992, 25 CDF funds were, with the approval of the President, to be released directly to the implementing
agencies but "subject to the submission of the required list of projects and activities."Although the GAAs from 1990 to 1992 were silent as to the
amounts of allocations of the individual legislators, as well as their participation in the identification of projects, it has been reported26 that by 1992,
Representatives were receiving ₱12.5 Million each in CDF funds, while Senators were receiving ₱18 Million each, without any limitation or qualification,
and that they could identify any kind of project, from hard or infrastructure projects such as roads, bridges, and buildings to "soft projects" such as
textbooks, medicines, and scholarships.27
D. Fidel Valdez Ramos (Ramos) Administration (1992-1998).
The following year, or in 1993,28 the GAA explicitly stated that the release of CDF funds was to be made upon the submission of the list of projects and
activities identified by, among others, individual legislators. For the first time, the 1993 CDF Article included an allocation for the Vice-President.29 As
such, Representatives were allocated ₱12.5 Million each in CDF funds, Senators, ₱18 Million each, and the Vice-President, ₱20 Million.
In 1994,30 1995,31 and 1996,32 the GAAs contained the same provisions on project identification and fund release as found in the 1993 CDF Article. In
addition, however, the Department of Budget and Management (DBM) was directed to submit reports to the Senate Committee on Finance and the
House Committee on Appropriations on the releases made from the funds. 33
Under the 199734 CDF Article, Members of Congress and the Vice-President, in consultation with the implementing agency concerned, were directed to
submit to the DBM the list of 50% of projects to be funded from their respective CDF allocations which shall be duly endorsed by (a) the Senate
President and the Chairman of the Committee on Finance, in the case of the Senate, and (b) the Speaker of the House of Representatives and the
Chairman of the Committee on Appropriations, in the case of the House of Representatives; while the list for the remaining 50% was to be submitted
within six (6) months thereafter. The same article also stated that the project list, which would be published by the DBM, 35 "shall be the basis for the
release of funds" and that "no funds appropriated herein shall be disbursed for projects not included in the list herein required."
The following year, or in 1998,36 the foregoing provisions regarding the required lists and endorsements were reproduced, except that the publication of
the project list was no longer required as the list itself sufficed for the release of CDF Funds.
The CDF was not, however, the lone form of "Congressional Pork Barrel" at that time. Other forms of "Congressional Pork Barrel" were reportedly
fashioned and inserted into the GAA (called "Congressional Insertions" or "CIs") in order to perpetuate the ad ministration‘s political agenda. 37 It has
been articulated that since CIs "formed part and parcel of the budgets of executive departments, they were not easily identifiable and were thus harder
to monitor." Nonetheless, the lawmakers themselves as well as the finance and budget officials of the implementing agencies, as well as the DBM,
purportedly knew about the insertions.38 Examples of these CIs are the Department of Education (DepEd) School Building Fund, the Congressional
Initiative Allocations, the Public Works Fund, the El Niño Fund, and the Poverty Alleviation Fund. 39 The allocations for the School Building Fund,
particularly, ―shall be made upon prior consultation with the representative of the legislative district concerned.” 40 Similarly, the legislators had the
power to direct how, where and when these appropriations were to be spent.41
E. Joseph Ejercito Estrada (Estrada) Administration (1998-2001).
In 1999,42 the CDF was removed in the GAA and replaced by three (3) separate forms of CIs, namely, the "Food Security Program Fund," 43 the "Lingap
Para Sa Mahihirap Program Fund,"44and the "Rural/Urban Development Infrastructure Program Fund,"45 all of which contained a special provision
requiring "prior consultation" with the Member s of Congress for the release of the funds.
It was in the year 200046 that the "Priority Development Assistance Fund" (PDAF) appeared in the GAA. The requirement of "prior consultation with the
respective Representative of the District" before PDAF funds were directly released to the implementing agency concerned was explicitly stated in the
2000 PDAF Article. Moreover, realignment of funds to any expense category was expressly allowed, with the sole condition that no amount shall be
used to fund personal services and other personnel benefits. 47 The succeeding PDAF provisions remained the same in view of the re-enactment48 of
the 2000 GAA for the year 2001.
F. Gloria Macapagal-Arroyo (Arroyo) Administration (2001-2010).
The 200249 PDAF Article was brief and straightforward as it merely contained a single special provision ordering the release of the funds directly to the
implementing agency or local government unit concerned, without further qualifications. The following year, 2003, 50 the same single provision was
present, with simply an expansion of purpose and express authority to realign. Nevertheless, the provisions in the 2003 budgets of the Department of
Public Works and Highways51 (DPWH) and the DepEd52 required prior consultation with Members of Congress on the aspects of implementation
delegation and project list submission, respectively. In 2004, the 2003 GAA was re-enacted.53
In 2005,54 the PDAF Article provided that the PDAF shall be used "to fund priority programs and projects under the ten point agenda of the national
government and shall be released directly to the implementing agencies." It also introduced the program menu concept, 55 which is essentially a list of
general programs and implementing agencies from which a particular PDAF project may be subsequently chosen by the identifying authority. The 2005
GAA was re-enacted56 in 2006 and hence, operated on the same bases. In similar regard, the program menu concept was consistently integrated into
the 2007,57 2008,58 2009,59 and 201060 GAAs.
Textually, the PDAF Articles from 2002 to 2010 were silent with respect to the specific amounts allocated for the individual legislators, as well as their
participation in the proposal and identification of PDAF projects to be funded. In contrast to the PDAF Articles, however, the provisions under the
DepEd School Building Program and the DPWH budget, similar to its predecessors, explicitly required prior consultation with the concerned Member of
Congress61anent certain aspects of project implementation.
Significantly, it was during this era that provisions which allowed formal participation of non-governmental organizations (NGO) in the implementation of
government projects were introduced. In the Supplemental Budget for 2006, with respect to the appropriation for school buildings, NGOs were, by law,
encouraged to participate. For such purpose, the law stated that "the amount of at least ₱250 Million of the ₱500 Million allotted for the construction
and completion of school buildings shall be made available to NGOs including the Federation of Filipino-Chinese Chambers of Commerce and Industry,
Inc. for its "Operation Barrio School" program, with capability and proven track records in the construction of public school buildings x x x."62 The same
allocation was made available to NGOs in the 2007 and 2009 GAAs under the DepEd Budget. 63 Also, it was in 2007 that the Government Procurement
Policy Board64 (GPPB) issued Resolution No. 12-2007 dated June 29, 2007 (GPPB Resolution 12-2007), amending the implementing rules and
regulations65 of RA 9184,66 the Government Procurement Reform Act, to include, as a form of negotiated procurement, 67 the procedure whereby the
Procuring Entity68(the implementing agency) may enter into a memorandum of agreement with an NGO, provided that "an appropriation law or
ordinance earmarks an amount to be specifically contracted out to NGOs." 69
G. Present Administration (2010-Present).
Differing from previous PDAF Articles but similar to the CDF Articles, the 2011 70 PDAF Article included an express statement on lump-sum amounts
allocated for individual legislators and the Vice-President: Representatives were given ₱70 Million each, broken down into ₱40 Million for "hard
projects" and ₱30 Million for "soft projects"; while ₱200 Million was given to each Senator as well as the Vice-President, with a ₱100 Million allocation
each for "hard" and "soft projects." Likewise, a provision on realignment of funds was included, but with the qualification that it may be allowed only
once. The same provision also allowed the Secretaries of Education, Health, Social Welfare and Development, Interior and Local Government,
Environment and Natural Resources, Energy, and Public Works and Highways to realign PDAF Funds, with the further conditions that: (a) realignment
is within the same implementing unit and same project category as the original project, for infrastructure projects; (b) allotment released has not yet
been obligated for the original scope of work, and (c) the request for realignment is with the concurrence of the legislator concerned. 71
In the 201272 and 201373 PDAF Articles, it is stated that the "identification of projects and/or designation of beneficiaries shall conform to the priority list,
standard or design prepared by each implementing agency (priority list requirement) x x x." However, as practiced, it would still be the individual
legislator who would choose and identify the project from the said priority list.74
Provisions on legislator allocations75 as well as fund realignment76 were included in the 2012 and 2013 PDAF Articles; but the allocation for the Vice-
President, which was pegged at ₱200 Million in the 2011 GAA, had been deleted. In addition, the 2013 PDAF Article now allowed LGUs to be identified
as implementing agencies if they have the technical capability to implement the projects. 77 Legislators were also allowed to identify programs/projects,
except for assistance to indigent patients and scholarships, outside of his legislative district provided that he secures the written concurrence of the
legislator of the intended outside-district, endorsed by the Speaker of the House. 78 Finally, any realignment of PDAF funds, modification and revision of
project identification, as well as requests for release of funds, were all required to be favorably endorsed by the House Committee on Appropriations
and the Senate Committee on Finance, as the case may be. 79
III. History of Presidential Pork Barrel in the Philippines.
While the term "Pork Barrel" has been typically associated with lump-sum, discretionary funds of Members of Congress, the present cases and the
recent controversies on the matter have, however, shown that the term‘s usage has expanded to include certain funds of the President such as the
Malampaya Funds and the Presidential Social Fund.
On the one hand, the Malampaya Funds was created as a special fund under Section 880 of Presidential Decree No. (PD) 910,81 issued by then
President Ferdinand E. Marcos (Marcos) on March 22, 1976. In enacting the said law, Marcos recognized the need to set up a special fund to help
intensify, strengthen, and consolidate government efforts relating to the exploration, exploitation, and development of indigenous energy resources vital
to economic growth.82 Due to the energy-related activities of the government in the Malampaya natural gas field in Palawan, or the "Malampaya Deep
Water Gas-to-Power Project",83 the special fund created under PD 910 has been currently labeled as Malampaya Funds.
On the other hand the Presidential Social Fund was created under Section 12, Title IV 84 of PD 1869,85 or the Charter of the Philippine Amusement and
Gaming Corporation (PAGCOR). PD 1869 was similarly issued by Marcos on July 11, 1983. More than two (2) years after, he amended PD 1869 and
accordingly issued PD 1993 on October 31, 1985,86 amending Section 1287 of the former law. As it stands, the Presidential Social Fund has been
described as a special funding facility managed and administered by the Presidential Management Staff through which the President provides direct
assistance to priority programs and projects not funded under the regular budget. It is sourced from the share of the government in the aggregate gross
earnings of PAGCOR.88
IV. Controversies in the Philippines.
Over the decades, "pork" funds in the Philippines have increased tremendously, 89 owing in no small part to previous Presidents who reportedly used
the "Pork Barrel" in order to gain congressional support.90 It was in 1996 when the first controversy surrounding the "Pork Barrel" erupted. Former
Marikina City Representative Romeo Candazo (Candazo), then an anonymous source, "blew the lid on the huge sums of government money that
regularly went into the pockets of legislators in the form of kickbacks." 91 He said that "the kickbacks were ‘SOP‘ (standard operating procedure) among
legislators and ranged from a low 19 percent to a high 52 percent of the cost of each project, which could be anything from dredging, rip rapping,
sphalting, concreting, and construction of school buildings."92 "Other sources of kickbacks that Candazo identified were public funds intended for
medicines and textbooks. A few days later, the tale of the money trail became the banner story of the Philippine Daily Inquirer issue of August 13, 1996,
accompanied by an illustration of a roasted pig."93 "The publication of the stories, including those about congressional initiative allocations of certain
lawmakers, including ₱3.6 Billion for a Congressman, sparked public outrage." 94
Thereafter, or in 2004, several concerned citizens sought the nullification of the PDAF as enacted in the 2004 GAA for being unconstitutional.
Unfortunately, for lack of "any pertinent evidentiary support that illegal misuse of PDAF in the form of kickbacks has become a common exercise of
unscrupulous Members of Congress," the petition was dismissed. 95
Recently, or in July of the present year, the National Bureau of Investigation (NBI) began its probe into allegations that "the government has been
defrauded of some ₱10 Billion over the past 10 years by a syndicate using funds from the pork barrel of lawmakers and various government agencies
for scores of ghost projects."96 The investigation was spawned by sworn affidavits of six (6) whistle-blowers who declared that JLN Corporation – "JLN"
standing for Janet Lim Napoles (Napoles) – had swindled billions of pesos from the public coffers for "ghost projects" using no fewer than 20 dummy
NGOs for an entire decade. While the NGOs were supposedly the ultimate recipients of PDAF funds, the whistle-blowers declared that the money was
diverted into Napoles‘ private accounts.97 Thus, after its investigation on the Napoles controversy, 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. 98
On August 16, 2013, the Commission on Audit (CoA) released the results of a three-year audit investigation99covering the use of legislators' PDAF from
2007 to 2009, or during the last three (3) years of the Arroyo administration. The purpose of the audit was to determine the propriety of releases of
funds under PDAF and the Various Infrastructures including Local Projects (VILP)100 by the DBM, the application of these funds and the implementation
of projects by the appropriate implementing agencies and several government-owned-and-controlled corporations (GOCCs).101 The total releases
covered by the audit amounted to ₱8.374 Billion in PDAF and ₱32.664 Billion in VILP, representing 58% and 32%, respectively, of the total PDAF and
VILP releases that were found to have been made nationwide during the audit period. 102 Accordingly, the Co A‘s findings contained in its Report No.
2012-03 (CoA Report), entitled "Priority Development Assistance Fund (PDAF) and Various Infrastructures including Local Projects (VILP)," were made
public, the highlights of which are as follows: 103
● Amounts released for projects identified by a considerable number of legislators significantly exceeded their respective allocations.
● Amounts were released for projects outside of legislative districts of sponsoring members of the Lower House.
● Total VILP releases for the period exceeded the total amount appropriated under the 2007 to 2009 GAAs.
● Infrastructure projects were constructed on private lots without these having been turned over to the government.
● Significant amounts were released to implementing agencies without the latter‘s endorsement and without considering their mandated functions,
administrative and technical capabilities to implement projects.
● Implementation of most livelihood projects was not undertaken by the implementing agencies themselves but by NGOs endorsed by the proponent
legislators to which the Funds were transferred.
● The funds were transferred to the NGOs in spite of the absence of any appropriation law or ordinance.
● Selection of the NGOs were not compliant with law and regulations.
● Eighty-Two (82) NGOs entrusted with implementation of seven hundred seventy two (772) projects amount to ₱6.156 Billion were either found
questionable, or submitted questionable/spurious documents, or failed to liquidate in whole or in part their utilization of the Funds.
● Procurement by the NGOs, as well as some implementing agencies, of goods and services reportedly used in the projects were not compliant with
law.
As for the "Presidential Pork Barrel", whistle-blowers alleged that" at least ₱900 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."104 According to incumbent CoA Chairperson Maria Gracia
Pulido Tan (CoA Chairperson), the CoA is, as of this writing, in the process of preparing "one consolidated report" on the Malampaya Funds. 105
V. The Procedural Antecedents.
Spurred in large part by the findings contained in the CoA Report and the Napoles controversy, several petitions were lodged before the Court similarly
seeking that the "Pork Barrel System" be declared unconstitutional. To recount, the relevant procedural antecedents in these cases are as follows:
On August 28, 2013, petitioner Samson S. Alcantara (Alcantara), President of the Social Justice Society, filed a Petition for Prohibition of even date
under Rule 65 of the Rules of Court (Alcantara Petition), seeking that the "Pork Barrel System" be declared unconstitutional, and a writ of prohibition be
issued permanently restraining respondents Franklin M. Drilon and Feliciano S. Belmonte, Jr., in their respective capacities as the incumbent Senate
President and Speaker of the House of Representatives, from further taking any steps to enact legislation appropriating funds for the "Pork Barrel
System," in whatever form and by whatever name it may be called, and from approving further releases pursuant thereto. 106 The Alcantara Petition was
docketed as G.R. No. 208493.
On September 3, 2013, petitioners Greco Antonious Beda B. Belgica, Jose L. Gonzalez, Reuben M. Abante, Quintin Paredes San Diego (Belgica, et
al.), and Jose M. Villegas, Jr. (Villegas) filed an Urgent Petition For Certiorari and Prohibition With Prayer For The Immediate Issuance of Temporary
Restraining Order (TRO) and/or Writ of Preliminary Injunction dated August 27, 2013 under Rule 65 of the Rules of Court (Belgica Petition), 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, 107 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 Paquito N. Ochoa, Jr., Florencio B.
Abad (Secretary Abad) and Rosalia V. De Leon, in their respective capacities as the incumbent Executive Secretary, Secretary of the Department of
Budget and Management (DBM), and National Treasurer, or their agents, for them to immediately cease any expenditure under the aforesaid funds.
Further, they pray that the Court order the foregoing respondents to release to the CoA and to the public: (a) "the complete schedule/list of legislators
who have availed of their PDAF and VILP from the years 2003 to 2013, specifying the use of the funds, the project or activity and the recipient entities
or individuals, and all pertinent data thereto"; and (b) "the use of the Executive‘s lump-sum, discretionary funds, including the proceeds from the x x x
Malampaya Funds and remittances from the PAGCOR x x x from 2003 to 2013, specifying the x x x project or activity and the recipient entities or
individuals, and all pertinent data thereto."108 Also, they pray for the "inclusion in budgetary deliberations with the Congress of all presently off-budget,
lump-sum, discretionary funds including, but not limited to, proceeds from the Malampaya Funds and remittances from the PAGCOR."109 The Belgica
Petition was docketed as G.R. No. 208566. 110
Lastly, on September 5, 2013, petitioner Pedrito M. Nepomuceno (Nepomuceno), filed a Petition dated August 23, 2012 (Nepomuceno Petition),
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 and, instead, allow their release to fund priority projects
identified and approved by the Local Development Councils in consultation with the executive departments, such as the DPWH, the Department of
Tourism, the Department of Health, the Department of Transportation, and Communication and the National Economic Development Authority.111 The
Nepomuceno Petition was docketed as UDK-14951.112
On September 10, 2013, the Court issued a Resolution of even date (a) consolidating all cases; (b) requiring public respondents to comment on the
consolidated petitions; (c) issuing a TRO (September 10, 2013 TRO) enjoining the DBM, National Treasurer, the Executive Secretary, or any of the
persons acting under their authority from releasing (1) the remaining PDAF allocated to Members of Congress under the GAA of 2013, and (2)
Malampaya Funds under the phrase "for such other purposes as may be hereafter directed by the President" pursuant to Section 8 of PD 910 but not
for the purpose of "financing energy resource development and exploitation programs and projects of the government‖ under the same provision; and
(d) setting the consolidated cases for Oral Arguments on October 8, 2013.
On September 23, 2013, the Office of the Solicitor General (OSG) filed a Consolidated Comment (Comment) of even date before the Court, seeking
the lifting, or in the alternative, the partial lifting with respect to educational and medical assistance purposes, of the Court‘s September 10, 2013 TRO,
and that the consolidated petitions be dismissed for lack of merit. 113
On September 24, 2013, the Court issued a Resolution of even date directing petitioners to reply to the Comment.
Petitioners, with the exception of Nepomuceno, filed their respective replies to the Comment: (a) on September 30, 2013, Villegas filed a separate
Reply dated September 27, 2013 (Villegas Reply); (b) on October 1, 2013, Belgica, et al. filed a Reply dated September 30, 2013 (Belgica Reply); and
(c) on October 2, 2013, Alcantara filed a Reply dated October 1, 2013.
On October 1, 2013, the Court issued an Advisory providing for the guidelines to be observed by the parties for the Oral Arguments scheduled on
October 8, 2013. In view of the technicality of the issues material to the present cases, incumbent Solicitor General Francis H. Jardeleza (Solicitor
General) was directed to bring with him during the Oral Arguments representative/s from the DBM and Congress who would be able to competently
and completely answer questions related to, among others, the budgeting process and its implementation. Further, the CoA Chairperson was
appointed as amicus curiae and thereby requested to appear before the Court during the Oral Arguments.
On October 8 and 10, 2013, the Oral Arguments were conducted. Thereafter, the Court directed the parties to submit their respective memoranda
within a period of seven (7) days, or until October 17, 2013, which the parties subsequently did.
The Issues Before the Court
Based on the pleadings, and as refined during the Oral Arguments, the following are the main issues for the Court‘s resolution:
I. Procedural Issues.
Whether or not (a) the issues raised in the consolidated petitions involve an actual and justiciable controversy; (b) the issues raised in the consolidated
petitions are matters of policy not subject to judicial review; (c) petitioners have legal standing to sue; and (d) the Court‘s Decision dated August 19,
1994 in G.R. Nos. 113105, 113174, 113766, and 113888, entitled "Philippine Constitution Association v. Enriquez" 114 (Philconsa) and Decision dated
April 24, 2012 in G.R. No. 164987, entitled "Lawyers Against Monopoly and Poverty v. Secretary of Budget and Management" 115 (LAMP) bar the re-
litigatio n of the issue of constitutionality of the "Pork Barrel System" under the principles of res judicata and stare decisis.
II. Substantive Issues on the "Congressional Pork Barrel."
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.
III. Substantive Issues on the "Presidential Pork Barrel."
Whether or not the phrases (a) "and for such other purposes as may be hereafter directed by the President" under Section 8 of PD 910,116 relating to
the Malampaya Funds, and (b) "to finance the priority infrastructure development projects 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" 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.
These main issues shall be resolved in the order that they have been stated. In addition, the Court shall also tackle certain ancillary issues as prompted
by the present cases.
The Court’s Ruling
The petitions are partly granted.
I. Procedural Issues.
The prevailing rule in constitutional litigation is that no question involving the constitutionality or validity of a law or governmental act may be heard and
decided by the Court unless there is compliance with the legal requisites for judicial inquiry,117 namely: (a) there must be an actual case or controversy
calling for the exercise of judicial power; (b) the person challenging the act must have the standing to question the validity of the subject act or
issuance; (c) the question of constitutionality must be raised at the earliest opportunity ; and (d) the issue of constitutionality must be the very lis mota
of the case.118 Of these requisites, case law states that the first two are the most important 119and, therefore, shall be discussed forthwith.
A. Existence of an Actual Case or Controversy.
By constitutional fiat, judicial power operates only when there is an actual case or controversy. 120 This is embodied in Section 1, Article VIII of the 1987
Constitution which pertinently states that "judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are
legally demandable and enforceable x x x." Jurisprudence provides that an actual case or controversy is one which "involves a conflict of legal rights,
an assertion of opposite legal claims, susceptible of judicial resolution as distinguished from a hypothetical or abstract difference or dispute. 121 In other
words, "there must be a contrariety of legal rights that can be interpreted and enforced on the basis of existing law and jurisprudence."122 Related to the
requirement of an actual case or controversy is the requirement of "ripeness," meaning that the questions raised for constitutional scrutiny are already
ripe for adjudication. "A question is ripe for adjudication when the act being challenged has had a direct adverse effect on the individual challenging it. It
is a prerequisite that something had then been accomplished or performed by either branch before a court may come into the picture, and the petitioner
must allege the existence of an immediate or threatened injury to itself as a result of the challenged action." 123 "Withal, courts will decline to pass upon
constitutional issues through advisory opinions, bereft as they are of authority to resolve hypothetical or moot questions." 124
Based on these principles, the Court finds that there exists an actual and justiciable controversy in these cases.
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." Also, the questions in these consolidated cases are ripe for adjudication since the challenged funds and the provisions allowing for their
utilization – such as the 2013 GAA for the PDAF, PD 910 for the Malampaya Funds and PD 1869, as amended by PD 1993, for the Presidential Social
Fund – are currently existing and operational; hence, there exists an immediate or threatened injury to petitioners as a result of the unconstitutional use
of these public funds.
As for the PDAF, the Court must dispel the notion that the issues related thereto had been rendered moot and academic by the reforms undertaken by
respondents. A case becomes moot when there is no more actual controversy between the parties or no useful purpose can be served in passing upon
the merits.125 Differing from this description, the Court observes that respondents‘ proposed line-item budgeting scheme would not terminate the
controversy nor diminish the useful purpose for its resolution since said reform is geared towards the 2014 budget, and not the 2013 PDAF Article
which, being a distinct subject matter, remains legally effective and existing. Neither will the President‘s declaration that he had already "abolished the
PDAF" render the issues on PDAF moot precisely because the Executive branch of government has no constitutional authority to nullify or annul its
legal existence. By constitutional design, 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. Instructive on this point is the following exchange between Associate Justice Antonio
T. Carpio (Justice Carpio) and the Solicitor General during the Oral Arguments: 126
Justice Carpio: The President has taken an oath to faithfully execute the law, 127 correct? Solicitor General Jardeleza: Yes, Your Honor.
Justice Carpio: And so the President cannot refuse to implement the General Appropriations Act, correct?
Solicitor General Jardeleza: Well, that is our answer, Your Honor. In the case, for example of the PDAF, the President has a duty to execute the laws
but in the face of the outrage over PDAF, the President was saying, "I am not sure that I will continue the release of the soft projects," and that started,
Your Honor. Now, whether or not that … (interrupted)
Justice Carpio: Yeah. I will grant the President if there are anomalies in the project, he has the power to stop the releases in the meantime, to
investigate, and that is Section 38 of Chapter 5 of Book 6 of the Revised Administrative Code 128 x x x. So at most the President can suspend, now if the
President believes that the PDAF is unconstitutional, can he just refuse to implement it?
Solicitor General Jardeleza: No, Your Honor, as we were trying to say in the specific case of the PDAF because of the CoA Report, because of the
reported irregularities and this Court can take judicial notice, even outside, outside of the COA Report, you have the report of the whistle-blowers, the
President was just exercising precisely the duty ….
xxxx
Justice Carpio: Yes, and that is correct. You‘ve seen the CoA Report, there are anomalies, you stop and investigate, and prosecute, he has done that.
But, does that mean that PDAF has been repealed?
Solicitor General Jardeleza: No, Your Honor x x x.
xxxx
Justice Carpio: So that PDAF can be legally abolished only in two (2) cases. Congress passes a law to repeal it, or this Court declares it
unconstitutional, correct?
Solictor General Jardeleza: Yes, Your Honor.
Justice Carpio: The President has no power to legally abolish PDAF. (Emphases supplied)
Even on the assumption of mootness, jurisprudence, nevertheless, dictates that "the moot and academic‘ principle is not a magical formula that can
automatically dissuade the Court in resolving a case." The Court will decide cases, otherwise moot, if: first, there is a grave violation of the Constitution;
second, the exceptional character of the situation and the paramount public interest is involved; third, when the constitutional issue raised requires
formulation of controlling principles to guide the bench, the bar, and the public; and fourth, the case is capable of repetition yet evading review.129
The applicability of the first exception is clear from the fundamental posture of petitioners – they essentially allege grave violations of the Constitution
with respect to, inter alia, the principles of separation of powers, non-delegability of legislative power, checks and balances, accountability and local
autonomy.
The applicability of the second exception is also apparent from the nature of the interests involved
– the constitutionality of the very system within which significant amounts of public funds have been and continue to be utilized and expended
undoubtedly presents a situation of exceptional character as well as a matter of paramount public interest. The present petitions, in fact, have been
lodged at a time when the system‘s flaws have never before been magnified. To the Court‘s mind, the coalescence of the CoA Report, the accounts of
numerous whistle-blowers, and the government‘s own recognition that reforms are needed "to address the reported abuses of the
PDAF"130 demonstrates a prima facie pattern of abuse which only underscores the importance of the matter. It is also by this finding that the Court finds
petitioners‘ claims as not merely theorized, speculative or hypothetical. Of note is the weight accorded by the Court to the findings made by the CoA
which is the constitutionally-mandated audit arm of the government. In Delos Santos v. CoA, 131 a recent case wherein the Court upheld the CoA‘s
disallowance of irregularly disbursed PDAF funds, it was emphasized that:
The COA is endowed with enough latitude to determine, prevent, and disallow irregular, unnecessary, excessive, extravagant or unconscionable
expenditures of government funds. It is tasked to be vigilant and conscientious in safeguarding the proper use of the government's, and ultimately the
people's, property. The exercise of its general audit power is among the constitutional mechanisms that gives life to the check and balance system
inherent in our form of government.
It is the general policy of the Court to sustain the decisions of administrative authorities, especially one which is constitutionally-created, such as the
CoA, not only on the basis of the doctrine of separation of powers but also for their presumed expertise in the laws they are entrusted to enforce.
Findings of administrative agencies are accorded not only respect but also finality when the decision and order are not tainted with unfairness or
arbitrariness that would amount to grave abuse of discretion. It is only when the CoA has acted without or in excess of jurisdiction, or with grave abuse
of discretion amounting to lack or excess of jurisdiction, that this Court entertains a petition questioning its rulings. x x x. (Emphases supplied)
Thus, if only for the purpose of validating the existence of an actual and justiciable controversy in these cases, the Court deems the findings under the
CoA Report to be sufficient.
The Court also finds the third exception to be applicable largely due to the practical need for a definitive ruling on the system‘s constitutionality. As
disclosed during the Oral Arguments, the CoA Chairperson estimates that thousands of notices of disallowances will be issued by her office in
connection with the findings made in the CoA Report. In this relation, Associate Justice Marvic Mario Victor F. Leonen (Justice Leonen) pointed out that
all of these would eventually find their way to the courts.132 Accordingly, there is a compelling need to formulate controlling principles relative to the
issues raised herein in order to guide the bench, the bar, and the public, not just for the expeditious resolution of the anticipated disallowance cases,
but more importantly, so that the government may be guided on how public funds should be utilized in accordance with constitutional principles.
Finally, the application of the fourth exception is called for by the recognition that the preparation and passage of the national budget is, by
constitutional imprimatur, an affair of annual occurrence. 133 The relevance of the issues before the Court does not cease with the passage of a "PDAF -
free budget for 2014."134 The evolution of the "Pork Barrel System," by its multifarious iterations throughout the course of history, lends a semblance of
truth to petitioners‘ claim that "the same dog will just resurface wearing a different collar." 135 In Sanlakas v. Executive Secretary,136 the government had
already backtracked on a previous course of action yet the Court used the "capable of repetition but evading review" exception in order "to prevent
similar questions from re- emerging."137 The situation similarly holds true to these cases. Indeed, the myriad of issues underlying the manner in which
certain public funds are spent, if not resolved at this most opportune time, are capable of repetition and hence, must not evade judicial review.
B. Matters of Policy: the Political Question Doctrine.
The "limitation on the power of judicial review to actual cases and controversies‖ carries the assurance that "the courts will not intrude into areas
committed to the other branches of government."138 Essentially, the foregoing limitation is a restatement of the political question doctrine which, under
the classic formulation of Baker v. Carr,139applies when there is found, among others, "a textually demonstrable constitutional commitment of the issue
to a coordinate political department," "a lack of judicially discoverable and manageable standards for resolving it" or "the impossibility of deciding
without an initial policy determination of a kind clearly for non- judicial discretion." Cast against this light, respondents submit that the "the political
branches are in the best position not only to perform budget-related reforms but also to do them in response to the specific demands of their
constituents" and, as such, "urge the Court not to impose a solution at this stage." 140
The Court must deny respondents‘ submission.
Suffice it to state that the issues raised before the Court do not present political but legal questions which are within its province to resolve. A political
question refers to "those questions which, under the Constitution, are to be decided by the people in their sovereign capacity, or in regard to which full
discretionary authority has been delegated to the Legislature or executive branch of the Government. It is concerned with issues dependent upon the
wisdom, not legality, of a particular measure."141 The intrinsic constitutionality of the "Pork Barrel System" is not an issue dependent upon the wisdom
of the political branches of government but rather a legal one which the Constitution itself has commanded the Court to act upon. Scrutinizing the
contours of the system along constitutional lines is a task that the political branches of government are incapable of rendering precisely because it is an
exercise of judicial power. More importantly, the present Constitution has not only vested the Judiciary the right to exercise judicial power but
essentially makes it a duty to proceed therewith. Section 1, Article VIII of the 1987 Constitution cannot be any clearer: "The judicial power shall be
vested in one Supreme Court and in such lower courts as may be established by law. It includes the duty of the courts of justice to settle actual
controversies involving rights which are legally demandable and enforceable, and to determine whether or not there has been a grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government." In Estrada v. Desierto, 142 the
expanded concept of judicial power under the 1987 Constitution and its effect on the political question doctrine was explained as follows: 143
To a great degree, the 1987 Constitution has narrowed the reach of the political question doctrine when it expanded the power of judicial review of this
court not only to settle actual controversies involving rights which are legally demandable and enforceable but also to determine whether or not there
has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of government. Heretofore,
the judiciary has focused on the "thou shalt not's" of the Constitution directed against the exercise of its jurisdiction. With the new provision, however,
courts are given a greater prerogative to determine what it can do to prevent grave abuse of discretion amounting to lack or excess of jurisdiction on
the part of any branch or instrumentality of government. Clearly, the new provision did not just grant the Court power of doing nothing. x x x (Emphases
supplied)
It must also be borne in mind that ― when the judiciary mediates to allocate constitutional boundaries, it does not assert any superiority over the other
departments; does not in reality nullify or invalidate an act of the legislature or the executive, but only asserts the solemn and sacred obligation
assigned to it by the Constitution."144 To a great extent, the Court is laudably cognizant of the reforms undertaken by its co-equal branches of
government. But it is by constitutional force that the Court must faithfully perform its duty. Ultimately, it is the Court‘s avowed intention that a resolution
of these cases would not arrest or in any manner impede the endeavors of the two other branches but, in fact, help ensure that the pillars of change are
erected on firm constitutional grounds. After all, it is in the best interest of the people that each great branch of government, within its own sphere,
contributes its share towards achieving a holistic and genuine solution to the problems of society. For all these reasons, the Court cannot heed
respondents‘ plea for judicial restraint.
C. Locus Standi.
"The gist of the question of standing is whether a party alleges such personal stake in the outcome of the controversy as to assure that concrete
adverseness which sharpens the presentation of issues upon which the court depends for illumination of difficult constitutional questions. Unless a
person is injuriously affected in any of his constitutional rights by the operation of statute or ordinance, he has no standing."145
Petitioners have come before the Court in their respective capacities as citizen-taxpayers and accordingly, assert that they "dutifully contribute to the
coffers of the National Treasury."146 Clearly, as taxpayers, they possess the requisite standing to question the validity of the existing "Pork Barrel
System" under which the taxes they pay have been and continue to be utilized. It is undeniable that petitioners, as taxpayers, are bound to suffer from
the unconstitutional usage of public funds, if the Court so rules. Invariably, taxpayers have been allowed to sue where there is a claim that public funds
are illegally disbursed or that public money is being deflected to any improper purpose, or that public funds are wasted through the enforcement of an
invalid or unconstitutional law,147 as in these cases.
Moreover, as citizens, petitioners have equally fulfilled the standing requirement given that the issues they have raised may be classified as matters "of
transcendental importance, of overreaching significance to society, or of paramount public interest." 148 The CoA Chairperson‘s statement during the
Oral Arguments that the present controversy involves "not merely a systems failure" but a "complete breakdown of controls" 149 amplifies, in addition to
the matters above-discussed, the seriousness of the issues involved herein. Indeed, of greater import than the damage caused by the illegal
expenditure of public funds is the mortal wound inflicted upon the fundamental law by the enforcement of an invalid statute. 150 All told, petitioners have
sufficient locus standi to file the instant cases.
D. Res Judicata and Stare Decisis.
Res judicata (which means a "matter adjudged") and stare decisis non quieta et movere (or simply, stare decisis which means "follow past precedents
and do not disturb what has been settled") are general procedural law principles which both deal with the effects of previous but factually similar
dispositions to subsequent cases. For the cases at bar, the Court examines the applicability of these principles in relation to its prior rulings in
Philconsa and LAMP.
The focal point of res judicata is the judgment. The principle states that a judgment on the merits in a previous case rendered by a court of competent
jurisdiction would bind a subsequent case if, between the first and second actions, there exists an identity of parties, of subject matter, and of causes of
action.151 This required identity is not, however, attendant hereto since Philconsa and LAMP, respectively involved constitutional challenges against the
1994 CDF Article and 2004 PDAF Article, whereas the cases at bar call for a broader constitutional scrutiny of the entire "Pork Barrel System." Also,
the ruling in LAMP is essentially a dismissal based on a procedural technicality – and, thus, hardly a judgment on the merits – in that petitioners therein
failed to present any "convincing proof x x x showing that, indeed, there were direct releases of funds to the Members of Congress, who actually spend
them according to their sole discretion" or "pertinent evidentiary support to demonstrate the illegal misuse of PDAF in the form of kickbacks and has
become a common exercise of unscrupulous Members of Congress." As such, the Court up held, in view of the presumption of constitutionality
accorded to every law, the 2004 PDAF Article, and saw "no need to review or reverse the standing pronouncements in the said case." Hence, for the
foregoing reasons, the res judicata principle, insofar as the Philconsa and LAMP cases are concerned, cannot apply.
On the other hand, the focal point of stare decisis is the doctrine created. The principle, entrenched under Article 8152 of the Civil Code, evokes the
general rule that, for the sake of certainty, a conclusion reached in one case should be doctrinally applied to those that follow if the facts are
substantially the same, even though the parties may be different. It proceeds from the first principle of justice that, absent any powerful countervailing
considerations, like cases ought to be decided alike. Thus, where the same questions relating to the same event have been put forward by the parties
similarly situated as in a previous case litigated and decided by a competent court, the rule of stare decisis is a bar to any attempt to re-litigate the
same issue.153
Philconsa was the first case where a constitutional challenge against a Pork Barrel provision, i.e., the 1994 CDF Article, was resolved by the Court. To
properly understand its context, petitioners‘ posturing was that "the power given to the Members of Congress to propose and identify projects and
activities to be funded by the CDF is an encroachment by the legislature on executive power, since said power in an appropriation act is in
implementation of the law" and that "the proposal and identification of the projects do not involve the making of laws or the repeal and amendment
thereof, the only function given to the Congress by the Constitution." 154 In deference to the foregoing submissions, the Court reached the following main
conclusions: one, under the Constitution, the power of appropriation, or the "power of the purse," belongs to Congress; two, the power of appropriation
carries with it the power to specify the project or activity to be funded under the appropriation law and it can be detailed and as broad as Congress
wants it to be; and, three, the proposals and identifications made by Members of Congress are merely recommendatory. At once, it is apparent that the
Philconsa resolution was a limited response to a separation of powers problem, specifically on the propriety of conferring post-enactment identification
authority to Members of Congress. On the contrary, the present cases call for a more holistic examination of (a) the inter-relation between the CDF and
PDAF Articles with each other, formative as they are of the entire "Pork Barrel System" as well as (b) the intra-relation of post-enactment measures
contained within a particular CDF or PDAF Article, including not only those related to the area of project identification but also to the areas of fund
release and realignment. The complexity of the issues and the broader legal analyses herein warranted may be, therefore, considered as a powerful
countervailing reason against a wholesale application of the stare decisis principle.
In addition, the Court observes that the Philconsa ruling was actually riddled with inherent constitutional inconsistencies which similarly countervail
against a full resort to stare decisis. As may be deduced from the main conclusions of the case, Philconsa‘s fundamental premise in allowing Members
of Congress to propose and identify of projects would be that the said identification authority is but an aspect of the power of appropriation which has
been constitutionally lodged in Congress. From this premise, the contradictions may be easily seen. If the authority to identify projects is an aspect of
appropriation and the power of appropriation is a form of legislative power thereby lodged in Congress, then it follows that: (a) it is Congress which
should exercise such authority, and not its individual Members; (b) such authority must be exercised within the prescribed procedure of law passage
and, hence, should not be exercised after the GAA has already been passed; and (c) such authority, as embodied in the GAA, has the force of law and,
hence, cannot be merely recommendatory. Justice Vitug‘s Concurring Opinion in the same case sums up the Philconsa quandary in this wise: "Neither
would it be objectionable for Congress, by law, to appropriate funds for such specific projects as it may be minded; to give that authority, however, to
the individual members of Congress in whatever guise, I am afraid, would be constitutionally impermissible." As the Court now largely benefits from
hindsight and current findings on the matter, among others, the CoA Report, the Court must partially abandon its previous ruling in Philconsa insofar as
it validated the post-enactment identification authority of Members of Congress on the guise that the same was merely recommendatory. This postulate
raises serious constitutional inconsistencies which cannot be simply excused on the ground that such mechanism is "imaginative as it is innovative."
Moreover, it must be pointed out that the recent case of Abakada Guro Party List v. Purisima 155(Abakada) has effectively overturned Philconsa‘s
allowance of post-enactment legislator participation in view of the separation of powers principle. These constitutional inconsistencies and the Abakada
rule will be discussed in greater detail in the ensuing section of this Decision.
As for LAMP, suffice it to restate that the said case was dismissed on a procedural technicality and, hence, has not set any controlling doctrine
susceptible of current application to the substantive issues in these cases. In fine, stare decisis would not apply.
II. Substantive Issues.
A. Definition of Terms.
Before the Court proceeds to resolve the substantive issues of these cases, it must first define the terms "Pork Barrel System," "Congressional Pork
Barrel," and "Presidential Pork Barrel" as they are essential to the ensuing discourse.
Petitioners define the term "Pork Barrel System" as the "collusion between the Legislative and Executive branches of government to accumulate lump-
sum public funds in their offices with unchecked discretionary powers to determine its distribution as political largesse." 156 They assert that the following
elements make up the Pork Barrel System: (a) lump-sum funds are allocated through the appropriations process to an individual officer; (b) the officer
is given sole and broad discretion in determining how the funds will be used or expended; (c) the guidelines on how to spend or use the funds in the
appropriation are either vague, overbroad or inexistent; and (d) projects funded are intended to benefit a definite constituency in a particular part of the
country and to help the political careers of the disbursing official by yielding rich patronage benefits.157 They further state that the Pork Barrel System is
comprised of two (2) kinds of discretionary public funds: first, the Congressional (or Legislative) Pork Barrel, currently known as the PDAF; 158 and,
second, the Presidential (or Executive) Pork Barrel, specifically, the Malampaya Funds under PD 910 and the Presidential Social Fund under PD 1869,
as amended by PD 1993.159
Considering petitioners‘ submission and in reference to its local concept and legal history, the Court defines the Pork Barrel System as the collective
body of rules and practices that govern the manner by which lump-sum, discretionary funds, primarily intended for local projects, are utilized through
the respective participations of the Legislative and Executive branches of government, including its members. The Pork Barrel System involves two (2)
kinds of lump-sum discretionary funds:
First, there is the Congressional Pork Barrel which is herein defined as a kind of lump-sum, discretionary fund wherein legislators, either individually or
collectively organized into committees, are able to effectively control certain aspects of the fund’s utilization through various post-enactment measures
and/or practices. In particular, petitioners consider the PDAF, as it appears under the 2013 GAA, as Congressional Pork Barrel since it is, inter alia, a
post-enactment measure that allows individual legislators to wield a collective power; 160 and
Second, there is the Presidential Pork Barrel which is herein defined as a kind of lump-sum, discretionary fund which allows the President to determine
the manner of its utilization. For reasons earlier stated,161 the Court shall delimit the use of such term to refer only to the Malampaya Funds and the
Presidential Social Fund.
With these definitions in mind, the Court shall now proceed to discuss the substantive issues of these cases.
B. Substantive Issues on the Congressional Pork Barrel.
1. Separation of Powers.
a. Statement of Principle.
The principle of separation of powers refers to the constitutional demarcation of the three fundamental powers of government. In the celebrated words
of Justice Laurel in Angara v. Electoral Commission, 162 it means that the "Constitution has blocked out with deft strokes and in bold lines, allotment of
power to the executive, the legislative and the judicial departments of the government." 163 To the legislative branch of government, through
Congress,164belongs the power to make laws; to the executive branch of government, through the President,165 belongs the power to enforce laws; and
to the judicial branch of government, through the Court, 166 belongs the power to interpret laws. Because the three great powers have been, by
constitutional design, ordained in this respect, "each department of the government has exclusive cognizance of matters within its jurisdiction, and is
supreme within its own sphere."167 Thus, "the legislature has no authority to execute or construe the law, the executive has no authority to make or
construe the law, and the judiciary has no power to make or execute the law." 168 The principle of separation of powers and its concepts of autonomy
and independence stem from the notion that the powers of government must be divided to avoid concentration of these powers in any one branch; the
division, it is hoped, would avoid any single branch from lording its power over the other branches or the citizenry.169 To achieve this purpose, the
divided power must be wielded by co-equal branches of government that are equally capable of independent action in exercising their respective
mandates. Lack of independence would result in the inability of one branch of government to check the arbitrary or self -interest assertions of another or
others.170
Broadly speaking, there is a violation of the separation of powers principle when one branch of government unduly encroaches on the domain of
another. US Supreme Court decisions instruct that the principle of separation of powers may be violated in two (2) ways: firstly, "one branch may
interfere impermissibly with the other’s performance of its constitutionally assigned function"; 171 and "alternatively, the doctrine may be violated when
one branch assumes a function that more properly is entrusted to another." 172 In other words, there is a violation of the principle when there is
impermissible (a) interference with and/or (b) assumption of another department‘s functions.
The enforcement of the national budget, as primarily contained in the GAA, is indisputably a function both constitutionally assigned and properly
entrusted to the Executive branch of government. In Guingona, Jr. v. Hon. Carague 173 (Guingona, Jr.), the Court explained that the phase of budget
execution "covers the various operational aspects of budgeting" and accordingly includes "the evaluation of work and financial plans for individual
activities," the "regulation and release of funds" as well as all "other related activities" that comprise the budget execution cycle. 174 This is rooted in the
principle that the allocation of power in the three principal branches of government is a grant of all powers inherent in them. 175 Thus, unless the
Constitution provides otherwise, the Executive department should exclusively exercise all roles and prerogatives which go into the implementation of
the national budget as provided under the GAA as well as any other appropriation law.
In view of the foregoing, the Legislative branch of government, much more any of its members, should not cross over the field of implementing the
national budget since, as earlier stated, the same is properly the domain of the Executive. Again, in Guingona, Jr., the Court stated that "Congress
enters the picture when it deliberates or acts on the budget proposals of the President. Thereafter, Congress, "in the exercise of its own judgment and
wisdom, formulates an appropriation act precisely following the process established by the Constitution, which specifies that no money may be paid
from the Treasury except in accordance with an appropriation made by law." Upon approval and passage of the GAA, Congress‘ law -making role
necessarily comes to an end and from there the Executive‘s role of implementing the national budget begins. So as not to blur the constitutional
boundaries between them, Congress must "not concern it self with details for implementation by the Executive." 176
The foregoing cardinal postulates were definitively enunciated in Abakada where the Court held that "from the moment the law becomes effective, any
provision of law that empowers Congress or any of its members to play any role in the implementation or enforcement of the law violates the principle
of separation of powers and is thus unconstitutional."177 It must be clarified, however, that since the restriction only pertains to "any role in the
implementation or enforcement of the law," Congress may still exercise its oversight function which is a mechanism of checks and balances that the
Constitution itself allows. But it must be made clear that Congress‘ role must be confined to mere oversight. Any post-enactment-measure allowing
legislator participation beyond oversight is bereft of any constitutional basis and hence, tantamount to impermissible interf erence and/or assumption of
executive functions. As the Court ruled in Abakada: 178
Any post-enactment congressional measure x x x should be limited to scrutiny and investigation.1âwphi1 In particular, congressional oversight must be
confined to the following:
(1) scrutiny based primarily on Congress‘ power of appropriation and the budget hearings conducted in connection with it, its power to ask heads of
departments to appear before and be heard by either of its Houses on any matter pertaining to their departments and its power of confirmation; and
(2) investigation and monitoring of the implementation of laws pursuant to the power of Congress to conduct inquiries in aid of legislation.
Any action or step beyond that will undermine the separation of powers guaranteed by the Constitution. (Emphases supplied)
b. Application.
In these cases, petitioners submit that the Congressional Pork Barrel – among others, the 2013 PDAF Article – "wrecks the assignment of
responsibilities between the political branches" as it is designed to allow individual legislators to interfere "way past the time it should have ceased" or,
particularly, "after the GAA is passed."179 They state that the findings and recommendations in the CoA Report provide "an illustration of how absolute
and definitive the power of legislators wield over project implementation in complete violation of the constitutional principle of separation of
powers."180 Further, they point out that the Court in the Philconsa case only allowed the CDF to exist on the condition that individual legislators limited
their role to recommending projects and not if they actually dictate their implementation. 181
For their part, respondents counter that the separations of powers principle has not been violated since the President maintains "ultimate authority to
control the execution of the GAA‖ and that he "retains the final discretion to reject" the legislators‘ proposals. 182 They maintain that the Court, in
Philconsa, "upheld the constitutionality of the power of members of Congress to propose and identify projects so long as such proposal and
identification are recommendatory."183 As such, they claim that "everything in the Special Provisions [of the 2013 PDAF Article follows the Philconsa
framework, and hence, remains constitutional."184
The Court rules in favor of petitioners.
As may be observed from its legal history, the defining feature of all forms of Congressional Pork Barrel would be the authority of legislators to
participate in the post-enactment phases of project implementation.
At its core, legislators – may it be through project lists,185 prior consultations186 or program menus187 – have been consistently accorded post-enactment
authority to identify the projects they desire to be funded through various Congressional Pork Barrel allocations. Under the 2013 PDAF Article, the
statutory authority of legislators to identify projects post-GAA may be construed from the import of Special Provisions 1 to 3 as well as the second
paragraph of Special Provision 4. To elucidate, Special Provision 1 embodies the program menu feature which, as evinced from past PDAF Articles,
allows individual legislators to identify PDAF projects for as long as the identified project falls under a general program listed in the said menu.
Relatedly, Special Provision 2 provides that the implementing agencies shall, within 90 days from the GAA is passed, submit to Congress a more
detailed priority list, standard or design prepared and submitted by implementing agencies from which the legislator may make his choice. The same
provision further authorizes legislators to identify PDAF projects outside his district for as long as the representative of the district concerned concurs in
writing. Meanwhile, Special Provision 3 clarifies that PDAF projects refer to "projects to be identified by legislators" 188 and thereunder provides the
allocation limit for the total amount of projects identified by each legislator. Finally, paragraph 2 of Special Provision 4 requires that any modification
and revision of the project identification "shall be submitted to the House Committee on Appropriations and the Senate Committee on Finance for
favorable endorsement to the DBM or the implementing agency, as the case may be." From the foregoing special provisions, it cannot be seriously
doubted that legislators have been accorded post-enactment authority to identify PDAF projects.
Aside from the area of project identification, legislators have also been accorded post-enactment authority in the areas of fund release and realignment.
Under the 2013 PDAF Article, the statutory authority of legislators to participate in the area of fund release through congressional committees is
contained in Special Provision 5 which explicitly states that "all request for release of funds shall be supported by the documents prescribed under
Special Provision No. 1 and favorably endorsed by House Committee on Appropriations and the Senate Committee on Finance, as the case may be";
while their statutory authority to participate in the area of fund realignment is contained in: first , paragraph 2, Special Provision 4 189 which explicitly
state s, among others, that "any realignment of funds shall be submitted to the House Committee on Appropriations and the Senate Committee on
Finance for favorable endorsement to the DBM or the implementing agency, as the case may be‖ ; and, second , paragraph 1, also of Special
Provision 4 which authorizes the "Secretaries of Agriculture, Education, Energy, Interior and Local Government, Labor and Employment, Public Works
and Highways, Social Welfare and Development and Trade and Industry 190 x x x to approve realignment from one project/scope to another within the
allotment received from this Fund, subject to among others (iii) the request is with the concurrence of the legislator concerned."
Clearly, these 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.
Indeed, by virtue of the foregoing, legislators have been, in one form or another, authorized to participate in – as Guingona, Jr. puts it – "the various
operational aspects of budgeting," including "the evaluation of work and financial plans for individual activities" and the "regulation and release of funds"
in violation of the separation of powers principle. The fundamental rule, as categorically articulated in Abakada, cannot be overstated – from the
moment the law becomes effective, any provision of law that empowers Congress or any of its members to play any role in the implementation or
enforcement of the law violates the principle of separation of powers and is thus unconstitutional. 191 That the said authority is treated as merely
recommendatory in nature does not alter its unconstitutional tenor since the prohibition, to repeat, covers any role in the implementation or enforcement
of the law. Towards this end, the Court must therefore abandon its ruling in Philconsa which sanctioned the conduct of legislator identification on the
guise that the same is merely recommendatory and, as such, respondents‘ reliance on the same falters altogether.
Besides, it must be pointed out that respondents have nonetheless failed to substantiate their position that the identification authority of legislators is
only of recommendatory import. Quite the contrary, respondents – through the statements of the Solicitor General during the Oral Arguments – have
admitted that the identification of the legislator constitutes a mandatory requirement before his PDAF can be tapped as a funding source, thereby
highlighting the indispensability of the said act to the entire budget execution process: 192
Justice Bernabe: Now, without the individual legislator’s identification of the project, can the PDAF of the legislator be utilized?
Solicitor General Jardeleza: No, Your Honor.
Justice Bernabe: It cannot?
Solicitor General Jardeleza: It cannot… (interrupted)
Justice Bernabe: So meaning you should have the identification of the project by the individual legislator?
Solicitor General Jardeleza: Yes, Your Honor.
xxxx
Justice Bernabe: In short, the act of identification is mandatory?
Solictor General Jardeleza: Yes, Your Honor. In the sense that if it is not done and then there is no identification.
xxxx
Justice Bernabe: Now, would you know of specific instances when a project was implemented without the identification by the individual legislator?
Solicitor General Jardeleza: I do not know, Your Honor; I do not think so but I have no specific examples. I would doubt very much, Your Honor,
because to implement, there is a need for a SARO and the NCA. And the SARO and the NCA are triggered by an identification from the legislator.
xxxx
Solictor General Jardeleza: What we mean by mandatory, Your Honor, is we were replying to a question, "How can a legislator make sure that he is
able to get PDAF Funds?" It is mandatory in the sense that he must identify, in that sense, Your Honor. Otherwise, if he does not identify, he cannot
avail of the PDAF Funds and his district would not be able to have PDAF Funds, only in that sense, Your Honor. (Emphases supplied)
Thus, for all the foregoing reasons, the Court hereby 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. Corollary thereto, informal practices, through which legislators have effectively
intruded into the proper phases of budget execution, must be deemed as acts of grave abuse of discretion amounting to lack or excess of jurisdiction
and, hence, accorded the same unconstitutional treatment. That such informal practices do exist and have, in fact, been constantly observed
throughout the years has not been substantially disputed here. As pointed out by Chief Justice Maria Lourdes P.A. Sereno (Chief Justice Sereno)
during the Oral Arguments of these cases: 193
Chief Justice Sereno:
Now, from the responses of the representative of both, the DBM and two (2) Houses of Congress, if we enforces the initial thought that I have, after I
had seen the extent of this research made by my staff, that neither the Executive nor Congress frontally faced the question of constitutional
compatibility of how they were engineering the budget process. In fact, the words you have been using, as the three lawyers of the DBM, and both
Houses of Congress has also been using is surprise; surprised that all of these things are now surfacing. In fact, I thought that what the 2013 PDAF
provisions did was to codify in one section all the past practice that had been done since 1991. In a certain sense, we should be thankful that they are
all now in the PDAF Special Provisions. x x x (Emphasis and underscoring supplied)
Ultimately, legislators cannot exercise powers which they do not have, whether through formal measures written into the law or informal practices
institutionalized in government agencies, else the Executive department be deprived of what the Constitution has vested as its own.
2. Non-delegability of Legislative Power.
a. Statement of Principle.
As an adjunct to the separation of powers principle,194 legislative power shall be exclusively exercised by the body to which the Constitution has
conferred the same. In particular, 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.195 Based on this provision, it is clear that only Congress, acting as a bicameral body, and the people, through the process of initiative and
referendum, may constitutionally wield legislative power and no other. This premise embodies the principle of non-delegability of legislative power, and
the only recognized exceptions thereto would be: (a) delegated legislative power to local governments which, by immemorial practice, are allowed to
legislate on purely local matters;196 and (b) constitutionally-grafted exceptions such as the authority of the President to, by law, exercise powers
necessary and proper to carry out a declared national policy in times of war or other national emergency, 197or fix within specified limits, and subject to
such limitations and restrictions as Congress may impose, tariff rates, import and export quotas, tonnage and wharfage dues, and other duties or
imposts within the framework of the national development program of the Government. 198
Notably, the principle of non-delegability should not be confused as a restriction to delegate rule-making authority to implementing agencies for the
limited purpose of either filling up the details of the law for its enforcement (supplementary rule-making) or ascertaining facts to bring the law into actual
operation (contingent rule-making).199The conceptual treatment and limitations of delegated rule-making were explained in the case of People v.
Maceren200 as follows:
The grant of the rule-making power to administrative agencies is a relaxation of the principle of separation of powers and is an exception to the
nondelegation of legislative powers. Administrative regulations or "subordinate legislation" calculated to promote the public interest are necessary
because of "the growing complexity of modern life, the multiplication of the subjects of governmental regulations, and the increased difficulty of
administering the law."
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Nevertheless, it must be emphasized that the rule-making power must be confined to details for regulating the mode or proceeding to carry into effect
the law as it has been enacted. The power cannot be extended to amending or expanding the statutory requirements or to embrace matters not
covered by the statute. Rules that subvert the statute cannot be sanctioned. (Emphases supplied)
b. Application.
In the cases at bar, the Court observes that the 2013 PDAF Article, insofar as it 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 – as
settled in Philconsa – is lodged in Congress.201 That the power to appropriate must be exercised only through legislation is clear from Section 29(1),
Article VI of the 1987 Constitution which states that: "No money shall be paid out of the Treasury except in pursuance of an appropriation made by
law." To understand what constitutes an act of appropriation, the Court, in Bengzon v. Secretary of Justice and Insular Auditor202 (Bengzon), held that
the power of appropriation involves (a) the setting apart by law of a certain sum from the public revenue for (b) a specified purpose. Essentially, under
the 2013 PDAF Article, 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. As these two (2) acts comprise the exercise of the power of
appropriation as described in Bengzon, and given that the 2013 PDAF Article authorizes individual legislators to perform the same, undoubtedly, said
legislators have been conferred the power to legislate which the Constitution does not, however, allow. Thus, keeping with the principle of non-
delegability of legislative power, the Court hereby declares the 2013 PDAF Article, as well as all other forms of Congressional Pork Barrel which
contain the similar legislative identification feature as herein discussed, as unconstitutional.
3. Checks and Balances.
a. Statement of Principle; Item-Veto Power.
The fact that the three great powers of government are intended to be kept separate and distinct does not mean that they are absolutely unrestrained
and independent of each other. The Constitution has also provided for an elaborate system of checks and balances to secure coordination in the
workings of the various departments of the government. 203
A prime example of a constitutional check and balance would be the President’s 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." The President‘s item-veto power is found in Section 27(2),
Article VI of the 1987 Constitution which reads as follows:
Sec. 27. x x x.
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(2) The President shall have the power to veto any particular item or items in an appropriation, revenue, or tariff bill, but the veto shall not affect the
item or items to which he does not object.
The presentment of appropriation, revenue or tariff bills to the President, wherein he may exercise his power of item-veto, forms part of the "single,
finely wrought and exhaustively considered, procedures" for law-passage as specified under the Constitution. 204 As stated in Abakada, the final step in
the law-making process is the "submission of the bill to the President for approval. Once approved, it takes effect as law after the required
publication."205
Elaborating on the President‘s item-veto power and its relevance as a check on the legislature, the Court, in Bengzon, explained that: 206
The former Organic Act and the present Constitution of the Philippines make the Chief Executive an integral part of the law-making power. His
disapproval of a bill, commonly known as a veto, is essentially a legislative act. The questions presented to the mind of the Chief Executive are
precisely the same as those the legislature must determine in passing a bill, except that his will be a broader point of view.
The Constitution is a limitation upon the power of the legislative department of the government, but in this respect it is a grant of power to the executive
department. The Legislature has the affirmative power to enact laws; the Chief Executive has the negative power by the constitutional exercise of which
he may defeat the will of the Legislature. It follows that the Chief Executive must find his authority in the Constitution. But in exercising that authority he
may not be confined to rules of strict construction or hampered by the unwise interference of the judiciary. The courts will indulge every intendment in
favor of the constitutionality of a veto in the same manner as they will presume the constitutionality of an act as originally passed by the Legislature.
(Emphases supplied)
The justification for the President‘s item-veto power rests on a variety of policy goals such as to prevent log-rolling legislation,207 impose fiscal
restrictions on the legislature, as well as to fortify the executive branch‘s role in the budgetary process. 208 In Immigration and Naturalization Service v.
Chadha, the US Supreme Court characterized the President‘s item-power as "a salutary check upon the legislative body, calculated to guard the
community against the effects of factions, precipitancy, or of any impulse unfriendly to the public good, which may happen to influence a majority of that
body"; phrased differently, it is meant to "increase the chances in favor of the community against the passing of bad laws, through haste, inadvertence,
or design."209
For the President to exercise his item-veto power, it necessarily follows that there exists a proper "item" which may be the object of the veto. An item,
as defined in the field of appropriations, pertains to "the particulars, the details, the distinct and severable parts of the appropriation or of the bill." In the
case of Bengzon v. Secretary of Justice of the Philippine Islands, 210 the US Supreme Court characterized an item of appropriation as follows:
An item of an appropriation bill obviously means an item which, in itself, is a specific appropriation of money, not some general provision of law which
happens to be put into an appropriation bill. (Emphases supplied)
On this premise, it may be concluded that an appropriation bill, to ensure that the President may be able to exercise his power of item veto, must
contain "specific appropriations of money" and not only "general provisions" which provide for parameters of appropriation.
Further, it is significant to point out that an item of appropriation must be an item characterized by singular correspondence – meaning an allocation of
a specified singular amount for a specified singular purpose, otherwise known as a "line-item."211 This treatment not only allows the item to be
consistent with its definition as a "specific appropriation of money" but also ensures that the President may discernibly veto the same. Based on the
foregoing formulation, the existing Calamity Fund, Contingent Fund and the Intelligence Fund, being appropriations which state a specified amount for
a specific purpose, would then be considered as "line- item" appropriations which are rightfully subject to item veto. Likewise, it must be observed that
an appropriation may be validly apportioned into component percentages or values; however, it is crucial that each percentage or value must be
allocated for its own corresponding purpose for such component to be considered as a proper line-item. Moreover, as Justice Carpio correctly pointed
out, a valid appropriation may even have several related purposes that are by accounting and budgeting practice considered as one purpose, e.g.,
MOOE (maintenance and other operating expenses), in which case the related purposes shall be deemed sufficiently specific for the exercise of the
President‘s item veto power. Finally, special purpose funds and discretionary funds would equally square with the constitutional mechanism of item-
veto for as long as they follow the rule on singular correspondence as herein discussed. Anent special purpose funds, it must be added that Section
25(4), Article VI of the 1987 Constitution requires that the "special appropriations bill shall specify the purpose for which it is intended, and shall be
supported by funds actually available as certified by the National Treasurer, or t o be raised by a corresponding revenue proposal therein." Meanwhile,
with respect to discretionary funds, Section 2 5(6), Article VI of the 1987 Constitution requires that said funds "shall be disbursed only for public
purposes to be supported by appropriate vouchers and subject to such guidelines as may be prescribed by law."
In contrast, what beckons constitutional infirmity are appropriations which merely provide for a singular lump-sum amount to be tapped as a source of
funding for multiple purposes. Since such appropriation type necessitates the further determination of both the actual amount to be expended and the
actual purpose of the appropriation which must still be chosen from the multiple purposes stated in the law, it cannot be said that the appropriation law
already indicates a "specific appropriation of money‖ and hence, without a proper line-item which the President may veto. As a practical result, the
President would then be faced with the predicament of either vetoing the entire appropriation if he finds some of its purposes wasteful or undesirable,
or approving the entire appropriation so as not to hinder some of its legitimate purposes. Finally, it may not be amiss to state that such arrangement
also raises non-delegability issues considering that the implementing authority would still have to determine, again, both the actual amount to be
expended and the actual purpose of the appropriation. Since the foregoing determinations constitute the integral aspects of the power to appropriate,
the implementing authority would, in effect, be exercising legislative prerogatives in violation of the principle of non-delegability.
b. Application.
In these cases, petitioners claim that "in the current x x x system where the PDAF is a lump-sum appropriation, the legislator‘s identification of the
projects after the passage of the GAA denies the President the chance to veto that item later on."212 Accordingly, they submit that the "item veto power
of the President mandates that appropriations bills adopt line-item budgeting" and that "Congress cannot choose a mode of budgeting which effectively
renders the constitutionally-given power of the President useless."213
On the other hand, respondents maintain that the text of the Constitution envisions a process which is intended to meet the demands of a modernizing
economy and, as such, lump-sum appropriations are essential to financially address situations which are barely foreseen when a GAA is enacted. They
argue that the decision of the Congress to create some lump-sum appropriations is constitutionally allowed and textually-grounded.214
The Court agrees with petitioners.
Under the 2013 PDAF Article, the amount of ₱24.79 Billion only appears as a collective allocation limit since the said amount would be further divided
among individual legislators who would then receive personal lump-sum allocations and could, after the GAA is passed, effectively appropriate PDAF
funds based on their own discretion. As these intermediate appropriations are made by legislators only after the GAA is passed and hence, outside of
the law, it necessarily means that the actual items of PDAF appropriation would not have been written into the General Appropriations Bill and thus
effectuated without veto consideration. This kind of lump-sum/post-enactment legislative identification budgeting system fosters the creation of a
budget within a budget" which subverts the prescribed procedure of presentment and consequently impairs the President‘s power of item veto. As
petitioners aptly point out, the above-described system forces the President to decide between (a) accepting the entire ₱24.79 Billion PDAF allocation
without knowing the specific projects of the legislators, which may or may not be consistent with his national agenda and (b) rejecting the whole PDAF
to the detriment of all other legislators with legitimate projects. 215
Moreover, even without its post-enactment legislative identification feature, the 2013 PDAF Article would remain constitutionally flawed since it would
then operate as a prohibited form of lump-sum appropriation above-characterized. In particular, the lump-sum amount of ₱24.79 Billion would be
treated as a mere funding source allotted for multiple purposes of spending, i.e., scholarships, medical missions, assistance to indigents, preservation
of historical materials, construction of roads, flood control, etc. This setup connotes that 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.
In fact, on the accountability side, the same lump-sum budgeting scheme has, as the CoA Chairperson relays, "limited state auditors from obtaining
relevant data and information that would aid in more stringently auditing the utilization of said Funds." 216 Accordingly, she recommends the adoption of
a "line by line budget or amount per proposed program, activity or project, and per implementing agency." 217
Hence, in view of the reasons above-stated, the Court finds the 2013 PDAF Article, as well as all Congressional Pork Barrel Laws of similar operation,
to be unconstitutional. That such budgeting system provides for a greater degree of flexibility to account for future contingencies cannot be an excuse
to defeat what the Constitution requires. Clearly, the first and essential truth of the matter is that unconstitutional means do not justify even
commendable ends.218
c. Accountability.
Petitioners further relate that the system under which various forms of Congressional Pork Barrel operate defies public accountability as it renders
Congress incapable of checking itself or its Members. In particular, they point out that the Congressional Pork Barrel "gives each legislator a direct,
financial interest in the smooth, speedy passing of the yearly budget" which turns them "from fiscalizers" into "financially-interested partners."219 They
also claim that the system has an effect on re- election as "the PDAF excels in self-perpetuation of elective officials." Finally, they add that the "PDAF
impairs the power of impeachment" as such "funds are indeed quite useful, ‘to well, accelerate the decisions of senators.‘" 220
The Court agrees in part.
The aphorism forged under Section 1, Article XI of the 1987 Constitution, which states that "public office is a public trust," is an overarching reminder
that every instrumentality of government should exercise their official functions only in accordance with the principles of the Constitution which
embodies the parameters of the people‘s trust. The notion of a public trust connotes accountability, 221 hence, the various mechanisms in the
Constitution which are designed to exact accountability from public officers.
Among others, an accountability mechanism with which the proper expenditure of public funds may be checked is the power of congressional
oversight. As mentioned in Abakada,222 congressional oversight may be performed either through: (a) scrutiny based primarily on Congress‘ power of
appropriation and the budget hearings conducted in connection with it, its power to ask heads of departments to appear before and be heard by either
of its Houses on any matter pertaining to their departments and its power of confirmation; 223 or (b) investigation and monitoring of the implementation of
laws pursuant to the power of Congress to conduct inquiries in aid of legislation. 224
The Court agrees with petitioners that certain features embedded in some forms of Congressional Pork Barrel, among others the 2013 PDAF Article,
has an effect on congressional oversight. The fact that individual legislators are given post-enactment roles in the implementation of the budget makes
it difficult for them to become disinterested "observers" when scrutinizing, investigating or monitoring the implementation of the appropriation law. To a
certain extent, the conduct of oversight would be tainted as said legislators, who are vested with post-enactment authority, would, in effect, be checking
on activities in which they themselves participate. Also, it must be pointed out that this very same concept of post-enactment authorization runs afoul of
Section 14, Article VI of the 1987 Constitution which provides that:
Sec. 14. No Senator or Member of the House of Representatives may personally appear as counsel before any court of justice or before the Electoral
Tribunals, or quasi-judicial and other administrative bodies. Neither shall he, directly or indirectly, be interested financially in any contract with, or in any
franchise or special privilege granted by the Government, or any subdivision, agency, or instrumentality thereof, including any government-owned or
controlled corporation, or its subsidiary, during his term of office. He shall not intervene in any matter before any office of the Government for his
pecuniary benefit or where he may be called upon to act on account of his office. (Emphasis supplied)
Clearly, allowing legislators to intervene in the various phases of project implementation – a matter before another office of government – renders them
susceptible to taking undue advantage of their own office.
The Court, however, cannot completely agree that the same post-enactment authority and/or the individual legislator‘s control of his PDAF per se would
allow him to perpetuate himself in office. Indeed, while the Congressional Pork Barrel and a legislator‘s use thereof may be linked to this area of
interest, the use of his PDAF for re-election purposes is a matter which must be analyzed based on particular facts and on a case-to-case basis.
Finally, while the Court accounts for the possibility that the close operational proximity between legislators and the Executive department, through the
former‘s post-enactment participation, may affect the process of impeachment, this matter largely borders on the domain of politics and does not strictly
concern the Pork Barrel System‘s intrinsic constitutionality. As such, it is an improper subject of judicial assessment.
In sum, insofar as its post-enactment features dilute congressional oversight and violate Section 14, Article VI of the 1987 Constitution, thus impairing
public accountability, the 2013 PDAF Article and other forms of Congressional Pork Barrel of similar nature are deemed as unconstitutional.
4. Political Dynasties.
One of the petitioners submits that the Pork Barrel System enables politicians who are members of political dynasties to accumulate funds to
perpetuate themselves in power, in contravention of Section 26, Article II of the 1987 Constitution 225 which states that:
Sec. 26. The State shall guarantee equal access to opportunities for public service, and prohibit political dynasties as may be defined by law.
(Emphasis and underscoring supplied)
At the outset, suffice it to state that the foregoing provision is considered as not self-executing due to the qualifying phrase "as may be defined by law."
In this respect, said provision does not, by and of itself, provide a judicially enforceable constitutional right but merely specifies guideline for legislative
or executive action.226 Therefore, since there appears to be no standing law which crystallizes the policy on political dynasties for enforcement, the
Court must defer from ruling on this issue.
In any event, the Court finds the above-stated argument on this score to be largely speculative since it has not been properly demonstrated how the
Pork Barrel System would be able to propagate political dynasties.
5. Local Autonomy.
The State‘s policy on local autonomy is principally stated in Section 25, Article II and Sections 2 and 3, Article X of the 1987 Constitution which read as
follows:
ARTICLE II
Sec. 25. The State shall ensure the autonomy of local governments.
ARTICLE X
Sec. 2. The territorial and political subdivisions shall enjoy local autonomy.
Sec. 3. The Congress shall enact a local government code which shall provide for a more responsive and accountable local government structure
instituted through a system of decentralization with effective mechanisms of recall, initiative, and referendum, allocate among the different local
government units their powers, responsibilities, and resources, and provide for the qualifications, election, appointment and removal, term, salaries,
powers and functions and duties of local officials, and all other matters relating to the organization and operation of the local units.
Pursuant thereto, Congress enacted RA 7160, 227 otherwise known as the "Local Government Code of 1991" (LGC), wherein the policy on local
autonomy had been more specifically explicated as follows:
Sec. 2. Declaration of Policy. – (a) It is hereby declared the policy of the State that the territorial and political subdivisions of the State shall enjoy
genuine and meaningful local autonomy to enable them to attain their fullest development as self-reliant communities and make them more effective
partners in the attainment of national goals. Toward this end, the State shall provide for a more responsive and accountable local government structure
instituted through a system of decentralization whereby local government units shall be given more powers, authority, responsibilities, and resources.
The process of decentralization shall proceed from the National Government to the local government units.
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(c) It is likewise the policy of the State to require all national agencies and offices to conduct periodic consultations with appropriate local government
units, nongovernmental and people‘s organizations, and other concerned sectors of the community before any project or program is implemented in
their respective jurisdictions. (Emphases and underscoring supplied)
The above-quoted provisions of the Constitution and the LGC reveal the policy of the State to empower local government units (LGUs) to develop and
ultimately, become self-sustaining and effective contributors to the national economy. As explained by the Court in Philippine Gamefowl Commission v.
Intermediate Appellate Court:228
This is as good an occasion as any to stress the commitment of the Constitution to the policy of local autonomy which is intended to provide the
needed impetus and encouragement to the development of our local political subdivisions as "self - reliant communities." In the words of Jefferson,
"Municipal corporations are the small republics from which the great one derives its strength." The vitalization of local governments will enable their
inhabitants to fully exploit their resources and more important, imbue them with a deepened sense of involvement in public affairs as members of the
body politic. This objective could be blunted by undue interference by the national government in purely local affairs which are best resolved by the
officials and inhabitants of such political units. The decision we reach today conforms not only to the letter of the pertinent laws but also to the spirit of
the Constitution.229 (Emphases and underscoring supplied)
In the cases at bar, petitioners contend that the Congressional Pork Barrel goes against the constitutional principles on local autonomy since it allows
district representatives, who are national officers, to substitute their judgments in utilizing public funds for local development.230 The Court agrees with
petitioners.
Philconsa described the 1994 CDF as an attempt "to make equal the unequal" and that "it is also a recognition that individual members of Congress, far
more than the President and their congressional colleagues, are likely to be knowledgeable about the needs of their respective constituents and the
priority to be given each project."231 Drawing strength from this pronouncement, previous legislators justified its existence by stating that "the relatively
small projects implemented under the Congressional Pork Barrel complement and link the national development goals to the countryside and
grassroots as well as to depressed areas which are overlooked by central agencies which are preoccupied with mega-projects.232 Similarly, in his
August 23, 2013 speech on the "abolition" of PDAF and budgetary reforms, President Aquino mentioned that the Congressional Pork Barrel was
originally established for a worthy goal, which is to enable the representatives to identify projects for communities that the LGU concerned cannot
afford.233
Notwithstanding these declarations, the Court, however, finds an inherent defect in the system which actually belies the avowed intention of "making
equal the unequal." In particular, the Court observes that the gauge of PDAF and CDF allocation/division is based solely on the fact of office, without
taking into account the specific interests and peculiarities of the district the legislator represents. In this regard, the allocation/division limits are clearly
not based on genuine parameters of equality, wherein economic or geographic indicators have been taken into consideration. As a result, a district
representative of a highly-urbanized metropolis gets the same amount of funding as a district representative of a far-flung rural province which would be
relatively "underdeveloped" compared to the former. To add, what rouses graver scrutiny is that even Senators and Party-List Representatives – and in
some years, even the Vice-President – who do not represent any locality, receive funding from the Congressional Pork Barrel as well. These certainly
are anathema to the Congressional Pork Barrel‘s original intent which is "to make equal the unequal." Ultimately, the PDAF and CDF had become
personal funds under the effective control of each legislator and given unto them on the sole account of their office.
The Court also observes that this concept of legislator control underlying the CDF and PDAF conflicts with the functions of the various Local
Development Councils (LDCs) which are already legally mandated to "assist the corresponding sanggunian in setting the direction of economic and
social development, and coordinating development efforts within its territorial jurisdiction."234 Considering that LDCs are instrumentalities whose
functions are essentially geared towards managing local affairs,235 their programs, policies and resolutions should not be overridden nor duplicated by
individual legislators, who are national officers that have no law-making authority except only when acting as a body. The undermining effect on local
autonomy caused by the post-enactment authority conferred to the latter was succinctly put by petitioners in the following wise: 236
With PDAF, a Congressman can simply bypass the local development council and initiate projects on his own, and even take sole credit for its
execution. Indeed, this type of personality-driven project identification has not only contributed little to the overall development of the district, but has
even contributed to "further weakening infrastructure planning and coordination efforts of the government."
Thus, insofar as individual legislators are authorized to intervene in purely local matters and thereby subvert genuine local autonomy, the 2013 PDAF
Article as well as all other similar forms of Congressional Pork Barrel is deemed unconstitutional.
With this final issue on the Congressional Pork Barrel resolved, the Court now turns to the substantive issues involving the Presidential Pork Barrel.
C. Substantive Issues on the Presidential Pork Barrel.
1. Validity of Appropriation.
Petitioners preliminarily assail Section 8 of PD 910 and Section 12 of PD1869 (now, amended by PD 1993), which respectively provide for the
Malampaya Funds and the Presidential Social Fund, as invalid appropriations laws since they do not have the "primary and specific" purpose of
authorizing the release of public funds from the National Treasury. Petitioners submit that Section 8 of PD 910 is not an appropriation law since the
"primary and specific‖ purpose of PD 910 is the creation of an Energy Development Board and Section 8 thereof only created a Special Fund incidental
thereto.237 In similar regard, petitioners argue that Section 12 of PD 1869 is neither a valid appropriations law since the allocation of the Presidential
Social Fund is merely incidental to the "primary and specific" purpose of PD 1869 which is the amendment of the Franchise and Powers of
PAGCOR.238 In view of the foregoing, petitioners suppose that such funds are being used without any valid law allowing for their proper appropriation in
violation of Section 29(1), Article VI of the 1987 Constitution which states that: "No money shall be paid out of the Treasury except in pursuance of an
appropriation made by law."239
The Court disagrees.
"An appropriation made by law‖ under the contemplation of Section 29(1), Article VI of the 1987 Constitution exists when a provision of law (a) sets
apart a determinate or determinable 240 amount of money and (b) allocates the same for a particular public purpose. These two minimum designations
of amount and purpose stem from the very definition of the word "appropriation," which means "to allot, assign, set apart or apply to a particular use or
purpose," and hence, if written into the law, demonstrate that the legislative intent to appropriate exists. As the Constitution "does not provide or
prescribe any particular form of words or religious recitals in which an authorization or appropriation by Congress shall be made, except that it be ‘made
by law,‘" an appropriation law may – according to Philconsa – be "detailed and as broad as Congress wants it to be" for as long as the intent to
appropriate may be gleaned from the same. As held in the case of Guingona, Jr.: 241
There is no provision in our Constitution that provides or prescribes any particular form of words or religious recitals in which an authorization or
appropriation by Congress shall be made, except that it be "made by law," such as precisely the authorization or appropriation under the questioned
presidential decrees. In other words, in terms of time horizons, an appropriation may be made impliedly (as by past but subsisting legislations) as well
as expressly for the current fiscal year (as by enactment of laws by the present Congress), just as said appropriation may be made in general as well
as in specific terms. The Congressional authorization may be embodied in annual laws, such as a general appropriations act or in special provisions of
laws of general or special application which appropriate public funds for specific public purposes, such as the questioned decrees. An appropriation
measure is sufficient if the legislative intention clearly and certainly appears from the language employed (In re Continuing Appropriations, 32 P. 272),
whether in the past or in the present. (Emphases and underscoring supplied)
Likewise, as ruled by the US Supreme Court in State of Nevada v. La Grave:242
To constitute an appropriation there must be money placed in a fund applicable to the designated purpose. The word appropriate means to allot,
assign, set apart or apply to a particular use or purpose. An appropriation in the sense of the constitution means the setting apart a portion of the public
funds for a public purpose. No particular form of words is necessary for the purpose, if the intention to appropriate is plainly manifested. (Emphases
supplied)
Thus, based on the foregoing, the Court cannot sustain the argument that the appropriation must be the "primary and specific" purpose of the law in
order for a valid appropriation law to exist. To reiterate, if a legal provision designates a determinate or determinable amount of money and allocates
the same for a particular public purpose, then the legislative intent to appropriate becomes apparent and, hence, already suf ficient to satisfy the
requirement of an "appropriation made by law" under contemplation of the Constitution.
Section 8 of PD 910 pertinently provides:
Section 8. Appropriations. x x x
All fees, revenues and receipts of the Board from any and all sources including receipts from service contracts and agreements such as application and
processing fees, signature bonus, discovery bonus, production bonus; all money collected from concessionaires, representing unspent work
obligations, fines and penalties under the Petroleum Act of 1949; as well as the government share representing royalties, rentals, production share on
service contracts and similar payments on the exploration, development and exploitation of energy resources, shall form part of a Special Fund to be
used to finance energy resource development and exploitation programs and projects of the government and for such other purposes as may be
hereafter directed by the President. (Emphases supplied)
Whereas Section 12 of PD 1869, as amended by PD 1993, reads:
Sec. 12. Special Condition of Franchise. — After deducting five (5%) percent as Franchise Tax, the Fifty (50%) percent share of the Government in the
aggregate gross earnings of the Corporation from this Franchise, or 60% if the aggregate gross earnings be less than ₱150,000,000.00 shall be set
aside and shall accrue to the General Fund to finance the priority infrastructure development projects 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. (Emphases supplied)
Analyzing the legal text vis-à-vis the above-mentioned principles, it may then be concluded that (a) Section 8 of PD 910, which creates a Special Fund
comprised of "all fees, revenues, and receipts of the Energy Development Board from any and all sources" (a determinable amount) "to be used to
finance energy resource development and exploitation programs and projects of the government and for such other purposes as may be hereafter
directed by the President" (a specified public purpose), and (b) Section 12 of PD 1869, as amended by PD 1993, which similarly sets aside, "after
deducting five (5%) percent as Franchise Tax, the Fifty (50%) percent share of the Government in the aggregate gross earnings of PAGCOR, or 60%,
if the aggregate gross earnings be less than ₱150,000,000.00" (also a determinable amount) "to finance the priority infrastructure development projects
and x x x 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" (also a specified public purpose), are legal appropriations under Section 29(1), Article VI of the 1987 Constitution.
In this relation, it is apropos to note that the 2013 PDAF Article cannot be properly deemed as a legal appropriation under the said constitutional
provision precisely because, as earlier stated, it contains post-enactment measures which effectively create a system of intermediate appropriations.
These intermediate appropriations are the actual appropriations meant for enforcement and since they are made by individual legislators after the GAA
is passed, they occur outside the law. As such, the Court observes that the real appropriation made under the 2013 PDAF Article is not the ₱24.79
Billion allocated for the entire PDAF, but rather the post-enactment determinations made by the individual legislators which are, to repeat, occurrences
outside of the law. Irrefragably, the 2013 PDAF Article does not constitute an "appropriation made by law" since it, in its truest sense, only authorizes
individual legislators to appropriate in violation of the non-delegability principle as afore-discussed.
2. Undue Delegation.
On a related matter, petitioners contend that Section 8 of PD 910 constitutes an undue delegation of legislative power since the phrase "and for such
other purposes as may be hereafter directed by the President" gives the President "unbridled discretion to determine for what purpose the funds will be
used."243 Respondents, on the other hand, urged the Court to apply the principle of ejusdem generis to the same section and thus, construe the phrase
"and for such other purposes as may be hereafter directed by the President" to refer only to other purposes related "to energy resource development
and exploitation programs and projects of the government." 244
The Court agrees with petitioners‘ submissions.
While the designation of a determinate or determinable amount for a particular public purpose is sufficient for a legal appropriation to exist, the
appropriation law must contain adequate legislative guidelines if the same law delegates rule-making authority to the Executive 245 either for the purpose
of (a) filling up the details of the law for its enforcement, known as supplementary rule-making, or (b) ascertaining facts to bring the law into actual
operation, referred to as contingent rule-making.246 There are two (2) fundamental tests to ensure that the legislative guidelines for delegated rule-
making are indeed adequate. The first test is called the "completeness test." Case law states that a law is complete when it sets forth therein the policy
to be executed, carried out, or implemented by the delegate. On the other hand, the second test is called the "sufficient standard test." Jurisprudence
holds that a law lays down a sufficient standard when it provides adequate guidelines or limitations in the law to map out the boundaries of the
delegate‘s authority and prevent the delegation from running riot. 247 To be sufficient, the standard must specify the limits of the delegate‘s authority,
announce the legislative policy, and identify the conditions under which it is to be implemented. 248
In view of the foregoing, the Court agrees with petitioners that the phrase "and for such other purposes as may be hereafter directed by the President"
under Section 8 of PD 910 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. As it reads, the said phrase
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. That the subject phrase may be confined only to "energy resource development and exploitation programs
and projects of the government" under the principle of ejusdem generis, meaning that the general word or phrase is to be construed to include – or be
restricted to – things akin to, resembling, or of the same kind or class as those specifically mentioned, 249 is belied by three (3) reasons: first, the phrase
"energy resource development and exploitation programs and projects of the government" states a singular and general class and hence, cannot be
treated as a statutory reference of specific things from which the general phrase "for such other purposes" may be limited; second, the said phrase also
exhausts the class it represents, namely energy development programs of the government; 250 and, third, the Executive department has, in fact, used
the Malampaya Funds for non-energy related purposes under the subject phrase, thereby contradicting respondents‘ own position that it is limited only
to "energy resource development and exploitation programs and projects of the government." 251 Thus, while Section 8 of PD 910 may have passed the
completeness test since the policy of energy development is clearly deducible from its text, the phrase "and for such other purposes as may be
hereafter directed by the President" under the same provision of law should nonetheless be stricken down as unconstitutional as it lies independently
unfettered by any sufficient standard of the delegating law. This notwithstanding, it must be underscored that the rest of Section 8, insofar as it allows
for the use of the Malampaya Funds "to finance energy resource development and exploitation programs and projects of the government," remains
legally effective and subsisting. Truth be told, the declared unconstitutionality of the aforementioned phrase is but an assurance that the Malampaya
Funds would be used – as it should be used – only in accordance with the avowed purpose and intention of PD 910.
As for the Presidential Social Fund, the Court takes judicial notice of the fact that Section 12 of PD 1869 has already been amended by PD 1993 which
thus moots the parties‘ submissions on the same. 252 Nevertheless, since the amendatory provision may be readily examined under the current
parameters of discussion, the Court proceeds to resolve its constitutionality.
Primarily, Section 12 of PD 1869, as amended by PD 1993, indicates that the Presidential Social Fund may be used "to first, f inance the priority
infrastructure development projects and second, 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." The Court finds that while the second indicated purpose adequately curtails the authority of
the President to spend the Presidential Social Fund only for restoration purposes which arise from calamities, the first indicated purpose, however,
gives him carte blanche authority to use the same fund for any infrastructure project he may so determine as a "priority". Verily, the law does not supply
a definition of "priority in frastructure development projects" and hence, leaves the President without any guideline to construe the same. To note, the
delimitation of a project as one of "infrastructure" is too broad of a classification since the said term could pertain to any kind of facility. This may be
deduced from its lexicographic definition as follows: "the underlying framework of a system, especially public services and facilities (such as highways,
schools, bridges, sewers, and water-systems) needed to support commerce as well as economic and residential development." 253 In fine, the phrase
"to finance the priority infrastructure development projects" must be stricken down as unconstitutional since – similar to the above-assailed provision
under Section 8 of PD 910 – it lies independently unfettered by any sufficient standard of the delegating law. As they are severable, all other provisions
of Section 12 of PD 1869, as amended by PD 1993, remains legally effective and subsisting.
D. Ancillary Prayers. 1.
Petitioners’ Prayer to be Furnished Lists and Detailed Reports.
Aside from seeking the Court to declare the Pork Barrel System unconstitutional – as the Court did so in the context of its pronouncements made in this
Decision – petitioners equally pray that the Executive Secretary and/or the DBM be ordered to release to the CoA and to the public: (a) "the complete
schedule/list of legislators who have availed of their PDAF and VILP from the years 2003 to 2013, specifying the use of the funds, the project or activity
and the recipient entities or individuals, and all pertinent data thereto" (PDAF Use Schedule/List);254 and (b) "the use of the Executive‘s lump-sum,
discretionary funds, including the proceeds from the x x x Malampaya Funds and remittances from the PAGCOR x x x from 2003 to 2013, specifying
the x x x project or activity and the recipient entities or individuals, and all pertinent data thereto" 255 (Presidential Pork Use Report). Petitioners‘ prayer is
grounded on Section 28, Article II and Section 7, Article III of the 1987 Constitution which read as follows:
ARTICLE II
Sec. 28. Subject to reasonable conditions prescribed by law, the State adopts and implements a policy of full public disclosure of all its transactions
involving public interest.
ARTICLE III Sec. 7.
The right of the people to information on matters of public concern shall be recognized. Access to official records, and to documents and papers
pertaining to official acts, transactions, or decisions, as well as to government research data used as basis for policy development, shall be afforded the
citizen, subject to such limitations as may be provided by law.
The Court denies petitioners‘ submission.
Case law instructs that the proper remedy to invoke the right to information is to file a petition for mandamus. As explained in the case of Legaspi v.
Civil Service Commission:256
While the manner of examining public records may be subject to reasonable regulation by the government agency in custody thereof, the duty to
disclose the information of public concern, and to afford access to public records cannot be discretionary on the part of said agencies. Certainly, its
performance cannot be made contingent upon the discretion of such agencies. Otherwise, the enjoyment of the constitutional right may be rendered
nugatory by any whimsical exercise of agency discretion. The constitutional duty, not being discretionary, its performance may be compelled by a writ
of mandamus in a proper case.
But what is a proper case for Mandamus to issue? In the case before Us, the public right to be enforced and the concomitant duty of the State are
unequivocably set forth in the Constitution.
The decisive question on the propriety of the issuance of the writ of mandamus in this case is, whether the information sought by the petitioner is within
the ambit of the constitutional guarantee. (Emphases supplied)
Corollarily, in the case of Valmonte v. Belmonte Jr. 257 (Valmonte), it has been clarified that the right to information does not include the right to compel
the preparation of "lists, abstracts, summaries and the like." In the same case, it was stressed that it is essential that the "applicant has a well -defined,
clear and certain legal right to the thing demanded and that it is the imperative duty of defendant to perform the act required." Hence, without the
foregoing substantiations, the Court cannot grant a particular request for information. The pertinent portions of Valmonte are hereunder quoted:258
Although citizens are afforded the right to information and, pursuant thereto, are entitled to "access to official records," the Constitution does not accord
them a right to compel custodians of official records to prepare lists, abstracts, summaries and the like in their desire to acquire information on matters
of public concern.
It must be stressed that it is essential for a writ of mandamus to issue that the applicant has a well-defined, clear and certain legal right to the thing
demanded and that it is the imperative duty of defendant to perform the act required. The corresponding duty of the respondent to perform the required
act must be clear and specific Lemi v. Valencia, G.R. No. L-20768, November 29,1968,126 SCRA 203; Ocampo v. Subido, G.R. No. L-28344, August
27, 1976, 72 SCRA 443.
The request of the petitioners fails to meet this standard, there being no duty on the part of respondent to prepare the list requested. (Emphases
supplied)
In these cases, aside from the fact that none of the petitions are in the nature of mandamus actions, the Court finds that petitioners have failed to
establish a "a well-defined, clear and certain legal right" to be furnished by the Executive Secretary and/or the DBM of their requested PDAF Use
Schedule/List and Presidential Pork Use Report. Neither did petitioners assert any law or administrative issuance which would form the bases of the
latter‘s duty to furnish them with the documents requested. While petitioners pray that said information be equally released to the CoA, it must be
pointed out that the CoA has not been impleaded as a party to these cases nor has it filed any petition before the Court to be allowed access to or to
compel the release of any official document relevant to the conduct of its audit investigations. While the Court recognizes that the information requested
is a matter of significant public concern, however, if only to ensure that the parameters of disclosure are properly foisted and so as not to unduly
hamper the equally important interests of the government, it is constrained to deny petitioners‘ prayer on this score, without prejudice to a proper
mandamus case which they, or even the CoA, may choose to pursue through a separate petition.
It bears clarification that the Court‘s denial herein should only cover petitioners‘ plea to be furnished with such schedule/list and report and not in any
way deny them, or the general public, access to official documents which are already existing and of public record. Subject to reasonable regulation
and absent any valid statutory prohibition, access to these documents should not be proscribed. Thus, in Valmonte, while the Court denied the
application for mandamus towards the preparation of the list requested by petitioners therein, it nonetheless allowed access to the documents sought
for by the latter, subject, however, to the custodian‘s reasonable regulations,viz.: 259
In fine, petitioners are entitled to access to the documents evidencing loans granted by the GSIS, subject to reasonable regulations that the latter may
promulgate relating to the manner and hours of examination, to the end that damage to or loss of the records may be avoided, that undue interference
with the duties of the custodian of the records may be prevented and that the right of other persons entitled to inspect the records may be insured
Legaspi v. Civil Service Commission, supra at p. 538, quoting Subido v. Ozaeta, 80 Phil. 383, 387. The petition, as to the second and third alternative
acts sought to be done by petitioners, is meritorious.
However, the same cannot be said with regard to the first act sought by petitioners, i.e.,
"to furnish petitioners the list of the names of the Batasang Pambansa members belonging to the UNIDO and PDP-Laban who were able to secure
clean loans immediately before the February 7 election thru the intercession/marginal note of the then First Lady Imelda Marcos."
The Court, therefore, applies the same treatment here.
2. Petitioners’ Prayer to Include Matters in Congressional Deliberations.
Petitioners further seek that the Court "order the inclusion in budgetary deliberations with the Congress of all presently, off-budget, lump sum,
discretionary funds including but not limited to, proceeds from the x x x Malampaya Fund, remittances from the PAGCOR and the PCSO or the
Executive‘s Social Funds."260
Suffice it to state that the above-stated relief sought by petitioners covers a matter which is generally left to the prerogative of the political branches of
government. Hence, lest the Court itself overreach, it must equally deny their prayer on this score.
3. Respondents’ Prayer to Lift TRO; Consequential Effects of Decision.
The final issue to be resolved stems from the interpretation accorded by the DBM to the concept of released funds. In response to the Court‘s
September 10, 2013 TRO that enjoined the release of the remaining PDAF allocated for the year 2013, the DBM issued Circular Letter No. 2013-8
dated September 27, 2013 (DBM Circular 2013-8) which pertinently reads as follows:
3.0 Nonetheless, PDAF projects funded under the FY 2013 GAA, where a Special Allotment Release Order (SARO) has been issued by the DBM and
such SARO has been obligated by the implementing agencies prior to the issuance of the TRO, may continually be implemented and disbursements
thereto effected by the agencies concerned.
Based on the text of the foregoing, the DBM authorized the continued implementation and disbursement of PDAF funds as long as they are: first,
covered by a SARO; and, second, that said SARO had been obligated by the implementing agency concerned prior to the issuance of the Court‘s
September 10, 2013 TRO.
Petitioners take issue with the foregoing circular, arguing that "the issuance of the SARO does not yet involve the release of funds under the PDAF, as
release is only triggered by the issuance of a Notice of Cash Allocation [(NCA)]." 261 As such, PDAF disbursements, even if covered by an obligated
SARO, should remain enjoined.
For their part, respondents espouse that the subject TRO only covers "unreleased and unobligated allotments." They explain that once a SARO has
been issued and obligated by the implementing agency concerned, the PDAF funds covered by the same are already "beyond the reach of the TRO
because they cannot be considered as ‘remaining PDAF.‘" They conclude that this is a reasonable interpretation of the TRO by the DBM.262
The Court agrees with petitioners in part.
At the outset, it must be observed that the issue of whether or not the Court‘s September 10, 2013 TRO should be lifted is a matter rendered moot by
the present Decision. The unconstitutionality of the 2013 PDAF Article as declared herein has the consequential effect of converting the temporary
injunction into a permanent one. Hence, from the promulgation of this Decision, the release of the remaining PDAF funds for 2013, among others, is
now permanently enjoined.
The propriety of the DBM‘s interpretation of the concept of "release" must, nevertheless, be resolved as it has a practical impact on the execution of the
current Decision. In particular, the Court must resolve the issue of whether or not PDAF funds covered by obligated SAROs, at the time this Decision is
promulgated, may still be disbursed following the DBM‘s interpretation in DBM Circular 2013-8.
On this score, the Court agrees with petitioners‘ posturing for the fundamental reason that funds covered by an obligated SARO are yet to be
"released" under legal contemplation. A SARO, as defined by the DBM itself in its website, is "aspecific authority issued to identified agencies to incur
obligations not exceeding a given amount during a specified period for the purpose indicated. It shall cover expenditures the release of which is subject
to compliance with specific laws or regulations, or is subject to separate approval or clearance by competent authority." 263
Based on this definition, it may be gleaned that a SARO only evinces the existence of an obligation and not the directive to pay. Practically speaking,
the SARO does not have the direct and immediate effect of placing public funds beyond the control of the disbursing authority. In fact, a SARO may
even be withdrawn under certain circumstances which will prevent the actual release of funds. On the other hand, the actual release of funds is brought Finally, the Court hereby DIRECTS all prosecutorial organs of the government to, within the bounds of reasonable dispatch, investigate and accordingly
about by the issuance of the NCA,264 which is subsequent to the issuance of a SARO. As may be determined from the statements of the DBM prosecute all government officials and/or private individuals for possible criminal offenses related to the irregular, improper and/or unlawful
representative during the Oral Arguments: 265 disbursement/utilization of all funds under the Pork Barrel System.
Justice Bernabe: Is the notice of allocation issued simultaneously with the SARO? This Decision is immediately executory but prospective in effect.
xxxx SO ORDERED.
Atty. Ruiz: It comes after. The SARO, Your Honor, is only the go signal for the agencies to obligate or to enter into commitments. The NCA, Your
Honor, is already the go signal to the treasury for us to be able to pay or to liquidate the amounts obligated in the SARO; so it comes after. x x x The
NCA, Your Honor, is the go signal for the MDS for the authorized government-disbursing banks to, therefore, pay the payees depending on the projects
or projects covered by the SARO and the NCA.
Justice Bernabe: Are there instances that SAROs are cancelled or revoked?
Atty. Ruiz: Your Honor, I would like to instead submit that there are instances that the SAROs issued are withdrawn by the DBM.
Justice Bernabe: They are withdrawn?
Atty. Ruiz: Yes, Your Honor x x x. (Emphases and underscoring supplied)
Thus, unless an NCA has been issued, public funds should not be treated as funds which have been "released." In this respect, therefore, the
disbursement of 2013 PDAF funds which are only covered by obligated SAROs, and without any corresponding NCAs issued, must, at the time of this
Decision’s promulgation, be enjoined and consequently reverted to the unappropriated surplus of the general fund. Verily, in view of the declared
unconstitutionality of the 2013 PDAF Article, the funds appropriated pursuant thereto cannot be disbursed even though already obligated, else the
Court sanctions the dealing of funds coming from an unconstitutional source.
This same pronouncement must be equally applied to (a) the Malampaya Funds which have been obligated but not released – meaning, those merely
covered by a SARO – under the phrase "and for such other purposes as may be hereafter directed by the President" pursuant to Section 8 of PD 910;
and (b) funds sourced from the Presidential Social Fund under the phrase "to finance the priority infrastructure development projects" pursuant to
Section 12 of PD 1869, as amended by PD 1993, which were altogether declared by the Court as unconstitutional. However, these funds should not be
reverted to the general fund as afore-stated but instead, respectively remain under the Malampaya Funds and the Presidential Social Fund to be
utilized for their corresponding special purposes not otherwise declared as unconstitutional.
E. Consequential Effects of Decision.
As a final point, it must be stressed that the Court‘s pronouncement anent the unconstitutionality of (a) the 2013 PDAF Article and its Special
Provisions, (b) all other Congressional Pork Barrel provisions similar thereto, and (c) the phrases (1) "and for such other purposes as may be hereafter
directed by the President" under Section 8 of PD 910, and (2) "to finance the priority infrastructure development projects" under Section 12 of PD 1869,
as amended by PD 1993, must only be treated as prospective in effect in view of the operative fact doctrine.
To explain, the operative fact doctrine exhorts the recognition that until the judiciary, in an appropriate case, declares the invalidity of a certain
legislative or executive act, such act is presumed constitutional and thus, entitled to obedience and respect and should be properly enforced and
complied with. As explained in the recent case of Commissioner of Internal Revenue v. San Roque Power Corporation, 266 the doctrine merely "reflects
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."267 "In the language
of an American Supreme Court decision: ‘The actual existence of a statute, prior to such a determination of unconstitutionality, is an operative fact and
may have consequences which cannot justly be ignored.‘"268
For these reasons, this Decision should be heretofore applied prospectively.
Conclusion
The Court renders this Decision to rectify an error which has persisted in the chronicles of our history. In the final analysis, the Court must strike down
the Pork Barrel System as unconstitutional in view of the inherent defects in the rules within which it operates. To recount, insofar as it has allowed
legislators to wield, in varying gradations, non-oversight, post-enactment authority in vital areas of budget execution, the system has violated the
principle of separation of powers; insofar as it has conferred unto legislators the power of appropriation by giving them personal, discretionary funds
from which they are able to fund specific projects which they themselves determine, it has similarly violated the principle of non-delegability of
legislative power ; insofar as it has created a system of budgeting wherein items are not textualized into the appropriations bill, it has flouted the
prescribed procedure of presentment and, in the process, denied the President the power to veto items ; insofar as it has diluted the effectiveness of
congressional oversight by giving legislators a stake in the affairs of budget execution, an aspect of governance which they may be called to monitor
and scrutinize, the system has equally impaired public accountability ; insofar as it has authorized legislators, who are national officers, to intervene in
affairs of purely local nature, despite the existence of capable local institutions, it has likewise subverted genuine local autonomy ; and again, insofar as
it has conferred to the President the power to appropriate funds intended by law for energy-related purposes only to other purposes he may deem fit as
well as other public funds under the broad classification of "priority infrastructure development projects," it has once more transgressed the principle of
non-delegability.
For as long as this nation adheres to the rule of law, any of the multifarious unconstitutional methods and mechanisms the Court has herein pointed out
should never again be adopted in any system of governance, by any name or form, by any semblance or similarity, by any influence or effect.
Disconcerting as it is to think that a system so constitutionally unsound has monumentally endured, the Court urges the people and its co-stewards in
government to look forward with the optimism of change and the awareness of the past. At a time of great civic unrest and vociferous public debate, the
Court fervently hopes that its Decision today, while it may not purge all the wrongs of society nor bring back what has been lost, guides this nation to
the path forged by the Constitution so that no one may heretofore detract from its cause nor stray from its course. After all, this is the Court‘s bounden
duty and no other‘s.
WHEREFORE, the petitions are PARTLY GRANTED. In view of the constitutional violations discussed in this Decision, the Court hereby declares as
UNCONSTITUTIONAL: (a) the entire 2013 PDAF Article; (b) all legal provisions of past and present Congressional Pork Barrel Laws, such as the G.R. No. 209287 July 1, 2014
previous PDAF and CDF Articles and the various Congressional Insertions, which authorize/d legislators – whether individually or collectively organized MARIA CAROLINA P. ARAULLO, CHAIRPERSON, BAGONG ALYANSANG MAKABAYAN; JUDY M. TAGUIWALO, PROFESSOR, UNIVERSITY
into committees – to intervene, assume or participate in any of the various post-enactment stages of the budget execution, such as but not limited to OF THE PHILIPPINES DILIMAN, CO-CHAIRPERSON, PAGBABAGO; HENRI KAHN, CONCERNED CITIZENS MOVEMENT; REP. LUZ ILAGAN,
the areas of project identification, modification and revision of project identification, fund release and/or fund realignment, unrelated to the power of GABRIELA WOMEN'S PARTY REPRESENTATIVE; REP. CARLOS ISAGANI ZARATE, BAY AN MUNA PARTY-LIST REPRESENTATIVE;
congressional oversight; (c) all legal provisions of past and present Congressional Pork Barrel Laws, such as the previous PDAF and CDF Articles and RENATO M. REYES, JR., SECRETARY GENERAL OF BAYAN; MANUEL K. DAYRIT, CHAIRMAN, ANG KAPATIRAN PARTY; VENCER MARI E.
the various Congressional Insertions, which confer/red personal, lump-sum allocations to legislators from which they are able to fund specific projects CRISOSTOMO, CHAIRPERSON, ANAKBAYAN; VICTOR VILLANUEVA, CONVENOR, YOUTH ACT NOW, Petitioners,
which they themselves determine; (d) all informal practices of similar import and effect, which the Court similarly deems to be acts of grave abuse of vs.
discretion amounting to lack or excess of jurisdiction; and (e) the phrases (1) "and for such other purposes as may be hereafter directed by the BENIGNO SIMEON C. AQUINO III, PRESIDENT OF THE REPUBLIC OF THE PHILIPPINES; PAQUITO N. OCHOA, JR., EXECUTIVE
President" under Section 8 of Presidential Decree No. 910 and (2) "to finance the priority infrastructure development projects" under Section 12 of SECRETARY; AND FLORENCIO B. ABAD, SECRETARY OF THE DEPARTMENT OF BUDGET AND MANAGEMENT, Respondents.
Presidential Decree No. 1869, as amended by Presidential Decree No. 1993, for both failing the sufficient standard test in violation of the principle of x-----------------------x
non-delegability of legislative power. G.R. No. 209135
Accordingly, the Court‘s temporary injunction dated September 10, 2013 is hereby declared to be PERMANENT. Thus, the disbursement/release of the AUGUSTO L. SY JUCO JR., Ph.D., Petitioner,
remaining PDAF funds allocated for the year 2013, as well as for all previous years, and the funds sourced from (1) the Malampaya Funds under the vs.
phrase "and for such other purposes as may be hereafter directed by the President" pursuant to Section 8 of Presidential Decree No. 910, and (2) the FLORENCIO B. ABAD, IN HIS CAPACITY AS THE SECRETARY OF DEPARTMENT OF BUDGET AND MANAGEMENT; AND HON. FRANKLIN
Presidential Social Fund under the phrase "to finance the priority infrastructure development projects" pursuant to Section 12 of Presidential Decree MAGTUNAO DRILON, IN HIS CAP A CITY AS THE SENATE PRESIDENT OF THE PHILIPPINES, Respondents.
No. 1869, as amended by Presidential Decree No. 1993, which are, at the time this Decision is promulgated, not covered by Notice of Cash Allocations x-----------------------x
(NCAs) but only by Special Allotment Release Orders (SAROs), whether obligated or not, are hereby ENJOINED. The remaining PDAF funds covered G.R. No. 209136
by this permanent injunction shall not be disbursed/released but instead reverted to the unappropriated surplus of the general fund, while the funds MANUELITO R. LUNA, Petitioner,
under the Malampaya Funds and the Presidential Social Fund shall remain therein to be utilized for their respective special purposes not otherwise vs.
declared as unconstitutional. SECRETARY FLORENCIO ABAD, IN HIS OFFICIAL CAPACITY AS HEAD OF THE DEPARTMENT OF BUDGET AND MANAGEMENT; AND
On the other hand, due to improper recourse and lack of proper substantiation, the Court hereby DENIES petitioners‘ prayer seeking that the Executive EXECUTIVE SECRETARY PAQUITO OCHOA, IN HIS OFFICIAL CAPACITY AS ALTER EGO OF THE PRESIDENT, Respondents.
Secretary and/or the Department of Budget and Management be ordered to provide the public and the Commission on Audit complete lists/schedules x-----------------------x
or detailed reports related to the availments and utilization of the funds subject of these cases. Petitioners‘ access to off icial documents already G.R. No. 209155
available and of public record which are related to these funds must, however, not be prohibited but merely subjected to the custodian‘s reasonable ATTY. JOSE MALV AR VILLEGAS, JR., Petitioner,
regulations or any valid statutory prohibition on the same. This denial is without prejudice to a proper mandamus case which they or the Commission vs.
on Audit may choose to pursue through a separate petition. THE HONORABLE EXECUTIVE SECRETARY PAQUITO N. OCHOA, JR.; AND THE SECRETARY OF BUDGET AND MANAGEMENT
The Court also DENIES petitioners prayer to order the inclusion of the funds subject of these cases in the budgetary deliberations of Congress as the FLORENCIO B. ABAD, Respondents.
same is a matter left to the prerogative of the political branches of government. x-----------------------x
G.R. No. 209164
PHILIPPINE CONSTITUTION ASSOCIATION (PHILCONSA), REPRESENTED BY DEAN FROILAN M. BACUNGAN, BENJAMIN E. DIOKNO AND
LEONOR M. BRIONES, Petitioners,
vs.
DEPARTMENT OF BUDGET AND MANAGEMENT AND/OR HON. FLORENCIO B. ABAD, Respondents.
x-----------------------x
G.R. No. 209260
INTEGRATED BAR OF THE PHILIPPINES (IBP), Petitioner,
vs.
SECRETARY FLORENCIO B. ABAD OF THE DEPARTMENT OF BUDGET AND MANAGEMENT (DBM),Respondent.
x-----------------------x
G.R. No. 209442
GRECO ANTONIOUS BEDA B. BELGICA; BISHOP REUBEN MABANTE AND REV. JOSE L. GONZALEZ,Petitioners,
vs.
PRESIDENT BENIGNO SIMEON C. AQUINO III, THE SENATE OF THE PHILIPPINES, REPRESENTED BY SENATE PRESIDENT FRANKLIN M.
DRILON; THE HOUSE OF REPRESENTATIVES, REPRESENTED BY SPEAKER FELICIANO BELMONTE, JR.; THE EXECUTIVE OFFICE,
REPRESENTED BY EXECUTIVE SECRETARY PAQUITO N. OCHOA, JR.; THE DEPARTMENT OF BUDGET AND MANAGEMENT,
REPRESENTED BY SECRETARY FLORENCIO ABAD; THE DEPARTMENT OF FINANCE, REPRESENTED BY SECRETARY CESAR V.
PURISIMA; AND THE BUREAU OF TREASURY, REPRESENTED BY ROSALIA V. DE LEON, Respondents.
x-----------------------x
G.R. No. 209517
CONFEDERATION FOR UNITY, RECOGNITION AND ADV AN CEMENT OF GOVERNMENT EMPLOYEES (COURAGE), REPRESENTED BY ITS
1ST VICE PRESIDENT, SANTIAGO DASMARINAS, JR.; ROSALINDA NARTATES, FOR HERSELF AND AS NATIONAL PRESIDENT OF THE
CONSOLIDATED UNION OF EMPLOYEES NATIONAL HOUSING AUTHORITY (CUENHA); MANUEL BACLAGON, FOR HIMSELF AND AS
PRESIDENT OF THE SOCIAL WELFARE EMPLOYEES ASSOCIATION OF THE PHILIPPINES, DEPARTMENT OF SOCIAL WELFARE AND
DEVELOPMENT CENTRAL OFFICE (SWEAP-DSWD CO); ANTONIA PASCUAL, FOR HERSELF AND AS NATIONAL PRESIDENT OF THE
DEPARTMENT OF AGRARIAN REFORM EMPLOYEES ASSOCIATION (DAREA); ALBERT MAGALANG, FOR HIMSELF AND AS PRESIDENT
OF THE ENVIRONMENT AND MANAGEMENT BUREAU EMPLOYEES UNION (EMBEU); AND MARCIAL ARABA, FOR HIMSELF AND AS
PRESIDENT OF THE KAPISANAN PARA SA KAGALINGAN NG MGA KAW ANI NG MMDA (KKKMMDA), Petitioners,
vs.
BENIGNO SIMEON C. AQUINO Ill, PRESIDENT OF THE REPUBLIC OF THE PHILIPPINES; PAQUITO OCHOA, JR., EXECUTIVE SECRETARY;
AND HON. FLORENCIO B. ABAD, SECRETARY OF THE DEPARTMENT OF BUDGET AND MANAGEMENT, Respondents.
x-----------------------x
G.R. No. 209569
VOLUNTEERS AGAINST CRIME AND CORRUPTION (VACC), REPRESENTED BY DANTE L. JIMENEZ,Petitioner,
vs.
PAQUITO N. OCHOA, EXECUTIVE SECRETARY, AND FLORENCIO B. ABAD, SECRETARY OF THE DEPARTMENT OF BUDGET AND
MANAGEMENT, Respondents.
DECISION
BERSAMIN, J.:
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. But
the challenges are further complicated by the interjection of allegations of transfer of funds to agencies or offices outside of the Executive.
Antecedents
What has precipitated the controversy?
On September 25, 2013, 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 ₱50 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 entitled Abad: Releases to Senators Part of
Spending Acceleration Program,1 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. He clarified that the funds had been released to the Senators based on their letters of request for
funding; and that it was not the first time that releases from the DAP had been made because the DAP had already been instituted in 2011 to ramp up
spending after sluggish disbursements had caused the growth of the gross domestic product (GDP) to slow down. He explained that the funds under
the DAP were usually taken from (1) unreleased appropriations under Personnel Services; 2 (2) unprogrammed funds; (3) carry-over appropriations
unreleased from the previous year; and (4) budgets for slow-moving items or projects that had been realigned to support faster-disbursing projects.
The DBM soon came out to claim in its website 3 that the DAP releases had been sourced from savings generated by the Government, and from
unprogrammed funds; and that the savings had been derived from (1) the pooling of unreleased appropriations, like unreleased Personnel
Services4 appropriations that would lapse at the end of the year, unreleased appropriations of slow-moving projects and discontinued projects per zero
based budgeting findings;5 and (2) the withdrawal of unobligated allotments also for slow-moving programs and projects that had been earlier released
to the agencies of the National Government.
The DBM listed the following as the legal bases for the DAP’s use of savings, 6 namely: (1) Section 25(5), Article VI of the 1987 Constitution, which
granted to the President the authority to augment an item for his office in the general appropriations law; (2) Section 49 (Authority to Use Savings for
Certain Purposes) and Section 38 (Suspension of Expenditure Appropriations), Chapter 5, Book VI of Executive Order (EO) No. 292 (Administrative
Code of 1987); and (3) the General Appropriations Acts (GAAs) of 2011, 2012 and 2013, particularly their provisions on the (a) use of savings; (b)
meanings of savings and augmentation; and (c) priority in the use of savings.
As for the use of unprogrammed funds under the DAP, the DBM cited as legal bases the special provisions on unprogrammed fund contained in the
GAAs of 2011, 2012 and 2013.
The revelation of Sen. Estrada and the reactions of Sec. Abad and the DBM brought the DAP to the consciousness of the Nation for the first time, and
made this present controversy inevitable. That the issues against the DAP came at a time when the Nation was still seething in anger over
Congressional pork barrel – "an appropriation of government spending meant for localized projects and secured solely or primarily to bring money to a
representative’s district"7 – excited the Nation as heatedly as the pork barrel controversy.
Nine petitions assailing the constitutionality of the DAP and the issuances relating to the DAP were filed within days of each other, as follows: G.R. No.
209135 (Syjuco), on October 7, 2013; G.R. No. 209136 (Luna), on October 7, 2013; G.R. No. 209155 (Villegas), 8 on October 16, 2013; G.R. No.
209164 (PHILCONSA), on October 8, 2013; G.R. No. 209260 (IBP), on October 16, 2013; G.R. No. 209287 (Araullo), on October 17, 2013; G.R. No.
209442 (Belgica), on October 29, 2013; G.R. No. 209517 (COURAGE), on November6, 2013; and G.R. No. 209569 (VACC), on November 8, 2013.
In G.R. No. 209287 (Araullo), the petitioners brought to the Court’s attention NBC No. 541 (Adoption of Operational Efficiency Measure – Withdrawal of
Agencies’ Unobligated Allotments as of June 30, 2012), alleging that NBC No. 541, which was issued to implement the DAP, directed the withdrawal of
unobligated allotments as of June 30, 2012 of government agencies and offices with low levels of obligations, both for continuing and current
allotments.
In due time, the respondents filed their Consolidated Comment through the Office of the Solicitor General (OSG).
The Court directed the holding of oral arguments on the significant issues raised and joined.
Issues
Under the Advisory issued on November 14, 2013, the presentations of the parties during the oral arguments were limited to the following, to wit:
Procedural Issue:
A. Whether or not certiorari, prohibition, and mandamus are proper remedies to assail the constitutionality and validity of the Disbursement Acceleration
Program (DAP), National Budget Circular (NBC) No. 541, and all other executive issuances allegedly implementing the DAP. Subsumed in this issue
are whether there is a controversy ripe for judicial determination, and the standing of petitioners.
Substantive Issues:
B. Whether or not the DAP violates Sec. 29, Art. VI of the 1987 Constitution, which provides: "No money shall be paid out of the Treasury except in
pursuance of an appropriation made by law."
C. Whether or not the DAP, NBC No. 541, and all other executive issuances allegedly implementing the DAP violate Sec. 25(5), Art. VI of the 1987
Constitution insofar as:
(a)They treat the unreleased appropriations and unobligated allotments withdrawn from government agencies as "savings" as the term is used in Sec.
25(5), in relation to the provisions of the GAAs of 2011, 2012 and 2013;
(b)They authorize the disbursement of funds for projects or programs not provided in the GAAs for the Executive Department; and
(c)They "augment" discretionary lump sum appropriations in the GAAs.
D. Whether or not the DAP violates: (1) the Equal Protection Clause, (2) the system of checks and balances, and (3) the principle of public
accountability enshrined in the 1987 Constitution considering that it authorizes the release of funds upon the request of legislators.
E. Whether or not factual and legal justification exists to issue a temporary restraining order to restrain the implementation of the DAP, NBC No. 541,
and all other executive issuances allegedly implementing the DAP.
In its Consolidated Comment, the OSG raised the matter of unprogrammed funds in order to support its argument regarding the President’s power to
spend. During the oral arguments, the propriety of releasing unprogrammed funds to support projects under the DAP was considerably discussed. The
petitioners in G.R. No. 209287 (Araullo) and G.R. No. 209442 (Belgica) dwelled on unprogrammed funds in their respective memoranda. Hence, an
additional issue for the oral arguments is stated as follows:
F. Whether or not the release of unprogrammed funds under the DAP was in accord with the GAAs.
During the oral arguments held on November 19, 2013, the Court directed Sec. Abad to submit a list of savings brought under the DAP that had been
sourced from (a) completed programs; (b) discontinued or abandoned programs; (c) unpaid appropriations for compensation; (d) a certified copy of the
President’s directive dated June 27, 2012 referred to in NBC No. 541; and (e) all circulars or orders issued in relation to the DAP.9
In compliance, the OSG submitted several documents, as follows:
(1) A certified copy of the Memorandum for the President dated June 25, 2012 (Omnibus Authority to Consolidate Savings/Unutilized Balances and
their Realignment);10
(2) Circulars and orders, which the respondents identified as related to the DAP, namely:
a. NBC No. 528 dated January 3, 2011 (Guidelines on the Release of Funds for FY 2011);
b. NBC No. 535 dated December 29, 2011 (Guidelines on the Release of Funds for FY 2012);
c. NBC No. 541 dated July 18, 2012 (Adoption of Operational Efficiency Measure – Withdrawal of Agencies’ Unobligated Allotments as of June 30,
2012);
d. NBC No. 545 dated January 2, 2013 (Guidelines on the Release of Funds for FY 2013);
e. DBM Circular Letter No. 2004-2 dated January 26, 2004 (Budgetary Treatment of Commitments/Obligations of the National Government);
f. COA-DBM Joint Circular No. 2013-1 dated March 15, 2013 (Revised Guidelines on the Submission of Quarterly Accountability Reports on
Appropriations, Allotments, Obligations and Disbursements);
g. NBC No. 440 dated January 30, 1995 (Adoption of a Simplified Fund Release System in the Government).
(3) A breakdown of the sources of savings, including savings from discontinued projects and unpaid appropriations for compensation from 2011 to
2013
On January 28, 2014, the OSG, to comply with the Resolution issued on January 21, 2014 directing the respondents to submit the documents not yet
submitted in compliance with the directives of the Court or its Members, submitted several evidence packets to aid the Court in understanding the
factual bases of the DAP, to wit:
(1) First Evidence Packet11 – containing seven memoranda issued by the DBM through Sec. Abad, inclusive of annexes, listing in detail the 116 DAP
identified projects approved and duly signed by the President, as follows:
a. Memorandum for the President dated October 12, 2011 (FY 2011 Proposed Disbursement Acceleration Program (Projects and Sources of Funds);
b. Memorandum for the President dated December 12, 2011 (Omnibus Authority to Consolidate Savings/Unutilized Balances and its Realignment);
c. Memorandum for the President dated June 25, 2012 (Omnibus Authority to Consolidate Savings/Unutilized Balances and their Realignment);
d. Memorandum for the President dated September 4, 2012 (Release of funds for other priority projects and expenditures of the Government);
e. Memorandum for the President dated December 19, 2012 (Proposed Priority Projects and Expenditures of the Government);
f. Memorandum for the President dated May 20, 2013 (Omnibus Authority to Consolidate Savings/Unutilized Balances and their Realignment to Fund
the Quarterly Disbursement Acceleration Program); and
g. Memorandum for the President dated September 25, 2013 (Funding for the Task Force Pablo Rehabilitation Plan).
(2) Second Evidence Packet12 – consisting of 15 applications of the DAP, with their corresponding Special Allotment Release Orders (SAROs) and
appropriation covers;
(3) Third Evidence Packet13 – containing a list and descriptions of 12 projects under the DAP;
(4) Fourth Evidence Packet14 – identifying the DAP-related portions of the Annual Financial Report (AFR) of the Commission on Audit for 2011 and
2012;
(5) Fifth Evidence Packet15 – containing a letter of Department of Transportation and Communications(DOTC) Sec. Joseph Abaya addressed to Sec.
Abad recommending the withdrawal of funds from his agency, inclusive of annexes; and
(6) Sixth Evidence Packet16 – a print-out of the Solicitor General’s visual presentation for the January 28, 2014 oral arguments.
On February 5, 2014,17 the OSG forwarded the Seventh Evidence Packet, 18 which listed the sources of funds brought under the DAP, the uses of such
funds per project or activity pursuant to DAP, and the legal bases thereof.
On February 14, 2014, the OSG submitted another set of documents in further compliance with the Resolution dated January 28, 2014, viz:
(1) Certified copies of the certifications issued by the Bureau of Treasury to the effect that the revenue collections exceeded the original revenue
targets for the years 2011, 2012 and 2013, including collections arising from sources not considered in the original revenue targets, which certifications
were required for the release of the unprogrammed funds as provided in Special Provision No. 1 of Article XLV, Article XVI, and Article XLV of the
2011, 2012 and 2013 GAAs; and (2) A report on releases of savings of the Executive Department for the use of the Constitutional Commissions and
other branches of the Government, as well as the fund releases to the Senate and the Commission on Elections (COMELEC).
RULING
I.
Procedural Issue:
a) The petitions under Rule 65 are proper remedies
All the petitions are filed under Rule 65 of the Rules of Court, and include applications for the issuance of writs of preliminary prohibitory injunction or
temporary restraining orders. More specifically, the nature of the petitions is individually set forth hereunder, to wit:
G.R. No. 209135 (Syjuco) Certiorari, Prohibition and Mandamus
G.R. No. 209136 (Luna) Certiorariand Prohibition
G.R. No. 209155 (Villegas) Certiorariand Prohibition
G.R. No. 209164 (PHILCONSA) Certiorariand Prohibition
G.R. No. 209260 (IBP) Prohibition

G.R. No. 209287 (Araullo) Certiorariand Prohibition
G.R. No. 209442 (Belgica) Certiorari
G.R. No. 209517 (COURAGE) Certiorari and Prohibition
G.R. No. 209569 (VACC) Certiorari and Prohibition
The respondents submit that there is no actual controversy that is ripe for adjudication in the absence of adverse claims between the parties;19 that the
petitioners lacked legal standing to sue because no allegations were made to the effect that they had suffered any injury as a result of the adoption of
the DAP and issuance of NBC No. 541; that their being taxpayers did not immediately confer upon the petitioners the legal standing to sue considering
that the adoption and implementation of the DAP and the issuance of NBC No. 541 were not in the exercise of the taxing or spending power of
Congress;20 and that even if the petitioners had suffered injury, there were plain, speedy and adequate remedies in the ordinary course of law available
to them, like assailing the regularity of the DAP and related issuances before the Commission on Audit (COA) or in the trial courts. 21
The respondents aver that the special civil actions of certiorari and prohibition are not proper actions for directly assailing the constitutionality and
validity of the DAP, NBC No. 541, and the other executive issuances implementing the DAP. 22
In their memorandum, the respondents further contend that there is no authorized proceeding under the Constitution and the Rules of Court for
questioning the validity of any law unless there is an actual case or controversy the resolution of which requires the determination of the constitutional
question; that the jurisdiction of the Court is largely appellate; that for a court of law to pass upon the constitutionality of a law or any act of the
Government when there is no case or controversy is for that court to set itself up as a reviewer of the acts of Congress and of the President in violation
of the principle of separation of powers; and that, in the absence of a pending case or controversy involving the DAP and NBC No. 541, any decision
herein could amount to a mere advisory opinion that no court can validly render. 23
The respondents argue that it is the application of the DAP to actual situations that the petitioners can question either in the trial courts or in the COA;
that if the petitioners are dissatisfied with the ruling either of the trial courts or of the COA, they can appeal the decision of the trial courts by petition for
review on certiorari, or assail the decision or final order of the COA by special civil action for certiorari under Rule 64 of the Rules of Court. 24
The respondents’ arguments and submissions on the procedural issue are bereft of merit.
Section 1, Article VIII of the 1987 Constitution expressly provides:
Section 1. The judicial power shall be vested in one Supreme Court and in such lower courts as may be established by law.
Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable,
and to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or
instrumentality of the Government.
Thus, the Constitution vests judicial power in the Court and in such lower courts as may be established by law. In creating a lower court, Congress
concomitantly determines the jurisdiction of that court, and that court, upon its creation, becomes by operation of the Constitution one of the
repositories of judicial power.25 However, only the Court is a constitutionally created court, the rest being created by Congress in its exercise of the
legislative power.
The Constitution states that judicial power includes the duty of the courts of justice not only "to settle actual controversies involving rights which are
legally demandable and enforceable" but also "to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of any branch or instrumentality of the Government." It has thereby expanded the concept of judicial power, which up to then
was confined to its traditional ambit of settling actual controversies involving rights that were legally demandable and enforceable.
The background and rationale of the expansion of judicial power under the 1987 Constitution were laid out during the deliberations of the 1986
Constitutional Commission by Commissioner Roberto R. Concepcion (a former Chief Justice of the Philippines) in his sponsorship of the proposed
provisions on the Judiciary, where he said:–
The Supreme Court, like all other courts, has one main function: to settle actual controversies involving conflicts of rights which are demandable and
enforceable. There are rights which are guaranteed by law but cannot be enforced by a judicial party. In a decided case, a husband complained that his
wife was unwilling to perform her duties as a wife. The Court said: "We can tell your wife what her duties as such are and that she is bound to comply
with them, but we cannot force her physically to discharge her main marital duty to her husband. There are some rights guaranteed by law, but they are
so personal that to enforce them by actual compulsion would be highly derogatory to human dignity." This is why the first part of the second paragraph
of Section 1 provides that: Judicial power includes the duty of courts to settle actual controversies involving rights which are legally demandable or
enforceable…
The courts, therefore, cannot entertain, much less decide, hypothetical questions. In a presidential system of government, the Supreme Court has,
also, another important function. The powers of government are generally considered divided into three branches: the Legislative, the Executive and
the Judiciary. Each one is supreme within its own sphere and independent of the others. Because of that supremacy power to determine whether a
given law is valid or not is vested in courts of justice.
Briefly stated, courts of justice determine the limits of power of the agencies and offices of the government as well as those of its officers. In other
words, the judiciary is the final arbiter on the question whether or not a branch of government or any of its officials has acted without jurisdiction or in
excess of jurisdiction, or so capriciously as to constitute an abuse of discretion amounting to excess of jurisdiction or lack of jurisdiction. This is not only
a judicial power but a duty to pass judgmenton matters of this nature.
This is the background of paragraph 2 of Section 1, which means that the courts cannot hereafter evade the duty to settle matters of this nature, by
claiming that such matters constitute a political question. (Bold emphasis supplied) 26
Upon interpellation by Commissioner Nolledo, Commissioner Concepcion clarified the scope of judicial power in the following manner:–
MR. NOLLEDO. x x x
The second paragraph of Section 1 states: "Judicial power includes the duty of courts of justice to settle actual controversies…" The term "actual
controversies" according to the Commissioner should refer to questions which are political in nature and, therefore, the courts should not refuse to
decide those political questions. But do I understand it right that this is restrictive or only an example? I know there are cases which are not actual yet
the court can assume jurisdiction. An example is the petition for declaratory relief.
May I ask the Commissioner’s opinion about that?
MR. CONCEPCION. The Supreme Court has no jurisdiction to grant declaratory judgments.
MR. NOLLEDO. The Gentleman used the term "judicial power" but judicial power is not vested in the Supreme Court alone but also in other lower
courts as may be created by law.
MR. CONCEPCION. Yes.
MR. NOLLEDO. And so, is this only an example?
MR. CONCEPCION. No, I know this is not. The Gentleman seems to identify political questions with jurisdictional questions. But there is a difference.
MR. NOLLEDO. Because of the expression "judicial power"?
MR. CONCEPCION. No. Judicial power, as I said, refers to ordinary cases but where there is a question as to whether the government had authority or
had abused its authority to the extent of lacking jurisdiction or excess of jurisdiction, that is not a political question. Therefore, the court has the duty to
decide.27
Our previous Constitutions equally recognized the extent of the power of judicial review and the great responsibility of the Judiciary in maintaining the
allocation of powers among the three great branches of Government. Speaking for the Court in Angara v. Electoral Commission, 28 Justice Jose P.
Laurel intoned:
x x x In times of social disquietude or political excitement, the great landmarks of the Constitution are apt to be forgotten or marred, if not entirely
obliterated. In cases of conflict, the judicial department is the only constitutional organ which can be called upon to determine the proper allocation of
powers between the several department and among the integral or constituent units thereof.
xxxx
The Constitution is a definition of the powers of government. Who is to determine the nature, scope and extent of such powers? The Constitution itself
has provided for the instrumentality of the judiciary as the rational way. And when the judiciary mediates to allocate constitutional boundaries, it does
not assert any superiority over the other department; it does not in reality nullify or invalidate an act of the legislature, but only asserts the solemn and
sacred obligation assigned to it by the Constitution to determine conflicting claims of authority under the Constitution and to establish for the parties in
an actual controversy the rights which that instrument secures and guarantees to them. This is in truth all that is involved in what is termed "judicial
supremacy" which properly is the power of judicial review under the Constitution. x x x29
What are the remedies by which the grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of
the Government may be determined under the Constitution?
The present Rules of Court uses two special civil actions for determining and correcting grave abuse of discretion amounting to lack or excess of
jurisdiction. These are the special civil actions for certiorari and prohibition, and both are governed by Rule 65. A similar remedy of certiorari exists
under Rule 64, but the remedy is expressly applicable only to the judgments and final orders or resolutions of the Commission on Elections and the
Commission on Audit.
The ordinary nature and function of the writ of certiorari in our present system are aptly explained in Delos Santos v. Metropolitan Bank and Trust
Company:30
In the common law, from which the remedy of certiorari evolved, the writ of certiorari was issued out of Chancery, or the King’s Bench, commanding
agents or officers of the inferior courts to return the record of a cause pending before them, so as to give the party more sure and speedy justice, for
the writ would enable the superior court to determine from an inspection of the record whether the inferior court’s judgment was rendered without
authority. The errors were of such a nature that, if allowed to stand, they would result in a substantial injury to the petitioner to whom no other remedy
was available. If the inferior court acted without authority, the record was then revised and corrected in matters of law. The writ of certiorari was limited
to cases in which the inferior court was said to be exceeding its jurisdiction or was not proceeding according to essential requirements of law and would
lie only to review judicial or quasi-judicial acts.
The concept of the remedy of certiorari in our judicial system remains much the same as it has been in the common law. In this jurisdiction, however,
the exercise of the power to issue the writ of certiorari is largely regulated by laying down the instances or situations in the Rules of Court in which a
superior court may issue the writ of certiorari to an inferior court or officer. Section 1, Rule 65 of the Rules of Court compellingly provides the
requirements for that purpose, viz:
xxxx
The sole office of the writ of certiorari is the correction of errors of jurisdiction, which includes the commission of grave abuse of discretion amounting to
lack of jurisdiction. In this regard, mere abuse of discretion is not enough to warrant the issuance of the writ. The abuse of discretion must be grave,
which means either that the judicial or quasi-judicial power was exercised in an arbitrary or despotic manner by reason of passion or personal hostility,
or that the respondent judge, tribunal or board evaded a positive duty, or virtually refused to perform the duty enjoined or to act in contemplation of law,
such as when such judge, tribunal or board exercising judicial or quasi-judicial powers acted in a capricious or whimsical manner as to be equivalent to
lack of jurisdiction.31
Although similar to prohibition in that it will lie for want or excess of jurisdiction, certiorari is to be distinguished from prohibition by the fact that it is a
corrective remedy used for the re-examination of some action of an inferior tribunal, and is directed to the cause or proceeding in the lower court and
not to the court itself, while prohibition is a preventative remedy issuing to restrain future action, and is directed to the court itself.32 The Court
expounded on the nature and function of the writ of prohibition in Holy Spirit Homeowners Association, Inc. v. Defensor:33
A petition for prohibition is also not the proper remedy to assail an IRR issued in the exercise of a quasi-legislative function. Prohibition is an
extraordinary writ directed against any tribunal, corporation, board, officer or person, whether exercising judicial, quasi-judicial or ministerial functions,
ordering said entity or person to desist from further proceedings when said proceedings are without or in excess of said entity’s or person’s jurisdiction,
or are accompanied with grave abuse of discretion, and there is no appeal or any other plain, speedy and adequate remedy in the ordinary course of
law. Prohibition lies against judicial or ministerial functions, but not against legislative or quasi-legislative functions. Generally, the purpose of a writ of
prohibition is to keep a lower court within the limits of its jurisdiction in order to maintain the administration of justice in orderly channels. Prohibition is
the proper remedy to afford relief against usurpation of jurisdiction or power by an inferior court, or when, in the exercise of jurisdiction in handling
matters clearly within its cognizance the inferior court transgresses the bounds prescribed to it by the law, or where there is no adequate remedy
available in the ordinary course of law by which such relief can be obtained. Where the principal relief sought is to invalidate an IRR, petitioners’
remedy is an ordinary action for its nullification, an action which properly falls under the jurisdiction of the Regional Trial Court. In any case, petitioners’
allegation that "respondents are performing or threatening to perform functions without or in excess of their jurisdiction" may appropriately be enjoined
by the trial court through a writ of injunction or a temporary restraining order.
With respect to the Court, however, the remedies of certiorari and prohibition are necessarily broader in scope and reach, and the writ of certiorari or
prohibition may be issued to correct errors of jurisdiction committed not only by a tribunal, corporation, board or officer exercising judicial, quasi-judicial
or ministerial functions but also to set right, undo and restrain any act of grave abuse of discretion amounting to lack or excess of jurisdiction by any
branch or instrumentality of the Government, even if the latter does not exercise judicial, quasi-judicial or ministerial functions. This application is
expressly authorized by the text of the second paragraph of Section 1, supra.
Thus, petitions for certiorari and prohibition are appropriate remedies to raise constitutional issues and to review and/or prohibit or nullify the acts of
legislative and executive officials.34
Necessarily, in discharging its duty under Section 1, supra, to set right and undo any act of grave abuse of discretion amounting to lack or excess of
jurisdiction by any branch or instrumentality of the Government, the Court is not at all precluded from making the inquiry provided the challenge was
properly brought by interested or affected parties. The Court has been thereby entrusted expressly or by necessary implication with both the duty and
the obligation of determining, in appropriate cases, the validity of any assailed legislative or executive action. This entrustment is consistent with the
republican system of checks and balances. 35
Following our recent dispositions concerning the congressional pork barrel, the Court has become more alert to discharge its constitutional duty. We
will not now refrain from exercising our expanded judicial power in order to review and determine, with authority, the limitations on the Chief Executive’s
spending power.
b) Requisites for the exercise of the
power of judicial review were
complied with
The requisites for the exercise of the power of judicial review are the following, namely: (1) there must bean actual case or justiciable controversy
before the Court; (2) the question before the Court must be ripe for adjudication; (3) the person challenging the act must be a proper party; and (4) the
issue of constitutionality must be raised at the earliest opportunity and must be the very litis mota of the case. 36
The first requisite demands that there be an actual case calling for the exercise of judicial power by the Court. 37 An actual case or controversy, in the
words of Belgica v. Executive Secretary Ochoa: 38
x x x is one which involves a conflict of legal rights, an assertion of opposite legal claims, susceptible of judicial resolution as distinguished from a
hypothetical or abstract difference or dispute. In other words, "[t]here must be a contrariety of legal rights that can be interpreted and enforced on the
basis of existing law and jurisprudence." Related to the requirement of an actual case or controversy is the requirement of "ripeness," meaning that the
questions raised for constitutional scrutiny are already ripe for adjudication. "A question is ripe for adjudication when the act being challenged has had
a direct adverse effect on the individual challenging it. It is a prerequisite that something had then been accomplished or performed by either branch
before a court may come into the picture, and the petitioner must allege the existence of an immediate or threatened injury to itself as a result of the
challenged action." "Withal, courts will decline to pass upon constitutional issues through advisory opinions, bereft as they are of authority to resolve
hypothetical or moot questions."
An actual and justiciable controversy exists in these consolidated cases. The incompatibility of the perspectives of the parties on the constitutionality of
the DAP and its relevant issuances satisfy the requirement for a conflict between legal rights. The issues being raised herein meet the requisite
ripeness considering that the challenged executive acts were already being implemented by the DBM, and there are averments by the petitioners that
such implementation was repugnant to the letter and spirit of the Constitution. Moreover, the implementation of the DAP entailed the allocation and
expenditure of huge sums of public funds. The fact that public funds have been allocated, disbursed or utilized by reason or on account of such
challenged executive acts gave rise, therefore, to an actual controversy that is ripe for adjudication by the Court.
It is true that Sec. Abad manifested during the January 28, 2014 oral arguments that the DAP as a program had been meanwhile discontinued because
it had fully served its purpose, saying: "In conclusion, Your Honors, may I inform the Court that because the DAP has already fully served its purpose,
the Administration’s economic managers have recommended its termination to the President. x x x." 39
The Solicitor General then quickly confirmed the termination of the DAP as a program, and urged that its termination had already mooted the
challenges to the DAP’s constitutionality, viz:
DAP as a program, no longer exists, thereby mooting these present cases brought to challenge its constitutionality. Any constitutional challenge should
no longer be at the level of the program, which is now extinct, but at the level of its prior applications or the specific disbursements under the now
defunct policy. We challenge the petitioners to pick and choose which among the 116 DAP projects they wish to nullify, the full details we will have
provided by February 5. We urge this Court to be cautious in limiting the constitutional authority of the President and the Legislature to respond to the
dynamic needs of the country and the evolving demands of governance, lest we end up straight jacketing our elected representa tives in ways not
consistent with our constitutional structure and democratic principles. 40
A moot and academic case is one that ceases to present a justiciable controversy by virtue of supervening events, so that a declaration thereon would
be of no practical use or value.41
The Court cannot agree that the termination of the DAP as a program was a supervening event that effectively mooted these consolidated cases.
Verily, the Court had in the past exercised its power of judicial review despite the cases being rendered moot and academic by supervening events,
like: (1) when there was a grave violation of the Constitution; (2) when the case involved a situation of exceptional character and was of paramount
public interest; (3) when the constitutional issue raised required the formulation of controlling principles to guide the Bench, the Bar and the public; and
(4) when the case was capable of repetition yet evading review. 42
Assuming that the petitioners’ several submissions against the DAP were ultimately sustained by the Court here, these cases would definitely come
under all the exceptions. Hence, the Court should not abstain from exercising its power of judicial review.
Did the petitioners have the legal standing to sue?
Legal standing, as a requisite for the exercise of judicial review, refers to "a right of appearance in a court of justice on a given question."43 The concept
of legal standing, or locus standi, was particularly discussed in De Castro v. Judicial and Bar Council, 44 where the Court said:
In public or constitutional litigations, the Court is often burdened with the determination of the locus standi of the petitioners due to the ever-present
need to regulate the invocation of the intervention of the Court to correct any official action or policy in order to avoid obstructing the efficient functioning
of public officials and offices involved in public service. It is required, therefore, that the petitioner must have a personal stake in the outcome of the
controversy, for, as indicated in Agan, Jr. v. Philippine International Air Terminals Co., Inc.:
The question on legal standing is whether such parties have "alleged such a personal stake in the outcome of the controversy as to assure that
concrete adverseness which sharpens the presentation of issues upon which the court so largely depends for illumination of difficult constitutional
questions." Accordingly, it has been held that the interest of a person assailing the constitutionality of a statute must be direct and personal. He must be
able to show, not only that the law or any government act is invalid, but also that he sustained or is in imminent danger of sustaining some direct injury
as a result of its enforcement, and not merely that he suffers thereby in some indefinite way. It must appear that the person complaining has been or is
about to be denied some right or privilege to which he is lawfully entitled or that he is about to be subjected to some burdens or penalties by reason of
the statute or act complained of.
It is true that as early as in 1937, in People v. Vera, the Court adopted the direct injury test for determining whether a petitioner in a public action had
locus standi. There, the Court held that the person who would assail the validity of a statute must have "a personal and substantial interest in the case
such that he has sustained, or will sustain direct injury as a result." Vera was followed in Custodio v. President of the Senate, Manila Race Horse
Trainers’ Association v. De la Fuente, Anti-Chinese League of the Philippines v. Felix, and Pascual v. Secretary of Public Works.
Yet, the Court has also held that the requirement of locus standi, being a mere procedural technicality, can be waived by the Court in the exercise of its
discretion. For instance, in 1949, in Araneta v. Dinglasan, the Court liberalized the approach when the cases had "transcendental importance." Some
notable controversies whose petitioners did not pass the direct injury test were allowed to be treated in the same way as in Araneta v. Dinglasan.
In the 1975 decision in Aquino v. Commission on Elections, this Court decided to resolve the issues raised by the petition due to their "far reaching
implications," even if the petitioner had no personality to file the suit. The liberal approach of Aquino v. Commission on Elections has been adopted in
several notable cases, permitting ordinary citizens, legislators, and civic organizations to bring their suits involving the constitutionality or validity of
laws, regulations, and rulings.
However, the assertion of a public right as a predicate for challenging a supposedly illegal or unconstitutional executive or legislative action rests on the
theory that the petitioner represents the public in general. Although such petitioner may not be as adversely affected by the action complained against
as are others, it is enough that he sufficiently demonstrates in his petition that he is entitled to protection or relief from the Court in the vindication of a
public right.
Quite often, as here, the petitioner in a public action sues as a citizen or taxpayer to gain locus standi. That is not surprising, for even if the issue may
appear to concern only the public in general, such capacities nonetheless equip the petitioner with adequate interest to sue. In David v. Macapagal-
Arroyo, the Court aptly explains why:
Case law in most jurisdiction snow allows both "citizen" and "taxpayer" standing in public actions. The distinction was f irst laid down in Beauchamp v.
Silk, where it was held that the plaintiff in a taxpayer’s suit is in a different category from the plaintiff in a citizen’s suit. In the former, the plaintiff is
affected by the expenditure of public funds, while in the latter, he is but the mere instrument of the public concern. As held by the New York Supreme
Court in People ex rel Case v. Collins: "In matter of mere public right, however…the people are the real parties…It is at least the right, if not the duty, of
every citizen to interfere and see that a public offence be properly pursued and punished, and that a public grievance be remedied." With respect to
taxpayer’s suits, Terr v. Jordan held that "the right of a citizen and a taxpayer to maintain an action in courts to restrain the unlawful use of public funds
to his injury cannot be denied."45
The Court has cogently observed in Agan, Jr. v. Philippine International Air Terminals Co., Inc.46 that "[s]tanding is a peculiar concept in constitutional
law because in some cases, suits are not brought by parties who have been personally injured by the operation of a law or any other government act
but by concerned citizens, taxpayers or voters who actually sue in the public interest."
Except for PHILCONSA, a petitioner in G.R. No. 209164, the petitioners have invoked their capacities as taxpayers who, by averring that the issuance
and implementation of the DAP and its relevant issuances involved the illegal disbursements of public funds, have an interest in preventing the further
dissipation of public funds. The petitioners in G.R. No. 209287 (Araullo) and G.R. No. 209442 (Belgica) also assert their right as citizens to sue for the
enforcement and observance of the constitutional limitations on the political branches of the Government. 47
On its part, PHILCONSA simply reminds that the Court has long recognized its legal standing to bring cases upon constitutional issues.48 Luna, the
petitioner in G.R. No. 209136, cites his additional capacity as a lawyer. The IBP, the petitioner in G.R. No. 209260, stands by "its avowed duty to work
for the rule of law and of paramount importance of the question in this action, not to mention its civic duty as the official association of all lawyers in this
country."49
Under their respective circumstances, each of the petitioners has established sufficient interest in the outcome of the controversy as to confer locus
standi on each of them.
In addition, considering that the issues center on the extent of the power of the Chief Executive to disburse and allocate public funds, whether
appropriated by Congress or not, these cases pose issues that are of transcendental importance to the entire Nation, the petitioners included. As such,
the determination of such important issues call for the Court’s exercise of its broad and wise discretion "to waive the requirement and so remove the
impediment to its addressing and resolving the serious constitutional questions raised." 50
II.
Substantive Issues
1.
Overview of the Budget System
An understanding of the Budget System of the Philippines will aid the Court in properly appreciating and justly resolving the substantive issues.
a) Origin of the Budget System
The term "budget" originated from the Middle English word bouget that had derived from the Latin word bulga (which means bag or purse). 51
In the Philippine setting, Commonwealth Act (CA) No. 246 (Budget Act) defined "budget" as the financial program of the National Government for a
designated fiscal year, consisting of the statements of estimated receipts and expenditures for the fiscal year for which it was intended to be effective
based on the results of operations during the preceding fiscal years. The term was given a different meaning under Republic Act No. 992 (Revised
Budget Act) by describing the budget as the delineation of the services and products, or benefits that would accrue to the public together with the
estimated unit cost of each type of service, product or benefit. 52 For a forthright definition, budget should simply be identified as the financial plan of the
Government,53 or "the master plan of government."54
The concept of budgeting has not been the product of recent economies. In reality, financing public goals and activities was an idea that existed from
the creation of the State.55 To protect the people, the territory and sovereignty of the State, its government must perform vital functions that required
public expenditures. At the beginning, enormous public expenditures were spent for war activities, preservation of peace and order, security,
administration of justice, religion, and supply of limited goods and services. 56 In order to finance those expenditures, the State raised revenues through
taxes and impositions.57 Thus, budgeting became necessary to allocate public revenues for specific government functions. 58 The State’s budgeting
mechanism eventually developed through the years with the growing functions of its government and changes in its market economy.
The Philippine Budget System has been greatly influenced by western public financial institutions. This is because of the country’s past as a colony
successively of Spain and the United States for a long period of time. Many aspects of the country’s public fiscal administration, including its Budget
System, have been naturally patterned after the practices and experiences of the western public financial institutions. At any rate, the Philippine Budget
System is presently guided by two principal objectives that are vital to the development of a progressive democratic government, namely: (1) to carry
on all government activities under a comprehensive fiscal plan developed, authorized and executed in accordance with the Constitution, prevailing
statutes and the principles of sound public management; and (2) to provide for the periodic review and disclosure of the budgetary status of the
Government in such detail so that persons entrusted by law with the responsibility as well as the enlightened citizenry can determine the adequacy of
the budget actions taken, authorized or proposed, as well as the true financial position of the Government. 59
b) Evolution of the Philippine Budget System
The budget process in the Philippines evolved from the early years of the American Regime up to the passage of the Jones Law in 1916. A Budget
Office was created within the Department of Finance by the Jones Law to discharge the budgeting function, and was given the responsibility to assist in
the preparation of an executive budget for submission to the Philippine Legislature. 60
As early as under the 1935 Constitution, a budget policy and a budget procedure were established, and subsequently strengthened through the
enactment of laws and executive acts.61 EO No. 25, issued by President Manuel L. Quezon on April 25, 1936, created the Budget Commission to serve
as the agency that carried out the President’s responsibility of preparing the budget.62 CA No. 246, the first budget law, went into effect on January 1,
1938 and established the Philippine budget process. The law also provided a line-item budget as the framework of the Government’s budgeting
system,63 with emphasis on the observance of a "balanced budget" to tie up proposed expenditures with existing revenues.
CA No. 246 governed the budget process until the passage on June 4, 1954 of Republic Act (RA) No. 992,whereby Congress introduced performance-
budgeting to give importance to functions, projects and activities in terms of expected results.64 RA No. 992 also enhanced the role of the Budget
Commission as the fiscal arm of the Government. 65
The 1973 Constitution and various presidential decrees directed a series of budgetary reforms that culminated in the enactment of PD No. 1177 that
President Marcos issued on July30, 1977, and of PD No. 1405, issued on June 11, 1978. The latter decree converted the Budget Commission into the
Ministry of Budget, and gave its head the rank of a Cabinet member.
The Ministry of Budget was later renamed the Office of Budget and Management (OBM) under EO No. 711. The OBM became the DBM pursuant to
EO No. 292 effective on November 24, 1989.
c) The Philippine Budget Cycle66
Four phases comprise the Philippine budget process, specifically: (1) Budget Preparation; (2) Budget Legislation; (3) Budget Execution; and (4)
Accountability. Each phase is distinctly separate from the others but they overlap in the implementation of the budget during the budget year.
c.1.Budget Preparation67
The budget preparation phase is commenced through the issuance of a Budget Call by the DBM. The Budget Call contains budget parameters earlier
set by the Development Budget Coordination Committee (DBCC) as well as policy guidelines and procedures to aid government agencies in the
preparation and submission of their budget proposals. The Budget Call is of two kinds, namely: (1) a National Budget Call, which is addressed to all
agencies, including state universities and colleges; and (2) a Corporate Budget Call, which is addressed to all government-owned and -controlled
corporations (GOCCs) and government financial institutions (GFIs).
Following the issuance of the Budget Call, the various departments and agencies submit their respective Agency Budget Proposals to the DBM. To
boost citizen participation, the current administration has tasked the various departments and agencies to partner with civil society organizations and
other citizen-stakeholders in the preparation of the Agency Budget Proposals, which proposals are then presented before a technical panel of the DBM
in scheduled budget hearings wherein the various departments and agencies are given the opportunity to defend their budget proposals. DBM bureaus
thereafter review the Agency Budget Proposals and come up with recommendations for the Executive Review Board, comprised by the DBM Secretary
and the DBM’s senior officials. The discussions of the Executive Review Board cover the prioritization of programs and their corresponding support vis-
à-vis the priority agenda of the National Government, and their implementation.
The DBM next consolidates the recommended agency budgets into the National Expenditure Program (NEP)and a Budget of Expenditures and
Sources of Financing (BESF). The NEP provides the details of spending for each department and agency by program, activity or project (PAP), and is
submitted in the form of a proposed GAA. The Details of Selected Programs and Projects is the more detailed disaggregation of key PAPs in the NEP,
especially those in line with the National Government’s development plan. The Staffing Summary provides the staffing complement of each department
and agency, including the number of positions and amounts allocated.
The NEP and BESF are thereafter presented by the DBM and the DBCC to the President and the Cabinet for further refinements or reprioritization.
Once the NEP and the BESF are approved by the President and the Cabinet, the DBM prepares the budget documents for submission to Congress.
The budget documents consist of: (1) the President’s Budget Message, through which the President explains the policy framework and budget
priorities; (2) the BESF, mandated by Section 22, Article VII of the Constitution, 68 which contains the macroeconomic assumptions, public sector
context, breakdown of the expenditures and funding sources for the fiscal year and the two previous years; and (3) the NEP.
Public or government expenditures are generally classified into two categories, specifically: (1) capital expenditures or outlays; and (2) current
operating expenditures. Capital expenditures are the expenses whose usefulness lasts for more than one year, and which add to the assets of the
Government, including investments in the capital of government-owned or controlled corporations and their subsidiaries. 69 Current operating
expenditures are the purchases of goods and services in current consumption the benefit of which does not extend beyond the f iscal year.70 The two
components of current expenditures are those for personal services (PS), and those for maintenance and other operating expenses(MOOE).
Public expenditures are also broadly grouped according to their functions into: (1) economic development expenditures (i.e., expenditures on
agriculture and natural resources, transportation and communications, commerce and industry, and other economic development efforts);71 (2) social
services or social development expenditures (i.e., government outlay on education, public health and medicare, labor and welfare and others);72 (3)
general government or general public services expenditures (i.e., expenditures for the general government, legislative services, the administration of
justice, and for pensions and gratuities);73 (4) national defense expenditures (i.e., sub-divided into national security expenditures and expenditures for
the maintenance of peace and order);74 and (5) public debt.75
Public expenditures may further be classified according to the nature of funds, i.e., general fund, special fund or bond fund. 76
On the other hand, public revenues complement public expenditures and cover all income or receipts of the government treasury used to support
government expenditures.77
Classical economist Adam Smith categorized public revenues based on two principal sources, stating: "The revenue which must defray…the necessary
expenses of government may be drawn either, first from some fund which peculiarly belongs to the sovereign or commonwealth, and which is
independent of the revenue of the people, or, secondly, from the revenue of the people." 78 Adam Smith’s classification relied on the two aspects of the
nature of the State: first, the State as a juristic person with an artificial personality, and, second, the State as a sovereign or entity possessing supreme
power. Under the first aspect, the State could hold property and engage in trade, thereby deriving what is called its quasi private income or revenues,
and which "peculiarly belonged to the sovereign." Under the second aspect, the State could collect by imposing charges on the revenues of its subjects
in the form of taxes.79
In the Philippines, public revenues are generally derived from the following sources, to wit: (1) tax revenues(i.e., compulsory contributions to finance
government activities); 80 (2) capital revenues(i.e., proceeds from sales of fixed capital assets or scrap thereof and public domain, and gains on such
sales like sale of public lands, buildings and other structures, equipment, and other properties recorded as fixed assets); 81 (3) grants(i.e., voluntary
contributions and aids given to the Government for its operation on specific purposes in the form of money and/or materials, and do not require any
monetary commitment on the part of the recipient); 82 (4) extraordinary income(i.e., repayment of loans and advances made by government corporations
and local governments and the receipts and shares in income of the Banko Sentral ng Pilipinas, and other receipts); 83 and (5) public borrowings(i.e.,
proceeds of repayable obligations generally with interest from domestic and foreign creditors of the Government in general, including the National
Government and its political subdivisions). 84
More specifically, public revenues are classified as follows: 85
 2.
General Income Specific Income Nature of the DAP as a fiscal plan
a. DAP was a program designed to
1. Subsidy Income from1. National Income Taxes promote economic growth
Government Policy is always a part of every budget and fiscal decision of any Administration. 99 The national budget the Executive prepares and presents to
2. Property Taxes Congress represents the Administration’s "blueprint for public policy" and reflects the Government’s goals and strategies.100 As such, the national
2. Subsidy from Central Office budget becomes a tangible representation of the programs of the Government in monetary terms, specifying therein the PAPs and services for which
3. Taxes on Goods and Services
specific amounts of public funds are proposed and allocated. 101 Embodied in every national budget is government spending. 102
3. Subsidy from Regional
4. Taxes on International Trade and When he assumed office in the middle of 2010, President Aquino made efficiency and transparency in government spending a significant focus of his
Office/Staff Bureaus
Transactions Administration. Yet, although such focus resulted in an improved fiscal deficit of 0.5% in the gross domestic product (GDP) from January to July of
4. Income from Government 2011, it also unfortunately decelerated government project implementation and payment schedules. 103 The World Bank observed that the Philippines’
Services 5. Other Taxes 6.Fines and Penalties-Tax Revenue economic growth could be reduced, and potential growth could be weakened should the Government continue with its underspending and fail to
address the large deficiencies in infrastructure. 104 The economic situation prevailing in the middle of 2011 thus paved the way for the development and
5. 7.
Income from Government Other Specific Income implementation of the DAP as a stimulus package intended to fast-track public spending and to push economic growth by investing on high-impact
Business Operations budgetary PAPs to be funded from the "savings" generated during the year as well as from unprogrammed funds. 105 In that respect, the DAP was the
product of "plain executive policy-making" to stimulate the economy by way of accelerated spending.106The Administration would thereby accelerate
6. Sales Revenue government spending by: (1) streamlining the implementation process through the clustering of infrastructure projects of the Department of Public
Works and Highways (DPWH) and the Department of Education (DepEd),and (2) front loading PPP-related projects107 due for implementation in the
7. Rent Income following year.108
Did the stimulus package work?
8. Insurance Income The March 2012 report of the World Bank, 109 released after the initial implementation of the DAP, revealed that the DAP was partially successful. The
disbursements under the DAP contributed 1.3 percentage points to GDP growth by the fourth quarter of 2011. 110 The continued implementation of the
9. Dividend Income DAP strengthened growth by 11.8% year on year while infrastructure spending rebounded from a 29% contraction to a 34% growth as of September
2013.111
10. Interest Income The DAP thus proved to be a demonstration that expenditure was a policy instrument that the Government could use to direct the economies towards
growth and development.112 The Government, by spending on public infrastructure, would signify its commitment of ensuring profitability for prospective
11. Sale of Confiscated Goods and
Properties investors.113 The PAPs funded under the DAP were chosen for this reason based on their: (1) multiplier impact on the economy and infrastructure
development; (2) beneficial effect on the poor; and (3) translation into disbursements. 114
12. Foreign Exchange (FOREX) b. History of the implementation of
Gains the DAP, and sources of funds
under the DAP
13. Miscellaneous Operating and How the Administration’s economic managers conceptualized and developed the DAP, and finally presented it to the President remains unknown
Service Income because the relevant documents appear to be scarce.
The earliest available document relating to the genesis of the DAP was the memorandum of October 12,2011 from Sec. Abad seeking the approval of
14. Fines and Penalties-Government the President to implement the proposed DAP. The memorandum, which contained a list of the funding sources for ₱72.11 billion and of the proposed
Services and Business Operations priority projects to be funded,115 reads:
MEMORANDUM FOR THE PRESIDENT
15. Income from Grants and xxxx
Donations SUBJECT: FY 2011 PROPOSED DISBURSEMENT ACCELERATION PROGRAM (PROJECTS AND SOURCES OF FUNDS)
DATE: OCTOBER 12, 2011
Mr. President, this is to formally confirm your approval of the Disbursement Acceleration Program totaling ₱72.11 billion. We are already working with
all the agencies concerned for the immediate execution of the projects therein.
c.2. Budget Legislation86 A. Fund Sources for the Acceleration Program
The Budget Legislation Phase covers the period commencing from the time Congress receives the President’s Budget, which is inclusive of the
NEPand the BESF, up to the President’s approval of the GAA. This phase is also known as the Budget Authorization Phase, and involves the
Amount
significant participation of the Legislative through its deliberations.
(In Action
Initially, the President’s Budget is assigned to the House of Representatives’ Appropriations Committee on First Reading. The Appropriations Fund Sources Description
million Requested
Committee and its various Sub-Committees schedule and conduct budget hearings to examine the PAPs of the departments and agencies. Thereafter,
Php)
the House of Representatives drafts the General Appropriations Bill (GAB). 87
The GABis sponsored, presented and defended by the House of Representatives’ Appropriations Committee and Sub-Committees in plenary session.
As with other laws, the GAB is approved on Third Reading before the House of Representatives’ version is transmitted to the Senate.88
After transmission, the Senate conducts its own committee hearings on the GAB. To expedite proceedings, the Senate may conduct its committee FY 2011 30,000 Unreleased Personnel Declare as
hearings simultaneously with the House of Representatives’ deliberations. The Senate’s Finance Committee and its Sub-Committees may submit the Unreleased Services (PS) savings and
proposed amendments to the GAB to the plenary of the Senate only after the House of Representatives has formally transmitted its version to the Personal appropriations which approve/
Senate. The Senate version of the GAB is likewise approved on Third Reading. 89 Services (PS) will lapse at the end of authorize its
The House of Representatives and the Senate then constitute a panel each to sit in the Bicameral Conference Committee for the purpose of discussing Appropriations FY 2011 but may be use
and harmonizing the conflicting provisions of their versions of the GAB. The "harmonized" version of the GAB is next presented to the President for pooled as savings and for the 2011
approval.90 The President reviews the GAB, and prepares the Veto Message where budget items are subjected to direct veto, 91 or are identified for realigned for priority Disbursement
conditional implementation. programs that require Acceleration
If, by the end of any fiscal year, the Congress shall have failed to pass the GAB for the ensuing fiscal year, the GAA for the preceding fiscal year shall immediate funding Program
be deemed re-enacted and shall remain in force and effect until the GAB is passed by the Congress. 92
c.3. Budget Execution93
With the GAA now in full force and effect, the next step is the implementation of the budget. The Budget Execution Phase is primarily the function of the
FY 2011 482 Unreleased
DBM, which is tasked to perform the following procedures, namely: (1) to issue the programs and guidelines for the release of funds; (2) to prepare an
Unreleased appropriations (slow
Allotment and Cash Release Program; (3) to release allotments; and (4) to issue disbursement authorities.
Appropriations moving projects and
The implementation of the GAA is directed by the guidelines issued by the DBM. Prior to this, the various departments and agencies are required to
programs for
submit Budget Execution Documents(BED) to outline their plans and performance targets by laying down the physical and financial plan, the monthly
discontinuance)
cash program, the estimate of monthly income, and the list of obligations that are not yet due and demandable.
Thereafter, the DBM prepares an Allotment Release Program (ARP)and a Cash Release Program (CRP).The ARP sets a limit for allotments issued in
general and to a specific agency. The CRP fixes the monthly, quarterly and annual disbursement levels.
Allotments, which authorize an agency to enter into obligations, are issued by the DBM. Allotments are lesser in scope than appropriations, in that the FY 2010 12,336 Supported by the GFI Approve and
latter embrace the general legislative authority to spend. Allotments may be released in two forms – through a comprehensive Agency Budget Matrix Unprogrammed Dividends authorize its
(ABM),94 or, individually, by SARO.95 Fund use
Armed with either the ABM or the SARO, agencies become authorized to incur obligations 96 on behalf of the Government in order to implement their for the 2011
PAPs. Obligations may be incurred in various ways, like hiring of personnel, entering into contracts for the supply of goods and services, and using Disbursement
utilities. Acceleration
In order to settle the obligations incurred by the agencies, the DBM issues a disbursement authority so that cash may be allocated in payment of the Program
obligations. A cash or disbursement authority that is periodically issued is referred to as a Notice of Cash Allocation (NCA),97 which issuance is based
upon an agency’s submission of its Monthly Cash Program and other required documents. The NCA specifies the maximum amount of cash that can
be withdrawn from a government servicing bank for the period indicated. Apart from the NCA, the DBM may issue a Non-Cash Availment FY 2010 21,544 Unreleased With prior
Authority(NCAA) to authorize non-cash disbursements, or a Cash Disbursement Ceiling(CDC) for departments with overseas operations to allow the Carryover appropriations (slow approval from
use of income collected by their foreign posts for their operating requirements. Appropriation moving projects and the President in
Actual disbursement or spending of government funds terminates the Budget Execution Phase and is usually accomplished through the Modified programs for November
Disbursement Scheme under which disbursements chargeable against the National Treasury are coursed through the government servicing banks. discontinuance) and 2010
c.4. Accountability98 savings from Zero-based to declare as
Accountability is a significant phase of the budget cycle because it ensures that the government funds have been effectively and efficiently utilized to Budgeting savings and
achieve the State’s socio-economic goals. It also allows the DBM to assess the performance of agencies during the fiscal year for the purpose of Initiative with
implementing reforms and establishing new policies. authority to use
An agency’s accountability may be examined and evaluated through (1) performance targets and outcomes; (2) budget accountability reports; (3)
review of agency performance; and (4) audit conducted by the Commission on Audit(COA).
1. LRTA: Rehabilitation of LRT 1 and 2 1,868

2. NHA: 11,050 FY 2011 7,748 FY 2011 Agency For information

Budget Budget items that can
a. Resettlement of North Triangle residents to items for be realigned within the
Camarin A7 realignment agency to fund new fast
b. Housing for BFP/BJMP 450 disbursing projects
c. On-site development for families living DPWH-3.981 Billion
along dangerous 500 DA – 2.497 Billion
d. Relocation sites for informal settlers 10,000 DOT – 1.000 Billion
along Iloilo River and its tributaries DepEd – 270 Million
100

3. PHIL. HEART CENTER: Upgrading of 357 TOTAL 72.110

ageing physical plant and medical equipment
4. CREDIT INFO CORP: Establishment of
centralized credit information system
B. Projects in the Disbursement Acceleration Program
(Descriptions of projects attached as Annex
75

GOCCs and GFIs

5. PIDS: purchase of land to relocate the PIDS 100
office and building construction
Agency/Project Allotment
(SARO and NCA Release) (in Million Php)
6. HGC: Equity infusion for credit insurance 400
and mortgage guaranty operations of HGC

7. PHIC: Obligations incurred (premium 1,496

subsidy for indigent families) in January-June
2010, booked for payment in Jul[y] – Dec
2010. The delay in payment is due to the
delay in the certification of the LGU
counterpart. Without it, the NG is obliged to
pay the full amount.

8. Philpost: Purchase of foreclosed property. 644

Payment of Mandatory Obligations, (GSIS,
PhilHealth, ECC), Franking Privilege

9. BSP: First equity infusion out of Php 40B 10,000

capitalization under the BSP Law

10. PCMC: Capital and Equipment Renovation 280

11. LCOP: 105

a. Pediatric Pulmonary Program
b. Bio-regenerative Technology Program
(Stem-Cell Research – subject to legal
review and presentation) 35

70

12. TIDCORP: NG Equity infusion 570

TOTAL 26,945

for priority
projects
 C. Summary

Fund Sources
Identified for Allotments Cash
Approval for Release Requirements for
(In Million Release in FY
Php) 2011

Total 72,110 72,110 70,895

GOCCs 26,895 26,895

NGAs/LGUs 45,165 44,000


For His Excellency’s Consideration
(Sgd.) FLORENCIO B. ABAD
[/] APPROVED
[ ] DISAPPROVED
(Sgd.) H.E. BENIGNO S. AQUINO, III
OCT 12, 2011
The memorandum of October 12, 2011 was followed by another memorandum for the President dated December 12, 2011 116 requesting omnibus
authority to consolidate the savings and unutilized balances for fiscal year 2011. Pertinent portions of the memorandum of December 12, 2011 read:
MEMORANDUM FOR THE PRESIDENT
xxxx
SUBJECT: Omnibus Authority to Consolidate Savings/Unutilized Balances and its Realignmentp
DATE: December 12, 2011
This is to respectfully request for the grant of Omnibus Authority to consolidate savings/unutilized balances in FY 2011 corresponding to completed or
discontinued projects which may be pooled to fund additional projects or expenditures.
In addition, Mr. President, this measure will allow us to undertake projects even if their implementation carries over to 2012 without necessarily
impacting on our budget deficit cap next year.
BACKGROUND
1.0 The DBM, during the course of performance reviews conducted on the agencies’ operations, particularly on the implementation of their
projects/activities, including expenses incurred in undertaking the same, have identified savings out of the 2011 General Appropriations Act. Said
savings correspond to completed or discontinued projects under certain departments/agencies which may be pooled, for the following:
1.1 to provide for new activities which have not been anticipated during preparation of the budget;
1.2 to augment additional requirements of on-going priority projects; and
1.3 to provide for deficiencies under the Special Purpose Funds, e.g., PDAF, Calamity Fund, Contingent Fund
1.4 to cover for the modifications of the original allotment class allocation as a result of on-going priority projects and implementation of new activities
2.0 x x x x
2.1 x x x
2.2 x x x
ON THE UTILIZATION OF POOLED SAVINGS
3.0 It may be recalled that the President approved our request for omnibus authority to pool savings/unutilized balances in FY 2010 last November
25, 2010.
4.0 It is understood that in the utilization of the pooled savings, the DBM shall secure the corresponding approval/confirmation of the President.
Furthermore, it is assured that the proposed realignments shall be within the authorized Expenditure level.
5.0 Relative thereto, we have identified some expenditure items that may be sourced from the said pooled appropriations in FY 2010 that will expire
on December 31, 2011 and appropriations in FY 2011 that may be declared as savings to fund additional expenditures.
5.1 The 2010 Continuing Appropriations (pooled savings) is proposed to be spent for the projects that we have identified to be immediate actual
disbursements considering that this same fund source will expire on December 31, 2011.
5.2 With respect to the proposed expenditure items to be funded from the FY 2011 Unreleased Appropriations, most of these are the same projects
for which the DBM is directed by the Office of the President, thru the Executive Secretary, to source funds.
6.0 Among others, the following are such proposed additional projects that have been chosen given their multiplier impact on economy and
infrastructure development, their beneficial effect on the poor, and their translation into disbursements. Please note that we have classified the list of
proposed projects as follows:
7.0 x x x
FOR THE PRESIDENT’S APPROVAL
8.0 Foregoing considered, may we respectfully request for the President’s approval for the following:
8.1 Grant of omnibus authority to consolidate FY 2011 savings/unutilized balances and its realignment; and
8.2 The proposed additional projects identified for funding.
For His Excellency’s consideration and approval.
(Sgd.)
[/] APPROVED
[ ] DISAPPROVED
(Sgd.) H.E. BENIGNO S. AQUINO, III
DEC 21, 2011
Substantially identical requests for authority to pool savings and to fund proposed projects were contained in various other memoranda from Sec.
Abad dated June 25, 2012,117 September 4, 2012,118 December 19, 2012,119 May 20, 2013,120 and September 25, 2013.121 The President apparently
approved all the requests, withholding approval only of the proposed projects contained in the June 25, 2012 memorandum, as borne out by his
marginal note therein to the effect that the proposed projects should still be "subject to further discussions." 122
In order to implement the June25, 2012 memorandum, Sec. Abad issued NBC No. 541 (Adoption of Operational Efficiency Measure – Withdrawal of
Agencies’ Unobligated Allotments as of June 30, 2012), 123 reproduced herein as follows:
NATIONAL BUDGET CIRCULAR No. 541
July 18, 2012
TO: All Heads of Departments/Agencies/State Universities and Colleges and other Offices of the National Government, Budget and Planning Officers;
Heads of Accounting Units and All Others Concerned
SUBJECT : Adoption of Operational Efficiency Measure – Withdrawal of Agencies’ Unobligated Allotments as of June 30, 2012
1.0 Rationale
The DBM, as mandated by Executive Order (EO) No. 292 (Administrative Code of 1987), periodically reviews and evaluates the
departments/agencies’ efficiency and effectiveness in utilizing budgeted funds for the delivery of services and production of goods, consistent with the
government priorities.
In the event that a measure is necessary to further improve the operational efficiency of the government, the President is authorized to suspend or
stop further use of funds allotted for any agency or expenditure authorized in the General Appropriations Act. Withdrawal and pooling of unutilized
allotment releases can be effected by DBM based on authority of the President, as mandated under Sections 38 and 39, Chapter 5, Book VI of EO
292.
For the first five months of 2012, the National Government has not met its spending targets. In order to accelerate spending and sustain the fiscal
targets during the year, expenditure measures have to be implemented to optimize the utilization of available resources.
Departments/agencies have registered low spending levels, in terms of obligations and disbursements per initial review of their 2012 performance. To
enhance agencies’ performance, the DBM conducts continuous consultation meetings and/or send call-up letters, requesting them to identify slow-
moving programs/projects and the factors/issues affecting their performance (both pertaining to internal systems and those which are outside the
agencies’ spheres of control). Also, they are asked to formulate strategies and improvement plans for the rest of 2012.
Notwithstanding these initiatives, some departments/agencies have continued to post low obligation levels as of end of first semester, thus resulting to
substantial unobligated allotments.
In line with this, the President, per directive dated June 27, 2012 authorized the withdrawal of unobligated allotments of agencies with low levels of
obligations as of June 30, 2012, both for continuing and current allotments. This measure will allow the maximum utilization of available allotments to
fund and undertake other priority expenditures of the national government.
2.0 Purpose
2.1 To provide the conditions and parameters on the withdrawal of unobligated allotments of agencies as of June 30, 2012 to fund priority and/or fast-
moving programs/projects of the national government;
2.2 To prescribe the reports and documents to be used as bases on the withdrawal of said unobligated allotments; and
2.3 To provide guidelines in the utilization or reallocation of the withdrawn allotments.
3.0 Coverage
3.1 These guidelines shall cover the withdrawal of unobligated allotments as of June 30, 2012 of all national government agencies (NGAs) charged
against FY 2011 Continuing Appropriation (R.A. No.10147) and FY 2012 Current Appropriation (R.A. No. 10155), pertaining to:
3.1.1 Capital Outlays (CO);
3.1.2 Maintenance and Other Operating Expenses (MOOE) related to the implementation of programs and projects, as well as capitalized MOOE;
and
3.1.3 Personal Services corresponding to unutilized pension benefits declared as savings by the agencies concerned based on their
updated/validated list of pensioners.
3.2 The withdrawal of unobligated allotments may cover the identified programs, projects and activities of the departments/agencies reflected in the
DBM list shown as Annex A or specific programs and projects as may be identified by the agencies.
4.0 Exemption
These guidelines shall not apply to the following:
4.1 NGAs
4.1.1 Constitutional Offices/Fiscal Autonomy Group, granted fiscal autonomy under the Philippine Constitution; and
4.1.2 State Universities and Colleges, adopting the Normative Funding allocation scheme i.e., distribution of a predetermined budget ceiling.
4.2 Fund Sources
4.2.1 Personal Services other than pension benefits;
4.2.2 MOOE items earmarked for specific purposes or subject to realignment conditions per General Provisions of the GAA:
• Confidential and Intelligence Fund;
• Savings from Traveling, Communication, Transportation and Delivery, Repair and Maintenance, Supplies and Materials and Utility which shall be
used for the grant of Collective Negotiation Agreement incentive benefit;
• Savings from mandatory expenditures which can be realigned only in the last quarter after taking into consideration the agency’s full year
requirements, i.e., Petroleum, Oil and Lubricants, Water, Illumination, Power Services, Telephone, other Communication Services and Rent.
4.2.3 Foreign-Assisted Projects (loan proceeds and peso counterpart);
4.2.4 Special Purpose Funds such as: E-Government Fund, International Commitments Fund, PAMANA, Priority Development Assistance Fund,
Calamity Fund, Budgetary Support to GOCCs and Allocation to LGUs, among others;
4.2.5 Quick Response Funds; and
4.2.6 Automatic Appropriations i.e., Retirement Life Insurance Premium and Special Accounts in the General Fund.
5.0 Guidelines
5.1 National government agencies shall continue to undertake procurement activities notwithstanding the implementation of the policy of withdrawal of
unobligated allotments until the end of the third quarter, FY 2012. Even without the allotments, the agency shall proceed in undertaking the
procurement processes (i.e., procurement planning up to the conduct of bidding but short of awarding of contract) pursuant to GPPB Circular Nos. 02-
2008 and 01-2009 and DBM Circular Letter No. 2010-9.
5.2 For the purpose of determining the amount of unobligated allotments that shall be withdrawn, all departments/agencies/operating units (OUs) shall
submit to DBM not later than July 30, 2012, the following budget accountability reports as of June 30, 2012;
• Statement of Allotments, Obligations and Balances (SAOB);
• Financial Report of Operations (FRO); and
• Physical Report of Operations.
5.3 In the absence of the June 30, 2012 reports cited under item 5.2 of this Circular, the agency’s latest report available shall be used by DBM as
basis for withdrawal of allotment. The DBM shall compute/approximate the agency’s obligation level as of June 30 to derive its unobligated allotments
as of same period. Example: If the March 31 SAOB or FRO reflects actual obligations of P 800M then the June 30 obligation level shall approximate
to ₱1,600 M (i.e., ₱800 M x 2 quarters).
5.4 All released allotments in FY 2011 charged against R.A. No. 10147 which remained unobligated as of June 30, 2012 shall be immediately
considered for withdrawal. This policy is based on the following considerations:
5.4.1 The departments/agencies’ approved priority programs and projects are assumed to be implementation-ready and doable during the given fiscal
year; and
5.4.2 The practice of having substantial carryover appropriations may imply that the agency has a slower-than-programmed implementation capacity
or agency tends to implement projects within a two-year timeframe.
5.5. Consistent with the President’s directive, the DBM shall, based on evaluation of the reports cited above and results of consultations with the
departments/agencies, withdraw the unobligated allotments as of June 30, 2012 through issuance of negative Special Allotment Release Orders
(SAROs).
5.6 DBM shall prepare and submit to the President, a report on the magnitude of withdrawn allotments. The report shall highlight the agencies which
failed to submit the June 30 reports required under this Circular.
5.7 The withdrawn allotments may be:
5.7.1 Reissued for the original programs and projects of the agencies/OUs concerned, from which the allotments were withdrawn;
5.7.2 Realigned to cover additional funding for other existing programs and projects of the agency/OU; or
5.7.3 Used to augment existing programs and projects of any agency and to fund priority programs and projects not considered in the 2012 budget
but expected to be started or implemented during the current year.
5.8 For items 5.7.1 and 5.7.2 above, agencies/OUs concerned may submit to DBM a Special Budget Request (SBR), supported with the following:
5.8.1 Physical and Financial Plan (PFP);
5.8.2 Monthly Cash Program (MCP); and
5.8.3 Proof that the project/activity has started the procurement processes i.e., Proof of Posting and/or Advertisement of the Invitation to Bid.
5.9 The deadline for submission of request/s pertaining to these categories shall be until the end of the third quarter i.e., September 30, 2012. After
said cut-off date, the withdrawn allotments shall be pooled and form part of the overall savings of the national government.
5.10 Utilization of the consolidated withdrawn allotments for other priority programs and projects as cited under item 5.7.3 of this Circular, shall be
subject to approval of the President. Based on the approval of the President, DBM shall issue the SARO to cover the approved priority expenditures
subject to submission by the agency/OU concerned of the SBR and supported with PFP and MCP.
5.11 It is understood that all releases to be made out of the withdrawn allotments (both 2011 and 2012 unobligated allotments) shall be within the
approved Expenditure Program level of the national government for the current year. The SAROs to be issued shall properly disclose the
appropriation source of the release to determine the extent of allotment validity, as follows:
• For charges under R.A. 10147 – allotments shall be valid up to December 31, 2012; and
• For charges under R.A. 10155 – allotments shall be valid up to December 31, 2013.
5.12 Timely compliance with the submission of existing BARs and other reportorial requirements is reiterated for monitoring purposes.
6.0 Effectivity
This circular shall take effect immediately.
(Sgd.) FLORENCIO B. ABAD
Secretary
As can be seen, NBC No. 541 specified that the unobligated allotments of all agencies and departments as of June 30, 2012 that were charged
against the continuing appropriations for fiscal year 2011 and the 2012 GAA (R.A. No. 10155) were subject to withdrawal through the issuance of
negative SAROs, but such allotments could be either: (1) reissued for the original PAPs of the concerned agencies from which they were withdrawn;
or (2) realigned to cover additional funding for other existing PAPs of the concerned agencies; or (3) used to augment existing PAPs of any agency
and to fund priority PAPs not considered in the 2012 budget but expected to be started or implemented in 2012. Financing the other priority PAPs was
made subject to the approval of the President. Note here that NBC No. 541 used terminologies like "realignment" and "augmentation" in the
application of the withdrawn unobligated allotments.
Taken together, all the issuances showed how the DAP was to be implemented and funded, that is — (1) by declaring "savings" coming from the
various departments and agencies derived from pooling unobligated allotments and withdrawing unreleased appropriations; (2) releasing
unprogrammed funds; and (3) applying the "savings" and unprogrammed funds to augment existing PAPs or to support other priority PAPs.
c. DAP was not an appropriation
measure; hence, no appropriation
law was required to adopt or to
implement it
Petitioners Syjuco, Luna, Villegas and PHILCONSA state that Congress did not enact a law to establish the DAP, or to authorize the disbursement
and release of public funds to implement the DAP. Villegas, PHILCONSA, IBP, Araullo, and COURAGE observe that the appropriations funded under
the DAP were not included in the 2011, 2012 and 2013 GAAs. To petitioners IBP, Araullo, and COURAGE, the DAP, being actually an appropriation
that set aside public funds for public use, should require an enabling law for its validity. VACC maintains that the DAP, because it involved huge
allocations that were separate and distinct from the GAAs, circumvented and duplicated the GAAs without congressional authorization and control.
The petitioners contend in unison that based on how it was developed and implemented the DAP violated the mandate of Section 29(1), Article VI of
the 1987 Constitution that "[n]o money shall be paid out of the Treasury except in pursuance of an appropriation made by law."
The OSG posits, however, that no law was necessary for the adoption and implementation of the DAP because of its being neither a fund nor an
appropriation, but a program or an administrative system of prioritizing spending; and that the adoption of the DAP was by virtue of the authority of the
President as the Chief Executive to ensure that laws were faithfully executed.
We agree with the OSG’s position.
The DAP was a government policy or strategy designed to stimulate the economy through accelerated spending. In the context of the DAP’s adoption
and implementation being a function pertaining to the Executive as the main actor during the Budget Execution Stage under its constitutional mandate
to faithfully execute the laws, including the GAAs, Congress did not need to legislate to adopt or to implement the DAP. Congress could appropriate
but would have nothing more to do during the Budget Execution Stage. Indeed, appropriation was the act by which Congress "designates a particular
fund, or sets apart a specified portion of the public revenue or of the money in the public treasury, to be applied to some general object of
governmental expenditure, or to some individual purchase or expense." 124 As pointed out in Gonzales v. Raquiza: 125 ‘"In a strict sense, appropriation
has been defined ‘as nothing more than the legislative authorization prescribed by the Constitution that money may be paid out of the Treasury,’ while
appropriation made by law refers to ‘the act of the legislature setting apart or assigning to a particular use a certain sum to be used in the payment of
debt or dues from the State to its creditors.’"126
On the other hand, the President, in keeping with his duty to faithfully execute the laws, had sufficient discretion during the execution of the budget to
adapt the budget to changes in the country’s economic situation. 127 He could adopt a plan like the DAP for the purpose. He could pool the savings
and identify the PAPs to be funded under the DAP. The pooling of savings pursuant to the DAP, and the identification of the PAPs to be funded under
the DAP did not involve appropriation in the strict sense because the money had been already set apart from the public treasury by Congress through
the GAAs. In such actions, the Executive did not usurp the power vested in Congress under Section 29(1), Article VI of the Constitution.
3.
Unreleased appropriations and withdrawn
unobligated allotments under the DAP
were not savings, and the use of such
appropriations contravened Section 25(5),
Article VI of the 1987 Constitution.
Notwithstanding our appreciation of the DAP as a plan or strategy validly adopted by the Executive to ramp up spending to accelerate economic
growth, the challenges posed by the petitioners constrain us to dissect the mechanics of the actual execution of the DAP. The management and
utilization of the public wealth inevitably demands a most careful scrutiny of whether the Executive’s implementation of the DAP was consistent with
the Constitution, the relevant GAAs and other existing laws.
a. Although executive discretion
and flexibility are necessary in
the execution of the budget, any
transfer of appropriated funds
should conform to Section 25(5),
Article VI of the Constitution
We begin this dissection by reiterating that Congress cannot anticipate all issues and needs that may come into play once the budget reaches its
execution stage. Executive discretion is necessary at that stage to achieve a sound fiscal administration and assure effective budget implementation.
The heads of offices, particularly the President, require flexibility in their operations under performance budgeting to enable them to make whatever
adjustments are needed to meet established work goals under changing conditions. 128 In particular, the power to transfer funds can give the President
the flexibility to meet unforeseen events that may otherwise impede the efficient implementation of the PAPs set by Congress in the GAA.
Congress has traditionally allowed much flexibility to the President in allocating funds pursuant to the GAAs, 129particularly when the funds are grouped
to form lump sum accounts.130 It is assumed that the agencies of the Government enjoy more flexibility when the GAAs provide broader appropriation
items.131 This flexibility comes in the form of policies that the Executive may adopt during the budget execution phase. The DAP – as a strategy to
improve the country’s economic position – was one policy that the President decided to carry out in order to fulfill his mandate under the GAAs.
Denying to the Executive flexibility in the expenditure process would be counterproductive. In Presidential Spending Power, 132 Prof. Louis Fisher, an
American constitutional scholar whose specialties have included budget policy, has justified extending discretionary authority to the Executive thusly:
[T]he impulse to deny discretionary authority altogether should be resisted. There are many number of reasons why obligations and outlays by
administrators may have to differ from appropriations by legislators. Appropriations are made many months, and sometimes years, in advance of
expenditures. Congress acts with imperfect knowledge in trying to legislate in fields that are highly technical and constantly undergoing change. New
circumstances will develop to make obsolete and mistaken the decisions reached by Congress at the appropriation stage. It is not practicable for
Congress to adjust to each new development by passing separate supplemental appropriation bills. Were Congress to control expenditures by
confining administrators to narrow statutory details, it would perhaps protect its power of the purse but it would not protect the purse itself. The
realities and complexities of public policy require executive discretion for the sound management of public funds.
xxxx
x x x The expenditure process, by its very nature, requires substantial discretion for administrators. They need to exercise judgment and take
responsibility for their actions, but those actions ought to be directed toward executing congressional, not administrative policy. Let there be
discretion, but channel it and use it to satisfy the programs and priorities established by Congress.
In contrast, by allowing to the heads of offices some power to transfer funds within their respective offices, the Constitution itself ensures the fiscal
autonomy of their offices, and at the same time maintains the separation of powers among the three main branches of the Government. The Court
has recognized this, and emphasized so in Bengzon v. Drilon, 133 viz:
The Judiciary, the Constitutional Commissions, and the Ombudsman must have the independence and flexibility needed in the discharge of their
constitutional duties. The imposition of restrictions and constraints on the manner the independent constitutional offices allocate and utilize the funds
appropriated for their operations is anathema to fiscal autonomy and violative not only of the express mandate of the Constitution but especially as
regards the Supreme Court, of the independence and separation of powers upon which the entire fabric of our constitutional system is based.
In the case of the President, the power to transfer funds from one item to another within the Executive has not been the mere offshoot of established
usage, but has emanated from law itself. It has existed since the time of the American Governors-General.134 Act No. 1902 (An Act authorizing the
Governor-General to direct any unexpended balances of appropriations be returned to the general fund of the Insular Treasury and to transfer from
the general fund moneys which have been returned thereto), passed on May 18, 1909 by the First Philippine Legislature, 135 was the first enabling law
that granted statutory authority to the President to transfer funds. The authority was without any limitation, for the Act explicitly empowered the
Governor-General to transfer any unexpended balance of appropriations for any bureau or office to another, and to spend such balance as if it had
originally been appropriated for that bureau or office.
From 1916 until 1920, the appropriations laws set a cap on the amounts of funds that could be transferred, thereby limiting the power to transfer
funds. Only 10% of the amounts appropriated for contingent or miscellaneous expenses could be transferred to a bureau or office, and the transferred
funds were to be used to cover deficiencies in the appropriations also for miscellaneous expenses of said bureau or office.
In 1921, the ceiling on the amounts of funds to be transferred from items under miscellaneous expenses to any other item of a certain bureau or office
was removed.
During the Commonwealth period, the power of the President to transfer funds continued to be governed by the GAAs despite the enactment of the
Constitution in 1935. It is notable that the 1935 Constitution did not include a provision on the power to transfer funds. At any rate, a shift in the extent
of the President’s power to transfer funds was again experienced during this era, with the President being given more flexibility in implementing the
budget. The GAAs provided that the power to transfer all or portions of the appropriations in the Executive Department could be made in the "interest
of the public, as the President may determine."136
In its time, the 1971 Constitutional Convention wanted to curtail the President’s seemingly unbounded discretion in transferring funds.137 Its
Committee on the Budget and Appropriation proposed to prohibit the transfer of funds among the separate branches of the Government and the
independent constitutional bodies, but to allow instead their respective heads to augment items of appropriations from savings in their respective
budgets under certain limitations.138 The clear intention of the Convention was to further restrict, not to liberalize, the power to transfer
appropriations.139 Thus, the Committee on the Budget and Appropriation initially considered setting stringent limitations on the power to augment, and
suggested that the augmentation of an item of appropriation could be made "by not more than ten percent if the original item of appropriation to be
augmented does not exceed one million pesos, or by not more than five percent if the original item of appropriation to be augmented exceeds one
million pesos."140 But two members of the Committee objected to the ₱1,000,000.00 threshold, saying that the amount was arbitrary and might not be
reasonable in the future. The Committee agreed to eliminate the ₱1,000,000.00 threshold, and settled on the ten percent limitation.141
In the end, the ten percent limitation was discarded during the plenary of the Convention, which adopted the following f inal version under Section 16,
Article VIII of the 1973 Constitution, to wit:
(5) 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.
The 1973 Constitution explicitly and categorically prohibited the transfer of funds from one item to another, unless Congress enacted a law authorizing
the President, the Prime Minister, the Speaker, the Chief Justice of the Supreme Court, and the heads of the Constitutional omissions to transfer
funds for the purpose of augmenting any item from savings in another item in the GAA of their respective offices. The leeway was limited to
augmentation only, and was further constricted by the condition that the funds to be transferred should come from savings from another item in the
appropriation of the office.142
On July 30, 1977, President Marcos issued PD No. 1177, providing in its Section 44 that:
Section 44. Authority to Approve Fund Transfers. 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.
The President shall, likewise, have the authority to augment any appropriation of the Executive Department in the General Appropriations Act, from
savings in the appropriations of another department, bureau, office or agency within the Executive Branch, pursuant to the provisions of Article VIII,
Section 16 (5) of the Constitution.
In Demetria v. Alba, however, the Court struck down the first paragraph of Section 44 for contravening Section 16(5)of the 1973 Constitution, ruling:
Paragraph 1 of Section 44 of P.D. No. 1177 unduly over-extends the privilege granted under said Section 16. It empowers the President to
indiscriminately transfer funds from one department, bureau, office or agency of the Executive Department 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 as to whether or not the funds
to be transferred are actually savings in the item from which the same are to be taken, or whether or not the transfer is for the purpose of augmenting
the item to which said transfer is to be made. It does not only completely disregard the standards set in the fundamental law, thereby amounting to an
undue delegation of legislative powers, but likewise goes beyond the tenor thereof. Indeed, such constitutional infirmities render the provision in
question null and void.143
It is significant that Demetria was promulgated 25 days after the ratification by the people of the 1987 Constitution, whose Section 25(5) of Article VI is
identical to Section 16(5), Article VIII of the 1973 Constitution, to wit:
Section 25. x x x
xxxx
5) No law shall be passed authorizing any transfer of appropriations; however, 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 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.
xxxx
The foregoing history makes it evident that the Constitutional Commission included Section 25(5), supra, to keep a tight rein on the exercise of the
power to transfer funds appropriated by Congress by the President and the other high officials of the Government named therein. The Court stated in
Nazareth v. Villar:144
In the funding of current activities, projects, and programs, the general rule should still be that the budgetary amount contained in the appropriations
bill is the extent Congress will determine as sufficient for the budgetary allocation for the proponent agency. The only exception is found in Section 25
(5), Article VI of the Constitution, by which 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 Constitutional Commissions are authorized to transfer appropriations to augmentany item in the GAA for their
respective offices from the savings in other items of their respective appropriations. The plain language of the constitutional restriction leaves no room
for the petitioner’s posture, which we should now dispose of as untenable.
It bears emphasizing that the exception in favor of the high officials named in Section 25(5), Article VI of the Constitution limiting the authority to
transfer savings only to augment another item in the GAA is strictly but reasonably construed as exclusive. As the Court has expounded in Lokin, Jr.
v. Commission on Elections:
When the statute itself enumerates the exceptions to the application of the general rule, the exceptions are strictly but reasonably construed. The
exceptions extend only as far as their language fairly warrants, and all doubts should be resolved in favor of the general provision rather than the
exceptions. Where the general rule is established by a statute with exceptions, none but the enacting authority can curtail the former. Not even the
courts may add to the latter by implication, and it is a rule that an express exception excludes all others, although it is always proper in determining
the applicability of the rule to inquire whether, in a particular case, it accords with reason and justice.
The appropriate and natural office of the exception is to exempt something from the scope of the general words of a statute, which is otherwise within
the scope and meaning of such general words. Consequently, the existence of an exception in a statute clarifies the intent that the statute shall apply
to all cases not excepted. Exceptions are subject to the rule of strict construction; hence, any doubt will be resolved in favor of the general provision
and against the exception. Indeed, the liberal construction of a statute will seem to require in many circumstances that the exception, by which the
operation of the statute is limited or abridged, should receive a restricted construction.
Accordingly, we should interpret Section 25(5), supra, in the context of a limitation on the President’s discretion over the appropriations during the
Budget Execution Phase.
b. Requisites for the valid transfer of
appropriated funds under Section
25(5), Article VI of the 1987
Constitution
The transfer of appropriated funds, to be valid under Section 25(5), supra, must be made upon a concurrence of the following requisites, namely:
(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 for their respective offices; and (3) The purpose of the transfer is to
augment an item in the general appropriations law for their respective offices.
b.1. First Requisite–GAAs of 2011 and
2012 lacked valid provisions to
authorize transfers of funds under
the DAP; hence, transfers under the
DAP were unconstitutional
Section 25(5), supra, not being a self-executing provision of the Constitution, must have an implementing law for it to be operative. That law,
generally, is the GAA of a given fiscal year. To comply with the first requisite, the GAAs should expressly authorize the transfer of funds.
Did the GAAs expressly authorize the transfer of funds?
In the 2011 GAA, the provision that gave the President and the other high officials the authority to transfer funds was Section 59, as follows:
Section 59. Use of Savings. The President of the Philippines, the Senate President, the Speaker of the House of Representatives, the Chief Justice of
the Supreme Court, the Heads of Constitutional Commissions enjoying fiscal autonomy, and the Ombudsman are hereby authorized to augment any
item in this Act from savings in other items of their respective appropriations.
In the 2012 GAA, the empowering provision was Section 53, to wit:
Section 53. Use of Savings. The President of the Philippines, the Senate President, the Speaker of the House of Representatives, the Chief Justice of
the Supreme Court, the Heads of Constitutional Commissions enjoying fiscal autonomy, and the Ombudsman are hereby authorized to augment any
item in this Act from savings in other items of their respective appropriations.
In fact, the foregoing provisions of the 2011 and 2012 GAAs were cited by the DBM as justification for the use of savings under the DAP.145
A reading shows, however, that the aforequoted provisions of the GAAs of 2011 and 2012 were textually unfaithful to the Constitution for not carrying
the phrase "for their respective offices" contained in Section 25(5), supra. The impact of the phrase "for their respective offices" was to authorize only
transfers of funds within their offices (i.e., in the case of the President, the transfer was to an item of appropriation within the Executive). The
provisions carried a different phrase ("to augment any item in this Act"), and the effect was that the 2011 and 2012 GAAs thereby literally allowed the
transfer of funds from savings to augment any item in the GAAs even if the item belonged to an office outside the Executive. To that extent did the
2011 and 2012 GAAs contravene the Constitution. At the very least, the aforequoted provisions cannot be used to claim authority to transfer
appropriations from the Executive to another branch, or to a constitutional commission.
Apparently realizing the problem, Congress inserted the omitted phrase in the counterpart provision in the 2013 GAA, to wit:
Section 52. Use of Savings. The President of the Philippines, the Senate President, the Speaker of the House of Representativ es, the Chief Justice of
the Supreme Court, the Heads of Constitutional Commissions enjoying fiscal autonomy, and the Ombudsman are hereby authorized to use savings in
their respective appropriations to augment actual deficiencies incurred for the current year in any item of their respective appropriations.
Even had a valid law authorizing the transfer of funds pursuant to Section 25(5), supra, existed, there still remained two other requisites to be met,
namely: that the source of funds to be transferred were savings from appropriations within the respective offices; and that the transfer must be for the
purpose of augmenting an item of appropriation within the respective offices.
b.2. Second Requisite – There were
no savings from which funds
could be sourced for the DAP
Were the funds used in the DAP actually savings?
The petitioners claim that the funds used in the DAP — the unreleased appropriations and withdrawn unobligated allotments — were not actual
savings within the context of Section 25(5), supra, and the relevant provisions of the GAAs. Belgica argues that "savings" should be understood to
refer to the excess money after the items that needed to be funded have been funded, or those that needed to be paid have been paid pursuant to the
budget.146 The petitioners posit that there could be savings only when the PAPs for which the funds had been appropriated were actually implemented
and completed, or finally discontinued or abandoned. They insist that savings could not be realized with certainty in the middle of the fiscal year; and
that the funds for "slow-moving" PAPs could not be considered as savings because such PAPs had not actually been abandoned or discontinued
yet.147 They stress that NBC No. 541, by allowing the withdrawn funds to be reissued to the "original program or project from which it was withdrawn,"
conceded that the PAPs from which the supposed savings were taken had not been completed, abandoned or discontinued. 148
The OSG represents that "savings" were "appropriations balances," being the difference between the appropriation authorized by Congress and the
actual amount allotted for the appropriation; that the definition of "savings" in the GAAs set only the parameters for determining when savings
occurred; that it was still the President (as well as the other officers vested by the Constitution with the authority to augment) who ultimately
determined when savings actually existed because savings could be determined only during the stage of budget execution; that the President must
be given a wide discretion to accomplish his tasks; and that the withdrawn unobligated allotments were savings inasmuch as they were clearly
"portions or balances of any programmed appropriation…free from any obligation or encumbrances which are (i) still available after the completion or
final discontinuance or abandonment of the work, activity or purpose for which the appropriation is authorized…"
We partially find for the petitioners.
In ascertaining the meaning of savings, certain principles should be borne in mind. The first principle is that Congress wields the power of the purse.
Congress decides how the budget will be spent; what PAPs to fund; and the amounts of money to be spent for each PAP. The second principle is that
the Executive, as the department of the Government tasked to enforce the laws, is expected to faithfully execute the GAA and to spend the budget in
accordance with the provisions of the GAA.149 The Executive is expected to faithfully implement the PAPs for which Congress allocated funds, and to
limit the expenditures within the allocations, unless exigencies result to deficiencies for which augmentation is authorized, subject to the conditions
provided by law. The third principle is that in making the President’s power to augment operative under the GAA, Congress recognizes the need for
flexibility in budget execution. In so doing, Congress diminishes its own power of the purse, for it delegates a fraction of its power to the Executive.
But Congress does not thereby allow the Executive to override its authority over the purse as to let the Executive exceed its delegated authority. And
the fourth principle is that savings should be actual. "Actual" denotes something that is real or substantial, or something that exists presently in fact, as
opposed to something that is merely theoretical, possible, potential or hypothetical. 150
The foregoing principles caution us to construe savings strictly against expanding the scope of the power to augment. It is then indubitable that the
power to augment was to be used only when the purpose for which the funds had been allocated were already satisfied, or the need for such funds
had ceased to exist, for only then could savings be properly realized. This interpretation prevents the Executive from unduly transgressing Congress’
power of the purse.
The definition of "savings" in the GAAs, particularly for 2011, 2012 and 2013, reflected this interpretation and made it operational, viz:
Savings refer to portions or balances of any programmed appropriation in this Act free from any obligation or encumbrance which are: (i) still available
after the completion or final discontinuance or abandonment of the work, activity or purpose for which the appropriation is authorized; (ii) from
appropriations balances arising from unpaid compensation and related costs pertaining to vacant positions and leaves of absence without pay; and
(iii) from appropriations balances realized from the implementation of measures resulting in improved systems and efficiencies and thus enabled
agencies to meet and deliver the required or planned targets, programs and services approved in this Act at a lesser cost.
The three instances listed in the GAAs’ aforequoted definition were a sure indication that savings could be generated only upon the purpose of the
appropriation being fulfilled, or upon the need for the appropriation being no longer existent.
The phrase "free from any obligation or encumbrance" in the definition of savings in the GAAs conveyed the notion that the appropriation was at that
stage when the appropriation was already obligated and the appropriation was already released. This interpretation was reinforced by the
enumeration of the three instances for savings to arise, which showed that the appropriation referred to had reached the agency level. It could not be
otherwise, considering that only when the appropriation had reached the agency level could it be determined whether (a) the PAP for which the
appropriation had been authorized was completed, finally discontinued, or abandoned; or (b) there were vacant positions and leaves of absence
without pay; or (c) the required or planned targets, programs and services were realized at a lesser cost because of the implementation of measures
resulting in improved systems and efficiencies.
The DBM declares that part of the savings brought under the DAP came from "pooling of unreleased appropriations such as unreleased Personnel
Services appropriations which will lapse at the end of the year, unreleased appropriations of slow moving projects and discontinued projects per Zero-
Based Budgeting findings."
The declaration of the DBM by itself does not state the clear legal basis for the treatment of unreleased or unalloted appropriations as savings.
The fact alone that the appropriations are unreleased or unalloted is a mere description of the status of the items as unalloted or unreleased. They
have not yet ripened into categories of items from which savings can be generated. Appropriations have been considered "released" if there has
already been an allotment or authorization to incur obligations and disbursement authority. This means that the DBM has issued either an ABM (for
those not needing clearance), or a SARO (for those needing clearance), and consequently an NCA, NCAA or CDC, as the case may be.
Appropriations remain unreleased, for instance, because of noncompliance with documentary requirements (like the Special Budget Request), or
simply because of the unavailability of funds. But the appropriations do not actually reach the agencies to which they were allocated under the GAAs,
and have remained with the DBM technically speaking. Ergo, unreleased appropriations refer to appropriations with allotments but without
disbursement authority.
For us to consider unreleased appropriations as savings, unless these met the statutory definition of savings, would seriously undercut the
congressional power of the purse, because such appropriations had not even reached and been used by the agency concerned vis-à-vis the PAPs for
which Congress had allocated them. However, if an agency has unfilled positions in its plantilla and did not receive an allotment and NCA for such
vacancies, appropriations for such positions, although unreleased, may already constitute savings for that agency under the second instance.
Unobligated allotments, on the other hand, were encompassed by the first part of the definition of "savings" in the GAA, that is, as "portions or
balances of any programmed appropriation in this Act free from any obligation or encumbrance." But the first part of the definition was further qualified
by the three enumerated instances of when savings would be realized. As such, unobligated allotments could not be indiscriminately declared as
savings without first determining whether any of the three instances existed. This signified that the DBM’s withdrawal of unobligated allotments had
disregarded the definition of savings under the GAAs.
Justice Carpio has validly observed in his Separate Concurring Opinion that MOOE appropriations are deemed divided into twelve monthly allocations
within the fiscal year; hence, savings could be generated monthly from the excess or unused MOOE appropriations other than the Mandatory
Expenditures and Expenditures for Business-type Activities because of the physical impossibility to obligate and spend such funds as MOOE for a
period that already lapsed. Following this observation, MOOE for future months are not savings and cannot be transferred.
The DBM’s Memorandum for the President dated June 25, 2012 (which became the basis of NBC No. 541) stated:
ON THE AUTHORITY TO WITHDRAW UNOBLIGATED ALLOTMENTS
5.0 The DBM, during the course of performance reviews conducted on the agencies’ operations, particularly on the implementation of their
projects/activities, including expenses incurred in undertaking the same, have been continuously calling the attention of all National Government
agencies (NGAs) with low levels of obligations as of end of the first quarter to speedup the implementation of their programs and projects in the
second quarter.
6.0 Said reminders were made in a series of consultation meetings with the concerned agencies and with call-up letters sent.
7.0 Despite said reminders and the availability of funds at the department’s disposal, the level of financial performance of some departments
registered below program, with the targeted obligations/disbursements for the first semester still not being met.
8.0 In order to maximize the use of the available allotment, all unobligated balances as of June 30, 2012, both for continuing and current allotments
shall be withdrawn and pooled to fund fast moving programs/projects.
9.0 It may be emphasized that the allotments to be withdrawn will be based on the list of slow moving projects to be identified by the agencies and
their catch up plans to be evaluated by the DBM.
It is apparent from the foregoing text that the withdrawal of unobligated allotments would be based on whether the allotments pertained to slow-
moving projects, or not. However, NBC No. 541 did not set in clear terms the criteria for the withdrawal of unobligated allotments, viz:
3.1. These guidelines shall cover the withdrawal of unobligated allotments as of June 30, 2012 ofall national government agencies (NGAs) charged
against FY 2011 Continuing Appropriation (R.A. No. 10147) and FY 2012 Current Appropriation (R.A. No. 10155), pertaining to:
3.1.1 Capital Outlays (CO);
3.1.2 Maintenance and Other Operating Expenses (MOOE) related to the implementation of programs and projects, as well as capitalized MOOE;
and
3.1.3 Personal Services corresponding to unutilized pension benefits declared as savings by the agencies concerned based on their
undated/validated list of pensioners.
A perusal of its various provisions reveals that NBC No. 541 targeted the "withdrawal of unobligated allotments of agencies with low levels of
obligations"151 "to fund priority and/or fast-moving programs/projects."152 But the fact that the withdrawn allotments could be "[r]eissued for the original
programs and projects of the agencies/OUs concerned, from which the allotments were withdrawn" 153 supported the conclusion that the PAPs had not
yet been finally discontinued or abandoned. Thus, the purpose for which the withdrawn funds had been appropriated was not yet fulfilled, or did not
yet cease to exist, rendering the declaration of the funds as savings impossible.
Worse, NBC No. 541 immediately considered for withdrawal all released allotments in 2011 charged against the 2011 GAA that had remained
unobligated based on the following considerations, to wit:
5.4.1 The departments/agencies’ approved priority programs and projects are assumed to be implementation-ready and doable during the given fiscal
year; and
5.4.2 The practice of having substantial carryover appropriations may imply that the agency has a slower-than-programmed implementation capacity
or agency tends to implement projects within a two-year timeframe.
Such withdrawals pursuant to NBC No. 541, the circular that affected the unobligated allotments for continuing and current appropriations as of June
30, 2012, disregarded the 2-year period of availability of the appropriations for MOOE and capital outlay extended under Section 65, General
Provisions of the 2011 GAA, viz:
Section 65. Availability of Appropriations. — Appropriations for MOOE and capital outlays authorized in this Act shall be available for release and
obligation for the purpose specified, and under the same special provisions applicable thereto, for a period extending to one fiscal year after the end
of the year in which such items were appropriated: PROVIDED, That appropriations for MOOE and capital outlays under R.A. No. 9970 shall be made
available up to the end of FY 2011: PROVIDED, FURTHER, That a report on these releases and obligations shall be submitted to the Senate
Committee on Finance and the House Committee on Appropriations.
and Section 63 General Provisions of the 2012 GAA, viz:
Section 63. Availability of Appropriations. — Appropriations for MOOE and capital outlays authorized in this Act shall be available for release and
obligation for the purpose specified, and under the same special provisions applicable thereto, for a period extending to one fiscal year after the end
of the year in which such items were appropriated: PROVIDED, That a report on these releases and obligations shall be submitted to the Senate
Committee on Finance and the House Committee on Appropriations, either in printed form or by way of electronic document. 154
Thus, another alleged area of constitutional infirmity was that the DAP and its relevant issuances shortened the period of availability of the
appropriations for MOOE and capital outlays.
Congress provided a one-year period of availability of the funds for all allotment classes in the 2013 GAA (R.A. No. 10352), to wit:
Section 63. Availability of Appropriations.— All appropriations authorized in this Act shall be available for release and obligation for the purposes
specified, and under the same special provisions applicable thereto, until the end of FY 2013: PROVIDED, That a report on these releases and
obligations shall be submitted to the Senate Committee on Finance and House Committee on Appropriations, either in printed form or by way of
electronic document.
Yet, in his memorandum for the President dated May 20, 2013, Sec. Abad sought omnibus authority to consolidate savings and unutilized balances to
fund the DAP on a quarterly basis, viz:
7.0 If the level of financial performance of some department will register below program, even with the availability of funds at their disposal, the
targeted obligations/disbursements for each quarter will not be met. It is important to note that these funds will lapse at the end of the fiscal year if
these remain unobligated.
8.0 To maximize the use of the available allotment, all unobligated balances at the end of every quarter, both for continuing and current allotments
shall be withdrawn and pooled to fund fast moving programs/projects.
9.0 It may be emphasized that the allotments to be withdrawn will be based on the list of slow moving projects to be identified by the agencies and
their catch up plans to be evaluated by the DBM.
The validity period of the affected appropriations, already given the brief Lifes pan of one year, was further shortened to only a quarter of a year under
the DBM’s memorandum dated May 20, 2013.
The petitioners accuse the respondents of forcing the generation of savings in order to have a larger fund available for discretionary spending. They
aver that the respondents, by withdrawing unobligated allotments in the middle of the fiscal year, in effect deprived funding for PAPs with existing
appropriations under the GAAs.155
The respondents belie the accusation, insisting that the unobligated allotments were being withdrawn upon the instance of the implementing agencies
based on their own assessment that they could not obligate those allotments pursuant to the President’s directive for them to spend their
appropriations as quickly as they could in order to ramp up the economy. 156
We agree with the petitioners.
Contrary to the respondents’ insistence, the withdrawals were upon the initiative of the DBM itself. The text of NBC No. 541 bears this out, to wit:
5.2 For the purpose of determining the amount of unobligated allotments that shall be withdrawn, all departments/agencies/operating units (OUs) shall
submit to DBM not later than July 30, 2012, the following budget accountability reports as of June 30, 2012;
• Statement of Allotments, Obligation and Balances (SAOB);
• Financial Report of Operations (FRO); and
• Physical Report of Operations.
5.3 In the absence of the June 30, 2012 reports cited under item 5.2 of this Circular, the agency’s latest report available shall be used by DBM as
basis for withdrawal of allotment. The DBM shall compute/approximate the agency’s obligation level as of June 30 to derive its unobligated allotments
as of same period. Example: If the March 31 SAOB or FRO reflects actual obligations of P 800M then the June 30 obligation level shall approximate
to ₱1,600 M (i.e., ₱800 M x 2 quarters).
The petitioners assert that no law had authorized the withdrawal and transfer of unobligated allotments and the pooling of unreleased appropriations;
and that the unbridled withdrawal of unobligated allotments and the retention of appropriated funds were akin to the impoundment of appropriations
that could be allowed only in case of "unmanageable national government budget deficit" under the GAAs, 157 thus violating the provisions of the GAAs
of 2011, 2012 and 2013 prohibiting the retention or deduction of allotments. 158
In contrast, the respondents emphasize that NBC No. 541 adopted a spending, not saving, policy as a last-ditch effort of the Executive to push
agencies into actually spending their appropriations; that such policy did not amount to an impoundment scheme, because impoundment referred to
the decision of the Executive to refuse to spend funds for political or ideological reasons; and that the withdrawal of allotments under NBC No. 541
was made pursuant to Section 38, Chapter 5, Book VI of the Administrative Code, by which the President was granted the authority to suspend or
otherwise stop further expenditure of funds allotted to any agency whenever in his judgment the public interest so required.
The assertions of the petitioners are upheld. The withdrawal and transfer of unobligated allotments and the pooling of unreleased appropriations were
invalid for being bereft of legal support. Nonetheless, such withdrawal of unobligated allotments and the retention of appropriated funds cannot be
considered as impoundment.
According to Philippine Constitution Association v. Enriquez: 159 "Impoundment refers to a refusal by the President, for whatever reason, to spend
funds made available by Congress. It is the failure to spend or obligate budget authority of any type." Impoundment under the GAA is understood to
mean the retention or deduction of appropriations. The 2011 GAA authorized impoundment only in case of unmanageable National Government
budget deficit, to wit:
Section 66. Prohibition Against Impoundment of Appropriations. No appropriations authorized under this Act shall be impounded through retention or
deduction, unless in accordance with the rules and regulations to be issued by the DBM: PROVIDED, That all the funds appropriated for the
purposes, programs, projects and activities authorized under this Act, except those covered under the Unprogrammed Fund, shall be released
pursuant to Section 33 (3), Chapter 5, Book VI of E.O. No. 292.
Section 67. Unmanageable National Government Budget Deficit. Retention or deduction of appropriations authorized in this Act shall be effected only
in cases where there is an unmanageable national government budget deficit.
 Unmanageable national government budget deficit as used in this section shall be construed to mean that (i) the actual national government budget
deficit has exceeded the quarterly budget deficit targets consistent with the full-year target deficit as indicated in the FY 2011 Budget of
Expenditures and Sources of Financing submitted by the President and approved by Congress pursuant to Section 22, Article VII of the Constitution,
or (ii) there are clear economic indications of an impending occurrence of such condition, as determined by the Development Budget Coordinating
Committee and approved by the President.
The 2012 and 2013 GAAs contained similar provisions.
The withdrawal of unobligated allotments under the DAP should not be regarded as impoundment because it entailed only the transfer of funds, not
the retention or deduction of appropriations.
Nor could Section 68 of the 2011 GAA (and the similar provisions of the 2012 and 2013 GAAs) be applicable. They uniformly stated:
Section 68. Prohibition Against Retention/Deduction of Allotment. Fund releases from appropriations provided in this Act shall be transmitted intact or
in full to the office or agency concerned. No retention or deduction as reserves or overhead shall be made, except as authorized by law, or upon
direction of the President of the Philippines. The COA shall ensure compliance with this provision to the extent that sub-allotments by agencies to
their subordinate offices are in conformity with the release documents issued by the DBM.
The provision obviously pertained to the retention or deduction of allotments upon their release from the DBM, which was a different matter
altogether. The Court should not expand the meaning of the provision by applying it to the withdrawal of allotments.
The respondents rely on Section 38, Chapter 5, Book VI of the Administrative Code of 1987 to justify the withdrawal of unobligated allotments. But the
provision authorized only the suspension or stoppage of further expenditures, not the withdrawal of unobligated allotments, to wit:
Section 38. Suspension of Expenditure of Appropriations.- Except as otherwise provided in the General Appropriations Act and whenever in his
judgment the public interest so requires, the President, upon notice to the head of office concerned, is authorized to suspend or otherwise stop further
expenditure of funds allotted for any agency, or any other expenditure authorized in the General Appropriations Act, except for personal services
appropriations used for permanent officials and employees.
Moreover, the DBM did not suspend or stop further expenditures in accordance with Section 38, supra, but instead transferred the funds to other
PAPs.
It is relevant to remind at this juncture that the balances of appropriations that remained unexpended at the end of the fiscal year were to be reverted
to the General Fund.1âwphi1 This was the mandate of Section 28, Chapter IV, Book VI of the Administrative Code, to wit:
Section 28. Reversion of Unexpended Balances of Appropriations, Continuing Appropriations.- Unexpended balances of appropriations authorized in
the General Appropriation Act shall revert to the unappropriated surplus of the General Fund at the end of the fiscal year and shall not thereafter be
available for expenditure except by subsequent legislative enactment: Provided, that appropriations for capital outlays shall remain valid until fully
spent or reverted: provided, further, that continuing appropriations for current operating expenditures may be specifically recommended and approved
as such in support of projects whose effective implementation calls for multi-year expenditure commitments: provided, finally, that the President may
authorize the use of savings realized by an agency during given year to meet non-recurring expenditures in a subsequent year.
The balances of continuing appropriations shall be reviewed as part of the annual budget preparation process and the preparation process and the
President may approve upon recommendation of the Secretary, the reversion of funds no longer needed in connection with the activities funded by
said continuing appropriations.
The Executive could not circumvent this provision by declaring unreleased appropriations and unobligated allotments as savings prior to the end of
the fiscal year.
b.3. Third Requisite – No funds from
savings could be transferred under
the DAP to augment deficient items
not provided in the GAA
The third requisite for a valid transfer of funds is that the purpose of the transfer should be "to augment an item in the general appropriations law for
the respective offices." The term "augment" means to enlarge or increase in size, amount, or degree. 160
The GAAs for 2011, 2012 and 2013 set as a condition for augmentation that the appropriation for the PAP item to be augmented must be deficient, to
wit: –
x x x Augmentation implies the existence in this Act of a program, activity, or project with an appropriation, which upon implementation, or subsequent
evaluation of needed resources, is determined to be deficient. In no case shall a non-existent program, activity, or project, be funded by augmentation
from savings or by the use of appropriations otherwise authorized in this Act.
In other words, an appropriation for any PAP must first be determined to be deficient before it could be augmented from savings. Note is taken of the
fact that the 2013 GAA already made this quite clear, thus:
Section 52. Use of Savings. The President of the Philippines, the Senate President, the Speaker of the House of Representatives, the Chief Justice of
the Supreme Court, the Heads of Constitutional Commissions enjoying fiscal autonomy, and the Ombudsman are hereby authorized to use savings in
their respective appropriations to augment actual deficiencies incurred for the current year in any item of their respective appropriations.
As of 2013, a total of ₱144.4 billion worth of PAPs were implemented through the DAP. 161
Of this amount ₱82.5 billion were released in 2011 and ₱54.8 billion in 2012. 162 Sec. Abad has reported that 9% of the total DAP releases were
applied to the PAPs identified by the legislators. 163
The petitioners disagree, however, and insist that the DAP supported the following PAPs that had not been covered with appropriations in the
respective GAAs, namely:
(i) ₱1.5 billion for the Cordillera People’s Liberation Army;
(ii) ₱1.8 billion for the Moro National Liberation Front;
(iii) ₱700 million for assistance to Quezon Province; 164
(iv) ₱50 million to ₱100 (million) each to certain senators; 165
(v) ₱10 billion for the relocation of families living along dangerous zones under the National Housing Authority;
(vi) ₱10 billion and ₱20 billion equity infusion under the Bangko Sentral;
(vii) ₱5.4 billion landowners’ compensation under the Department of Agrarian Reform;
(viii) ₱8.6 billion for the ARMM comprehensive peace and development program;
(ix) ₱6.5 billion augmentation of LGU internal revenue allotments
(x) ₱5 billion for crucial projects like tourism road construction under the Department of Tourism and the Department of Public Works and Highways;
(xi) ₱1.8 billion for the DAR-DPWH Tulay ng Pangulo;
(xii) ₱1.96 billion for the DOH-DPWH rehabilitation of regional health units; and
(xiii) ₱4 billion for the DepEd-PPP school infrastructure projects.166
In refutation, the OSG argues that a total of 116 DAP-financed PAPs were implemented, had appropriation covers, and could properly be accounted
for because the funds were released following and pursuant to the standard practices adopted by the DBM. 167 In support of its argument, the OSG
has submitted seven evidence packets containing memoranda, SAROs, and other pertinent documents relative to the implementation and fund
transfers under the DAP.168
Upon careful review of the documents contained in the seven evidence packets, we conclude that the "savings" pooled under the DAP were allocated
to PAPs that were not covered by any appropriations in the pertinent GAAs.
For example, the SARO issued on December 22, 2011 for the highly vaunted Disaster Risk, Exposure, Assessment and Mitigation (DREAM) project
under the Department of Science and Technology (DOST) covered the amount of ₱1.6 Billion, 169 broken down as follows:
the pertinent provision of the 2011 GAA (R.A. No. 10147) showed that Congress had appropriated only ₱537,910,000 for MOOE, but nothing for
personnel services and capital outlays, to wit:
Personnel Maintenance Capital TOTAL
Services and Other Outlays
Operating
Expenditures
III. Operations
a. Funding Assistance to Science 177,406,000 1,887,365,000 49,090,000 2,113,861,000
and Technology Activities
1. Central Office 1,554,238,000 1,554,238,000
a. Generation of new
knowledge and
technologies and research
capability building in
priority areas identified as
strategic to National
Development 537,910,000 537,910,000
Aside from this transfer under the DAP to the DREAM project exceeding by almost 300% the appropriation by Congress for the program Generation
of new knowledge and technologies and research capability building in priority areas identified as strategic to National Development, the Executive
allotted funds for personnel services and capital outlays. The Executive thereby substituted its will to that of Congress. Worse, the Executive had not
earlier proposed any amount for personnel services and capital outlays in the NEP that became the basis of the 2011 GAA. 170
It is worth stressing in this connection that the failure of the GAAs to set aside any amounts for an expense category sufficiently indicated that
Congress purposely did not see fit to fund, much less implement, the PAP concerned. This indication becomes clearer when even the President
himself did not recommend in the NEP to fund the PAP. The consequence was that any PAP requiring expenditure that did not receive any
appropriation under the GAAs could only be a new PAP, any funding for which would go beyond the authority laid down by Congress in enacting the
GAAs. That happened in some instances under the DAP.
In relation to the December 22, 2011 SARO issued to the Philippine Council for Industry, Energy and Emerging Technology Research and
Development (DOST-PCIEETRD)171 for Establishment of the Advanced Failure Analysis Laboratory, which reads:
APPROPRIATION PARTICULARS AMOUNT
CODE AUTHORIZED
Development, integration and coordination of the National
Research System for Industry, Energy and Emerging
A.02.a
Technology and Related Fields
Capital Outlays P 300,000,000
the appropriation code and the particulars appearing in the SARO did not correspond to the program specified in the GAA, whose particulars were
Research and Management Services(inclusive of the following activities: (1) Technological and Economic Assessment for Industry, Energy and
Utilities; (2) Dissemination of Science and Technology Information; and (3) Management of PCIERD Information System for Industry, Energy and
Utilities. Even assuming that Development, integration and coordination of the National Research System for Industry, Energy and Emerging
Technology and Related Fields– the particulars stated in the SARO – could fall under the broad program description of Research and Management
Services– as appearing in the SARO, it would nonetheless remain a new activity by reason of its not being specifically stated in the GAA. As such, the
DBM, sans legislative authorization, could not validly fund and implement such PAP under the DAP.
In defending the disbursements, however, the OSG contends that the Executive enjoyed sound discretion in implementing the budget given the
generality in the language and the broad policy objectives identified under the GAAs; 172 and that the President enjoyed unlimited authority to spend
the initial appropriations under his authority to declare and utilize savings, 173 and in keeping with his duty to faithfully execute the laws.
Although the OSG rightly contends that the Executive was authorized to spend in line with its mandate to faithfully execute the laws (which included
the GAAs), such authority did not translate to unfettered discretion that allowed the President to substitute his own will for that of Congress. He was
still required to remain faithful to the provisions of the GAAs, given that his power to spend pursuant to the GAAs was but a delegation to him from
Congress. Verily, the power to spend the public wealth resided in Congress, not in the Executive. 174 Moreover, leaving the spending power of the
Executive unrestricted would threaten to undo the principle of separation of powers.175
Congress acts as the guardian of the public treasury in faithful discharge of its power of the purse whenever it deliberates and acts on the budget
proposal submitted by the Executive.176 Its power of the purse is touted as the very foundation of its institutional strength, 177 and underpins "all other
legislative decisions and regulating the balance of influence between the legislative and executive branches of government." 178 Such enormous power
encompasses the capacity to generate money for the Government, to appropriate public funds, and to spend the money. 179 Pertinently, when it
exercises its power of the purse, Congress wields control by specifying the PAPs for which public money should be spent.
It is the President who proposes the budget but it is Congress that has the final say on matters of appropriations. 180For this purpose, appropriation
involves two governing principles, namely: (1) "a Principle of the Public Fisc, asserting that all monies received from whatever source by any part of
the government are public funds;" and (2) "a Principle of Appropriations Control, prohibiting expenditure of any public money without legislative
authorization."181To conform with the governing principles, the Executive cannot circumvent the prohibition by Congress of an expenditure for a PAP
by resorting to either public or private funds.182 Nor could the Executive transfer appropriated funds resulting in an increase in the budget for one PAP,
for by so doing the appropriation for another PAP is necessarily decreased. The terms of both appropriations will thereby be violated.
b.4 Third Requisite – Cross-border
augmentations from savings were
prohibited by the Constitution
By providing that 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 may be authorized to augment any item in the GAA "for their respective offices," Section 25(5),
supra, has delineated borders between their offices, such that funds appropriated for one office are prohibited from crossing over to another office
even in the guise of augmentation of a deficient item or items. Thus, we call such transfers of funds cross-border transfers or cross-border
augmentations.
To be sure, the phrase "respective offices" used in Section 25(5), supra, refers to the entire Executive, with respect to the President; the Senate, with
respect to the Senate President; the House of Representatives, with respect to the Speaker; the Judiciary, with respect to the Chief Justice; the
Constitutional Commissions, with respect to their respective Chairpersons.
Did any cross-border transfers or augmentations transpire?
During the oral arguments on January 28, 2014, Sec. Abad admitted making some cross-border augmentations, to wit:
JUSTICE BERSAMIN:
Alright, the whole time that you have been Secretary of Department of Budget and Management, did the Executive Department ever redirect any part
of savings of the National Government under your control cross border to another department?
SECRETARY ABAD:
Well, in the Memos that we submitted to you, such an instance, Your Honor
JUSTICE BERSAMIN:
Can you tell me two instances? I don’t recall having read your material.
SECRETARY ABAD:
Well, the first instance had to do with a request from the House of Representatives. They started building their e-library in 2010 and they had a budget
for about 207 Million but they lack about 43 Million to complete its 250 Million requirements. Prior to that, the COA, in an audit observation informed
the Speaker that they had to continue with that construction otherwise the whole building, as well as the equipments therein may suffer from serious
deterioration. And at that time, since the budget of the House of Representatives was not enough to complete 250 Million, they wrote to the President
requesting for an augmentation of that particular item, which was granted, Your Honor. The second instance in the Memos is a request from the
Commission on Audit. At the time they were pushing very strongly the good governance programs of the government and therefore, part of that is a
requirement to conduct audits as well as review financial reports of many agencies. And in the performance of that function, the Commission on Audit
needed information technology equipment as well as hire consultants and litigators to help them with their audit work and for that they requested
funds from the Executive and the President saw that it was important for the Commission to be provided with those IT equipments and litigators and
consultants and the request was granted, Your Honor.
JUSTICE BERSAMIN:
These cross border examples, cross border augmentations were not supported by appropriations…
SECRETARY ABAD:
They were, we were augmenting existing items within their… (interrupted)
JUSTICE BERSAMIN:
No, appropriations before you augmented because this is a cross border and the tenor or text of the Constitution is quite clear as far as I am
concerned. It says here, "The power to augment may only be made to increase any item in the General Appropriations Law for their respective
offices." Did you not feel constricted by this provision?
SECRETARY ABAD:
Well, as the Constitution provides, the prohibition we felt was on the transfer of appropriations, Your Honor. What we thought we did was to transfer
savings which was needed by the Commission to address deficiency in an existing item in both the Commission as well as in the House of
Representatives; that’s how we saw…(interrupted)
JUSTICE BERSAMIN:
So your position as Secretary of Budget is that you could do that?
SECRETARY ABAD:
In an extreme instances because…(interrupted)
JUSTICE BERSAMIN:
No, no, in all instances, extreme or not extreme, you could do that, that’s your feeling.
SECRETARY ABAD:
Well, in that particular situation when the request was made by the Commission and the House of Representatives, we felt that we needed to respond
because we felt…(interrupted).183
The records show, indeed, that funds amounting to ₱143,700,000.00 and ₱250,000,000.00 were transferred under the DAP respectively to the
COA184 and the House of Representatives.185 Those transfers of funds, which constituted cross-border augmentations for being from the Executive to
the COA and the House of Representatives, are graphed as follows: 186
The respondents further stated in their memorandum that the President "made available" to the "Commission on Elections the savings of his
department upon [its] request for funds…"187 This was another instance of a cross-border augmentation.
The respondents justified all the cross-border transfers thusly:
99. The Constitution does not prevent the President from transferring savings of his department to another department upon the latter’s request,
provided it is the recipient department that uses such funds to augment its own appropriation. In such a case, the President merely gives the other
department access to public funds but he cannot dictate how they shall be applied by that department whose fiscal autonomy is guaranteed by the
Constitution.188
In the oral arguments held on February 18, 2014, Justice Vicente V. Mendoza, representing Congress, announced a different characterization of the
cross-border transfers of funds as in the nature of "aid" instead of "augmentation," viz:
HONORABLE MENDOZA:
The cross-border transfers, if Your Honors please, is not an application of the DAP. What were these cross-border transfers? They are transfers of
savings as defined in the various General Appropriations Act. So, that makes it similar to the DAP, the use of savings. There was a cross-border
which appears to be in violation of Section 25, paragraph 5 of Article VI, in the sense that the border was crossed. But never has it been claimed that
the purpose was to augment a deficient item in another department of the government or agency of the government. The cross-border transfers, if
Your Honors please, were in the nature of [aid] rather than augmentations. Here is a government entity separate and independent from the Executive
Department solely in need of public funds. The President is there 24 hours a day, 7 days a week. He’s in charge of the whole operation although six
or seven heads of government offices are given the power to augment. Only the President stationed there and in effect in-charge and has the
responsibility for the failure of any part of the government. You have election, for one reason or another, the money is not enough to hold election.
There would be chaos if no money is given as an aid, not to augment, but as an aid to a department like COA. The President is responsible in a way
that the other heads, given the power to augment, are not. So, he cannot very well allow this, if Your Honor please.189
JUSTICE LEONEN:
May I move to another point, maybe just briefly. I am curious that the position now, I think, of government is that some transfers of savings is now
considered to be, if I’m not mistaken, aid not augmentation. Am I correct in my hearing of your argument?
HONORABLE MENDOZA:
That’s our submission, if Your Honor, please.
JUSTICE LEONEN:
May I know, Justice, where can we situate this in the text of the Constitution? Where do we actually derive the concepts that transfers of appropriation
from one branch to the other or what happened in DAP can be considered a said? What particular text in the Constitution can we situate this?
HONORABLE MENDOZA:
There is no particular provision or statutory provision for that matter, if Your Honor please. It is drawn from the fact that the Executive is the executive
in-charge of the success of the government.
JUSTICE LEONEN:
So, the residual powers labelled in Marcos v. Manglapus would be the basis for this theory of the government?
HONORABLE MENDOZA:
Yes, if Your Honor, please.
JUSTICE LEONEN:
A while ago, Justice Carpio mentioned that the remedy is might be to go to Congress. That there are opportunities and there have been opportunities
of the President to actually go to Congress and ask for supplemental budgets?
HONORABLE MENDOZA:
If there is time to do that, I would say yes.
JUSTICE LEONEN:
So, the theory of aid rather than augmentation applies in extra-ordinary situation?
HONORABLE MENDOZA:
Very extra-ordinary situations.
JUSTICE LEONEN:
But Counsel, this would be new doctrine, in case?
HONORABLE MENDOZA:
Yes, if Your Honor please.190
Regardless of the variant characterizations of the cross-border transfers of funds, the plain text of Section 25(5), supra, disallowing cross border
transfers was disobeyed. Cross-border transfers, whether as augmentation, or as aid, were prohibited under Section 25(5), supra.
4.
Sourcing the DAP from unprogrammed
funds despite the original revenue targets
not having been exceeded was invalid
Funding under the DAP were also sourced from unprogrammed funds provided in the GAAs for 2011, 2012,and 2013. The respondents stress,
however, that the unprogrammed funds were not brought under the DAP as savings, but as separate sources of funds; and that, consequently, the
release and use of unprogrammed funds were not subject to the restrictions under Section 25(5), supra.
The documents contained in the Evidence Packets by the OSG have confirmed that the unprogrammed funds were treated as separate sources of
funds. Even so, the release and use of the unprogrammed funds were still subject to restrictions, for, to start with, the GAAs precisely specified the
instances when the unprogrammed funds could be released and the purposes for which they could be used.
The petitioners point out that a condition for the release of the unprogrammed funds was that the revenue collections must exceed revenue targets;
and that the release of the unprogrammed funds was illegal because such condition was not met. 191
The respondents disagree, holding that the release and use of the unprogrammed funds under the DAP were in accordance with the pertinent
provisions of the GAAs. In particular, the DBM avers that the unprogrammed funds could be availed of when any of the following three instances
occur, to wit: (1) the revenue collections exceeded the original revenue targets proposed in the BESFs submitted by the President to Congress; (2)
new revenues were collected or realized from sources not originally considered in the BESFs; or(3) newly-approved loans for foreign assisted projects
were secured, or when conditions were triggered for other sources of funds, such as perfected loan agreements for foreign-assisted projects.192 This
view of the DBM was adopted by all the respondents in their Consolidated Comment. 193
The BESFs for 2011, 2012 and 2013 uniformly defined "unprogrammed appropriations" as appropriations that provided standby authority to incur
additional agency obligations for priority PAPs when revenue collections exceeded targets, and when additional foreign funds are
generated.194 Contrary to the DBM’s averment that there were three instances when unprogrammed funds could be released, the BESFs envisioned
only two instances. The third mentioned by the DBM – the collection of new revenues from sources not originally considered in the BESFs – was not
included. This meant that the collection of additional revenues from new sources did not warrant the release of the unprogrammed funds. Hence,
even if the revenues not considered in the BESFs were collected or generated, the basic condition that the revenue collections should exceed the
revenue targets must still be complied with in order to justify the release of the unprogrammed funds.
The view that there were only two instances when the unprogrammed funds could be released was bolstered by the following texts of the Special
Provisions of the 2011 and 2012 GAAs, to wit:
2011 GAA
1. Release of Fund. The amounts authorized herein shall be released only when the revenue collections exceed the original revenue targets
submitted by the President of the Philippines to Congress pursuant to Section 22, Article VII of the Constitution, including savings generated from
programmed appropriations for the year: PROVIDED, That collections arising from sources not considered in the aforesaid original revenue targets
may be used to cover releases from appropriations in this Fund: PROVIDED, FURTHER, That in case of newly approved loans for foreign-assisted
projects, the existence of a perfected loan agreement for the purpose shall be sufficient basis for the issuance of a SARO covering the loan proceeds:
PROVIDED, FURTHERMORE, That if there are savings generated from the programmed appropriations for the first two quarters of the year, the
DBM may, subject to the approval of the President, release the pertinent appropriations under the Unprogrammed Fund corresponding to only fifty
percent (50%) of the said savings net of revenue shortfall: PROVIDED, FINALLY, That the release of the balance of the total savings from
programmed appropriations for the year shall be subject to fiscal programming and approval of the President.
2012 GAA
1. Release of the Fund. The amounts authorized herein shall be released only when the revenue collections exceed the original revenue targets
submitted by the President of the Philippines to Congress pursuant to Section 22, Article VII of the Constitution: PROVIDED, That collections arising
from sources not considered in the aforesaid original revenue targets may be used to cover releases from appropriations in this Fund: PROVIDED,
FURTHER, That in case of newly approved loans for foreign-assisted projects, the existence of a perfected loan agreement for the purpose shall be
sufficient basis for the issuance of a SARO covering the loan proceeds.
As can be noted, the provisos in both provisions to the effect that "collections arising from sources not considered in the aforesaid original revenue
targets may be used to cover releases from appropriations in this Fund" gave the authority to use such additional revenues for appropriations funded
from the unprogrammed funds. They did not at all waive compliance with the basic requirement that revenue collections must still exceed the original
revenue targets.
In contrast, the texts of the provisos with regard to additional revenues generated from newly-approved foreign loans were clear to the effect that the
perfected loan agreement would be in itself "sufficient basis" for the issuance of a SARO to release the funds but only to the extent of the amount of
the loan. In such instance, the revenue collections need not exceed the revenue targets to warrant the release of the loan proceeds, and the mere
perfection of the loan agreement would suffice.
It can be inferred from the foregoing that under these provisions of the GAAs the additional revenues from sources not considered in the BESFs must
be taken into account in determining if the revenue collections exceeded the revenue targets. The text of the relevant provision of the 2013 GAA,
which was substantially similar to those of the GAAs for 2011 and 2012, already made this explicit, thus:
1. Release of the Fund. The amounts authorized herein shall be released only when the revenue collections exceed the original revenue targets
submitted by the President of the Philippines to Congress pursuant to Section 22, Article VII of the Constitution, including collections arising from
sources not considered in the aforesaid original revenue target, as certified by the BTr: PROVIDED, That in case of newly approved loans for foreign-
assisted projects, the existence of a perfected loan agreement for the purpose shall be sufficient basis for the issuance of a SARO covering the loan
proceeds.
Consequently, that there were additional revenues from sources not considered in the revenue target would not be enough. The total revenue
collections must still exceed the original revenue targets to justify the release of the unprogrammed funds (other than those from newly-approved
foreign loans).
The present controversy on the unprogrammed funds was rooted in the correct interpretation of the phrase "revenue collections should exceed the
original revenue targets." The petitioners take the phrase to mean that the total revenue collections must exceed the total revenue target stated in the
BESF, but the respondents understand the phrase to refer only to the collections for each source of revenue as enumerated in the BESF, with the
condition being deemed complied with once the revenue collections from a particular source already exceeded the stated target.
The BESF provided for the following sources of revenue, with the corresponding revenue target stated for each source of revenue, to wit:
TAX REVENUES
Taxes on Net Income and Profits
Taxes on Property
Taxes on Domestic Goods and Services
General Sales, Turnover or VAT
Selected Excises on Goods
Selected Taxes on Services
Taxes on the Use of Goods or Property or Permission to Perform Activities
Other Taxes
Taxes on International Trade and Transactions
NON-TAX REVENUES
Fees and Charges
BTR Income
Government Services
Interest on NG Deposits
Interest on Advances to Government Corporations
Income from Investments
Interest on Bond Holdings
Guarantee Fee
Gain on Foreign Exchange
NG Income Collected by BTr
Dividends on Stocks
NG Share from Airport Terminal Fee
NG Share from PAGCOR Income
NG Share from MIAA Profit
Privatization
Foreign Grants
Thus, when the Court required the respondents to submit a certification from the Bureau of Treasury (BTr) to the effect that the revenue collections
had exceeded the original revenue targets, 195 they complied by submitting certifications from the BTr and Department of Finance (DOF) pertaining to
only one identified source of revenue – the dividends from the shares of stock held by the Government in government-owned and controlled
corporations.
To justify the release of the unprogrammed funds for 2011, the OSG presented the certification dated March 4, 2011 issued by DOF Undersecretary
Gil S. Beltran, as follows:
This is to certify that under the Budget for Expenditures and Sources of Financing for 2011, the programmed income from dividends from shares of
stock in government-owned and controlled corporations is 5.5 billion.
This is to certify further that based on the records of the Bureau of Treasury, the National Government has recorded dividend income amounting to
₱23.8 billion as of 31 January 2011. 196
For 2012, the OSG submitted the certification dated April 26, 2012 issued by National Treasurer Roberto B. Tan, viz:
This is to certify that the actual dividend collections remitted to the National Government for the period January to March 2012 amounted to ₱19.419
billion compared to the full year program of ₱5.5 billion for 2012. 197
And, finally, for 2013, the OSG presented the certification dated July 3, 2013 issued by National Treasurer Rosalia V. De Leo n, to wit:
This is to certify that the actual dividend collections remitted to the National Government for the period January to May 2013 amounted to ₱12.438
billion compared to the full year program of ₱10.0 198 billion for 2013.
Moreover, the National Government accounted for the sale of the right to build and operate the NAIA expressway amounting to ₱11.0 billion in June
2013.199
The certifications reflected that by collecting dividends amounting to ₱23.8 billion in 2011, ₱19.419 billion in 2012, and ₱12.438 billion in 2013 the BTr
had exceeded only the ₱5.5 billion in target revenues in the form of dividends from stocks in each of 2011 and 2012, and only the ₱10 billion in target
revenues in the form of dividends from stocks in 2013.
However, the requirement that revenue collections exceed the original revenue targets was to be construed in light of the purpose for which the
unprogrammed funds were incorporated in the GAAs as standby appropriations to support additional expenditures for certain priority PAPs should the
revenue collections exceed the resource targets assumed in the budget or when additional foreign project loan proceeds were realized. The
unprogrammed funds were included in the GAAs to provide ready cover so as not to delay the implementation of the PAPs should new or additional
revenue sources be realized during the year. 200 Given the tenor of the certifications, the unprogrammed funds were thus not yet supported by the
corresponding resources.201
The revenue targets stated in the BESF were intended to address the funding requirements of the proposed programmed appropriations. In contrast,
the unprogrammed funds, as standby appropriations, were to be released only when there were revenues in excess of what the programmed
appropriations required. As such, the revenue targets should be considered as a whole, not individually; otherwise, we would be dealing with artificial
revenue surpluses. The requirement that revenue collections must exceed revenue target should be understood to mean that the revenue collections
must exceed the total of the revenue targets stated in the BESF. Moreover, to release the unprogrammed funds simply because there was an excess
revenue as to one source of revenue would be an unsound fiscal management measure because it would disregard the budget plan and foster
budget deficits, in contravention of the Government’s surplus budget policy. 202
We cannot, therefore, subscribe to the respondents’ view.
5.
Equal protection, checks and balances,
and public accountability challenges
The DAP is further challenged as violative of the Equal Protection Clause, the system of checks and balances, and the principle of public
accountability.
With respect to the challenge against the DAP under the Equal Protection Clause, 203 Luna argues that the implementation of the DAP was "unfair as it
[was] selective" because the funds released under the DAP was not made available to all the legislators, with some of them refusing to avail
themselves of the DAP funds, and others being unaware of the availability of such funds. Thus, the DAP practised "undue favoritism" in favor of select
legislators in contravention of the Equal Protection Clause.
Similarly, COURAGE contends that the DAP violated the Equal Protection Clause because no reasonable classification was used in distributing the
funds under the DAP; and that the Senators who supposedly availed themselves of said funds were differently treated as to the amounts they
respectively received.
Anent the petitioners’ theory that the DAP violated the system of checks and balances, Luna submits that the grant of the funds under the DAP to
some legislators forced their silence about the issues and anomalies surrounding the DAP. Meanwhile, Belgica stresses that the DAP, by allowing the
legislators to identify PAPs, authorized them to take part in the implementation and execution of the GAAs, a function that exclusively belonged to the
Executive; that such situation constituted undue and unjustified legislative encroachment in the functions of the Executive; and that the President
arrogated unto himself the power of appropriation vested in Congress because NBC No. 541 authorized the use of the funds under the DAP for PAPs
not considered in the 2012 budget.
Finally, the petitioners insist that the DAP was repugnant to the principle of public accountability enshrined in the Constitution, 204 because the
legislators relinquished the power of appropriation to the Executive, and exhibited a reluctance to inquire into the legality of the DAP.
The OSG counters the challenges, stating that the supposed discrimination in the release of funds under the DAP could be raised only by the affected
Members of Congress themselves, and if the challenge based on the violation of the Equal Protection Clause was really against the constitutionality
of the DAP, the arguments of the petitioners should be directed to the entitlement of the legislators to the funds, not to the proposition that all of the
legislators should have been given such entitlement.
The challenge based on the contravention of the Equal Protection Clause, which focuses on the release of funds under the DAP to legislators, lacks
factual and legal basis. The allegations about Senators and Congressmen being unaware of the existence and implementation of the DAP, and about
some of them having refused to accept such funds were unsupported with relevant data. Also, the claim that the Executive discriminated against
some legislators on the ground alone of their receiving less than the others could not of itself warrant a finding of contravention of the Equal Protection
Clause. The denial of equal protection of any law should be an issue to be raised only by parties who supposedly suffer it, and, in these cases, such
parties would be the few legislators claimed to have been discriminated against in the releases of funds under the DAP. The reason for the
requirement is that only such affected legislators could properly and fully bring to the fore when and how the denial of equal protection occurred, and
explain why there was a denial in their situation. The requirement was not met here. Consequently, the Court was not put in the position to determine
if there was a denial of equal protection. To have the Court do so despite the inadequacy of the showing of factual and legal support would be to
compel it to speculate, and the outcome would not do justice to those for whose supposed benefit the claim of denial of equal protection has been
made.
The argument that the release of funds under the DAP effectively stayed the hands of the legislators from conducting congressional inquiries into the
legality and propriety of the DAP is speculative. That deficiency eliminated any need to consider and resolve the argument, for it is fundamental that
speculation would not support any proper judicial determination of an issue simply because nothing concrete can thereby be gained. In order to
sustain their constitutional challenges against official acts of the Government, the petitioners must discharge the basic burden of proving that the
constitutional infirmities actually existed. 205 Simply put, guesswork and speculation cannot overcome the presumption of the constitutionality of the
assailed executive act.
We do not need to discuss whether or not the DAP and its implementation through the various circulars and memoranda of the DBM transgressed the
system of checks and balances in place in our constitutional system. Our earlier expositions on the DAP and its implementing issuances infringing the
doctrine of separation of powers effectively addressed this particular concern.
Anent the principle of public accountability being transgressed because the adoption and implementation of the DAP constituted an assumption by the
Executive of Congress’ power of appropriation, we have already held that the DAP and its implementing issuances were policies and acts that the
Executive could properly adopt and do in the execution of the GAAs to the extent that they sought to implement strategies to ramp up or accelerate
the economy of the country.
6.
Doctrine of operative fact was applicable
After declaring the DAP and its implementing issuances constitutionally infirm, we must now deal with the consequences of the declaration.
Article 7 of the Civil Code provides:
Article 7. Laws are repealed only by subsequent ones, and their violation or non-observance shall not be excused by disuse, or custom or practice to
the contrary.
When the courts declared a law to be inconsistent with the Constitution, the former shall be void and the latter shall govern.
Administrative or executive acts, orders and regulations shall be valid only when they are not contrary to the laws or the Constitution.
A legislative or executive act that is declared void for being unconstitutional cannot give rise to any right or obligation. 206 However, 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:207
The decision now on appeal reflects the orthodox view that an unconstitutional act, for that matter an executive order or a municipal ordinance
likewise suffering from that infirmity, cannot be the source of any legal rights or duties. Nor can it justify any official act taken under it. Its repugnancy
to the fundamental law once judicially declared results in its being to all intents and purposes a mere scrap of paper. As the new Civil Code puts it:
‘When the courts declare a law to be inconsistent with the Constitution, the former shall be void and the latter shall govern.’ Administrative or
executive acts, orders and regulations shall be valid only when they are not contrary to the laws of the Constitution. It is understandable why it should
be so, the Constitution being supreme and paramount. Any legislative or executive act contrary to its terms cannot survive.
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.
In the language of an American Supreme Court decision: ‘The actual existence of a statute, prior to such a determination [of unconstitutionality], is an
operative fact and may have consequences which cannot justly be ignored. The past cannot always be erased by a new judicial declaration. The
effect of the subsequent ruling as to invalidity may have to be considered in various aspects, with respect to particular relations, individual and
corporate, and particular conduct, private and official.’"
The doctrine of operative fact recognizes the existence of the law or executive act prior to the determination of its unconstitutionality as an operative
fact that produced consequences that cannot always be erased, ignored or disregarded. In short, it nullifies the void law or executive act but sustains
its effects. It provides an exception to the general rule that a void or unconstitutional law produces no effect. 208 But its use must be subjected to great
scrutiny and circumspection, and it cannot be invoked to validate an unconstitutional law or executive act, but is resorted to only as a matter of equity
and fair play.209 It applies only to cases where extraordinary circumstances exist, and only when the extraordinary circumstances have met the
stringent conditions that will permit its application.
We find the doctrine of operative fact applicable to the adoption and implementation of the DAP. Its application to the DAP proceeds from equity and
fair play. The consequences resulting from the DAP and its related issuances could not be ignored or could no longer be undone.
To be clear, the doctrine of operative fact extends to a void or unconstitutional executive act. The term executive act is broad enough to include any
and all acts of the Executive, including those that are quasi legislative and quasi-judicial in nature. The Court held so in Hacienda Luisita, Inc. v.
Presidential Agrarian Reform Council:210
Nonetheless, the minority is of the persistent view that the applicability of the operative fact doctrine should be limited to statutes and rules and
regulations issued by the executive department that are accorded the same status as that of a statute or those which are quasi-legislative in nature.
Thus, the minority concludes that the phrase ‘executive act’ used in the case of De Agbayani v. Philippine National Bank refers only to acts, orders,
and rules and regulations that have the force and effect of law. The minority also made mention of the Concurring Opinion of Justice Enrique
Fernando in Municipality of Malabang v. Benito, where it was supposedly made explicit that the operative fact doctrine applies to executive acts,
which are ultimately quasi-legislative in nature.
We disagree. For one, neither the De Agbayani case nor the Municipality of Malabang case elaborates what ‘executive act’ mean. Moreover, while
orders, rules and regulations issued by the President or the executive branch have fixed definitions and meaning in the Administrative Code and
jurisprudence, the phrase ‘executive act’ does not have such specific definition under existing laws. It should be noted that in the cases cited by the
minority, nowhere can it be found that the term ‘executive act’ is confined to the foregoing. Contrarily, the term ‘executive act’ is broad enough to
encompass decisions of administrative bodies and agencies under the executive department which are subsequently revoked by the agency in
question or nullified by the Court.
A case in point is the concurrent appointment of Magdangal B. Elma (Elma) as Chairman of the Presidential Commission on Good Government
(PCGG) and as Chief Presidential Legal Counsel (CPLC) which was declared unconstitutional by this Court in Public Interest Center, Inc. v. Elma. In
said case, this Court ruled that the concurrent appointment of Elma to these offices is in violation of Section 7, par. 2, Article IX-B of the 1987
Constitution, since these are incompatible offices. Notably, the appointment of Elma as Chairman of the PCGG and as CPLC is, without a question,
an executive act. Prior to the declaration of unconstitutionality of the said executive act, certain acts or transactions were made in good faith and in
reliance of the appointment of Elma which cannot just be set aside or invalidated by its subsequent invalidation.
In Tan v. Barrios, this Court, in applying the operative fact doctrine, held that despite the invalidity of the jurisdiction of the military courts over civilians,
certain operative facts must be acknowledged to have existed so as not to trample upon the rights of the accused therein. Relevant thereto, in
Olaguer v. Military Commission No. 34, it was ruled that ‘military tribunals pertain to the Executive Department of the Government and are simply
instrumentalities of the executive power, provided by the legislature for the President as Commander-in-Chief to aid him in properly commanding the
army and navy and enforcing discipline therein, and utilized under his orders or those of his authorized military representatives.’
Evidently, the operative fact doctrine is not confined to statutes and rules and regulations issued by the executive department that are accorded the
same status as that of a statute or those which are quasi-legislative in nature.
Even assuming that De Agbayani initially applied the operative fact doctrine only to executive issuances like orders and rules and regulations, said
principle can nonetheless be applied, by analogy, to decisions made by the President or the agencies under the executive department. This doctrine,
in the interest of justice and equity, can be applied liberally and in a broad sense to encompass said decisions of the executive branch. In keeping
with the demands of equity, the Court can apply the operative fact doctrine to acts and consequences that resulted from the reliance not only on a law
or executive act which is quasi-legislative in nature but also on decisions or orders of the executive branch which were later nullified. This Court is not
unmindful that such acts and consequences must be recognized in the higher interest of justice, equity and fairness.
Significantly, a decision made by the President or the administrative agencies has to be complied with because it has the force and effect of law,
springing from the powers of the President under the Constitution and existing laws. Prior to the nullification or recall of said decision, it may have
produced acts and consequences in conformity to and in reliance of said decision, which must be respected. It is on this score that the operative fact
doctrine should be applied to acts and consequences that resulted from the implementation of the PARC Resolution approving the SDP of HLI. (Bold
underscoring supplied for emphasis)
In Commissioner of Internal Revenue v. San Roque Power Corporation, 211 the Court likewise declared that "for the operative fact doctrine to apply,
there must be a ‘legislative or executive measure,’ meaning a law or executive issuance." Thus, the Court opined there that the operative fact doctrine
did not apply to a mere administrative practice of the Bureau of Internal Revenue, viz:
Under Section 246, taxpayers may rely upon a rule or ruling issued by the Commissioner from the time the rule or ruling is issued up to its reversal by
the Commissioner or this Court. The reversal is not given retroactive effect. This, in essence, is the doctrine of operative fact. There must, however,
be a rule or ruling issued by the Commissioner that is relied upon by the taxpayer in good faith. A mere administrative practice, not formalized into a
rule or ruling, will not suffice because such a mere administrative practice may not be uniformly and consistently applied. An administrative practice, if
not formalized as a rule or ruling, will not be known to the general public and can be availed of only by those with informal contacts with the
government agency.
It is clear from the foregoing that the adoption and the implementation of the DAP and its related issuances were executive acts.1avvphi1 The DAP
itself, as a policy, transcended a merely administrative practice especially after the Executive, through the DBM, implemented it by issuing various
memoranda and circulars. The pooling of savings pursuant to the DAP from the allotments made available to the different agencies and departments
was consistently applied throughout the entire Executive. With the Executive, through the DBM, being in charge of the third phase of the budget cycle
– the budget execution phase, the President could legitimately adopt a policy like the DAP by virtue of his primary responsibility as the Chief
Executive of directing the national economy towards growth and development. This is simply because savings could and should be determined only
during the budget execution phase.
As already mentioned, the implementation of the DAP resulted into the use of savings pooled by the Executive to finance the PAPs that were not
covered in the GAA, or that did not have proper appropriation covers, as well as to augment items pertaining to other departments of the Government
in clear violation of the Constitution. To declare the implementation of the DAP unconstitutional without recognizing that its prior implementation
constituted an operative fact that produced consequences in the real as well as juristic worlds of the Government and the Nation is to be impractical
and unfair. Unless the doctrine is held to apply, the Executive as the disburser and the offices under it and elsewhere as the recipients could be
required to undo everything that they had implemented in good faith under the DAP. That scenario would be enormously burdensome for the
Government. Equity alleviates such burden.
The other side of the coin is that it has been adequately shown as to be beyond debate that the implementation of the DAP yielded undeniably
positive results that enhanced the economic welfare of the country. To count the positive results may be impossible, but the visible ones, like public
infrastructure, could easily include roads, bridges, homes for the homeless, hospitals, classrooms and the like. Not to apply the doctrine of operative
fact to the DAP could literally cause the physical undoing of such worthy results by destruction, and would result in most undesirable wastefulness.
Nonetheless, as Justice Brion has pointed out during the deliberations, the doctrine of operative fact does not always apply, and is not always the
consequence of every declaration of constitutional invalidity. It can be invoked only in situations where the nullification of the effects of what used to
be a valid law would result in inequity and injustice; 212but where no such result would ensue, the general rule that an unconstitutional law is totally
ineffective should apply.
In that context, as Justice Brion has clarified, the doctrine of operative fact can apply only to the PAPs that can no longer be undone, and whose
beneficiaries relied in good faith on the validity of the DAP, but cannot apply to the authors, proponents and implementors of the DAP, unless there
are concrete findings of good faith in their favor by the proper tribunals determining their criminal, civil, administrative and other liabilities.
WHEREFORE, the Court PARTIALLY GRANTS the petitions for certiorari and prohibition; and DECLARES the following acts and practices under the
Disbursement Acceleration Program, National Budget Circular No. 541 and related executive issuances UNCONSTITUTIONAL for being in violation
of Section 25(5), Article 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 non-compliance with the conditions provided in the relevant General Appropriations Acts.
SO ORDERED.
EN BANC
January 23, 2018
G.R. No. 219683
HON. JONATHAN A. DELA CRUZ and HON. GUSTA VO S. TAMBUNTING, as MEMBERS OF THE HOUSE OF REPRESENTATIVES and as
Taxpayers, Petitioners
vs.
HON. PAQUITO N. OCHOA JR., in his capacity as the EXECUTIVE SECRETARY; HON. JOSEPH EMILIO A. ABAYA, in his capacity as the
SECRETARY OF THE DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS; HON. FLORENCIO B. ABAD, in his capacity as the
SECRETARY OF THE DEPARTMENT OF BUDGET AND MANAGEMENT; and HON. ROSALIA V. DE LEON, in her capacity as the NATIONAL
TREASURER, Respondents
DECISION
BERSAMIN, J.:
In this special civil action for certiorari and prohibition, the petitioners, as Members of the House of Representatives and as taxpayers, assail the
implementation of the Motor Vehicle License PlateStandardization Program (MVPSP) of the Land Transportation Office (LTO) 1 by using funds
appropriated under Republic Act No. 10633 (General Appropriations Act of 2014), hereinafter referred to as the 2014 GAA. 2
This case was preceded by the ruling in Jacomille v. Abaya,3 which involved the procurement for the MVPSP. On May 19, 2014, Reynaldo M.
Jacomille (Jacomille) filed in this Court a petition for certiorari and prohibition assailing the legality of the procurement under the MVPSP. He insisted
therein that the MVPSP contract was void for lack of adequate budgetary appropriations in the General Appropriations Act of 2013 (2013 GAA) as
well as for the failure of the procuring entity to obtain the required Multi-Year Obligational Authority (MYOA) from the Department of Budget and
Management (DBM).4
In the decision promulgated on April 22, 2015, the Court dismissed Jacomille's petition for having been rendered moot and academic by the passage
of the 2014 GAA that already included the full appropriation necessary to fund the MVPSP. Nonetheless, the Court expressly observed therein that
the appropriation made in the 2013 GAA had been insufficient for the MVPSP; and that the procurement process had been tainted with irregularities,
to wit:
x x x [T]he project did not have the adequate appropriation when its procurement was commenced on February 20, 2013, contrary to the provisions of
Sections 5a, 7 and 20 of R.A. No. 9184. The DOTC and the LTO likewise failed to secure the MYOA before the start of the procurement process even
though MVPSP is MYP [Multi-Year Project] involving MYC [Multi-Year Contract]. All these irregularities tainted the earlier procurement process and
rendered it null and void.
At the outset, however, the Court has stated that the present petition has been rendered moot and academic by the appropriation for the full amount
of the project fund in GAA 2014. Said appropriation "cured" whatever defect the process had. 5
Jacomille moved for reconsideration but the Court, denying his motion on July 25, 2016,6 reiterated that:
x x x Congress had appropriated the amount of ₱4,843,753,000.00 for the MVPSP project. Consequently, the Court deemed it proper not to
question the wisdom of the legislative department in appropriating the full budget of the MVPSP in the GAA 2014. As the MVPSP was
adequately funded by law when it was signed by the contracting parties, the petition became moot and academic. With that, the duty of the Court in
the present petition was discharged. (Bold underscoring supplied for emphasis) 7
Antecedents
Given the intimate connection between this case and Jacomille v. Abaya, supra, we adopt and reiterate the summary of the factual antecedents
rendered in Jacomille v. Abaya for the sake of consistency, as follows:
The Department of Transportation and Communications (DOTC) is the primary policy, planning, programming, coordinating, implementing, regulating,
and administrative entity of the Executive Branch of the government in the promotion, development and regulation of dependable and coordinated
networks of transportation and communications systems as well as in the fast, safe, efficient, and reliable postal, transportation and communication
services. One of its line agencies is the Land Transportation Office (LTO) which is tasked, among others, to register motor vehicles and regulate their
operation.
In accordance with its mandate, the LTO is required to issue motor vehicle license plates which serve to identify the registered vehicles as they ply
the roads. These plates should at all times be conspicuously displayed on the front and rear portions of the registered vehicles to assure quick and
expedient identification should there be a need, as in the case of motor vehicle accidents or infraction of traffic rules.
Recently, the LTO formulated the Motor Vehicle License Plate Standardization Program (MVPSP) to supply the new license plates for both old and
new vehicle registrants. On February 20, 2013, the DOTC published in newspapers of general circulation the Invitation To Bid for the supply and
delivery of motor vehicle license plates for the MVPSP, to wit:
The Department of Transportation and Communications (DOTC)/Land Transportation Office (L TO) are inviting bids for its LTO MV Plate
Standardization Program which involves the procurement, supply and delivery of Motor Vehicle License Plates. The program shall run from July 2013
until June 2018 when the supply and delivery of the Motor Vehicle License Plates of the L TO MV Plate Standardization program is completed.
The LTO, through the General Appropriations Act, intends to apply the sum of Three Billion Eight Hundred Fifty One Million Six Hundred Thousand
One Hundred Pesos (Php 3,851,600,100.00) being the Approved Budget for the Contract (ABC), for payment of approximately [₱]5,236,439 for Motor
Vehicles (MV) and approximately [₱]9,968,017 for motorcycles (MC), under the contract for the Supply and Delivery of Motor Vehicle License Plate for
the Land Transportation Office Motor Vehicle License Plate Standardization Program or the "LTO MV Plate Standardization Program".
On February 25, 2013, the DOTC Bids and Awards Committee (BAC) issued BAC General Bid Bulletin No. 002-2013 setting the Submission and
Opening of Bids on March 25, 2013. On February 28, 2013, the first Pre-Bid Conference was held at the offices of the BAC.
On March 6, 2013, BAC General Bid Bulletin No. 003-2013 was issued, amending paragraph 1 of the Invitation to Bid, to wit:
The Department of Transportation and Communication (DOTC)/Land Transportation Office (LTO), through the General Appropriations Act, intends to
apply the sum of Three Billion Eight Hundred Fifty One Million Six Hundred Thousand One Hundred Pesos (Php 3,851,600, 100.00) being the
Approved Budget for the Contract (ABC), to payments for:
a. Lot 1 - Motor Vehicle License Plates (MV): 5,236,439 pairs for MV amounting to Two Billion Three Hundred Fifty Six Million Three Hundred Ninety
Seven Thousand Five Hundred Fifty Pesos (Php 2,356,397,550.00)
b. Lot 2 - Motorcycles Plates (MC): 9,968,017 pieces for MC amounting to One Billion Four Hundred Ninety Five Million Two Hundred Two Thousand
Five Hundred Fifty Pesos (Php 1,495,202,550.00) under the contract for the Supply and Delivery of Motor Vehicle License Plate for the Land
Transportation Office Motor Vehicle License Plate Standardization Program (herein after the "LTO MV Plate Standardization Program").
a. The joint venture of the Netherlands' J. Knieriem B.V. Goes and local company Power Plates Development Concepts. Inc. (JKG-Power Plates); and
b. The joint venture of Spain's Industrias Samar't and local company Datatrail Corporation (Industrias Samar't-Datatrial).
As the only eligible bidders, their financial proposals were then opened to reveal that JKG-Power Plates made the lowest offers. For Lot 1, JKG-
Power Plates proposed to supply the MV License Plates for a total of ₱1 .98 Billion, while Industrias Samar't-Datatrial offered it at P2.03 Billion. On
the other hand, for Lot 2, JKG-Power Plates aimed to supply the MC License Plates for a total of ₱l.196 Billion, while Industrias Samar't-Datatrial's
offer was at ₱l.275 Billion.
On July 22, 2013, the DOTC issued the Notice of Award to JKG-Power Plates.2 It was only on August 8, 2013 [,] however, when JKGPower Plates
signified its conforme on the Notice of Award.3 On August 12, 2013, the Notice of Award was posted in the DOTC website; while the A ward Notice
Abstract was posted in the Philippine Government Electronic Procurement System (PhilGEPS) website on even date.
Despite the notice of award, the contract signing of the project was not immediately undertaken. On February 17, 2014, the DOTC issued the Notice
to Proceed4 to JKG-Power Plates and directed it to commence delivery of the items within seven (7) calendar days from the date of the issuance of
the said notice.
On February 21, 2014, the contract for MVPSP was finally signed by Jose Perpetuo M. Lotilla, as DOTC Undersecretary for Legal Affairs, and by
Christian S. Calalang, as Chief Executive Officer of JKG-Power Plates. It was approved by public respondent Joseph Emilio A. Abaya (Secretary
Abaya),as DOTC Secretary.
On March 11, 2014, the Senate Committee on Public Services, pursuant to Resolution No. 31, conducted an inquiry in aid of legislation on the
reported delays in the release of motor vehicle license plates, stickers and tags by the LTO. On April 4, 2014, JKG-Power Plates delivered the first
batch of plates to the DOTC/LTO.8
The Commission on Audit (COA) issued three Audit Observation Memoranda (AOM) to the LTO, namely: AOM No. 14-013 dated September 2, 2014;
AOM No. 14-014 dated November 17, 2014; and AOM No. 15-004 dated March 5, 2015. The COA later on issued Notice of Suspension No. 15- 002-
101-(14) dated April 10, 2015.9
The COA ultimately issued Notice of Disallowance No. 2015-001-101-(l4) dated July 13, 2015 stating therein that it had disallowed the advance
payment of P477,901,329.00 to JKG Power Plates for the supply and delivery of motor vehicle plates on the ground that the transaction had been
irregular and illegal for being in violation of Sections 46(1) and 47, Book V of the Administrative Code of 1987; Sections 85(1) and 86 of
the Government Auditing Code of the Philippines; DBM Circular Letter No. 2004-12 dated October 27, 2004; and the implementing rules of
the Government Procurement Reform Act. 10
On September 1, 2015, the petitioners instituted this special civil action. Initially, the Court consolidated this case with G.R. No. 212381
(Jacomille).11 However, the cases were deconsolidated and treated separately 12 because G.R. No. 212381 raised legal issues centering on the
procurement of the MVPSP but this case raised issues referring to the implementation of the MVPSP.
To be clear, the petitioners herein do not seek the review of the COA's issuance of Notice of Disallowance No. 2015-001-101-(14).1âwphi1 They only
assail the constitutionality of the implementation of the MVPSP using funds appropriated under the 2014 GAA, arguing that:
A. The transfer of the appropriation for the Motor Vehicle Registration and Driver's Licensing Regulatory Services under the GAA 2014 and the
application and implementation of said transferred appropriation to the L TO-MVPSP is unconstitutional.
xxx
B. The fact that L TO-MVPSP does not appear as an item under the Motor Vehicle Registration and Driver's Licensing Regulatory Services in effect
deprives the President of its veto powers under Section 27 .(2) of Article VI of the Constitution and must be declared as unconstitutional.
xxx
C. The public expenditure in the amount of [₱]3,186,008,860 for the LTO-MVP SP in the absence of an appropriation under the GAA 2013 and GAA
2014 is unconstitutional.13
On June 14, 2016, the Court issued a temporary restraining order enjoining the release and distribution of the license plates for both motor vehicles
and motorcycles.14
The Office of the Solicitor General (OSG) filed its Manifestation and Motion in Lieu of Comment, 15 whereby it affirmed that the 2014 GAA did not
contain an appropriation for the MVPSP, a fact that was known to the DOTC; that the transfer of funds allotted for Motor Vehicle Registration and
Driver's Licensing Regulatory Servicesunder the 2014 GAA to the MVPSP was contrary to the Constitution because the DOTC Secretary lacked
the authority to transfer funds, and because the timing of the transfer belied the existence of savings; and that without a valid transfer or realignment,
the release of funds for the MVPSP violated Section 29, Article VI of the Constitution.
In its own Comment and Opposition-in-Intervention, 16 JKG-Power Plates contended that the legality of the MVPSP had been settled by the Court in
its decision and resolution in G.R. No. 212381 (Jacomille); and that the Court could not yet rule on the propriety of Notice of Disallowance No. 2015-
001-101-(14) because it was still pending review by the COA.
On his part, respondent Joseph Emilio Abaya (Abaya), the former Secretary of the Department of Transportation and Communication
(DOTC),17 submitted his own Consolidated Comment vis-a-vis the petition and the OSG's Manifestation and Motion in Lieu of Comment. 18 He
represented therein that Jacomille v. Abaya constituted stare decisis; that the requisites for judicial review were not present; that the amount of
₱4,483,700,000.00 under the description Motor Vehicle Registration and Driver's Licensing Regulatory Services in the 2014 GAA included the
allocation for the implementation of the MVPSP; and that the use of the amount appropriated under the 2014 GAA to implement the MVPSP did not
violate the Constitution.
In their Reply to the Consolidated Comment, the petitioners maintained that there was no sufficient appropriation in the 2013 GAA when the public
bidding for the MVPSP was conducted; that any discussion on the funding of the MVPSP under the 2014 GAA had no bearing in reality on the
MVPSP that was bid in 2013 without sufficient appropriation; and that the principles of stare decisis and res judicata did not apply because the ruling
in G.R. No. 212381 (Jacomille) was still pending reconsideration at the time when this case was commenced.
Issues
The primordial issue is whether or not the 2014 GAA included an appropriation for the implementation of the MVPSP.
The second issue is whether or not the use of the appropriation under 2014 GAA for the implementation of the MVPSP was constitutional.19
Ruling of the Court
The Court affirms that there was an appropriation for the MVPSP under the 2014 GAA; and that the use of such appropriation for the implementation
of the MVPSP was constitutional.
1.
The decision in G.R. No.212381 (Jacomille) constituted stare decisis
In Jacomille v. Abaya,20 the Court, upholding the legality of the procurement of the MVPSP, opined that whatever defects had attended its
procurement were "cured" by the appropriation for the full amount of the project under the 2014 GAA. The Court specifically stated that:
The Court agrees with the OSG that the present controversy has been rendered moot by the passage of GAA 2014. The essence of petitioner's case
is that MVPSP was not sufficiently funded under GAA 2013. Because of GAA 2014, however, the amount of IUl-,843,753,000.00 had been
appropriated by Congress to MVPSP before the contract was entered into on February 21, 2014.
By appropriating the amount of ₱4,843,753,000.00 for MVPSP, Congress agreed with the DOTC and the LTO that the said project should be funded
and implemented. Verily, the Court cannot question the wisdom of the legislative department in appropriating the full budget of MVPSP in GAA 2014.
Thus, it is settled that MVPSP was adequately funded before the contract was signed by the parties. Petitioner even admits, and the Court takes
judicial notice, that the new vehicle plates under MVPSP are being distributed by the LTO and released to new vehicle owners.
xxxx
Conclusion
The Court concludes that MVPSP did not follow the timelines provided in Sec. 37 of R.A. No. 9184. As earlier recited, the project did not have the
adequate appropriation when its procurement was commenced on February 20, 2013, contrary to the provisions of Sections 5a, 7 and 20 of R.A. No.
9184. The DOTC and the LTO likewise failed to secure the MYOA before the start of the procurement process even though MVPSP is MYP involving
MYC. All these irregularities tainted the earlier procurement process and rendered it null and void.
At the outset, however, the Court has stated that the present petition has been rendered moot and academic by the appropriation for the full amount
of the project fund in GAA 2014. Said appropriation "cured" whatever defect the process had. 21
The doctrine of stare decisis et non quieta movere is fully applicable. The doctrine means -
"[T]o adhere to precedents, and not to unsettle things which are established." Under the doctrine, when this Court has once laid down a principle of
law as applicable to a certain state of facts, it will adhere to that principle, and apply it to all future cases, where facts are substantially the same;
regardless of whether the parties and property are the same. The doctrine of stare decisis is based upon the legal principle or rule involved and not
upon the judgment, which results therefrom. In this particular sense, stare decisis differs from res judicata, which is based upon the judgment.
The doctrine of stare decisis is one of policy grounded on the necessity for securing certainty and stability of judicial decisions, thus:
Time and again, the Court has held that it is a very desirable and necessary judicial practice that when a court has laid down a principle of law as
applicable to a certain state of facts, it will adhere to that principle and apply it to all future cases in which the facts are substantially the same. Stare
decisis et non quieta movere. Stand by the decisions and disturb not what is settled. Stare decisis simply means that for the sake of certainty, a
conclusion reached in one case should be applied to those that follow if the facts are substantially the same, even though the parties may be different.
It proceeds from the first principle of justice that, absent any powerful countervailing considerations, like cases ought to be decided alike. Thus, where
the same questions relating to the same event have been put forward by the parties similarly situated as in a previous case litigated and decided by a
competent court, the rule of stare decisis is a bar to any attempt to relitigate the same [issue].22
Even if G.R. No. 212381 (Jacomille) focused on the legality of the procurement of the MVPSP because of the inadequacy of the funding for the
project under the 2013 GAA, the Court nonetheless determined and declared therein that the 2014 GAA contained an appropriation for the MVPSP,
and held that the MVPSP could be validly implemented using the funds appropriated under the 2014 GAA. With G.R. No. 212381 (Jacomille) having
thus fully examined and definitively ruled upon the existence of sufficient funding for the MVPSP, both for procurement and implementation, the
 pronouncement therein on the applicability of the appropriation under the 2104 GAA for the MVPSP - a question of law – now constituted stare THE CHAIRMAN (SEN. OSMENA). All right. So why don't you present your budget?
decisis that precluded further contention on the same matter. We can do it quickly because I've already read it. But you might want just to do it for the record para nasa transcript.
2. The implementation of thee MVPSP was properly funded under the appropriation for Motor Vehicle Registration and Driver's Licensing MR. TAN. Yes, Your Honor.
Regulatory Services in the 2014 GAA; hence, no unconstitutionally transfer of funds took place For the year 2014, we have the proposed plans and programs. The LTO IT System, meaning, this intends to be the replacement for the current IT
The following discussion will further substantiate the valid implementation of the MVPSP because no funds were unconstitutionally transferred for the system which expired in February of this year. Second, we have the Motor Vehicle Inspection System. This is a program than intends to privatize the
purpose. inspection of motor vehicles. It's presently with the PPP Center for the bidding and a transactional advisor. Third, we have the Motor Vehicle License
The DOTC serves as the primary policy, planning, programming, coordinating, implementing, regulating, and administrative entity of the Executive Plate Standardization Program. The bidding for this is presently with the DOTC.
Branch of the Government in the promotion, development and regulation of dependable and coorfinated transportation networks as well as fast, safe, xxxx
efficient, and reliable transportation services. 23 As a line agency of the DOTC, the L TO is tasked, among others, with the registration of motor For our MOOE, the increase is mainly due to two factors: the implementation of the our Plate Standardization Program; as well as our intent to rent
vehicles,24 as well as wit the preparation and issuance of motor vehicle number plates. 25 impounding areas for violations which require impounding of motor vehicles. 36
Pursuant to its legal mandate, the L TO formulated and adopted the MVPSP in order to supply new standardized license plates for all motor vehicles. That Congress approved the request for the ₱2,489,600,100.00 increase was indubitable. This is borne out by the fact that the final amount
LTO Memorandum Circular No. (MC) VPT-2013-177226 outlined the underlying purposes behind the MVPSP, viz: appropriated for MF02 under the 2014 GAA aggregated to ₱4,843,753,000.00 (i.e.,₱2,489,600, 100.00+₱2,354,153,000.00). We can see that such
WHEREAS, there exist nine (9) license plates of various designs, some of which date back to 1981; final increased amount was almost exactly identical37 to the total appearing in Details of the FY 2014 Budget. Indeed, the legislative intent to fund the
WHEREAS, there is a proliferation of dilapidated and illegible license plates and the prevalent practice of not replacing lost license plates by motor MVPSP under the 2014 GAA was manifest.
vehicle owners; We further remind that the Court, in interpreting the 2014 GAA, should consider the figures appearing in the main text as controlling over the attached
WHEREAS, there is difficulty in promptly identifying counterfeit license plates; details.1awp++i1 The general provisions of the 2014 GAA expressly so provided, viz.:
WHEREAS, the foregoing problems have adversely affected law enforcement and national security; Sec. 3. Details of the FY 2014 Budget. The details of the budgetary programs and projects authorized herein, attached as Annex A (Volumes 1 and 2)
WHEREAS, in order to aid law enforcement, improve the motor vehicle registration database and enhance the institutional capability of the "Details of the FY 2014 Budget" shall be considered as an integral part of this Act. Said amounts and details should be consistent with those indicated
government, there is a need to replace all existing motor vehicle license plates with standardized license plates. 27 herein. In case of discrepancy, the amounts provided herein shall be controlling. 38
In this connection, the DOTC was given the following appropriation for 2014:28 Considering that Congress appropriated ₱4,843, 753,000.00 for the MF02 (inclusive of the requested increase of ₱2,489,600,100.00) for the purpose
of funding the LTO's MVPSP, the inescapable conclusion is that the 2014 GAA itself contained the direct appropriation necessary to implement the
Personnel Maintenance and Other MVPSP. Under the circumstances, there was no unconstitutional transfer of funds because no transfer of funds was made to augment the item Motor
Operations Capital Outlays Total
Services Operating Expenses Vehicle Registration and Driver's Licensing Regulatory Services to include the funding for the MVPSP.
3. The item Motor Vehicle Registration and Driver's Licensing Regulatory Services did not constitute a lump-sum appropriation
The petitioners contended that the implementation of the MVPSP using the funds allocated under the item MF02: Motor Vehicle Registration and
MFO 2: Motor Vehicle ₱314,981,000 ₱4,528,397,000 ₱375,000 ₱4,843,753,000
Driver's Licensing Regulatory Services was unconstitutional because the item constituted a lump-sum appropriation39 that undermined the exercise by
Registration and Driver's
the President of his veto power under Article VI, Section 27(2) 40 of the Constitution.
Licensing Regulatory
The petitioners' contention lacks merit.
Services
Starting in 2014, the National Government adopted the system of "Performance Informed Budgeting" 41 in the preparation and presentation of the
National Budget. This adoption is expressed in Section 2 of the general provisions of the 2014 GAA, to wit:
According to the petitioners, however, the 2014 GAA appropriated ₱4,843,753,000.00 specifically only for the Major Final Output 2 (MF02): Motor
Sec. 2. Performance Informed Budgeting. The amounts appropriated herein considered the physical accomplishments vis-a-vis performance targets
Vehicle Registration and Driver's Licensing Regulatory Services. They argue that considering that Motor vehicle plate making project did not appear
of departments, bureaus, offices and instrumentalities of the National Government, including Constitutional Offices enjoying fiscal autonomy, SUCs
as an item in the 2014 National Expenditure Program (2014 NEP) and the 2014 GAA, unlike in the 2013 GAA, the use of the funds allocated for the
and GOCCs, formulated in terms of Major Final Outputs (MF Os) and their corresponding Performance Indicators under the Organizational
MF02: Motor Vehicle Registration and Driver's Licensing Regulatory Services amounted to an unconstitutional transfer of appropriations prohibited by
Performance Indicator Framework, the results-based budgeting system being adopted in the whole of government. Accordingly, the budget
Article VI, Section 25 (5) of the Constitution.
allocations for the various programs and projects under this Act are informed by, among others, the actual performance of spending units in delivering
The petitioners' argument lacks persuasion.
their MFOs and their impact on the sectoral and societal objectives and priorities set by the National Government. This is consistent with the national
In Goh v. Bayron, 29 the Court explained that:
policy of orienting the budget towards the achievement of explicit objectives and desire budget outcomes, as well as for greater transparency and
x x x To be valid, an appropriation must indicate a specific amount and a specific purpose. However, the purpose may be specific even if it is broken
accountability in public spending. x x x
down into different related sub-categories of the same nature. For example, the purpose can be to "conduct elections," which even if not expressly
Under the system of Performance Informed Budgeting, the PAPS are grouped or aligned into the Major Final Outputs (MFOs). However, the
spelled out covers regular, special, or recall elections. The purpose of the appropriation is still specific - to fund elections, which naturally and logically
groupings do not mean that there are no longer any line-items. As explained in Belgica v. Executive Secretary,42 line-items under appropriations
include, even if not expressly stated, not only regular but also special or recall elections. 30
should be "specific appropriations of money" that will enable the President to discernibly veto the same, to wit:
The Court holds that the appropriation for motor vehicle registration naturally and logically included plate-making inasmuch as plate-making was an
An item, as defined in the field of appropriations, pertains to "the particulars, the details, the distinct and severable parts of the appropriation or of the
integral component of the registration process. Plate-making ensured that the LTO fulfilled its function to "aid law enforcement and improve the motor
bill." In the case of Bengzon v. Secretary of Justice of the Philippine Islands, the US Supreme Court characterized an item of appropriation as follows:
vehicle registration database."
"An item of an appropriation bill obviously means an item which, in itself, is a specific appropriation of money, not some general provision of law which
The inclusion of the MVPSP in the line item for the MF02 was further explained in Details of the FY 2014 Budget:31
happens to be put into an appropriation bill."
Maintenance and On this premise, it may be concluded that an appropriation bill, to ensure that the President may be able to exercise his power of item veto, must
Personnel Capital contain "specific appropriations of money" and not only "general provisions" which provide for parameters of appropriation.
Operations Other Operating Total
Services Outlays Further, it is significant to point out that an item of appropriation must be an item characterized by singular correspondence - meaning an allocation of
Expenses
a specified singular amount for a specified singular purpose, otherwise known as a "line-item." This treatment not only allows the item to be consistent
with its definition as a "specific appropriation of money" but also ensures that the President may discernibly veto the same. 43
MFO 2: Motor Vehicle Registration and ₱314,981,000 ₱2,038,797,000 ₱375,000 ₱2,354,153,000 In Araullo v. Aquino III, 44 the Court has expounded the term item as the last and indivisible purpose of a program in the appropriation law, which is
Driver's Licensing Regulatory Services distinct from the expense category or allotment class, viz.:
Indeed, Section 25(5) of the 1987 Constitution mentions of the term item that may be the object of augmentation by the President, the Senate
President, the Speaker of the House, the Chief Justice, and the heads of the Constitutional Commissions. In Belgica v. Ochoa, we said that an item
Motor vehicle registration system ₱148,236,000 ₱1,378,945,000 ₱375,000 ₱ 1,527,556,000
that is the distinct and several part of the appropriation bill, in line with the item-veto power of the President, must contain "specific appropriations of
Although the Details of the FY 2014 Budget seemed to present a discrepancy from the main text of the 2014 GAA given that the total allotment money" and not be only general provisions, x x x
indicated for the MF02 was only ₱2,354,153,000, and a separate allocation of ₱1,527,556,000 appeared for Motor vehicle registration system, the xxxx
discrepancy can be easily clarified by referring to the 2014 NEP, and the letter of respondent former DOTC Secretary Joseph Emilio Aguinaldo Accordingly, the item referred to by Section 25(5) of the Constitution is the last and indivisible purpose of a program in the appropriation law, which is
Abaya. distinct from the expense category or allotment class. There is no specificity, indeed, either in the Constitution or in the relevant GAAs that the object
To explain, the NEP provides the details of spending for each department and agency by program, activity or project (PAP), and is submitted by the of augmentation should be the expense category or allotment class. In the same vein, the President cannot exercise his veto power over an expense
President to Congress along with a budget message.32 Upon the submission of the NEP to Congress, the NEP morphs into the General Appropriation category; he may only veto the item to which that expense category belongs to. 45
Bill. The petitioners' contention that the MF02 constituted a lump-sum appropriation46 had no basis. The specific appropriations of money were still found
Under the 2014 NEP, the MF02 had the following proposed budget:33 under Details of the FY 2014 Budget which was attached to the 2014 GAA. They specified and contained the authorized budgetary programs and
projects under the GAA, as follows:
Operations by MFO PS MOOE CO TOTAL
Personnel Maintenance and Other
Operations Capital Outlays Total
Services Operating Expenses
MF02: Motor vehicle ₱314,981,000 ₱2,039,297,000 ₱375,000 ₱2,354,653,000
registration and driver's
licensing regulatory services MFO 2: Motor Vehicle Registration and ₱314,981,000 ₱2,038,797,000 ₱375,000 ₱2,354, 153,000
Driver's Licensing Regulatory Services
The proposed budget for the MF02 stated in the 2014 NEP, which was only ₱2,354,653,000.00, would be inadequate to fund the implementation of
the MVPSP. Thus, on September 1, 2013, respondent Secretary Abaya wrote to DBM Secretary Florencio B. Abad to request the modification of the
Motor vehicle registration system47 ₱148,236,000 ₱1,378,945,000 ₱375,000 ₱1,527,556,000
2014 NEP by way of a realignment to increase the MF02 budget by ₱2,489,600,100.00 for the LTO Plate Standardization Program, to wit:
xxxx As gleaned from the Details of the FY 2014 Budget, the MFOs constituted the expense category or class; while the last and indivisible purpose of
Dear Secretary Abad: each program under the MFOs were enumerated under the Details of the FY 2014 Budget. In particular, the specific purpose provided under the
This is to request for modifications in the 2014 National Expenditure Program of the DOTC as follows: MF02 was an appropriation for a Motor vehicle registration system. Such specific purpose satisfied the requirement of a valid line-item that the
xxxx President could discernibly veto. WHEREFORE, the Court DISMISSES the petition for certiorari and prohibition; and DECLARES the use of the
2. Realignment from LRT 1 Cavite Extension (₱500,000,000). New Bohol (Panglao) International Airport Development Project (₱l,000,000,000) and appropriation under Motor Vehicle Registration and Driver's Licensing Regulatory Services in the General Appropriations Act of 2014 for the
LRT Line East Extension Project (₱989,600,100) for the LTO Plate Standardization Program under MF02-Motor Vehicle Registration and Driver's implementation of the Motor Vehicle License Plate Standardization Program of the Land Transportation Office of the Department of Transportation as
Licensing Regulatory Services (Maintenance & Other Operating Expenses) .... (₱2,489,600,100 Operating Expenses) CONSTITUTIONAL. The TEMPORARY RESTRAINING ORDER issued by the Court on June 14, 2016 is LIFTED. SO ORDERED.
This will be for the immediate implementation of the Plate Standardization Program. EN BANC
x x x x34
The same requested increase in the LTO's 2014 budget in order to cover the MVPSP was discussed during the hearings before the Committee on
Appropriations of the House of Representatives:
MR. LIMCACO. x x x x The next slide will show you a bird's eye view of the DOTC's summary of our proposed 2014 budget. We are proposing a total
budget of 46.7 billion pesos which is 31 % higher that last year's budget of 35.7; our program budget is 11.2 billion which is 27% higher than last year,
primarily, it is derived from 2.3 billion due to the reclassification of MRT3 operations and maintenance budget from where it used to be four which was
project and we are reclassifying it to programs. That's the first and the second is to increase the Land Transportation Office's MOOE due to the
increase requirement of our plate standardization program. 35
Likewise, the records of the hearings before the Senate Committee on Finance confirmed that the purpose for the increase in the LTO's 2014 budget
was the implementation of the MVPSP:
 AN ACT AUTHORIZING THE COMMISSIONER OF INTERNAL REVENUE TO PRESCRIBE THE PLACE FOR PAYMENT OF INTERNAL
G.R. No. 115455 October 30, 1995 REVENUE TAXES BY LARGE TAXPAYERS, AMENDING FOR THIS PURPOSE CERTAIN PROVISIONS OF THE NATIONAL INTERNAL
ARTURO M. TOLENTINO, petitioner, REVENUE CODE, AS AMENDED (February 24, 1993)
vs. House Bill No. 1470, October 20, 1992
THE SECRETARY OF FINANCE and THE COMMISSIONER OF INTERNAL REVENUE, respondents. Senate Bill No. 35, November 19, 1992
G.R. No. 115525 October 30, 1995 4. R.A. NO. 7649
JUAN T. DAVID, petitioner, AN ACT REQUIRING THE GOVERNMENT OR ANY OF ITS POLITICAL SUBDIVISIONS, INSTRUMENTALITIES OR AGENCIES INCLUDING
vs. GOVERNMENT-OWNED OR CONTROLLED CORPORATIONS (GOCCS) TO DEDUCT AND WITHHOLD THE VALUE-ADDED TAX DUE AT THE
TEOFISTO T. GUINGONA, JR., as Executive Secretary; ROBERTO DE OCAMPO, as Secretary of Finance; LIWAYWAY VINZONS-CHATO, as RATE OF THREE PERCENT (3%) ON GROSS PAYMENT FOR THE PURCHASE OF GOODS AND SIX PERCENT (6%) ON GROSS RECEIPTS
Commissioner of Internal Revenue; and their AUTHORIZED AGENTS OR REPRESENTATIVES, respondents. FOR SERVICES RENDERED BY CONTRACTORS (April 6, 1993)
G.R. No. 115543 October 30, 1995 House Bill No. 5260, January 26, 1993
RAUL S. ROCO and the INTEGRATED BAR OF THE PHILIPPINES, petitioners, Senate Bill No. 1141, March 30, 1993
vs. 5. R.A. NO. 7656
THE SECRETARY OF THE DEPARTMENT OF FINANCE; THE COMMISSIONERS OF THE BUREAU OF INTERNAL REVENUE AND BUREAU AN ACT REQUIRING GOVERNMENT-OWNED OR CONTROLLED CORPORATIONS TO DECLARE DIVIDENDS UNDER CERTAIN CONDITIONS
OF CUSTOMS, respondents. TO THE NATIONAL GOVERNMENT, AND FOR OTHER PURPOSES (November 9, 1993)
G.R. No. 115544 October 30, 1995 House Bill No. 11024, November 3, 1993
PHILIPPINE PRESS INSTITUTE, INC.; EGP PUBLISHING CO., INC.; KAMAHALAN PUBLISHING CORPORATION; PHILIPPINE JOURNALISTS, Senate Bill No. 1168, November 3, 1993
INC.; JOSE L. PAVIA; and OFELIA L. DIMALANTA, petitioners, 6. R.A. NO. 7660
vs. AN ACT RATIONALIZING FURTHER THE STRUCTURE AND ADMINISTRATION OF THE DOCUMENTARY STAMP TAX, AMENDING FOR THE
HON. LIWAYWAY V. CHATO, in her capacity as Commissioner of Internal Revenue; HON. TEOFISTO T. GUINGONA, JR., in his capacity as PURPOSE CERTAIN PROVISIONS OF THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED, ALLOCATING FUNDS FOR SPECIFIC
Executive Secretary; and HON. ROBERTO B. DE OCAMPO, in his capacity as Secretary of Finance, respondents. PROGRAMS, AND FOR OTHER PURPOSES (December 23, 1993)
G.R. No. 115754 October 30, 1995 House Bill No. 7789, May 31, 1993
CHAMBER OF REAL ESTATE AND BUILDERS ASSOCIATIONS, INC., (CREBA), petitioner, Senate Bill No. 1330, November 18, 1993
vs. 7. R.A. NO. 7717
THE COMMISSIONER OF INTERNAL REVENUE, respondent. AN ACT IMPOSING A TAX ON THE SALE, BARTER OR EXCHANGE OF SHARES OF STOCK LISTED AND TRADED THROUGH THE LOCAL
G.R. No. 115781 October 30, 1995 STOCK EXCHANGE OR THROUGH INITIAL PUBLIC OFFERING, AMENDING FOR THE PURPOSE THE NATIONAL INTERNAL REVENUE
KILOSBAYAN, INC., JOVITO R. SALONGA, CIRILO A. RIGOS, ERME CAMBA, EMILIO C. CAPULONG, JR., JOSE T. APOLO, EPHRAIM CODE, AS AMENDED, BY INSERTING A NEW SECTION AND REPEALING CERTAIN SUBSECTIONS THEREOF (May 5, 1994)
TENDERO, FERNANDO SANTIAGO, JOSE ABCEDE, CHRISTINE TAN, FELIPE L. GOZON, RAFAEL G. FERNANDO, RAOUL V. VICTORINO, House Bill No. 9187, November 3, 1993
JOSE CUNANAN, QUINTIN S. DOROMAL, MOVEMENT OF ATTORNEYS FOR BROTHERHOOD, INTEGRITY AND NATIONALISM, INC. Senate Bill No. 1127, March 23, 1994
("MABINI"), FREEDOM FROM DEBT COALITION, INC., and PHILIPPINE BIBLE SOCIETY, INC. and WIGBERTO TAÑADA, petitioners, Thus, the enactment of S. No. 1630 is not the only instance in which the Senate, in the exercise of its power to propose amendments to bills required
vs. to originate in the House, passed its own version of a House revenue measure. It is noteworthy that, in the particular case of S. No. 1630, petitioners
THE EXECUTIVE SECRETARY, THE SECRETARY OF FINANCE, THE COMMISSIONER OF INTERNAL REVENUE and THE COMMISSIONER Tolentino and Roco, as members of the Senate, voted to approve it on second and third readings.
OF CUSTOMS, respondents. On the other hand, amendment by substitution, in the manner urged by petitioner Tolentino, concerns a mere matter of form. Petitioner has not shown
G.R. No. 115852 October 30, 1995 what substantial difference it would make if, as the Senate actually did in this case, a separate bill like S. No. 1630 is instead enacted as a substitute
PHILIPPINE AIRLINES, INC., petitioner, measure, "taking into Consideration . . . H.B. 11197."
vs. Indeed, so far as pertinent, the Rules of the Senate only provide:
THE SECRETARY OF FINANCE and COMMISSIONER OF INTERNAL REVENUE, respondents. RULE XXIX
G.R. No. 115873 October 30, 1995 AMENDMENTS
COOPERATIVE UNION OF THE PHILIPPINES, petitioner, xxx xxx xxx
vs. §68. Not more than one amendment to the original amendment shall be considered.
HON. LIWAYWAY V. CHATO, in her capacity as the Commissioner of Internal Revenue, HON. TEOFISTO T. GUINGONA, JR., in his capacity No amendment by substitution shall be entertained unless the text thereof is submitted in writing.
as Executive Secretary, and HON. ROBERTO B. DE OCAMPO, in his capacity as Secretary of Finance, respondents. Any of said amendments may be withdrawn before a vote is taken thereon.
G.R. No. 115931 October 30, 1995 §69. No amendment which seeks the inclusion of a legislative provision foreign to the subject matter of a bill (rider) shall be entertained.
PHILIPPINE EDUCATIONAL PUBLISHERS ASSOCIATION, INC. and ASSOCIATION OF PHILIPPINE BOOK SELLERS, petitioners, xxx xxx xxx
vs. §70-A. A bill or resolution shall not be amended by substituting it with another which covers a subject distinct from that proposed in the original bill or
HON. ROBERTO B. DE OCAMPO, as the Secretary of Finance; HON. LIWAYWAY V. CHATO, as the Commissioner of Internal Revenue; and resolution. (emphasis added).
HON. GUILLERMO PARAYNO, JR., in his capacity as the Commissioner of Customs, respondents. Nor is there merit in petitioners' contention that, with regard to revenue bills, the Philippine Senate possesses less power than the U.S. Senate
RESOLUTION because of textual differences between constitutional provisions giving them the power to propose or concur with amendments.
Art. I, §7, cl. 1 of the U.S. Constitution reads:
MENDOZA, J.: All Bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with amendments as on other
These are motions seeking reconsideration of our decision dismissing the petitions filed in these cases for the declaration of unconstitutionality of R.A. Bills.
No. 7716, otherwise known as the Expanded Value-Added Tax Law. The motions, of which there are 10 in all, have been filed by the several Art. VI, §24 of our Constitution reads:
petitioners in these cases, with the exception of the Philippine Educational Publishers Association, Inc. and the Association of Philippine Booksellers, All appropriation, revenue or tariff bills, bills authorizing increase of the public debt, bills of local application, and private bills shall originate exclusively
petitioners in G.R. No. 115931. in the House of Representatives, but the Senate may propose or concur with amendments.
The Solicitor General, representing the respondents, filed a consolidated comment, to which the Philippine Airlines, Inc., petitioner in G.R. No. The addition of the word "exclusively" in the Philippine Constitution and the decision to drop the phrase "as on other Bills" in the American version,
115852, and the Philippine Press Institute, Inc., petitioner in G.R. No. 115544, and Juan T. David, petitioner in G.R. No. 115525, each filed a reply. In according to petitioners, shows the intention of the framers of our Constitution to restrict the Senate's power to propose amendments to revenue bills.
turn the Solicitor General filed on June 1, 1995 a rejoinder to the PPI's reply. Petitioner Tolentino contends that the word "exclusively" was inserted to modify "originate" and "the words 'as in any other bills' (sic) were eliminated
On June 27, 1995 the matter was submitted for resolution. so as to show that these bills were not to be like other bills but must be treated as a special kind."
I. Power of the Senate to propose amendments to revenue bills. Some of the petitioners (Tolentino, Kilosbayan, Inc., Philippine Airlines (PAL), Roco, The history of this provision does not support this contention. The supposed indicia of constitutional intent are nothing but the relics of an
and Chamber of Real Estate and Builders Association (CREBA)) reiterate previous claims made by them that R.A. No. 7716 did not "originate unsuccessful attempt to limit the power of the Senate. It will be recalled that the 1935 Constitution originally provided for a unicameral National
exclusively" in the House of Representatives as required by Art. VI, §24 of the Constitution. Although they admit that H. No. 11197 was filed in the Assembly. When it was decided in 1939 to change to a bicameral legislature, it became necessary to provide for the procedure for lawmaking by the
House of Representatives where it passed three readings and that afterward it was sent to the Senate where after first reading it was referred to the Senate and the House of Representatives. The work of proposing amendments to the Constitution was done by the National Assembly, acting as a
Senate Ways and Means Committee, they complain that the Senate did not pass it on second and third readings. Instead what the Senate did was to constituent assembly, some of whose members, jealous of preserving the Assembly's lawmaking powers, sought to curtail the powers of the
pass its own version (S. No. 1630) which it approved on May 24, 1994. Petitioner Tolentino adds that what the Senate committee should have done proposed Senate. Accordingly they proposed the following provision:
was to amend H. No. 11197 by striking out the text of the bill and substituting it with the text of S. No. 1630. That way, it is said, "the bill remains a All bills appropriating public funds, revenue or tariff bills, bills of local application, and private bills shall originate exclusively in the Assembly, but the
House bill and the Senate version just becomes the text (only the text) of the House bill." Senate may propose or concur with amendments. In case of disapproval by the Senate of any such bills, the Assembly may repass the same by a
The contention has no merit. two-thirds vote of all its members, and thereupon, the bill so repassed shall be deemed enacted and may be submitted to the President for
The enactment of S. No. 1630 is not the only instance in which the Senate proposed an amendment to a House revenue bill by enacting its own corresponding action. In the event that the Senate should fail to finally act on any such bills, the Assembly may, after thirty days from the opening of
version of a revenue bill. On at least two occasions during the Eighth Congress, the Senate passed its own version of revenue bills, which, in the next regular session of the same legislative term, reapprove the same with a vote of two-thirds of all the members of the Assembly. And upon
consolidation with House bills earlier passed, became the enrolled bills. These were: such reapproval, the bill shall be deemed enacted and may be submitted to the President for corresponding action.
R.A. No. 7369 (AN ACT TO AMEND THE OMNIBUS INVESTMENTS CODE OF 1987 BY EXTENDING FROM FIVE (5) YEARS TO TEN YEARS The special committee on the revision of laws of the Second National Assembly vetoed the proposal. It deleted everything after the first sentence. As
THE PERIOD FOR TAX AND DUTY EXEMPTION AND TAX CREDIT ON CAPITAL EQUIPMENT) which was approved by the President on April 10, rewritten, the proposal was approved by the National Assembly and embodied in Resolution No. 38, as amended by Resolution No. 73. (J. ARUEGO,
1992. This Act is actually a consolidation of H. No. 34254, which was approved by the House on January 29, 1992, and S. No. 1920, which was KNOW YOUR CONSTITUTION 65-66 (1950)). The proposed amendment was submitted to the people and ratified by them in the elections held on
approved by the Senate on February 3, 1992. June 18, 1940.
R.A. No. 7549 (AN ACT GRANTING TAX EXEMPTIONS TO WHOEVER SHALL GIVE REWARD TO ANY FILIPINO ATHLETE WINNING A MEDAL This is the history of Art. VI, §18 (2) of the 1935 Constitution, from which Art. VI, §24 of the present Constitution was derived. It explains why the word
IN OLYMPIC GAMES) which was approved by the President on May 22, 1992. This Act is a consolidation of H. No. 22232, which was approved by "exclusively" was added to the American text from which the framers of the Philippine Constitution borrowed and why the phrase "as on other Bills"
the House of Representatives on August 2, 1989, and S. No. 807, which was approved by the Senate on October 21, 1991. was not copied. Considering the defeat of the proposal, the power of the Senate to propose amendments must be understood to be full, plenary and
On the other hand, the Ninth Congress passed revenue laws which were also the result of the consolidation of House and Senate bills. These are the complete "as on other Bills." Thus, because revenue bills are required to originate exclusively in the House of Representatives, the Senate cannot
following, with indications of the dates on which the laws were approved by the President and dates the separate bills of the two chambers of enact revenue measures of its own without such bills. After a revenue bill is passed and sent over to it by the House, however, the Senate certainly
Congress were respectively passed: can pass its own version on the same subject matter. This follows from the coequality of the two chambers of Congress.
1. R.A. NO. 7642 That this is also the understanding of book authors of the scope of the Senate's power to concur is clear from the following commentaries:
AN ACT INCREASING THE PENALTIES FOR TAX EVASION, AMENDING FOR THIS PURPOSE THE PERTINENT SECTIONS OF THE The power of the Senate to propose or concur with amendments is apparently without restriction. It would seem that by virtue of this power, the
NATIONAL INTERNAL REVENUE CODE (December 28, 1992). Senate can practically re-write a bill required to come from the House and leave only a trace of the original bill. For example, a general revenue bill
House Bill No. 2165, October 5, 1992 passed by the lower house of the United States Congress contained provisions for the imposition of an inheritance tax . This was changed by the
Senate Bill No. 32, December 7, 1992 Senate into a corporation tax. The amending authority of the Senate was declared by the United States Supreme Court to be sufficiently broad to
2. R.A. NO. 7643 enable it to make the alteration. [Flint v. Stone Tracy Company, 220 U.S. 107, 55 L. ed. 389].
AN ACT TO EMPOWER THE COMMISSIONER OF INTERNAL REVENUE TO REQUIRE THE PAYMENT OF THE VALUE-ADDED TAX EVERY (L. TAÑADA AND F. CARREON, POLITICAL LAW OF THE PHILIPPINES 247 (1961))
MONTH AND TO ALLOW LOCAL GOVERNMENT UNITS TO SHARE IN VAT REVENUE, AMENDING FOR THIS PURPOSE CERTAIN SECTIONS The above-mentioned bills are supposed to be initiated by the House of Representatives because it is more numerous in membership and therefore
OF THE NATIONAL INTERNAL REVENUE CODE (December 28, 1992) also more representative of the people. Moreover, its members are presumed to be more familiar with the needs of the country in regard to the
House Bill No. 1503, September 3, 1992 enactment of the legislation involved.
Senate Bill No. 968, December 7, 1992 The Senate is, however, allowed much leeway in the exercise of its power to propose or concur with amendments to the bills initiated by the House of
3. R.A. NO. 7646 Representatives. Thus, in one case, a bill introduced in the U.S. House of Representatives was changed by the Senate to make a proposed
inheritance tax a corporation tax. It is also accepted practice for the Senate to introduce what is known as an amendment by substitution, which may
entirely replace the bill initiated in the House of Representatives.
(I. CRUZ, PHILIPPINE POLITICAL LAW 144-145 (1993)).
In sum, while Art. VI, §24 provides that all appropriation, revenue or tariff bills, bills authorizing increase of the public debt, bills of local application,
and private bills must "originate exclusively in the House of Representatives," it also adds, "but the Senate may propose or concur with amendments."
In the exercise of this power, the Senate may propose an entirely new bill as a substitute measure. As petitioner Tolentino states in a high school text,
a committee to which a bill is referred may do any of the following:
(1) to endorse the bill without changes; (2) to make changes in the bill omitting or adding sections or altering its language; (3) to make and endorse an
entirely new bill as a substitute, in which case it will be known as a committee bill; or (4) to make no report at all.
(A. TOLENTINO, THE GOVERNMENT OF THE PHILIPPINES 258 (1950))
To except from this procedure the amendment of bills which are required to originate in the House by prescribing that the number of the House bill
and its other parts up to the enacting clause must be preserved although the text of the Senate amendment may be incorporated in place of the
original body of the bill is to insist on a mere technicality. At any rate there is no rule prescribing this form. S. No. 1630, as a substitute measure, is
therefore as much an amendment of H. No. 11197 as any which the Senate could have made.
II. S. No. 1630 a mere amendment of H. No. 11197. Petitioners' basic error is that they assume that S. No. 1630 is an independent and distinct bill.
Hence their repeated references to its certification that it was passed by the Senate "in substitution of S.B. No. 1129, taking into consideration P.S.
Res. No. 734 and H.B. No. 11197," implying that there is something substantially different between the reference to S. No. 1129 and the reference to
H. No. 11197. From this premise, they conclude that R.A. No. 7716 originated both in the House and in the Senate and that it is the product of two
"half-baked bills because neither H. No. 11197 nor S. No. 1630 was passed by both houses of Congress."
In point of fact, in several instances the provisions of S. No. 1630, clearly appear to be mere amendments of the corresponding provisions of H. No.
11197. The very tabular comparison of the provisions of H. No. 11197 and S. No. 1630 attached as Supplement A to the basic petition of petitioner
Tolentino, while showing differences between the two bills, at the same time indicates that the provisions of the Senate bill were precisely intended to
be amendments to the House bill.
Without H. No. 11197, the Senate could not have enacted S. No. 1630. Because the Senate bill was a mere amendment of the House bill, H. No.
11197 in its original form did not have to pass the Senate on second and three readings. It was enough that after it was passed on first reading it was
referred to the Senate Committee on Ways and Means. Neither was it required that S. No. 1630 be passed by the House of Representatives before
the two bills could be referred to the Conference Committee.
There is legislative precedent for what was done in the case of H. No. 11197 and S. No. 1630. When the House bill and Senate bill, which became
R.A. No. 1405 (Act prohibiting the disclosure of bank deposits), were referred to a conference committee, the question was raised whether the two
bills could be the subject of such conference, considering that the bill from one house had not been passed by the other and vice versa. As
Congressman Duran put the question:
MR. DURAN. Therefore, I raise this question of order as to procedure: If a House bill is passed by the House but not passed by the Senate, and a
Senate bill of a similar nature is passed in the Senate but never passed in the House, can the two bills be the subject of a conference, and can a law
be enacted from these two bills? I understand that the Senate bill in this particular instance does not refer to investments in government securities,
whereas the bill in the House, which was introduced by the Speaker, covers two subject matters: not only investigation of deposits in banks but also
investigation of investments in government securities. Now, since the two bills differ in their subject matter, I believe that no law can be enacted.
Ruling on the point of order raised, the chair (Speaker Jose B. Laurel, Jr.) said:
THE SPEAKER. The report of the conference committee is in order. It is precisely in cases like this where a conference should be had. If the House
bill had been approved by the Senate, there would have been no need of a conference; but precisely because the Senate passed another bill on the
same subject matter, the conference committee had to be created, and we are now considering the report of that committee.
(2 CONG. REC. NO. 13, July 27, 1955, pp. 3841-42 (emphasis added))
III. The President's certification. The fallacy in thinking that H. No. 11197 and S. No. 1630 are distinct and unrelated measures also accounts for the
petitioners' (Kilosbayan's and PAL's) contention that because the President separately certified to the need for the immediate enactment of these
measures, his certification was ineffectual and void. The certification had to be made of the version of the same revenue bill which at the moment was
being considered. Otherwise, to follow petitioners' theory, it would be necessary for the President to certify as many bills as are presented in a house
of Congress even though the bills are merely versions of the bill he has already certified. It is enough that he certifies the bill which, at the time he
makes the certification, is under consideration. Since on March 22, 1994 the Senate was considering S. No. 1630, it was that bill which had to be
certified. For that matter on June 1, 1993 the President had earlier certified H. No. 9210 for immediate enactment because it was the one which at
that time was being considered by the House. This bill was later substituted, together with other bills, by H. No. 11197.
As to what Presidential certification can accomplish, we have already explained in the main decision that the phrase "except when the President
certifies to the necessity of its immediate enactment, etc." in Art. VI, §26 (2) qualifies not only the requirement that "printed copies [of a bill] in its final
form [must be] distributed to the members three days before its passage" but also the requirement that before a bill can become a law it must have
passed "three readings on separate days." There is not only textual support for such construction but historical basis as well.
Art. VI, §21 (2) of the 1935 Constitution originally provided:
(2) No bill shall be passed by either House unless it shall have been printed and copies thereof in its final form furnished its Members at least three
calendar days prior to its passage, except when the President shall have certified to the necessity of its immediate enactment. Upon the last reading
of a bill, no amendment thereof shall be allowed and the question upon its passage shall be taken immediately thereafter, and
the yeas and nays entered on the Journal.
When the 1973 Constitution was adopted, it was provided in Art. VIII, §19 (2):
(2) No bill shall become a law unless it has passed three readings on separate days, and printed copies thereof in its final form have been distributed
to the Members three days before its passage, except when the Prime Minister certifies to the necessity of its immediate enactment to meet a public
calamity or emergency. Upon the last reading of a bill, no amendment thereto shall be allowed, and the vote thereon shall be taken immediately
thereafter, and the yeas and nays entered in the Journal.
This provision of the 1973 document, with slight modification, was adopted in Art. VI, §26 (2) of the present Constitution, thus:
(2) No bill passed by either House shall become a law unless it has passed three readings on separate days, and printed copies thereof in its final
form have been distributed to its Members three days before its passage, except when the President certifies to the necessity of its immediate
enactment to meet a public calamity or emergency. Upon the last reading of a bill, no amendment thereto shall be allowed, and the vote thereon shall
be taken immediately thereafter, and the yeas and nays entered in the Journal.
The exception is based on the prudential consideration that if in all cases three readings on separate days are required and a bill has to be printed in
final form before it can be passed, the need for a law may be rendered academic by the occurrence of the very emergency or public calamity which it
is meant to address.
Petitioners further contend that a "growing budget deficit" is not an emergency, especially in a country like the Philippines where budget deficit is a
chronic condition. Even if this were the case, an enormous budget deficit does not make the need for R.A. No. 7716 any less urgent or the situation
calling for its enactment any less an emergency.
Apparently, the members of the Senate (including some of the petitioners in these cases) believed that there was an urgent need for consideration of
S. No. 1630, because they responded to the call of the President by voting on the bill on second and third readings on the same day. While the
judicial department is not bound by the Senate's acceptance of the President's certification, the respect due coequal departments of the government
in matters committed to them by the Constitution and the absence of a clear showing of grave abuse of discretion caution a stay of the judicial hand.
At any rate, we are satisfied that S. No. 1630 received thorough consideration in the Senate where it was discussed for six days. Only its distribution
in advance in its final printed form was actually dispensed with by holding the voting on second and third readings on the same day (March 24, 1994).
Otherwise, sufficient time between the submission of the bill on February 8, 1994 on second reading and its approval on March 24, 1994 elapsed
before it was finally voted on by the Senate on third reading.
The purpose for which three readings on separate days is required is said to be two-fold: (1) to inform the members of Congress of what they must
vote on and (2) to give them notice that a measure is progressing through the enacting process, thus enabling them and others interested in the
measure to prepare their positions with reference to it. (1 J. G. SUTHERLAND, STATUTES AND STATUTORY CONSTRUCTION §10.04, p. 282
(1972)). These purposes were substantially achieved in the case of R.A. No. 7716.
IV. Power of Conference Committee. It is contended (principally by Kilosbayan, Inc. and the Movement of Attorneys for Brotherhood, Integrity and
Nationalism, Inc. (MABINI)) that in violation of the constitutional policy of full public disclosure and the people's right to know (Art. II, §28 and Art. III,
§7) the Conference Committee met for two days in executive session with only the conferees present.
As pointed out in our main decision, even in the United States it was customary to hold such sessions with only the conferees and their staffs in
attendance and it was only in 1975 when a new rule was adopted requiring open sessions. Unlike its American counterpart, the Philippine Congress
has not adopted a rule prescribing open hearings for conference committees.
It is nevertheless claimed that in the United States, before the adoption of the rule in 1975, at least staff members were present. These were staff
members of the Senators and Congressmen, however, who may be presumed to be their confidential men, not stenographers as in this case who on
the last two days of the conference were excluded. There is no showing that the conferees themselves did not take notes of their proceedings so as
to give petitioner Kilosbayan basis for claiming that even in secret diplomatic negotiations involving state interests, conferees keep notes of their
meetings. Above all, the public's right to know was fully served because the Conference Committee in this case submitted a report showing the
changes made on the differing versions of the House and the Senate.
Petitioners cite the rules of both houses which provide that conference committee reports must contain "a detailed, sufficiently explicit statement of the
changes in or other amendments." These changes are shown in the bill attached to the Conference Committee Report. The members of both houses
could thus ascertain what changes had been made in the original bills without the need of a statement detailing the changes.
The same question now presented was raised when the bill which became R.A. No. 1400 (Land Reform Act of 1955) was reported by the Conference
Committee. Congressman Bengzon raised a point of order. He said:
MR. BENGZON. My point of order is that it is out of order to consider the report of the conference committee regarding House Bill No. 2557 by reason
of the provision of Section 11, Article XII, of the Rules of this House which provides specifically that the conference report must be accompanied by a
detailed statement of the effects of the amendment on the bill of the House. This conference committee report is not accompanied by that detailed
statement, Mr. Speaker. Therefore it is out of order to consider it.
Petitioner Tolentino, then the Majority Floor Leader, answered:
MR. TOLENTINO. Mr. Speaker, I should just like to say a few words in connection with the point of order raised by the gentleman from Pangasinan.
There is no question about the provision of the Rule cited by the gentleman from Pangasinan, but this provision applies to those cases where only
portions of the bill have been amended. In this case before us an entire bill is presented; therefore, it can be easily seen from the reading of the bill
what the provisions are. Besides, this procedure has been an established practice.
After some interruption, he continued:
MR. TOLENTINO. As I was saying, Mr. Speaker, we have to look into the reason for the provisions of the Rules, and the reason for the requirement in
the provision cited by the gentleman from Pangasinan is when there are only certain words or phrases inserted in or deleted f rom the provisions of the
bill included in the conference report, and we cannot understand what those words and phrases mean and their relation to the bill. In that case, it is
necessary to make a detailed statement on how those words and phrases will affect the bill as a whole; but when the entire bill itself is copied
verbatim in the conference report, that is not necessary. So when the reason for the Rule does not exist, the Rule does not exist.
(2 CONG. REC. NO. 2, p. 4056. (emphasis added))
Congressman Tolentino was sustained by the chair. The record shows that when the ruling was appealed, it was upheld by viva voce and when a
division of the House was called, it was sustained by a vote of 48 to 5. (Id.,
p. 4058)
Nor is there any doubt about the power of a conference committee to insert new provisions as long as these are germane to the subject of the
conference. As this Court held in Philippine Judges Association v. Prado, 227 SCRA 703 (1993), in an opinion written by then Justice Cruz, 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. What is important is that its report is subsequently approved by the respective houses of Congress. This Court ruled that it would not
entertain allegations that, because new provisions had been added by the conference committee, there was thereby a violation of the constitutional
injunction that "upon the last reading of a bill, no amendment thereto shall be allowed."
Applying these principles, we shall decline to look into the petitioners' charges that an amendment was made upon the last reading of the bill that
eventually became R.A. No. 7354 and that copies thereof in its final form were not distributed among the members of each House. Both the enrolled
bill and the legislative journals certify that the measure was duly enacted i.e., in accordance with Article VI, Sec. 26 (2) of the Constitution. We are
bound by such official assurances from a coordinate department of the government, to which we owe, at the very least, a becoming courtesy.
(Id. at 710. (emphasis added))
It is interesting to note the following description of conference committees in the Philippines in a 1979 study:
Conference committees may be of two types: free or instructed. These committees may be given instructions by their parent bodies or they may be
left without instructions. Normally the conference committees are without instructions, and this is why they are often critically referred to as "the little
legislatures." Once bills have been sent to them, the conferees have almost unlimited authority to change the clauses of the bills and in fact
sometimes introduce new measures that were not in the original legislation. No minutes are kept, and members' activities on conference committees
are difficult to determine. One congressman known for his idealism put it this way: "I killed a bill on export incentives for my interest group [copra] in
the conference committee but I could not have done so anywhere else." The conference committee submits a report to both houses, and usually it is
accepted. If the report is not accepted, then the committee is discharged and new members are appointed.
(R. Jackson, Committees in the Philippine Congress, in COMMITTEES AND LEGISLATURES: A COMPARATIVE ANALYSIS 163 (J. D. LEES AND
M. SHAW, eds.)).
In citing this study, we pass no judgment on the methods of conference committees. We cite it only to say that conference committees here are no
different from their counterparts in the United States whose vast powers we noted in Philippine Judges Association v. Prado, supra. At all events,
under Art. VI, §16(3) each house has the power "to determine the rules of its proceedings," including those of its committees. Any meaningful change
in the method and procedures of Congress or its committees must therefore be sought in that body itself.
V. The titles of S. No. 1630 and H. No. 11197. PAL maintains that R.A. No. 7716 violates Art. VI, §26 (1) of the Constitution which provides that
"Every bill passed by Congress shall embrace only one subject which shall be expressed in the title thereof." PAL contends that the amendment of its
franchise by the withdrawal of its exemption from the VAT is not expressed in the title of the law.
Pursuant to §13 of P.D. No. 1590, PAL pays a franchise tax of 2% on its gross revenue "in lieu of all other taxes, duties, royalties, registration, license
and other fees and charges of any kind, nature, or description, imposed, levied, established, assessed or collected by any municipal, city, provincial or
national authority or government agency, now or in the future."
PAL was exempted from the payment of the VAT along with other entities by §103 of the National Internal Revenue Code, which provides as follows:
§103. Exempt transactions. — The following shall be exempt from the value-added tax:
xxx xxx xxx
(q) Transactions which are exempt under special laws or international agreements to which the Philippines is a signatory.
R.A. No. 7716 seeks to withdraw certain exemptions, including that granted to PAL, by amending §103, as follows:
§103. Exempt transactions. — The following shall be exempt from the value-added tax:
xxx xxx xxx
(q) Transactions which are exempt under special laws, except those granted under Presidential Decree Nos. 66, 529, 972, 1491, 1590. . . .
The amendment of §103 is expressed in the title of R.A. No. 7716 which reads:
AN ACT RESTRUCTURING THE VALUE-ADDED TAX (VAT) SYSTEM, WIDENING ITS TAX BASE AND ENHANCING ITS ADMINISTRATION,
AND FOR THESE PURPOSES AMENDING AND REPEALING THE RELEVANT PROVISIONS OF THE NATIONAL INTERNAL REVENUE CODE,
AS AMENDED, AND FOR OTHER PURPOSES.
By stating that R.A. No. 7716 seeks to "[RESTRUCTURE] THE VALUE-ADDED TAX (VAT) SYSTEM [BY] WIDENING ITS TAX BASE AND
ENHANCING ITS ADMINISTRATION, AND FOR THESE PURPOSES AMENDING AND REPEALING THE RELEVANT PROVISIONS OF THE
NATIONAL INTERNAL REVENUE CODE, AS AMENDED AND FOR OTHER PURPOSES," Congress thereby clearly expresses its intention to
amend any provision of the NIRC which stands in the way of accomplishing the purpose of the law.
PAL asserts that the amendment of its franchise must be reflected in the title of the law by specific reference to P.D. No. 1590. It is unnecessary to do
this in order to comply with the constitutional requirement, since it is already stated in the title that the law seeks to amend the pertinent provisions of
the NIRC, among which is §103(q), in order to widen the base of the VAT. Actually, it is the bill which becomes a law that is required to express in its
title the subject of legislation. The titles of H. No. 11197 and S. No. 1630 in fact specifically referred to §103 of the NIRC as among the provisions
sought to be amended. We are satisfied that sufficient notice had been given of the pendency of these bills in Congress before they were enacted into
what is now R.A.
No. 7716.
In Philippine Judges Association v. Prado, supra, a similar argument as that now made by PAL was rejected. R.A. No. 7354 is entitled AN ACT
CREATING THE PHILIPPINE POSTAL CORPORATION, DEFINING ITS POWERS, FUNCTIONS AND RESPONSIBILITIES, PROVIDING FOR
REGULATION OF THE INDUSTRY AND FOR OTHER PURPOSES CONNECTED THEREWITH. It contained a provision repealing all franking
privileges. It was contended that the withdrawal of franking privileges was not expressed in the title of the law. In holding that there was sufficient
description of the subject of the law in its title, including the repeal of franking privileges, this Court held:
To require every end and means necessary for the accomplishment of the general objectives of the statute to be expressed in its title would not only
be unreasonable but would actually render legislation impossible. [Cooley, Constitutional Limitations, 8th Ed., p. 297] As has been correctly explained:
The details of a legislative act need not be specifically stated in its title, but matter germane to the subject as expressed in the title, and adopted to the
accomplishment of the object in view, may properly be included in the act. Thus, it is proper to create in the same act the machinery by which the act
is to be enforced, to prescribe the penalties for its infraction, and to remove obstacles in the way of its execution. If such matters are properly
connected with the subject as expressed in the title, it is unnecessary that they should also have special mention in the title. (Southern Pac. Co. v.
Bartine, 170 Fed. 725)
(227 SCRA at 707-708)
VI. Claims of press freedom and religious liberty. We have held that, as a general proposition, the press is not exempt from the taxing power of the
State and that what the constitutional guarantee of free press prohibits are laws which single out the press or target a group belonging to the press for
special treatment or which in any way discriminate against the press on the basis of the content of the publication, and R.A. No. 7716 is none of
these.
Now it is contended by the PPI that by removing the exemption of the press from the VAT while maintaining those granted to others, the law
discriminates against the press. At any rate, it is averred, "even nondiscriminatory taxation of constitutionally guaranteed freedom is unconstitutional."
With respect to the first contention, it would suffice to say that since the law granted the press a privilege, the law could take back the privilege
anytime without offense to the Constitution. The reason is simple: by granting exemptions, the State does not forever waive the exercise of its
sovereign prerogative.
Indeed, in withdrawing the exemption, the law merely subjects the press to the same tax burden to which other businesses have long ago been
subject. It is thus different from the tax involved in the cases invoked by the PPI. The license tax in Grosjean v. American Press Co., 297 U.S. 233, 80
L. Ed. 660 (1936) was found to be discriminatory because it was laid on the gross advertising receipts only of newspapers whose weekly circulation
was over 20,000, with the result that the tax applied only to 13 out of 124 publishers in Louisiana. These large papers were critical of Senator Huey
Long who controlled the state legislature which enacted the license tax. The censorial motivation for the law was thus evident.
On the other hand, in Minneapolis Star & Tribune Co. v. Minnesota Comm'r of Revenue, 460 U.S. 575, 75 L. Ed. 2d 295 (1983), the tax was found to
be discriminatory because although it could have been made liable for the sales tax or, in lieu thereof, for the use tax on the privilege of using, storing
or consuming tangible goods, the press was not. Instead, the press was exempted from both taxes. It was, however, later made to pay a special use
tax on the cost of paper and ink which made these items "the only items subject to the use tax that were component of goods to be sold at retail." The
U.S. Supreme Court held that the differential treatment of the press "suggests that the goal of regulation is not related to suppression of expression,
and such goal is presumptively unconstitutional." It would therefore appear that even a law that favors the press is constitutionally suspect. (See the
dissent of Rehnquist, J. in that case)
Nor is it true that only two exemptions previously granted by E.O. No. 273 are withdrawn "absolutely and unqualifiedly" by R.A. No. 7716. Other
exemptions from the VAT, such as those previously granted to PAL, petroleum concessionaires, enterprises registered with the Export Processing
Zone Authority, and many more are likewise totally withdrawn, in addition to exemptions which are partially withdrawn, in an effort to broaden the
base of the tax.
The PPI says that the discriminatory treatment of the press is highlighted by the fact that transactions, which are profit oriented, continue to enjoy
exemption under R.A. No. 7716. An enumeration of some of these transactions will suffice to show that by and large this is not so and that the
exemptions are granted for a purpose. As the Solicitor General says, such exemptions are granted, in some cases, to encourage agricultural
production and, in other cases, for the personal benefit of the end-user rather than for profit. The exempt transactions are:
(a) Goods for consumption or use which are in their original state (agricultural, marine and forest products, cotton seeds in their original state,
fertilizers, seeds, seedlings, fingerlings, fish, prawn livestock and poultry feeds) and goods or services to enhance agriculture (milling of palay, corn,
sugar cane and raw sugar, livestock, poultry feeds, fertilizer, ingredients used for the manufacture of feeds).
(b) Goods used for personal consumption or use (household and personal effects of citizens returning to the Philippines) or for professional use, like
professional instruments and implements, by persons coming to the Philippines to settle here.
(c) Goods subject to excise tax such as petroleum products or to be used for manufacture of petroleum products subject to excise tax and services
subject to percentage tax.
(d) Educational services, medical, dental, hospital and veterinary services, and services rendered under employer-employee relationship.
(e) Works of art and similar creations sold by the artist himself.
(f) Transactions exempted under special laws, or international agreements.
(g) Export-sales by persons not VAT-registered.
(h) Goods or services with gross annual sale or receipt not exceeding P500,000.00.
(Respondents' Consolidated Comment on the Motions for Reconsideration, pp. 58-60)
The PPI asserts that it does not really matter that the law does not discriminate against the press because "even nondiscriminatory taxation on
constitutionally guaranteed freedom is unconstitutional." PPI cites in support of this assertion the following statement in Murdock v. Pennsylvania, 319
U.S. 105, 87 L. Ed. 1292 (1943):
The fact that the ordinance is "nondiscriminatory" is immaterial. The protection afforded by the First Amendment is not so restricted. A license tax
certainly does not acquire constitutional validity because it classifies the privileges protected by the First Amendment along with the wares and
merchandise of hucksters and peddlers and treats them all alike. Such equality in treatment does not save the ordinance. Freedom of press, freedom
of speech, freedom of religion are in preferred position.
The Court was speaking in that case of a license tax, which, unlike an ordinary tax, is mainly for regulation. Its imposition on the press is
unconstitutional because it lays a prior restraint on the exercise of its right. Hence, although its application to others, such those selling goods, is valid,
its application to the press or to religious groups, such as the Jehovah's Witnesses, in connection with the latter's sale of religious books and
pamphlets, is unconstitutional. As the U.S. Supreme Court put it, "it is one thing to impose a tax on income or property of a preacher. It is quite
another thing to exact a tax on him for delivering a sermon."
A similar ruling was made by this Court in American Bible Society v. City of Manila, 101 Phil. 386 (1957) which invalidated a city ordinance requiring a
business license fee on those engaged in the sale of general merchandise. It was held that the tax could not be imposed on the sale of bibles by the
American Bible Society without restraining the free exercise of its right to propagate.
The VAT is, however, different. It is not a license tax. It is not a tax on the exercise of a privilege, much less a constitutional right. It is imposed on the
sale, barter, lease or exchange of goods or properties or the sale or exchange of services and the lease of properties purely for revenue purposes. To
subject the press to its payment is not to burden the exercise of its right any more than to make the press pay income tax or subject it to general
regulation is not to violate its freedom under the Constitution.
Additionally, the Philippine Bible Society, Inc. claims that although it sells bibles, the proceeds derived from the sales are used to subsidize the cost of
printing copies which are given free to those who cannot afford to pay so that to tax the sales would be to increase the price, while reducing the
volume of sale. Granting that to be the case, the resulting burden on the exercise of religious freedom is so incidental as to make it difficult to
differentiate it from any other economic imposition that might make the right to disseminate religious doctrines costly. Otherwise, to follow the
petitioner's argument, to increase the tax on the sale of vestments would be to lay an impermissible burden on the right of the preacher to make a
sermon.
On the other hand the registration fee of P1,000.00 imposed by §107 of the NIRC, as amended by §7 of R.A. No. 7716, although fixed in amount, is
really just to pay for the expenses of registration and enforcement of provisions such as those relating to accounting in §108 of the NIRC. That the
PBS distributes free bibles and therefore is not liable to pay the VAT does not excuse it from the payment of this fee because it also sells some
copies. At any rate whether the PBS is liable for the VAT must be decided in concrete cases, in the event it is assessed this tax by the Commissioner
of Internal Revenue.
VII. Alleged violations of the due process, equal protection and contract clauses and the rule on taxation. CREBA asserts that R.A. No. 7716 (1)
impairs the obligations of contracts, (2) classifies transactions as covered or exempt without reasonable basis and (3) violates the rule that taxes
should be uniform and equitable and that Congress shall "evolve a progressive system of taxation."
With respect to the first contention, it is claimed that the application of the tax to existing contracts of the sale of real property by installment or on
deferred payment basis would result in substantial increases in the monthly amortizations to be paid because of the 10% VAT. The additional amount,
it is pointed out, is something that the buyer did not anticipate at the time he entered into the contract.
The short answer to this is the one given by this Court in an early case: "Authorities from numerous sources are cited by the plaintiffs, but none of
them show that a lawful tax on a new subject, or an increased tax on an old one, interferes with a contract or impairs its obligation, within the meaning
of the Constitution. Even though such taxation may affect particular contracts, as it may increase the debt of one person and lessen the security of
another, or may impose additional burdens upon one class and release the burdens of another, still the tax must be paid unless prohibited by the
Constitution, nor can it be said that it impairs the obligation of any existing contract in its true legal sense." (La Insular v. Machuca Go-Tauco and
Nubla Co-Siong, 39 Phil. 567, 574 (1919)). Indeed not only existing laws but also "the reservation of the essential attributes of sovereignty, is . . . read
into contracts as a postulate of the legal order." (Philippine-American Life Ins. Co. v. Auditor General, 22 SCRA 135, 147 (1968)) Contracts must be
understood as having been made in reference to the possible exercise of the rightful authority of the government and no obligation of contract can
extend to the defeat of that authority. (Norman v. Baltimore and Ohio R.R., 79 L. Ed. 885 (1935)).
It is next pointed out that while §4 of R.A. No. 7716 exempts such transactions as the sale of agricultural products, food items, petroleum, and medical
and veterinary services, it grants no exemption on the sale of real property which is equally essential. The sale of real property for socialized and low-
cost housing is exempted from the tax, but CREBA claims that real estate transactions of "the less poor," i.e., the middle class, who are equally
homeless, should likewise be exempted.
The sale of food items, petroleum, medical and veterinary services, etc., which are essential goods and services was already exempt under §103,
pars. (b) (d) (1) of the NIRC before the enactment of R.A. No. 7716. Petitioner is in error in claiming that R.A. No. 7716 granted exemption to these
transactions, while subjecting those of petitioner to the payment of the VAT. Moreover, there is a difference between the "homeless poor" and the
"homeless less poor" in the example given by petitioner, because the second group or middle class can afford to rent houses in the meantime that
they cannot yet buy their own homes. The two social classes are thus differently situated in life. "It is inherent in the power to tax that the State be free
to select the subjects of taxation, and it has been repeatedly held that 'inequalities which result from a singling out of one particular class for taxation,
or exemption infringe no constitutional limitation.'" (Lutz v. Araneta, 98 Phil. 148, 153 (1955). Accord, City of Baguio v. De Leon, 134 Phil. 912 (1968);
Sison, Jr. v. Ancheta, 130 SCRA 654, 663 (1984); Kapatiran ng mga Naglilingkod sa Pamahalaan ng Pilipinas, Inc. v. Tan, 163 SCRA 371 (1988)).
Finally, it is contended, for the reasons already noted, that R.A. No. 7716 also violates Art. VI, §28(1) which provides that "The rule of taxation shall be
uniform and equitable. The Congress shall evolve a progressive system of taxation."
Equality and uniformity of taxation means that all taxable articles or kinds of property of the same class be taxed at the same rate. The taxing power
has the authority to make reasonable and natural classifications for purposes of taxation. To satisfy this requirement it is enough that the statute or
ordinance applies equally to all persons, forms and corporations placed in similar situation. (City of Baguio v. De Leon, supra; Sison, Jr. v.
Ancheta, supra)
Indeed, the VAT was already provided in E.O. No. 273 long before R.A. No. 7716 was enacted. R.A. No. 7716 merely expands the base of the tax.
The validity of the original VAT Law was questioned in Kapatiran ng Naglilingkod sa Pamahalaan ng Pilipinas, Inc. v. Tan, 163 SCRA 383 (1988) on
grounds similar to those made in these cases, namely, that the law was "oppressive, discriminatory, unjust and regressive in violation of Art. VI,
§28(1) of the Constitution." (At 382) Rejecting the challenge to the law, this Court held:
As the Court sees it, EO 273 satisfies all the requirements of a valid tax. It is uniform. . . .
The sales tax adopted in EO 273 is applied similarly on all goods and services sold to the public, which are not exempt, at the constant rate of 0% or
10%.
The disputed sales tax is also equitable. It is imposed only on sales of goods or services by persons engaged in business with an aggregate gross
annual sales exceeding P200,000.00. Small corner sari-sari stores are consequently exempt from its application. Likewise exempt from the tax are
sales of farm and marine products, so that the costs of basic food and other necessities, spared as they are from the incidence of the VAT, are
expected to be relatively lower and within the reach of the general public.
(At 382-383)
The CREBA claims that the VAT is regressive. A similar claim is made by the Cooperative Union of the Philippines, Inc. (CUP), while petitioner Juan
T. David argues that the law contravenes the mandate of Congress to provide for a progressive system of taxation because the law imposes a flat
rate of 10% and thus places the tax burden on all taxpayers without regard to their ability to pay.
The Constitution does not really prohibit the imposition of indirect taxes which, like the VAT, are regressive. What it simply provides is that Congress
shall "evolve a progressive system of taxation." The constitutional provision has been interpreted to mean simply that "direct taxes are . . . to be
preferred [and] as much as possible, indirect taxes should be minimized." (E. FERNANDO, THE CONSTITUTION OF THE PHILIPPINES 221
(Second ed. (1977)). Indeed, the mandate to Congress is not to prescribe, but to evolve, a progressive tax system. Otherwise, sales taxes, which
perhaps are the oldest form of indirect taxes, would have been prohibited with the proclamation of Art. VIII, §17(1) of the 1973 Constitution from which
the present Art. VI, §28(1) was taken. Sales taxes are also regressive.
Resort to indirect taxes should be minimized but not avoided entirely because it is difficult, if not impossible, to avoid them by imposing such taxes
according to the taxpayers' ability to pay. In the case of the VAT, the law minimizes the regressive effects of this imposition by providing for zero
rating of certain transactions (R.A. No. 7716, §3, amending §102 (b) of the NIRC), while granting exemptions to other transactions. (R.A. No. 7716,
§4, amending §103 of the NIRC).
Thus, the following transactions involving basic and essential goods and services are exempted from the VAT:
(a) Goods for consumption or use which are in their original state (agricultural, marine and forest products, cotton seeds in their original state,
fertilizers, seeds, seedlings, fingerlings, fish, prawn livestock and poultry feeds) and goods or services to enhance agriculture (milling of palay, corn
sugar cane and raw sugar, livestock, poultry feeds, fertilizer, ingredients used for the manufacture of feeds).
(b) Goods used for personal consumption or use (household and personal effects of citizens returning to the Philippines) and or professional use, like
professional instruments and implements, by persons coming to the Philippines to settle here.
(c) Goods subject to excise tax such as petroleum products or to be used for manufacture of petroleum products subject to excise tax and services
subject to percentage tax.
(d) Educational services, medical, dental, hospital and veterinary services, and services rendered under employer-employee relationship.
(e) Works of art and similar creations sold by the artist himself.
(f) Transactions exempted under special laws, or international agreements.
(g) Export-sales by persons not VAT-registered.
(h) Goods or services with gross annual sale or receipt not exceeding P500,000.00.
(Respondents' Consolidated Comment on the Motions for Reconsideration, pp. 58-60)
On the other hand, the transactions which are subject to the VAT are those which involve goods and services which are used or availed of mainly by
higher income groups. These include real properties held primarily for sale to customers or for lease in the ordinary course of trade or business, the
right or privilege to use patent, copyright, and other similar property or right, the right or privilege to use industrial, commercial or scientific equipment,
motion picture films, tapes and discs, radio, television, satellite transmission and cable television time, hotels, restaurants and similar places,
securities, lending investments, taxicabs, utility cars for rent, tourist buses, and other common carriers, services of franchise grantees of telephone
and telegraph.
The problem with CREBA's petition is that it presents broad claims of constitutional violations by tendering issues not at retail but at wholesale and in
the abstract. There is no fully developed record which can impart to adjudication the impact of actuality. There is no factual foundation to show in
the concrete the application of the law to actual contracts and exemplify its effect on property rights. For the fact is that petitioner's members have not
even been assessed the VAT. Petitioner's case is not made concrete by a series of hypothetical questions asked which are no different from those
dealt with in advisory opinions.
The difficulty confronting petitioner is thus apparent. He alleges arbitrariness. A mere allegation, as here, does not suffice. There must be a factual
foundation of such unconstitutional taint. Considering that petitioner here would condemn such a provision as void on its face, he has not made out a
case. This is merely to adhere to the authoritative doctrine that where the due process and equal protection clauses are invoked, considering that they
are not fixed rules but rather broad standards, there is a need for proof of such persuasive character as would lead to such a conclusion. Absent such
a showing, the presumption of validity must prevail.
(Sison, Jr. v. Ancheta, 130 SCRA at 661)
Adjudication of these broad claims must await the development of a concrete case. It may be that postponement of adjudication would result in a
multiplicity of suits. This need not be the case, however. Enforcement of the law may give rise to such a case. A test case, provided it is an actual
case and not an abstract or hypothetical one, may thus be presented.
Nor is hardship to taxpayers alone an adequate justification for adjudicating abstract issues. Otherwise, adjudication would be no different from the
giving of advisory opinion that does not really settle legal issues.
We are told that it is our duty under Art. VIII, §1, ¶2 to decide whenever a claim is made that "there has been a grave abuse of discretion amounting to
lack or excess of jurisdiction on the part of any branch or instrumentality of the government." This duty can only arise if an actual case or controversy
is before us. Under Art . VIII, §5 our jurisdiction is defined in terms of "cases" and all that Art. VIII, §1, ¶2 can plausibly mean is that in the exercise of
that jurisdiction we have the judicial power to determine questions of grave abuse of discretion by any branch or instrumentality of the government.
Put in another way, what is granted in Art. VIII, §1, ¶2 is "judicial power," which is "the power of a court to hear and decide cases pending between
parties who have the right to sue and be sued in the courts of law and equity" (Lamb v. Phipps, 22 Phil. 456, 559 (1912)), as distinguished from
legislative and executive power. This power cannot be directly appropriated until it is apportioned among several courts either by the Constitution, as
in the case of Art. VIII, §5, or by statute, as in the case of the Judiciary Act of 1948 (R.A. No. 296) and the Judiciary Reorganization Act of 1980 (B.P.
Blg. 129). The power thus apportioned constitutes the court's "jurisdiction," defined as "the power conferred by law upon a court or judge to take
cognizance of a case, to the exclusion of all others." (United States v. Arceo, 6 Phil. 29 (1906)) Without an actual case coming within its jurisdiction,
this Court cannot inquire into any allegation of grave abuse of discretion by the other departments of the government.
VIII. Alleged violation of policy towards cooperatives. On the other hand, the Cooperative Union of the Philippines (CUP), after briefly surveying the
course of legislation, argues that it was to adopt a definite policy of granting tax exemption to cooperatives that the present Constitution embodies
provisions on cooperatives. To subject cooperatives to the VAT would therefore be to infringe a constitutional policy. Petitioner claims that in 1973,
P.D. No. 175 was promulgated exempting cooperatives from the payment of income taxes and sales taxes but in 1984, because of the crisis which
menaced the national economy, this exemption was withdrawn by P.D. No. 1955; that in 1986, P.D. No. 2008 again granted cooperatives exemption
from income and sales taxes until December 31, 1991, but, in the same year, E.O. No. 93 revoked the exemption; and that finally in 1987 the framers
of the Constitution "repudiated the previous actions of the government adverse to the interests of the cooperatives, that is, the repeated revocation of
the tax exemption to cooperatives and instead upheld the policy of strengthening the cooperatives by way of the grant of tax exemptions," by
providing the following in Art. XII:
§1. The goals of the national economy are a more equitable distribution of opportunities, income, and wealth; a sustained increase in the amount of
goods and services produced by the nation for the benefit of the people; and an expanding productivity as the key to raising the quality of life for all,
especially the underprivileged.
The State shall promote industrialization and full employment based on sound agricultural development and agrarian reform, through industries that
make full and efficient use of human and natural resources, and which are competitive in both domestic and foreign markets. However, the State shall
protect Filipino enterprises against unfair foreign competition and trade practices.
In the pursuit of these goals, all sectors of the economy and all regions of the country shall be given optimum opportunity to develop. Private
enterprises, including corporations, cooperatives, and similar collective organizations, shall be encouraged to broaden the base of their ownership.
§15. The Congress shall create an agency to promote the viability and growth of cooperatives as instruments for social justice and economic
development.
Petitioner's contention has no merit. In the first place, it is not true that P.D. No. 1955 singled out cooperatives by withdrawing their exemption from
income and sales taxes under P.D. No. 175, §5. What P.D. No. 1955, §1 did was to withdraw the exemptions and preferential treatments theretofore
granted to private business enterprises in general, in view of the economic crisis which then beset the nation. It is true that after P.D. No. 2008, §2
had restored the tax exemptions of cooperatives in 1986, the exemption was again repealed by E.O. No. 93, §1, but then again cooperatives were not
the only ones whose exemptions were withdrawn. The withdrawal of tax incentives applied to all, including government and private entities. In the
second place, the Constitution does not really require that cooperatives be granted tax exemptions in order to promote their growth and viability.
Hence, there is no basis for petitioner's assertion that the government's policy toward cooperatives had been one of vacillation, as far as the grant of
tax privileges was concerned, and that it was to put an end to this indecision that the constitutional provisions cited were adopted. Perhaps as a
matter of policy cooperatives should be granted tax exemptions, but that is left to the discretion of Congress. If Congress does not grant exemption
and there is no discrimination to cooperatives, no violation of any constitutional policy can be charged.
Indeed, petitioner's theory amounts to saying that under the Constitution cooperatives are exempt from taxation. Such theory is contrary to the
Constitution under which only the following are exempt from taxation: charitable institutions, churches and parsonages, by reason of Art. VI, §28 (3),
and non-stock, non-profit educational institutions by reason of Art. XIV, §4 (3).
CUP's further ground for seeking the invalidation of R.A. No. 7716 is that it denies cooperatives the equal protection of the law because electric
cooperatives are exempted from the VAT. The classification between electric and other cooperatives (farmers cooperatives, producers cooperatives,
marketing cooperatives, etc.) apparently rests on a congressional determination that there is greater need to provide cheaper electric power to as
many people as possible, especially those living in the rural areas, than there is to provide them with other necessities in life. We cannot say that such
classification is unreasonable.
We have carefully read the various arguments raised against the constitutional validity of R.A. No. 7716. We have in fact taken the extraordinary step
of enjoining its enforcement pending resolution of these cases. We have now come to the conclusion that the law suffers from none of the infirmities
attributed to it by petitioners and that its enactment by the other branches of the government does not constitute a grave abuse of discretion. Any
question as to its necessity, desirability or expediency must be addressed to Congress as the body which is electorally responsible, remembering
that, as Justice Holmes has said, "legislators are the ultimate guardians of the liberties and welfare of the people in quite as great a degree as are the
courts." (Missouri, Kansas & Texas Ry. Co. v. May, 194 U.S. 267, 270, 48 L. Ed. 971, 973 (1904)). It is not right, as petitioner in G.R. No. 115543
does in arguing that we should enforce the public accountability of legislators, that those who took part in passing the law in question by voting for it in
Congress should later thrust to the courts the burden of reviewing measures in the flush of enactment. This Court does not sit as a third branch of the
legislature, much less exercise a veto power over legislation.
WHEREFORE, the motions for reconsideration are denied with finality and the temporary restraining order previously issued is hereby lifted.
SO ORDERED.
[G.R. No. 144104. June 29, 2004]
LUNG CENTER OF THE PHILIPPINES, petitioner, vs. QUEZON CITY and CONSTANTINO P. ROSAS, in his capacity as City Assessor of
Quezon City, respondents.
DECISION
CALLEJO, SR., J.:
This is a petition for review on certiorari under Rule 45 of the Rules of Court, as amended, of the Decision [1] dated July 17, 2000 of the Court of
Appeals in CA-G.R. SP No. 57014 which affirmed the decision of the Central Board of Assessment Appeals holding that the lot owned by the
petitioner and its hospital building constructed thereon are subject to assessment for purposes of real property tax.
The Antecedents
The petitioner Lung Center of the Philippines is a non-stock and non-profit entity established on January 16, 1981 by virtue of Presidential Decree No.
1823.[2] It is the registered owner of a parcel of land, particularly described as Lot No. RP-3-B-3A-1-B-1, SWO-04-000495, located at Quezon Avenue
corner Elliptical Road, Central District, Quezon City. The lot has an area of 121,463 square meters and is covered by Transfer Certificate of Title
(TCT) No. 261320 of the Registry of Deeds of Quezon City. Erected in the middle of the aforesaid lot is a hospital known as the Lung Center of
the Philippines. A big space at the ground floor is being leased to private parties, for canteen and small store spaces, and to medical or professional
practitioners who use the same as their private clinics for their patients whom they charge for their professional services. Almost one-half of the entire
area on the left side of the building along Quezon Avenue is vacant and idle, while a big portion on the right side, at the corner of Quezon
Avenue and Elliptical Road, is being leased for commercial purposes to a private enterprise known as the Elliptical Orchids and Garden Center.
The petitioner accepts paying and non-paying patients. It also renders medical services to out-patients, both paying and non-paying. Aside from its
income from paying patients, the petitioner receives annual subsidies from the government.
On June 7, 1993, both the land and the hospital building of the petitioner were assessed for real property taxes in the amount of P4,554,860 by the
City Assessor of Quezon City.[3] Accordingly, Tax Declaration Nos. C-021-01226 (16-2518) and C-021-01231 (15-2518-A) were issued for the land
and the hospital building, respectively.[4] On August 25, 1993, the petitioner filed a Claim for Exemption [5] from real property taxes with the City
Assessor, predicated on its claim that it is a charitable institution. The petitioners request was denied, and a petition was, thereafter, filed before the
Local Board of Assessment Appeals of Quezon City (QC-LBAA, for brevity) for the reversal of the resolution of the City Assessor. The petitioner
alleged that under Section 28, paragraph 3 of the 1987 Constitution, the property is exempt from real property taxes. It averred that a minimum of
60% of its hospital beds are exclusively used for charity patients and that the major thrust of its hospital operation is to serve charity patients. The
petitioner contends that it is a charitable institution and, as such, is exempt from real property taxes. The QC-LBAA rendered judgment dismissing the
petition and holding the petitioner liable for real property taxes. [6]
The QC-LBAAs decision was, likewise, affirmed on appeal by the Central Board of Assessment Appeals of Quezon City (CBAA, for brevity) [7] which
ruled that the petitioner was not a charitable institution and that its real properties were not actually, directly and exclusively used for charitable
purposes; hence, it was not entitled to real property tax exemption under the constitution and the law. The petitioner sought relief from the Court of
Appeals, which rendered judgment affirming the decision of the CBAA. [8]
Undaunted, the petitioner filed its petition in this Court contending that:
A. THE COURT A QUO ERRED IN DECLARING PETITIONER AS NOT ENTITLED TO REALTY TAX EXEMPTIONS ON THE GROUND THAT ITS
LAND, BUILDING AND IMPROVEMENTS, SUBJECT OF ASSESSMENT, ARE NOT ACTUALLY, DIRECTLY AND EXCLUSIVELY DEVOTED FOR
CHARITABLE PURPOSES.
B. WHILE PETITIONER IS NOT DECLARED AS REAL PROPERTY TAX EXEMPT UNDER ITS CHARTER, PD 1823, SAID EXEMPTION MAY
NEVERTHELESS BE EXTENDED UPON PROPER APPLICATION.
The petitioner avers that it is a charitable institution within the context of Section 28(3), Article VI of the 1987 Constitution. It asserts that its character
as a charitable institution is not altered by the fact that it admits paying patients and renders medical services to them, leases portions of the land to
private parties, and rents out portions of the hospital to private medical practitioners from which it derives income to be used for operational
expenses. The petitioner points out that for the years 1995 to 1999, 100% of its out-patients were charity patients and of the hospitals 282-bed
capacity, 60% thereof, or 170 beds, is allotted to charity patients. It asserts that the fact that it receives subsidies from the government attests to its
character as a charitable institution. It contends that the exclusivity required in the Constitution does not necessarily mean solely. Hence, even if a
portion of its real estate is leased out to private individuals from whom it derives income, it does not lose its character as a charitable institution, and
its exemption from the payment of real estate taxes on its real property. The petitioner cited our ruling in Herrera v. QC-BAA[9] to bolster its pose. The
petitioner further contends that even if P.D. No. 1823 does not exempt it from the payment of real estate taxes, it is not precluded from seeking tax
exemption under the 1987 Constitution.
In their comment on the petition, the respondents aver that the petitioner is not a charitable entity. The petitioners real property is not exempt from the
payment of real estate taxes under P.D. No. 1823 and even under the 1987 Constitution because it failed to prove that it is a charitable institution and
that the said property is actually, directly and exclusively used for charitable purposes. The respondents noted that in a newspaper report, it appears
that graft charges were filed with the Sandiganbayan against the director of the petitioner, its administrative officer, and Zenaida Rivera, the
proprietress of the Elliptical Orchids and Garden Center, for entering into a lease contract over 7,663.13 square meters of the property in 1990 for
only P20,000 a month, when the monthly rental should be P357,000 a month as determined by the Commission on Audit; and that instead of
complying with the directive of the COA for the cancellation of the contract for being grossly prejudicial to the government, the petitioner renewed the
same on March 13, 1995 for a monthly rental of only P24,000. They assert that the petitioner uses the subsidies granted by the government for
charity patients and uses the rest of its income from the property for the benefit of paying patients, among other purposes. They aver that the
petitioner failed to adduce substantial evidence that 100% of its out-patients and 170 beds in the hospital are reserved for indigent patients. The
respondents further assert, thus:
13. That the claims/allegations of the Petitioner LCP do not speak well of its record of service. That before a patient is admitted for treatment in the
Center, first impression is that it is pay-patient and required to pay a certain amount as deposit. That even if a patient is living below the poverty line,
he is charged with high hospital bills. And, without these bills being first settled, the poor patient cannot be allowed to leave the hospital or be
discharged without first paying the hospital bills or issue a promissory note guaranteed and indorsed by an influential agency or person known only to
the Center; that even the remains of deceased poor patients suffered the same fate. Moreover, before a patient is admitted for treatment as free or
charity patient, one must undergo a series of interviews and must submit all the requirements needed by the Center, usually accompanied by
endorsement by an influential agency or person known only to the Center. These facts were heard and admitted by the Petitioner LCP during the
hearings before the Honorable QC-BAA and Honorable CBAA. These are the reasons of indigent patients, instead of seeking treatment with the
Center, they prefer to be treated at the Quezon Institute. Can such practice by the Center be called charitable? [10]
The Issues
The issues for resolution are the following: (a) whether the petitioner is a charitable institution within the context of Presidential Decree No. 1823 and
the 1973 and 1987 Constitutions and Section 234(b) of Republic Act No. 7160; and (b) whether the real properties of the petitioner are exempt from
real property taxes.
The Courts Ruling
The petition is partially granted.
On the first issue, we hold that the petitioner is a charitable institution within the context of the 1973 and 1987 Constitutions. To determine whether an
enterprise is a charitable institution/entity or not, the elements which should be considered include the statute creating the enterprise, its corporate
purposes, its constitution and by-laws, the methods of administration, the nature of the actual work performed, the character of the services rendered,
the indefiniteness of the beneficiaries, and the use and occupation of the properties. [11]
In the legal sense, a charity may be fully defined as a gift, to be applied consistently with existing laws, for the benefit of an indefinite number of
persons, either by bringing their minds and hearts under the influence of education or religion, by assisting them to establish themselves in life or
otherwise lessening the burden of government.[12] It may be applied to almost anything that tend to promote the well-doing and well-being of social
man. It embraces the improvement and promotion of the happiness of man.[13] The word charitable is not restricted to relief of the poor or sick. [14] The
test of a charity and a charitable organization are in law the same. The test whether an enterprise is charitable or not is whether it exists to carry out a
purpose reorganized in law as charitable or whether it is maintained for gain, profit, or private advantage.
Under P.D. No. 1823, the petitioner is a non-profit and non-stock corporation which, subject to the provisions of the decree, is to be administered by
the Office of the President of the Philippines with the Ministry of Health and the Ministry of Human Settlements. It was organized for the welfare and
benefit of the Filipino people principally to help combat the high incidence of lung and pulmonary diseases in the Philippines. The raison detre for the
creation of the petitioner is stated in the decree, viz:
Whereas, for decades, respiratory diseases have been a priority concern, having been the leading cause of illness and death in the Philippines,
comprising more than 45% of the total annual deaths from all causes, thus, exacting a tremendous toll on human resources, which ailments are likely
to increase and degenerate into serious lung diseases on account of unabated pollution, industrialization and unchecked cigarette smoking in the
country;
Whereas, the more common lung diseases are, to a great extent, preventable, and curable with early and adequate medical care, immunization and
through prompt and intensive prevention and health education programs;
Whereas, there is an urgent need to consolidate and reinforce existing programs, strategies and efforts at preventing, treating and rehabilitating
people affected by lung diseases, and to undertake research and training on the cure and prevention of lung diseases, through a Lung Center which
will house and nurture the above and related activities and provide tertiary-level care for more difficult and problematical cases;
Whereas, to achieve this purpose, the Government intends to provide material and financial support towards the establishment and maintenance of
a Lung Center for the welfare and benefit of the Filipino people. [15]
The purposes for which the petitioner was created are spelled out in its Articles of Incorporation, thus:
SECOND: That the purposes for which such corporation is formed are as follows:
1. To construct, establish, equip, maintain, administer and conduct an integrated medical institution which shall specialize in the treatment, care,
rehabilitation and/or relief of lung and allied diseases in line with the concern of the government to assist and provide material and financial support in
the establishment and maintenance of a lung center primarily to benefit the people of the Philippines and in pursuance of the policy of the State to
secure the well-being of the people by providing them specialized health and medical services and by minimizing the incidence of lung diseases in the
country and elsewhere.
2. To promote the noble undertaking of scientific research related to the prevention of lung or pulmonary ailments and the care of lung patients,
including the holding of a series of relevant congresses, conventions, seminars and conferences;
3. To stimulate and, whenever possible, underwrite scientific researches on the biological, demographic, social, economic, eugenic and physiological
aspects of lung or pulmonary diseases and their control; and to collect and publish the findings of such research for public consumption;
4. To facilitate the dissemination of ideas and public acceptance of information on lung consciousness or awareness, and the development of fact-
finding, information and reporting facilities for and in aid of the general purposes or objects aforesaid, especially in human lung requirements, general
health and physical fitness, and other relevant or related fields;
5. To encourage the training of physicians, nurses, health officers, social workers and medical and technical personnel in the practical and scientific
implementation of services to lung patients;
6. To assist universities and research institutions in their studies about lung diseases, to encourage advanced training in matters of the lung and
related fields and to support educational programs of value to general health;
7. To encourage the formation of other organizations on the national, provincial and/or city and local levels; and to coordinate their various efforts and
activities for the purpose of achieving a more effective programmatic approach on the common problems relative to the objectives enumerated herein;
8. To seek and obtain assistance in any form from both international and local foundations and organizations; and to administer grants and funds that
may be given to the organization;
9. To extend, whenever possible and expedient, medical services to the public and, in general, to promote and protect the health of the masses of our
people, which has long been recognized as an economic asset and a social blessing;
10. To help prevent, relieve and alleviate the lung or pulmonary afflictions and maladies of the people in any and all walks of life, including those who
are poor and needy, all without regard to or discrimination, because of race, creed, color or political belief of the persons helped; and to enable them
to obtain treatment when such disorders occur;
11. To participate, as circumstances may warrant, in any activity designed and carried on to promote the general health of the community;
12. To acquire and/or borrow funds and to own all funds or equipment, educational materials and supplies by purchase, donation, or otherwise and to
dispose of and distribute the same in such manner, and, on such basis as the Center shall, from time to time, deem proper and best, under the
particular circumstances, to serve its general and non-profit purposes and objectives;
13. To buy, purchase, acquire, own, lease, hold, sell, exchange, transfer and dispose of properties, whether real or personal, for purposes herein
mentioned; and
14. To do everything necessary, proper, advisable or convenient for the accomplishment of any of the powers herein set forth and to do every other
act and thing incidental thereto or connected therewith. [16]
Hence, the medical services of the petitioner are to be rendered to the public in general in any and all walks of life including those who are poor and
the needy without discrimination. After all, any person, the rich as well as the poor, may fall sick or be injured or wounded and become a subject of
charity.[17]
As a general principle, a charitable institution does not lose its character as such and its exemption from taxes simply because it derives income from
paying patients, whether out-patient, or confined in the hospital, or receives subsidies from the government, so long as the money received is devoted
or used altogether to the charitable object which it is intended to achieve; and no money inures to the private benefit of the persons managing or
operating the institution.[18] In Congregational Sunday School, etc. v. Board of Review,[19] the State Supreme Court of Illinois held, thus:
[A]n institution does not lose its charitable character, and consequent exemption from taxation, by reason of the fact that those recipients of its
benefits who are able to pay are required to do so, where no profit is made by the institution and the amounts so received are applied in furthering its
charitable purposes, and those benefits are refused to none on account of inability to pay therefor.The fundamental ground upon which all exemptions
in favor of charitable institutions are based is the benefit conferred upon the public by them, and a consequent relief, to some extent, of the burden
upon the state to care for and advance the interests of its citizens. [20]
As aptly stated by the State Supreme Court of South Dakota in Lutheran Hospital Association of South Dakota v. Baker:[21]
[T]he fact that paying patients are taken, the profits derived from attendance upon these patients being exclusively devoted to the maintenance of the
charity, seems rather to enhance the usefulness of the institution to the poor; for it is a matter of common observation amongst those who have gone
about at all amongst the suffering classes, that the deserving poor can with difficulty be persuaded to enter an asylum of any kind confined to the
reception of objects of charity; and that their honest pride is much less wounded by being placed in an institution in which paying patients are also
received. The fact of receiving money from some of the patients does not, we think, at all impair the character of the charity, so long as the money
thus received is devoted altogether to the charitable object which the institution is intended to further. [22]
The money received by the petitioner becomes a part of the trust fund and must be devoted to public trust purposes and cannot be diverted to private
profit or benefit.[23]
Under P.D. No. 1823, the petitioner is entitled to receive donations. The petitioner does not lose its character as a charitable institution simply
because the gift or donation is in the form of subsidies granted by the government. As held by the State Supreme Court of Utah in Yorgason v.
County Board of Equalization of Salt Lake County:[24]
Second, the government subsidy payments are provided to the project. Thus, those payments are like a gift or donation of any other kind except they
come from the government. In both Intermountain Health Care and the present case, the crux is the presence or absence of material reciprocity. It is
entirely irrelevant to this analysis that the government, rather than a private benefactor, chose to make up the deficit resulting from the exchange
between St. Marks Tower and the tenants by making a contribution to the landlord, just as it would have been irrelevant inIntermountain Health Care if
the patients income supplements had come from private individuals rather than the government.
Therefore, the fact that subsidization of part of the cost of furnishing such housing is by the government rather than private charitable contributions
does not dictate the denial of a charitable exemption if the facts otherwise support such an exemption, as they do here. [25]
In this case, the petitioner adduced substantial evidence that it spent its income, including the subsidies from the government for 1991 and 1992 for
its patients and for the operation of the hospital. It even incurred a net loss in 1991 and 1992 from its operations.
Even as we find that the petitioner is a charitable institution, we hold, anent the second issue, that those portions of its real property that are leased to
private entities are not exempt from real property taxes as these are not actually, directly and exclusively used for charitable purposes.
The settled rule in this jurisdiction is that laws granting exemption from tax are construed strictissimi juris against the taxpayer and liberally in favor of
the taxing power.Taxation is the rule and exemption is the exception. The effect of an exemption is equivalent to an appropriation. Hence, a claim for
exemption from tax payments must be clearly shown and based on language in the law too plain to be mistaken. [26] As held in Salvation Army v.
Hoehn:[27]
An intention on the part of the legislature to grant an exemption from the taxing power of the state will never be implied from language which will admit
of any other reasonable construction. Such an intention must be expressed in clear and unmistakable terms, or must appear by necessary implication
from the language used, for it is a well settled principle that, when a special privilege or exemption is claimed under a statute, charter or act of
incorporation, it is to be construed strictly against the property owner and in favor of the public. This principle applies with peculiar force to a claim of
exemption from taxation . [28]
Section 2 of Presidential Decree No. 1823, relied upon by the petitioner, specifically provides that the petitioner shall enjoy the tax exemptions and
privileges:
SEC. 2. TAX EXEMPTIONS AND PRIVILEGES. Being a non-profit, non-stock corporation organized primarily to help combat the high incidence of
lung and pulmonary diseases in the Philippines, all donations, contributions, endowments and equipment and supplies to be imported by authorized
entities or persons and by the Board of Trustees of the Lung Center of the Philippines, Inc., for the actual use and benefit of the Lung Center, shall be
exempt from income and gift taxes, the same further deductible in full for the purpose of determining the maximum deductible amount under Section
30, paragraph (h), of the National Internal Revenue Code, as amended.
The Lung Center of the Philippines shall be exempt from the payment of taxes, charges and fees imposed by the Government or any political
subdivision or instrumentality thereof with respect to equipment purchases made by, or for the Lung Center.[29]
It is plain as day that under the decree, the petitioner does not enjoy any property tax exemption privileges for its real properties as well as the
building constructed thereon. If the intentions were otherwise, the same should have been among the enumeration of tax exempt privileges under
Section 2:
It is a settled rule of statutory construction that the express mention of one person, thing, or consequence implies the exclusion of all others. The rule
is expressed in the familiar maxim, expressio unius est exclusio alterius.
The rule of expressio unius est exclusio alterius is formulated in a number of ways. One variation of the rule is principle that what is expressed puts an
end to that which is implied. Expressium facit cessare tacitum. Thus, where a statute, by its terms, is expressly limited to certain matters, it may not,
by interpretation or construction, be extended to other matters.
...
The rule of expressio unius est exclusio alterius and its variations are canons of restrictive interpretation. They are based on the rules of logic and the
natural workings of the human mind. They are predicated upon ones own voluntary act and not upon that of others. They proceed from the premise
that the legislature would not have made specified enumeration in a statute had the intention been not to restrict its meaning and confine its terms to
those expressly mentioned.[30]
The exemption must not be so enlarged by construction since the reasonable presumption is that the State has granted in express terms all it
intended to grant at all, and that unless the privilege is limited to the very terms of the statute the favor would be intended beyond what was meant. [31]
Section 28(3), Article VI of the 1987 Philippine Constitution provides, thus:
(3) Charitable institutions, churches and parsonages or convents appurtenant thereto, mosques, non-profit cemeteries, and all lands, buildings, and
improvements, actually, directly and exclusivelyused for religious, charitable or educational purposes shall be exempt from taxation. [32]
The tax exemption under this constitutional provision covers property taxes only.[33] As Chief Justice Hilario G. Davide, Jr., then a member of the 1986
Constitutional Commission, explained: . . . what is exempted is not the institution itself . . .; those exempted from real estate taxes are lands, buildings
and improvements actually, directly and exclusively used for religious, charitable or educational purposes. [34]
Consequently, the constitutional provision is implemented by Section 234(b) of Republic Act No. 7160 (otherwise known as the Local Government
Code of 1991) as follows:
SECTION 234. Exemptions from Real Property Tax. The following are exempted from payment of the real property tax:
...
(b) Charitable institutions, churches, parsonages or convents appurtenant thereto, mosques, non-profit or religious cemeteries and all lands,
buildings, and improvements actually, directly, and exclusively used for religious, charitable or educational purposes. [35]
We note that under the 1935 Constitution, ... all lands, buildings, and improvements used exclusively for charitable purposes shall be exempt from
taxation.[36] However, under the 1973 and the present Constitutions, for lands, buildings, and improvements of the charitable institution to be
considered exempt, the same should not only be exclusively used for charitable purposes; it is required that such property be used actually and
directly for such purposes.[37]
In light of the foregoing substantial changes in the Constitution, the petitioner cannot rely on our ruling in Herrera v. Quezon City Board of Assessment
Appeals which was promulgated on September 30, 1961 before the 1973 and 1987 Constitutions took effect. [38] As this Court held in Province of Abra
v. Hernando:[39]
Under the 1935 Constitution: Cemeteries, churches, and parsonages or convents appurtenant thereto, and all lands, buildings, and improvements
used exclusively for religious, charitable, or educational purposes shall be exempt from taxation. The present Constitution added charitable
institutions, mosques, and non-profit cemeteries and required that for the exemption of lands, buildings, and improvements, they should not only be
exclusively but also actually and directly used for religious or charitable purposes. The Constitution is worded differently. The change should not be
ignored. It must be duly taken into consideration. Reliance on past decisions would have sufficed were the words actually as well as directly not
added. There must be proof therefore of the actual and direct use of the lands, buildings, and improvements for religious or charitable purposes to be
exempt from taxation.
Under the 1973 and 1987 Constitutions and Rep. Act No. 7160 in order to be entitled to the exemption, the petitioner is burdened to prove, by clear
and unequivocal proof, that (a) it is a charitable institution; and (b) its real properties are ACTUALLY, DIRECTLY and EXCLUSIVELY used for
charitable purposes. Exclusive is defined as possessed and enjoyed to the exclusion of others; debarred from participation or enjoyment; and
exclusively is defined, in a manner to exclude; as enjoying a privilege exclusively.[40] If real property is used for one or more commercial purposes, it is
not exclusively used for the exempted purposes but is subject to taxation. [41] The words dominant use or principal use cannot be substituted for the
words used exclusively without doing violence to the Constitutions and the law. [42] Solely is synonymous with exclusively.[43]
What is meant by actual, direct and exclusive use of the property for charitable purposes is the direct and immediate and actual application of the
property itself to the purposes for which the charitable institution is organized. It is not the use of the income from the real property that is
determinative of whether the property is used for tax-exempt purposes.[44]
The petitioner failed to discharge its burden to prove that the entirety of its real property is actually, directly and exclusively used for charitable
purposes. While portions of the hospital are used for the treatment of patients and the dispensation of medical services to them, whether paying or
non-paying, other portions thereof are being leased to private individuals for their clinics and a canteen. Further, a portion of the land is being leased
to a private individual for her business enterprise under the business name Elliptical Orchids and Garden Center. Indeed, the petitioners evidence
shows that it collected P1,136,483.45 as rentals in 1991 and P1,679,999.28 for 1992 from the said lessees.
Accordingly, we hold that the portions of the land leased to private entities as well as those parts of the hospital leased to private individuals are not
exempt from such taxes.[45] On the other hand, the portions of the land occupied by the hospital and portions of the hospital used for its patients,
whether paying or non-paying, are exempt from real property taxes.
IN LIGHT OF ALL THE FOREGOING, the petition is PARTIALLY GRANTED. The respondent Quezon City Assessor is hereby DIRECTED to
determine, after due hearing, the precise portions of the land and the area thereof which are leased to private persons, and to compute the real
property taxes due thereon as provided for by law.
SO ORDERED.
G.R. No. 109289 October 3, 1994
RUFINO R. TAN, petitioner,
vs.
RAMON R. DEL ROSARIO, JR., as SECRETARY OF FINANCE & JOSE U. ONG, as COMMISSIONER OF INTERNAL REVENUE, respondents.
G.R. No. 109446 October 3, 1994
CARAG, CABALLES, JAMORA AND SOMERA LAW OFFICES, CARLO A. CARAG, MANUELITO O. CABALLES, ELPIDIO C. JAMORA, JR.
and BENJAMIN A. SOMERA, JR., petitioners,
vs.
RAMON R. DEL ROSARIO, in his capacity as SECRETARY OF FINANCE and JOSE U. ONG, in his capacity as COMMISSIONER OF
INTERNAL REVENUE, respondents.
Rufino R. Tan for and in his own behalf.
Carag, Caballes, Jamora & Zomera Law Offices for petitioners in G.R. 109446.
VITUG, J.:
These two consolidated special civil actions for prohibition challenge, in G.R. No. 109289, the constitutionality of Republic Act No. 7496, also
commonly known as the Simplified Net Income Taxation Scheme ("SNIT"), amending certain provisions of the National Internal Revenue Code and, in
G.R. No. 109446, the validity of Section 6, Revenue Regulations No. 2-93, promulgated by public respondents pursuant to said law.
Petitioners claim to be taxpayers adversely affected by the continued implementation of the amendatory legislation.
In G.R. No. 109289, it is asserted that the enactment of Republic Act
No. 7496 violates the following provisions of the Constitution:
Article VI, Section 26(1) — Every bill passed by the Congress shall embrace only one subject which shall be expressed in the title thereof.
Article VI, Section 28(1) — The rule of taxation shall be uniform and equitable. The Congress shall evolve a progressive system of taxation.
Article III, Section 1 — No person shall be deprived of . . . property without due process of law, nor shall any person be denied the equal protection of
the laws.
In G.R. No. 109446, petitioners, assailing Section 6 of Revenue Regulations No. 2-93, argue that public respondents have exceeded their rule-making
authority in applying SNIT to general professional partnerships.
The Solicitor General espouses the position taken by public respondents.
The Court has given due course to both petitions. The parties, in compliance with the Court's directive, have filed their respective memoranda.
G.R. No. 109289
Petitioner contends that the title of House Bill No. 34314, progenitor of Republic Act No. 7496, is a misnomer or, at least, deficient for being merely
entitled, "Simplified Net Income Taxation Scheme for the Self-Employed
and Professionals Engaged in the Practice of their Profession" (Petition in G.R. No. 109289).
The full text of the title actually reads:
An Act Adopting the Simplified Net Income Taxation Scheme For The Self-Employed and Professionals Engaged In The Practice of Their Profession,
Amending Sections 21 and 29 of the National Internal Revenue Code, as Amended.
The pertinent provisions of Sections 21 and 29, so referred to, of the National Internal Revenue Code, as now amended, provide:
Sec. 21. Tax on citizens or residents. —
xxx xxx xxx
(f) Simplified Net Income Tax for the Self-Employed and/or Professionals Engaged in the Practice of Profession. — A tax is hereby imposed upon the
taxable net income as determined in Section 27 received during each taxable year from all sources, other than income covered by paragraphs (b), (c),
(d) and (e) of this section by every individual whether
a citizen of the Philippines or an alien residing in the Philippines who is self-employed or practices his profession herein, determined in accordance
with the following schedule:
Not over P10,000 3%
Over P10,000 P300 + 9%
but not over P30,000 of excess over P10,000
Over P30,000 P2,100 + 15%
but not over P120,00 of excess over P30,000
Over P120,000 P15,600 + 20%
but not over P350,000 of excess over P120,000
Over P350,000 P61,600 + 30%
of excess over P350,000
Sec. 29. Deductions from gross income. — In computing taxable income subject to tax under Sections 21(a), 24(a), (b) and (c); and 25 (a)(1), there
shall be allowed as deductions the items specified in paragraphs (a) to (i) of this section: Provided, however, That in computing taxable income
subject to tax under Section 21 (f) in the case of individuals engaged in business or practice of profession, only the following direct costs shall be
allowed as deductions:
(a) Raw materials, supplies and direct labor;
(b) Salaries of employees directly engaged in activities in the course of or pursuant to the business or practice of their profession;
(c) Telecommunications, electricity, fuel, light and water;
(d) Business rentals;
(e) Depreciation;
(f) Contributions made to the Government and accredited relief organizations for the rehabilitation of calamity stricken areas declared by the
President; and
(g) Interest paid or accrued within a taxable year on loans contracted from accredited financial institutions which must be proven to have been
incurred in connection with the conduct of a taxpayer's profession, trade or business.
For individuals whose cost of goods sold and direct costs are difficult to determine, a maximum of forty per cent (40%) of their gross receipts shall be
allowed as deductions to answer for business or professional expenses as the case may be.
On the basis of the above language of the law, it would be difficult to accept petitioner's view that the amendatory law should be considered as having
now adopted a gross income, instead of as having still retained the net income, taxation scheme. The allowance for deductible items, it is true, may
have significantly been reduced by the questioned law in comparison with that which has prevailed prior to the amendment; limiting, however,
allowable deductions from gross income is neither discordant with, nor opposed to, the net income tax concept. The fact of the matter is still that
various deductions, which are by no means inconsequential, continue to be well provided under the new law.
Article VI, Section 26(1), of the Constitution has been envisioned so as (a) to prevent log-rolling legislation intended to unite the members of the
legislature who favor any one of unrelated subjects in support of the whole act, (b) to avoid surprises or even fraud upon the legislature, and (c) to
fairly apprise the people, through such publications of its proceedings as are usually made, of the subjects of legislation. 1 The above objectives of the
fundamental law appear to us to have been sufficiently met. Anything else would be to require a virtual compendium of the law which could not have
been the intendment of the constitutional mandate.
Petitioner intimates that Republic Act No. 7496 desecrates the constitutional requirement that taxation "shall be uniform and equitable" in that the law
would now attempt to tax single proprietorships and professionals differently from the manner it imposes the tax on corporations and partnerships.
The contention clearly forgets, however, that such a system of income taxation has long been the prevailing rule even prior to Republic Act No. 7496.
Uniformity of taxation, like the kindred concept of equal protection, merely requires that all subjects or objects of taxation, similarly situated, are to be
treated alike both in privileges and liabilities (Juan Luna Subdivision vs. Sarmiento, 91 Phil. 371). Uniformity does not forfend classification as long as:
(1) the standards that are used therefor are substantial and not arbitrary, (2) the categorization is germane to achieve the legislative purpose, (3) the
law applies, all things being equal, to both present and future conditions, and (4) the classification applies equally well to all those belonging to the
same class (Pepsi Cola vs. City of Butuan, 24 SCRA 3; Basco vs. PAGCOR, 197 SCRA 52).
What may instead be perceived to be apparent from the amendatory law is the legislative intent to increasingly shift the income tax system towards
the schedular approach2 in the income taxation of individual taxpayers and to maintain, by and large, the present global treatment 3 on taxable
corporations. We certainly do not view this classification to be arbitrary and inappropriate.
Petitioner gives a fairly extensive discussion on the merits of the law, illustrating, in the process, what he believes to be an imbalance between the tax
liabilities of those covered by the amendatory law and those who are not. With the legislature primarily lies the discretion to determine the nature
(kind), object (purpose), extent (rate), coverage (subjects) and situs (place) of taxation. This court cannot freely delve into those matters which, by
constitutional fiat, rightly rest on legislative judgment. Of course, where a tax measure becomes so unconscionable and unjust as to amount to
confiscation of property, courts will not hesitate to strike it down, for, despite all its plenitude, the power to tax cannot override constitutional
proscriptions. This stage, however, has not been demonstrated to have been reached within any appreciable distance in this controversy before us.
Having arrived at this conclusion, the plea of petitioner to have the law declared unconstitutional for being violative of due process must perforce fail.
The due process clause may correctly be invoked only when there is a clear contravention of inherent or constitutional limitations in the exercise of
the tax power. No such transgression is so evident to us.
G.R. No. 109446
The several propositions advanced by petitioners revolve around the question of whether or not public respondents have exceeded their authority in
promulgating Section 6, Revenue Regulations No. 2-93, to carry out Republic Act No. 7496.
The questioned regulation reads:
Sec. 6. General Professional Partnership — The general professional partnership (GPP) and the partners comprising the GPP are covered by R. A.
No. 7496. Thus, in determining the net profit of the partnership, only the direct costs mentioned in said law are to be deducted from partnership
income. Also, the expenses paid or incurred by partners in their individual capacities in the practice of their profession which are not reimbursed or
paid by the partnership but are not considered as direct cost, are not deductible from his gross income.
The real objection of petitioners is focused on the administrative interpretation of public respondents that would apply SNIT to partners in general
professional partnerships. Petitioners cite the pertinent deliberations in Congress during its enactment of Republic Act No. 7496, also quoted by the
Honorable Hernando B. Perez, minority floor leader of the House of Representatives, in the latter's privilege speech by way of commenting on the
questioned implementing regulation of public respondents following the effectivity of the law, thusly:
MR. ALBANO, Now Mr. Speaker, I would like to get the correct impression of this bill. Do we speak here of individuals who are earning, I mean, who
earn through business enterprises and therefore, should file an income tax return?
MR. PEREZ. That is correct, Mr. Speaker. This does not apply to corporations. It applies only to individuals.
(See Deliberations on H. B. No. 34314, August 6, 1991, 6:15 P.M.; Emphasis ours).
Other deliberations support this position, to wit:
MR. ABAYA . . . Now, Mr. Speaker, did I hear the Gentleman from Batangas say that this bill is intended to increase collections as far as individuals
are concerned and to make collection of taxes equitable?
MR. PEREZ. That is correct, Mr. Speaker.
(Id. at 6:40 P.M.; Emphasis ours).
In fact, in the sponsorship speech of Senator Mamintal Tamano on the Senate version of the SNITS, it is categorically stated, thus:
This bill, Mr. President, is not applicable to business corporations or to partnerships; it is only with respect to individuals and professionals. (Emphasis
ours)
The Court, first of all, should like to correct the apparent misconception that general professional partnerships are subject to the payment of income
tax or that there is a difference in the tax treatment between individuals engaged in business or in the practice of their respective professions and
partners in general professional partnerships. The fact of the matter is that a general professional partnership, unlike an ordinary business partnership
(which is treated as a corporation for income tax purposes and so subject to the corporate income tax), is not itself an income taxpayer. The income
tax is imposed not on the professional partnership, which is tax exempt, but on the partners themselves in their individual capacity computed on their
distributive shares of partnership profits. Section 23 of the Tax Code, which has not been amended at all by Republic Act 7496, is explicit:
Sec. 23. Tax liability of members of general professional partnerships. — (a) Persons exercising a common profession in general partnership shall be
liable for income tax only in their individual capacity, and the share in the net profits of the general professional partnership to which any taxable
partner would be entitled whether distributed or otherwise, shall be returned for taxation and the tax paid in accordance with the provisions of this
Title.
(b) In determining his distributive share in the net income of the partnership, each partner —
(1) Shall take into account separately his distributive share of the partnership's income, gain, loss, deduction, or credit to the extent provided by the
pertinent provisions of this Code, and
(2) Shall be deemed to have elected the itemized deductions, unless he declares his distributive share of the gross income undiminished by his share
of the deductions.
There is, then and now, no distinction in income tax liability between a person who practices his profession alone or individually and one who does it
through partnership (whether registered or not) with others in the exercise of a common profession. Indeed, outside of the gross compensation
income tax and the final tax on passive investment income, under the present income tax system all individuals deriving income from any source
whatsoever are treated in almost invariably the same manner and under a common set of rules.
We can well appreciate the concern taken by petitioners if perhaps we were to consider Republic Act No. 7496 as an entirely independent, not merely
as an amendatory, piece of legislation. The view can easily become myopic, however, when the law is understood, as it should be, as only forming
part of, and subject to, the whole income tax concept and precepts long obtaining under the National Internal Revenue Code. To elaborate a little, the
phrase "income taxpayers" is an all embracing term used in the Tax Code, and it practically covers all persons who derive taxable income. The law, in
levying the tax, adopts the most comprehensive tax situs of nationality and residence of the taxpayer (that renders citizens, regardless of residence,
and resident aliens subject to income tax liability on their income from all sources) and of the generally accepted and internationally recognized
income taxable base (that can subject non-resident aliens and foreign corporations to income tax on their income from Philippine sources). In the
process, the Code classifies taxpayers into four main groups, namely: (1) Individuals, (2) Corporations, (3) Estates under Judicial Settlement and (4)
Irrevocable Trusts (irrevocable both as to corpus and as to income).
Partnerships are, under the Code, either "taxable partnerships" or "exempt partnerships." Ordinarily, partnerships, no matter how created or
organized, are subject to income tax (and thus alluded to as "taxable partnerships") which, for purposes of the above categorization, are by law
assimilated to be within the context of, and so legally contemplated as, corporations. Except for few variances, such as in the application of the
"constructive receipt rule" in the derivation of income, the income tax approach is alike to both juridical persons. Obviously, SNIT is not intended or
envisioned, as so correctly pointed out in the discussions in Congress during its deliberations on Republic Act 7496, aforequoted, to cover
corporations and partnerships which are independently subject to the payment of income tax.
"Exempt partnerships," upon the other hand, are not similarly identified as corporations nor even considered as independent taxable entities for
income tax purposes. A general professional partnership is such an example.4 Here, the partners themselves, not the partnership (although it is still
obligated to file an income tax return [mainly for administration and data]), are liable for the payment of income tax in their individual capacity
computed on their respective and distributive shares of profits. In the determination of the tax liability, a partner does so as an individual, and there is
no choice on the matter. In fine, under the Tax Code on income taxation, the general professional partnership is deemed to be no more than a mere
mechanism or a flow-through entity in the generation of income by, and the ultimate distribution of such income to, respectively, each of the individual
partners.
Section 6 of Revenue Regulation No. 2-93 did not alter, but merely confirmed, the above standing rule as now so modified by Republic Act
No. 7496 on basically the extent of allowable deductions applicable to all individual income taxpayers on their non-compensation income. There is no
evident intention of the law, either before or after the amendatory legislation, to place in an unequal footing or in significant variance the income tax
treatment of professionals who practice their respective professions individually and of those who do it through a general professional partnership.
WHEREFORE, the petitions are DISMISSED. No special pronouncement on costs.
SO ORDERED.
G.R. No. 101273 July 3, 1992
CONGRESSMAN ENRIQUE T. GARCIA (Second District of Bataan), petitioner,
vs.
THE EXECUTIVE SECRETARY, THE COMMISSIONER OF CUSTOMS, THE NATIONAL ECONOMIC AND DEVELOPMENT AUTHORITY, THE
TARIFF COMMISSION, THE SECRETARY OF FINANCE, and THE ENERGY REGULATORY BOARD, respondents.
FELICIANO, J.:
On 27 November 1990, the President issued Executive Order No. 438 which imposed, in addition to any other duties, taxes and charges imposed by
law on all articles imported into the Philippines, an additional duty of five percent (5%) ad valorem. This additional duty was imposed across the board
on all imported articles, including crude oil and other oil products imported into the Philippines. This additional duty was subsequently increased from
five percent (5%) ad valorem to nine percent (9%) ad valorem by the promulgation of Executive Order No. 443, dated 3 January 1991.
On 24 July 1991, the Department of Finance requested the Tariff Commission to initiate the process required by the Tariff and Customs Code for the
imposition of a specific levy on crude oil and other petroleum products, covered by HS Heading Nos. 27.09, 27.10 and 27.11 of Section 104 of the
Tariff and Customs Code as amended. Accordingly, the Tariff Commission, following the procedure set forth in Section 401 of the Tariff and Customs
Code, scheduled a public hearing to give interested parties an opportunity to be heard and to present evidence in support of their respective positions.
Meantime, Executive Order No. 475 was issued by the President, on 15 August 1991 reducing the rate of additional duty on all imported articles from
nine percent (9%) to five percent (5%) ad valorem, except in the cases of crude oil and other oil products which continued to be subject to the
additional duty of nine percent (9%) ad valorem.
Upon completion of the public hearings, the Tariff Commission submitted to the President a "Report on Special Duty on Crude Oil and Oil Products"
dated 16 August 1991, for consideration and appropriate action. Seven (7) days later, the President issued Executive Order No. 478, dated 23 August
1991, which levied (in addition to the aforementioned additional duty of nine percent (9%) ad valorem and all other existing ad valorem duties)
a special duty of P0.95 per liter or P151.05 per barrel of imported crude oil and P1.00 per liter of imported oil products.
In the present Petition for Certiorari, Prohibition and Mandamus, petitioner assails the validity of Executive Orders Nos. 475 and 478. He argues that
Executive Orders Nos. 475 and 478 are violative of Section 24, Article VI of the 1987 Constitution which provides as follows:
Sec. 24: All appropriation, revenue or tariff bills, bills authorizing increase of the public debt, bills of local application, and private bills shall originate
exclusively in the House of Representatives, but the Senate may propose or concur with amendments.
He contends that since the Constitution vests the authority to enact revenue bills in Congress, the President may not assume such power by issuing
Executive Orders Nos. 475 and 478 which are in the nature of revenue-generating measures.
Petitioner further argues that Executive Orders No. 475 and 478 contravene Section 401 of the Tariff and Customs Code, which Section authorizes
the President, according to petitioner, to increase, reduce or remove tariff duties or to impose additional duties only when necessary to protect local
industries or products but not for the purpose of raising additional revenue for the government.
Thus, petitioner questions first the constitutionality and second the legality of Executive Orders Nos. 475 and 478, and asks us to restrain the
implementation of those Executive Orders. We will examine these questions in that order.
Before doing so, however, the Court notes that the recent promulgation of Executive Order No. 507 did not render the instant Petition moot and
academic. Executive Order No. 517 which is dated 30 April 1992 provides as follows:
Sec. 1. Lifting of the Additional Duty. — The additional duty in the nature of ad valorem imposed on all imported articles prescribed by the provisions
of Executive Order No. 443, as amended, is hereby lifted; Provided, however, that the selected articles covered by HS Heading Nos. 27.09 and 27.10
of Section 104 of the Tariff and Customs Code, as amended, subject of Annex "A" hereof, shall continue to be subject to the additional duty of nine
(9%) percent ad valorem.
Under the above quoted provision, crude oil and other oil products continue to be subject to the additional duty of nine percent (9%) ad valorem under
Executive Order No. 475 and to the special duty of P0.95 per liter of imported crude oil and P1.00 per liter of imported oil products under Executive
Order No. 478.
Turning first to the question of constitutionality, under Section 24, Article VI of the Constitution, the enactment of appropriation, revenue and tariff bills,
like all other bills is, of course, within the province of the Legislative rather than the Executive Department. It does not follow, however, that therefore
Executive Orders Nos. 475 and 478, assuming they may be characterized as revenue measures, are prohibited to the President, that they must be
enacted instead by the Congress of the Philippines. Section 28(2) of Article VI of the Constitution provides as follows:
(2) The Congress may, by law, authorize the President to fix within specified limits, and subject to such limitations and restrictions as it may
impose, tariff rates, import and export quotas, tonage and wharfage dues, and other duties or imposts within the framework of the national
development program of the Government. (Emphasis supplied)
There is thus explicit constitutional permission 1 to Congress to authorize the President "subject to such limitations and restrictions is [Congress] may
impose" to fix "within specific limits" "tariff rates . . . and other duties or imposts . . ."
The relevant congressional statute is the Tariff and Customs Code of the Philippines, and Sections 104 and 401, the pertinent provisions thereof.
These are the provisions which the President explicitly invoked in promulgating Executive Orders Nos. 475 and 478. Section 104 of the Tariff and
Customs Code provides in relevant part:
Sec. 104. All tariff sections, chapters, headings and subheadings and the rates of import duty under Section 104 of Presidential Decree No. 34 and all
subsequent amendments issued under Executive Orders and Presidential Decrees are hereby adopted and form part of this Code.
There shall be levied, collected, and paid upon all imported articles the rates of duty indicated in the Section under this section except as otherwise
specifically provided for in this Code: Provided, that, the maximum rate shall not exceed one hundred per cent ad valorem.
The rates of duty herein provided or subsequently fixed pursuant to Section Four Hundred One of this Code shall be subject to periodic investigation
by the Tariff Commission and may be revised by the President upon recommendation of the National Economic and Development Authority.
xxx xxx xxx
(Emphasis supplied)
Section 401 of the same Code needs to be quoted in full:
Sec. 401. Flexible Clause. —
a. In the interest of national economy, general welfare and/or national security, and subject to the limitations herein prescribed, the President, upon
recommendation of the National Economic and Development Authority (hereinafter referred to as NEDA), is hereby empowered: (1) to increase,
reduce or remove existing protective rates of import duty (including any necessary change in classification). The existing rates may be increased or
decreased but in no case shall the reduced rate of import duty be lower than the basic rate of ten (10) per cent ad valorem, nor shall the increased
rate of import duty be higher than a maximum of one hundred (100) per cent ad valorem; (2) to establish import quota or to ban imports of any
commodity, as may be necessary; and (3) to impose an additional duty on all imports not exceeding ten (10) per cent ad valorem, whenever
necessary; Provided, That upon periodic investigations by the Tariff Commission and recommendation of the NEDA, the President may cause a
gradual reduction of protection levels granted in Section One hundred and four of this Code, including those subsequently granted pursuant to this
section.
b. Before any recommendation is submitted to the President by the NEDA pursuant to the provisions of this section, except in the imposition of an
additional duty not exceeding ten (10) per cent ad valorem, the Commission shall conduct an investigation in the course of which they shall hold
public hearings wherein interested parties shall be afforded reasonable opportunity to be present, produce evidence and to be heard. The
Commission shall also hear the views and recommendations of any government office, agency or instrumentality concerned. The Commission shall
submit their findings and recommendations to the NEDA within thirty (30) days after the termination of the public hearings.
c. The power of the President to increase or decrease rates of import duty within the limits fixed in subsection "a" shall include the authority to modify
the form of duty. In modifying the form of duty, the corresponding ad valorem or specific equivalents of the duty with respect to imports from the
principal competing foreign country for the most recent representative period shall be used as bases.
d. The Commissioner of Customs shall regularly furnish the Commission a copy of all customs import entries as filed in the Bureau of Customs. The
Commission or its duly authorized representatives shall have access to, and the right to copy all liquidated customs import entries and other
documents appended thereto as finally filed in the Commission on Audit.
e. The NEDA shall promulgate rules and regulations necessary to carry out the provisions of this section.
f. Any Order issued by the President pursuant to the provisions of this section shall take effect thirty (30) days after promulgation, except in the
imposition of additional duty not exceeding ten (10) per cent ad valorem which shall take effect at the discretion of the President. (Emphasis supplied)
Petitioner, however, seeks to avoid the thrust of the delegated authorizations found in Sections 104 and 401 of the Tariff and Customs Code, by
contending that the President is authorized to act under the Tariff and Customs Code only "to protect local industries and products for the sake of the
national economy, general welfare and/or national security." 2 He goes on to claim that:
E.O. Nos. 478 and 475 having nothing to do whatsoever with the protection of local industries and products for the sake of national economy, general
welfare and/or national security. On the contrary, they work in reverse, especially as to crude oil, an essential product which we do not have to
protect, since we produce only minimal quantities and have to import the rest of what we need.
These Executive Orders are avowedly solely to enable the government to raise government finances, contrary to Sections 24 and 28 (2) of Article VI
of the Constitution, as well as to Section 401 of the Tariff and Customs Code. 3 (Emphasis in the original)
The Court is not persuaded. In the first place, there is nothing in the language of either Section 104 or of 401 of the Tariff and Customs Code that
suggest such a sharp and absolute limitation of authority. The entire contention of petitioner is anchored on just two (2) words, one found in Section
401 (a)(1): "existing protective rates of import duty," and the second in the proviso found at the end of Section 401 (a): "protection levels granted in
Section 104 of this Code . . . . " We believe that the words "protective" and ''protection" are simply not enough to support the very broad and
encompassing limitation which petitioner seeks to rest on those two (2) words.
In the second place, petitioner's singular theory collides with a very practical fact of which this Court may take judicial notice — that the Bureau of
Customs which administers the Tariff and Customs Code, is one of the two (2) principal traditional generators or producers of governmental revenue,
the other being the Bureau of Internal Revenue. (There is a third agency, non-traditional in character, that generates lower but still comparable levels
of revenue for the government — The Philippine Amusement and Games Corporation [PAGCOR].)
In the third place, customs duties which are assessed at the prescribed tariff rates are very much like taxes which are frequently imposed for both
revenue-raising and for regulatory purposes. 4 Thus, it has been held that "customs duties" is "the name given to taxes on the importation and
exportation of commodities, the tariff or tax assessed upon merchandise imported from, or exported to, a foreign country." 5 The levying of customs
duties on imported goods may have in some measure the effect of protecting local industries — where such local industries actually exist and are
producing comparable goods. Simultaneously, however, the very same customs duties inevitably have the effect of producing governmental
revenues. Customs duties like internal revenue taxes are rarely, if ever, designed to achieve one policy objective only. Most commonly, customs
duties, which constitute taxes in the sense of exactions the proceeds of which become public funds 6 — have either or both the generation of revenue
and the regulation of economic or social activity as their moving purposes and frequently, it is very difficult to say which, in a particular instance, is the
dominant or principal objective. In the instant case, since the Philippines in fact produces ten (10) to fifteen percent (15%) of the crude oil consumed
here, the imposition of increased tariff rates and a special duty on imported crude oil and imported oil products may be seen to have some "protective"
impact upon indigenous oil production. For the effective, price of imported crude oil and oil products is increased. At the same time, it cannot be
gainsaid that substantial revenues for the government are raised by the imposition of such increased tariff rates or special duty.
In the fourth place, petitioner's concept which he urges us to build into our constitutional and customs law, is a stiflingly narrow one. Section 401 of the
Tariff and Customs Code establishes general standards with which the exercise of the authority delegated by that provision to the President must be
consistent: that authority must be exercised in "the interest of national economy, general welfare and/or national security." Petitioner, however, insists
that the "protection of local industries" is the only permissible objective that can be secured by the exercise of that delegated authority, and that
therefore "protection of local industries" is the sum total or the alpha and the omega of "the national economy, general welfare and/or national
security." We find it extremely difficult to take seriously such a confined and closed view of the legislative standards and policies summed up in
Section 401. We believe, for instance, that the protection of consumers, who after all constitute the very great bulk of our population, is at the very
least as important a dimension of "the national economy, general welfare and national security" as the protection of local industries. And so customs
duties may be reduced or even removed precisely for the purpose of protecting consumers from the high prices and shoddy quality and inefficient
service that tariff-protected and subsidized local manufacturers may otherwise impose upon the community.
It seems also important to note that tariff rates are commonly established and the corresponding customs duties levied and collected upon articles
and goods which are not found at all and not produced in the Philippines. The Tariff and Customs Code is replete with such articles and commodities:
among the more interesting examples are ivory (Chapter 5, 5.10); castoreum or musk taken from the beaver (Chapter 5, 5.14); Olives (Chapter 7,
Notes); truffles or European fungi growing under the soil on tree roots (Chapter 7, Notes); dates (Chapter 8, 8.01); figs (Chapter 8,
8.03); caviar (Chapter 16, 16.01); aircraft (Chapter 88, 88.0l); special diagnostic instruments and apparatus for human medicine and surgery (Chapter
90, Notes); X-ray generators; X-ray tubes;
X-ray screens, etc. (Chapter 90, 90.20); etc. In such cases, customs duties may be seen to be imposed either for revenue purposes purely or
perhaps, in certain cases, to discourage any importation of the items involved. In either case, it is clear that customs duties are levied and imposed
entirely apart from whether or not there are any competing local industries to protect.
Accordingly, we believe and so hold that Executive Orders Nos. 475 and 478 which may be conceded to be substantially moved by the desire to
generate additional public revenues, are not, for that reason alone, either constitutionally flawed, or legally infirm under Section 401 of the Tariff and
Customs Code. Petitioner has not successfully overcome the presumptions of constitutionality and legality to which those Executive Orders are
entitled. 7
The conclusion we have reached above renders it unnecessary to deal with petitioner's additional contention that, should Executive Orders Nos. 475
and 478 be declared unconstitutional and illegal, there should be a roll back of prices of petroleum products equivalent to the "resulting excess money
not be needed to adequately maintain the Oil Price Stabilization Fund (OPSF)." 8
WHEREFORE, premises considered, the Petition for Certiorari, Prohibition and Mandamus is hereby DISMISSED for lack of merit. Costs against
petitioner.
SO ORDERED.
[G. R. No. 119775. October 24, 2003]
JOHN HAY PEOPLES ALTERNATIVE COALITION, MATEO CARIO FOUNDATION INC., CENTER FOR ALTERNATIVE SYSTEMS
FOUNDATION INC., REGINA VICTORIA A. BENAFIN REPRESENTED AND JOINED BY HER MOTHER MRS. ELISA BENAFIN, IZABEL M.
LUYK REPRESENTED AND JOINED BY HER MOTHER MRS. REBECCA MOLINA LUYK, KATHERINE PE REPRESENTED AND JOINED BY
HER MOTHER ROSEMARIE G. PE, SOLEDAD S. CAMILO, ALICIA C. PACALSO ALIAS KEVAB, BETTY I. STRASSER, RUBY C. GIRON,
URSULA C. PEREZ ALIAS BA-YAY, EDILBERTO T. CLARAVALL, CARMEN CAROMINA, LILIA G. YARANON, DIANE MONDOC, petitioners,
vs. VICTOR LIM, PRESIDENT, BASES CONVERSION DEVELOPMENT AUTHORITY; JOHN HAY PORO POINT DEVELOPMENT
CORPORATION, CITY OF BAGUIO, TUNTEX (B.V.I.) CO. LTD., ASIAWORLD INTERNATIONALE GROUP, INC., DEPARTMENT OF
ENVIRONMENT AND NATURAL RESOURCES, respondents.
DECISION
CARPIO MORALES, J.:
By the present petition for prohibition, mandamus and declaratory relief with prayer for a temporary restraining order (TRO) and/or writ of preliminary
injunction, petitioners assail, in the main, the constitutionality of Presidential Proclamation No. 420, Series of 1994, CREATING AND
DESIGNATING A PORTION OF THE AREA COVERED BY THE FORMER CAMP JOHN [HAY] AS THE JOHN HAY SPECIAL ECONOMIC ZONE
PURSUANT TO REPUBLIC ACT NO. 7227.
Republic Act No. 7227, AN ACT ACCELERATING THE CONVERSION OF MILITARY RESERVATIONS INTO OTHER PRODUCTIVE USES,
CREATING THE BASES CONVERSION AND DEVELOPMENT AUTHORITY FOR THIS PURPOSE, PROVIDING FUNDS THEREFOR AND FOR
OTHER PURPOSES, otherwise known as the Bases Conversion and Development Act of 1992, which was enacted on March 13, 1992, set out the
policy of the government to accelerate the sound and balanced conversion into alternative productive uses of the former military bases under the
1947 Philippines-United States of America Military Bases Agreement, namely, the Clark and Subic military reservations as well as their extensions
including the John Hay Station (Camp John Hay or the camp) in the City of Baguio. [1]
As noted in its title, R.A. No. 7227 created public respondent Bases Conversion and Development Authority [2] (BCDA), vesting it with powers
pertaining to the multifarious aspects of carrying out the ultimate objective of utilizing the base areas in accordance with the declared government
policy.
R.A. No. 7227 likewise created the Subic Special Economic [and Free Port] Zone (Subic SEZ) the metes and bounds of which were to be delineated
in a proclamation to be issued by the President of the Philippines. [3]
R.A. No. 7227 granted the Subic SEZ incentives ranging from tax and duty-free importations, exemption of businesses therein from local and national
taxes, to other hallmarks of a liberalized financial and business climate. [4]
And R.A. No. 7227 expressly gave authority to the President to create through executive proclamation, subject to the concurrence of the local
government units directly affected, other Special Economic Zones (SEZ) in the areas covered respectively by the Clark military reservation, the
Wallace Air Station in San Fernando, La Union, and Camp John Hay. [5]
On August 16, 1993, BCDA entered into a Memorandum of Agreement and Escrow Agreement with private respondents Tuntex (B.V.I.) Co., Ltd
(TUNTEX) and Asiaworld Internationale Group, Inc. (ASIAWORLD), private corporations registered under the laws of the British Virgin Islands,
preparatory to the formation of a joint venture for the development of Poro Point in La Union and Camp John Hay as premier tourist destinations and
recreation centers. Four months later or on December 16, 1993, BCDA, TUNTEX and ASIAWORD executed a Joint Venture Agreement [6] whereby
they bound themselves to put up a joint venture company known as the Baguio International Development and Management Corporation which would
lease areas within Camp John Hay and Poro Point for the purpose of turning such places into principal tourist and recreation spots, as originally
envisioned by the parties under their Memorandum of Agreement.
The Baguio City government meanwhile passed a number of resolutions in response to the actions taken by BCDA as owner and administrator of
Camp John Hay.
By Resolution[7] of September 29, 1993, the Sangguniang Panlungsod of Baguio City (the sanggunian) officially asked BCDA to exclude all the
barangays partly or totally located within Camp John Hay from the reach or coverage of any plan or program for its development.
By a subsequent Resolution[8] dated January 19, 1994, the sanggunian sought from BCDA an abdication, waiver or quitclaim of its ownership over the
home lots being occupied by residents of nine (9) barangays surrounding the military reservation.
Still by another resolution passed on February 21, 1994, the sanggunian adopted and submitted to BCDA a 15-point concept for the development of
Camp John Hay.[9] The sanggunians vision expressed, among other things, a kind of development that affords protection to the environment, the
making of a family-oriented type of tourist destination, priority in employment opportunities for Baguio residents and free access to the base area,
guaranteed participation of the city government in the management and operation of the camp, exclusion of the previously named nine barangays
from the area for development, and liability for local taxes of businesses to be established within the camp. [10]
BCDA, TUNTEX and ASIAWORLD agreed to some, but rejected or modified the other proposals of the sanggunian.[11] They stressed the need to
declare Camp John Hay a SEZ as a condition precedent to its full development in accordance with the mandate of R.A. No. 7227. [12]
On May 11, 1994, the sanggunian passed a resolution requesting the Mayor to order the determination of realty taxes which may otherwise be
collected from real properties of Camp John Hay. [13] The resolution was intended to intelligently guide the sanggunian in determining its position on
whether Camp John Hay be declared a SEZ, it (the sanggunian) being of the view that such declaration would exempt the camps property and the
economic activity therein from local or national taxation.
More than a month later, however, the sanggunian passed Resolution No. 255, (Series of 1994), [14] seeking and supporting, subject to its
concurrence, the issuance by then President Ramos of a presidential proclamation declaring an area of 288.1 hectares of the camp as a SEZ in
accordance with the provisions of R.A. No. 7227. Together with this resolution was submitted a draft of the proposed proclamation for consideration
by the President.[15]
On July 5, 1994 then President Ramos issued Proclamation No. 420, [16] the title of which was earlier indicated, which established a SEZ on a portion
of Camp John Hay and which reads as follows:
xxx
Pursuant to the powers vested in me by the law and the resolution of concurrence by the City Council of Baguio, I, FIDEL V. RAMOS, President of the
Philippines, do hereby create and designate a portion of the area covered by the former John Hay reservation as embraced, covered, and defined by
the 1947 Military Bases Agreement between the Philippines and the United States of America, as amended, as the John Hay Special Economic Zone,
and accordingly order:
SECTION 1. Coverage of John Hay Special Economic Zone. The John Hay Special Economic Zone shall cover the area consisting of Two Hundred
Eighty Eight and one/tenth (288.1) hectares, more or less, of the total of Six Hundred Seventy-Seven (677) hectares of the John Hay Reservation,
more or less, which have been surveyed and verified by the Department of Environment and Natural Resources (DENR) as defined by the following
technical description:
A parcel of land, situated in the City of Baguio, Province of Benguet, Island of Luzon, and particularly described in survey plans Psd-131102-002639
and Ccs-131102-000030 as approved on 16 August 1993 and 26 August 1993, respectively, by the Department of Environment and Natural
Resources, in detail containing :
Lot 1, Lot 2, Lot 3, Lot 4, Lot 5, Lot 6, Lot 7, Lot 13, Lot 14, Lot 15, and Lot 20 of Ccs-131102-000030
-and-
Lot 3, Lot 4, Lot 5, Lot 6, Lot 7, Lot 8, Lot 9, Lot 10, Lot 11, Lot 14, Lot 15, Lot 16, Lot 17, and Lot 18 of Psd-131102-002639 being portions of TCT
No. T-3812, LRC Rec. No. 87.
With a combined area of TWO HUNDRED EIGHTY EIGHT AND ONE/TENTH HECTARES (288.1 hectares); Provided that the area consisting of
approximately Six and two/tenth (6.2) hectares, more or less, presently occupied by the VOA and the residence of the Ambassador of the United
States, shall be considered as part of the SEZ only upon turnover of the properties to the government of the Republic of the Philippines.
Sec. 2. Governing Body of the John Hay Special Economic Zone. Pursuant to Section 15 of Republic Act No. 7227, the Bases Conversion and
Development Authority is hereby established as the governing body of the John Hay Special Economic Zone and, as such, authorized to determine
the utilization and disposition of the lands comprising it, subject to private rights, if any, and in consultation and coordination with the City Government
of Baguio after consultation with its inhabitants, and to promulgate the necessary policies, rules, and regulations to govern and regulate the zone thru
the John Hay Poro Point Development Corporation, which is its implementing arm for its economic development and optimum utilization.
Sec. 3. Investment Climate in John Hay Special Economic Zone. Pursuant to Section 5(m) and Section 15 of Republic Act No. 7227, the John Hay
Poro Point Development Corporation shall implement all necessary policies, rules, and regulations governing the zone, including investment
incentives, in consultation with pertinent government departments. Among others, the zone shall have all the applicable incentives of the Special
Economic Zone under Section 12 of Republic Act No. 7227 and those applicable incentives granted in the Export Processing Zones, the Omnibus
Investment Code of 1987, the Foreign Investment Act of 1991, and new investment laws that may hereinafter be enacted.
Sec. 4. Role of Departments, Bureaus, Offices, Agencies and Instrumentalities. All Heads of departments, bureaus, offices, agencies, and
instrumentalities of the government are hereby directed to give full support to Bases Conversion and Development Authority and/or its implementing
subsidiary or joint venture to facilitate the necessary approvals to expedite the implementation of various projects of the conversion program.
Sec. 5. Local Authority. Except as herein provided, the affected local government units shall retain their basic autonomy and identity.
Sec. 6. Repealing Clause. All orders, rules, and regulations, or parts thereof, which are inconsistent with the provisions of this Proclamation, are
hereby repealed, amended, or modified accordingly.
Sec. 7. Effectivity. This proclamation shall take effect immediately.
Done in the City of Manila, this 5 th day of July, in the year of Our Lord, nineteen hundred and ninety-four.
The issuance of Proclamation No. 420 spawned the present petition [17] for prohibition, mandamus and declaratory relief which was filed on April 25,
1995 challenging, in the main, its constitutionality or validity as well as the legality of the Memorandum of Agreement and Joint Venture Agreement
between public respondent BCDA and private respondents TUNTEX and ASIAWORLD.
Petitioners allege as grounds for the allowance of the petition the following:
I. PRESIDENTIAL PROCLAMATION NO. 420, SERIES OF 1990 (sic) IN SO FAR AS IT GRANTS TAX EXEMPTIONS IS INVALID AND ILLEGAL AS
IT IS AN UNCONSTITUTIONAL EXERCISE BY THE PRESIDENT OF A POWER GRANTED ONLY TO THE LEGISLATURE.
II. PRESIDENTIAL PROCLAMATION NO. 420, IN SO FAR AS IT LIMITS THE POWERS AND INTERFERES WITH THE AUTONOMY OF THE CITY
OF BAGUIO IS INVALID, ILLEGAL AND UNCONSTITUTIONAL.
III. PRESIDENTIAL PROCLAMATION NO. 420, SERIES OF 1994 IS UNCONSTITUTIONAL IN THAT IT VIOLATES THE RULE THAT ALL TAXES
SHOULD BE UNIFORM AND EQUITABLE.
IV. THE MEMORANDUM OF AGREEMENT ENTERED INTO BY AND BETWEEN PRIVATE AND PUBLIC RESPONDENTS BASES CONVERSION
DEVELOPMENT AUTHORITY HAVING BEEN ENTERED INTO ONLY BY DIRECT NEGOTIATION IS ILLEGAL.
V. THE TERMS AND CONDITIONS OF THE MEMORANDUM OF AGREEMENT ENTERED INTO BY AND BETWEEN PRIVATE AND PUBLIC
RESPONDENT BASES CONVERSION DEVELOPMENT AUTHORITY IS (sic) ILLEGAL.
VI. THE CONCEPTUAL DEVELOPMENT PLAN OF RESPONDENTS NOT HAVING UNDERGONE ENVIRONMENTAL IMPACT ASSESSMENT IS
BEING ILLEGALLY CONSIDERED WITHOUT A VALID ENVIRONMENTAL IMPACT ASSESSMENT.
A temporary restraining order and/or writ of preliminary injunction was prayed for to enjoin BCDA, John Hay Poro Point Development Corporation and
the city government from implementing Proclamation No. 420, and TUNTEX and ASIAWORLD from proceeding with their plan respecting Camp John
Hays development pursuant to their Joint Venture Agreement with BCDA. [18]
Public respondents, by their separate Comments, allege as moot and academic the issues raised by the petition, the questioned Memorandum of
Agreement and Joint Venture Agreement having already been deemed abandoned by the inaction of the parties thereto prior to the filing of the
petition as in fact, by letter of November 21, 1995, BCDA formally notified TUNTEX and ASIAWORLD of the revocation of their said agreements. [19]
In maintaining the validity of Proclamation No. 420, respondents contend that by extending to the John Hay SEZ economic incentives similar to those
enjoyed by the Subic SEZ which was established under R.A. No. 7227, the proclamation is merely implementing the legislative intent of said law to
turn the US military bases into hubs of business activity or investment. They underscore the point that the governments policy of bases conversion
can not be achieved without extending the same tax exemptions granted by R.A. No. 7227 to Subic SEZ to other SEZs.
Denying that Proclamation No. 420 is in derogation of the local autonomy of Baguio City or that it is violative of the constitutional guarantee of equal
protection, respondents assail petitioners lack of standing to bring the present suit even as taxpayers and in the absence of any actual case or
controversy to warrant this Courts exercise of its power of judicial review over the proclamation.
Finally, respondents seek the outright dismissal of the petition for having been filed in disregard of the hierarchy of courts and of the doctrine of
exhaustion of administrative remedies.
Replying,[20] petitioners aver that the doctrine of exhaustion of administrative remedies finds no application herein since they are invoking the
exclusive authority of this Court under Section 21 of R.A. No. 7227 to enjoin or restrain implementation of projects for conversion of the base areas;
that the established exceptions to the aforesaid doctrine obtain in the present petition; and that they possess the standing to bring the petition which is
a taxpayers suit.
Public respondents have filed their Rejoinder[21] and the parties have filed their respective memoranda.
Before dwelling on the core issues, this Court shall first address the preliminary procedural questions confronting the petition.
The judicial policy is and has always been that this Court will not entertain direct resort to it except when the redress sought cannot be obtained in the
proper courts, or when exceptional and compelling circumstances warrant availment of a remedy within and calling for the exercise of this Courts
primary jurisdiction.[22] Neither will it entertain an action for declaratory relief, which is partly the nature of this petition, over which it has no original
jurisdiction.
Nonetheless, as it is only this Court which has the power under Section 21 [23] of R.A. No. 7227 to enjoin implementation of projects for the
development of the former US military reservations, the issuance of which injunction petitioners pray for, petitioners direct filing of the present petition
with it is allowed. Over and above this procedural objection to the present suit, this Court retains full discretionary power to take cognizance of a
petition filed directly to it if compelling reasons, or the nature and importance of the issues raised, warrant. [24] Besides, remanding the case to the
lower courts now would just unduly prolong adjudication of the issues.
The transformation of a portion of the area covered by Camp John Hay into a SEZ is not simply a re-classification of an area, a mere ascription of a
status to a place. It involves turning the former US military reservation into a focal point for investments by both local and foreign entities. It is to be
made a site of vigorous business activity, ultimately serving as a spur to the countrys long awaited economic growth. For, as R.A. No. 7227
unequivocally declares, it is the governments policy to enhance the benefits to be derived from the base areas in order to promote the economic and
social development of Central Luzon in particular and the country in general. [25] Like the Subic SEZ, the John Hay SEZ should also be turned into a
self-sustaining, industrial, commercial, financial and investment center. [26]
More than the economic interests at stake, the development of Camp John Hay as well as of the other base areas unquestionably has critical links to
a host of environmental and social concerns. Whatever use to which these lands will be devoted will set a chain of events that can affect one way or
another the social and economic way of life of the communities where the bases are located, and ultimately the nation in general.
Underscoring the fragility of Baguio Citys ecology with its problem on the scarcity of its water supply, petitioners point out that the local and national
government are faced with the challenge of how to provide for an ecologically sustainable, environmentally sound, equitable transition for the city in
the wake of Camp John Hays reversion to the mass of government property.[27] But that is why R.A. No. 7227 emphasizes the sound and balanced
conversion of the Clark and Subic military reservations and their extensions consistent with ecological and environmental standards.[28] It cannot thus
be gainsaid that the matter of conversion of the US bases into SEZs, in this case Camp John Hay, assumes importance of a national magnitude.
Convinced then that the present petition embodies crucial issues, this Court assumes jurisdiction over the petition.
As far as the questioned agreements between BCDA and TUNTEX and ASIAWORLD are concerned, the legal questions being raised thereon by
petitioners have indeed been rendered moot and academic by the revocation of such agreements. There are, however, other issues posed by the
petition, those which center on the constitutionality of Proclamation No. 420, which have not been mooted by the said supervening event upon
application of the rules for the judicial scrutiny of constitutional cases. The issues boil down to:
(1) Whether the present petition complies with the requirements for this Courts exercise of jurisdiction over constitutional issues;
(2) Whether Proclamation No. 420 is constitutional by providing for national and local tax exemption within and granting other economic incentives to
the John Hay Special Economic Zone; and
(3) Whether Proclamation No. 420 is constitutional for limiting or interfering with the local autonomy of Baguio City;
It is settled that when questions of constitutional significance are raised, the court can exercise its power of judicial review only if the following
requisites are present: (1) the existence of an actual and appropriate case; (2) a personal and substantial interest of the party raising the constitutional
question; (3) the exercise of judicial review is pleaded at the earliest opportunity; and (4) the constitutional question is the lis mota of the case.[29]
An actual case or controversy refers to an existing case or controversy that is appropriate or ripe for determination, not conjectural or
anticipatory.[30] The controversy needs to be definite and concrete, bearing upon the legal relations of parties who are pitted against each other due to
their adverse legal interests.[31] There is in the present case a real clash of interests and rights between petitioners and respondents arising from the
issuance of a presidential proclamation that converts a portion of the area covered by Camp John Hay into a SEZ, the former insisting that such
proclamation contains unconstitutional provisions, the latter claiming otherwise.
R.A. No. 7227 expressly requires the concurrence of the affected local government units to the creation of SEZs out of all the base areas in the
country.[32] The grant by the law on local government units of the right of concurrence on the bases conversion is equivalent to vesting a legal
standing on them, for it is in effect a recognition of the real interests that communities nearby or surrounding a particular base area have in its
utilization. Thus, the interest of petitioners, being inhabitants of Baguio, in assailing the legality of Proclamation No. 420, is personal and substantial
such that they have sustained or will sustain direct injury as a result of the government act being challenged.[33] Theirs is a material interest, an
interest in issue affected by the proclamation and not merely an interest in the question involved or an incidental interest,[34] for what is at stake in the
enforcement of Proclamation No. 420 is the very economic and social existence of the people of Baguio City.
Petitioners locus standi parallels that of the petitioner and other residents of Bataan, specially of the town of Limay, in Garcia v. Board of credit, and other incentives under the Omnibus Investments Code of 1987; [40] and the applicability to the subject zone of rules governing foreign
Investments[35] where this Court characterized their interest in the establishment of a petrochemical plant in their place as actual, real, vital and legal, investments in the Philippines.[41]
for it would affect not only their economic life but even the air they breathe. While the grant of economic incentives may be essential to the creation and success of SEZs, free trade zones and the like, the grant thereof to the
Moreover, petitioners Edilberto T. Claravall and Lilia G. Yaranon were duly elected councilors of Baguio at the time, engaged in the local governance John Hay SEZ cannot be sustained. The incentives under R.A. No. 7227 are exclusive only to the Subic SEZ, hence, the extension of the same to
of Baguio City and whose duties included deciding for and on behalf of their constituents the question of whether to concur with the declaration of a the John Hay SEZ finds no support therein. Neither does the same grant of privileges to the John Hay SEZ find support in the other laws specified
portion of the area covered by Camp John Hay as a SEZ. Certainly then, petitioners Claravall and Yaranon, as city officials who voted under Section 3 of Proclamation No. 420, which laws were already extant before the issuance of the proclamation or the enactment of R.A. No. 7227.
against[36] the sanggunian Resolution No. 255 (Series of 1994) supporting the issuance of the now challenged Proclamation No. 420, have legal More importantly, the nature of most of the assailed privileges is one of tax exemption. It is the legislature, unless limited by a provision of the state
standing to bring the present petition. constitution, that has full power to exempt any person or corporation or class of property from taxation, its power to exempt being as broad as its
That there is herein a dispute on legal rights and interests is thus beyond doubt. The mootness of the issues concerning the questioned agreements power to tax.[42] Other than Congress, the Constitution may itself provide for specific tax exemptions, [43] or local governments may pass ordinances on
between public and private respondents is of no moment. exemption only from local taxes.[44]
By the mere enactment of the questioned law or the approval of the challenged act, the dispute is deemed to have ripened into a judicial controversy The challenged grant of tax exemption would circumvent the Constitutions imposition that a law granting any tax exemption must have the
even without any other overt act. Indeed, even a singular violation of the Constitution and/or the law is enough to awaken judicial duty. [37] concurrence of a majority of all the members of Congress. [45] In the same vein, the other kinds of privileges extended to the John Hay SEZ are by
As to the third and fourth requisites of a judicial inquiry, there is likewise no question that they have been complied with in the case at bar. This is an tradition and usage for Congress to legislate upon.
action filed purposely to bring forth constitutional issues, ruling on which this Court must take up. Besides, respondents never raised issues with Contrary to public respondents suggestions, the claimed statutory exemption of the John Hay SEZ from taxation should be manifest and unmistakable
respect to these requisites, hence, they are deemed waived. from the language of the law on which it is based; it must be expressly granted in a statute stated in a language too clear to be mistaken.[46] Tax
Having cleared the way for judicial review, the constitutionality of Proclamation No. 420, as framed in the second and third issues above, must now be exemption cannot be implied as it must be categorically and unmistakably expressed. [47]
addressed squarely. If it were the intent of the legislature to grant to the John Hay SEZ the same tax exemption and incentives given to the Subic SEZ, it would have so
The second issue refers to petitioners objection against the creation by Proclamation No. 420 of a regime of tax exemption within the John Hay SEZ. expressly provided in the R.A. No. 7227.
Petitioners argue that nowhere in R. A. No. 7227 is there a grant of tax exemption to SEZs yet to be established in base areas, unlike the grant This Court no doubt can void an act or policy of the political departments of the government on either of two groundsinfringement of the Constitution
under Section 12 thereof of tax exemption and investment incentives to the therein established Subic SEZ. The grant of tax exemption to the John or grave abuse of discretion.[48]
Hay SEZ, petitioners conclude, thus contravenes Article VI, Section 28 (4) of the Constitution which provides that No law granting any tax exemption This Court then declares that the grant by Proclamation No. 420 of tax exemption and other privileges to the John Hay SEZ is void for being violative
shall be passed without the concurrence of a majority of all the members of Congress. of the Constitution. This renders it unnecessary to still dwell on petitioners claim that the same grant violates the equal protection guarantee.
Section 3 of Proclamation No. 420, the challenged provision, reads: With respect to the final issue raised by petitioners that Proclamation No. 420 is unconstitutional for being in derogation of Baguio Citys local
Sec. 3. Investment Climate in John Hay Special Economic Zone. Pursuant to Section 5(m) and Section 15 of Republic Act No. 7227, the John Hay autonomy, objection is specifically mounted against Section 2 thereof in which BCDA is set up as the governing body of the John Hay SEZ.[49]
Poro Point Development Corporation shall implement all necessary policies, rules, and regulations governing the zone, including investment Petitioners argue that there is no authority of the President to subject the John Hay SEZ to the governance of BCDA which has just oversight
incentives, in consultation with pertinent government departments. Among others, the zone shall have all the applicable incentives of the Special functions over SEZ; and that to do so is to diminish the city governments power over an area within its jurisdiction, hence, Proclamation No. 420
Economic Zone under Section 12 of Republic Act No. 7227 and those applicable incentives granted in the Export Processing Zones, the unlawfully gives the President power of control over the local government instead of just mere supervision.
Omnibus Investment Code of 1987, the Foreign Investment Act of 1991, and new investment laws that may hereinafter be Petitioners arguments are bereft of merit. Under R.A. No. 7227, the BCDA is entrusted with, among other things, the following purpose: [50]
enacted. (Emphasis and underscoring supplied) xxx
Upon the other hand, Section 12 of R.A. No. 7227 provides: (a) To own, hold and/or administer the military reservations of John Hay Air Station, Wallace Air Station, ODonnell Transmitter Station, San Miguel
xxx Naval Communications Station, Mt. Sta. Rita Station (Hermosa, Bataan) and those portions of Metro Manila Camps which may be transferred to it by
(a) Within the framework and subject to the mandate and limitations of the Constitution and the pertinent provisions of the Local Government the President;
Code, the Subic Special Economic Zone shall be developed into a self-sustaining, industrial, commercial, financial and investment center to x x x (Underscoring supplied)
generate employment opportunities in and around the zone and to attract and promote productive foreign investments; With such broad rights of ownership and administration vested in BCDA over Camp John Hay, BCDA virtually has control over it, subject to certain
b) The Subic Special Economic Zone shall be operated and managed as a separate customs territory ensuring free flow or movement of goods and limitations provided for by law. By designating BCDA as the governing agency of the John Hay SEZ, the law merely emphasizes or reiterates the
capital within, into and exported out of the Subic Special Economic Zone, as well as provide incentives such as tax and duty free importations of raw statutory role or functions it has been granted.
materials, capital and equipment. However, exportation or removal of goods from the territory of the Subic Special Economic Zone to the other parts The unconstitutionality of the grant of tax immunity and financial incentives as contained in the second sentence of Section 3 of Proclamation No. 420
of the Philippine territory shall be subject to customs duties and taxes under the Customs and Tariff Code and other relevant tax laws of the notwithstanding, the entire assailed proclamation cannot be declared unconstitutional, the other parts thereof not being repugnant to law or the
Philippines; Constitution. The delineation and declaration of a portion of the area covered by Camp John Hay as a SEZ was well within the powers of the
(c) The provisions of existing laws, rules and regulations to the contrary notwithstanding, no taxes, local and national, shall be imposed within President to do so by means of a proclamation. [51] The requisite prior concurrence by the Baguio City government to such proclamation appears to
the Subic Special Economic Zone. In lieu of paying taxes, three percent (3%) of the gross income earned by all businesses and enterprises within have been given in the form of a duly enacted resolution by the sanggunian. The other provisions of the proclamation had been proven to be
the Subic Special Economic Zone shall be remitted to the National Government, one percent (1%) each to the local government units affected by the consistent with R.A. No. 7227.
declaration of the zone in proportion to their population area, and other factors. In addition, there is hereby established a development fund of one Where part of a statute is void as contrary to the Constitution, while another part is valid, the valid portion, if separable from the invalid, may stand and
percent (1%) of the gross income earned by all businesses and enterprises within the Subic Special Economic Zone to be utilized for the Municipality be enforced.[52] This Court finds that the other provisions in Proclamation No. 420 converting a delineated portion of Camp John Hay into the John
of Subic, and other municipalities contiguous to be base areas. In case of conflict between national and local laws with respect to tax exemption Hay SEZ are separable from the invalid second sentence of Section 3 thereof, hence they stand.
privileges in the Subic Special Economic Zone, the same shall be resolved in favor of the latter; WHEREFORE, the second sentence of Section 3 of Proclamation No. 420 is hereby declared NULL AND VOID and is accordingly declared of no
(d) No exchange control policy shall be applied and free markets for foreign exchange, gold, securities and futures shall be allowed and maintained in legal force and effect. Public respondents are hereby enjoined from implementing the aforesaid void provision.
the Subic Special Economic Zone; Proclamation No. 420, without the invalidated portion, remains valid and effective.
(e) The Central Bank, through the Monetary Board, shall supervise and regulate the operations of banks and other financial institutions within SO ORDERED.
the Subic Special Economic Zone;
(f) Banking and Finance shall be liberalized with the establishment of foreign currency depository units of local commercial banks and offshore
banking units of foreign banks with minimum Central Bank regulation;
(g) Any investor within the Subic Special Economic Zone whose continuing investment shall not be less than Two Hundred fifty thousand dollars
($250,000), his/her spouse and dependent children under twenty-one (21) years of age, shall be granted permanent resident status within the Subic
Special Economic Zone. They shall have freedom of ingress and egress to and from the Subic Special Economic Zone without any need of special
authorization from the Bureau of Immigration and Deportation. The Subic Bay Metropolitan Authority referred to in Section 13 of this Act may also
issue working visas renewable every two (2) years to foreign executives and other aliens possessing highly-technical skills which no Filipino within the
Subic Special Economic Zone possesses, as certified by the Department of Labor and Employment. The names of aliens granted permanent
residence status and working visas by the Subic Bay Metropolitan Authority shall be reported to the Bureau of Immigration and Deportation within
thirty (30) days after issuance thereof;
x x x (Emphasis supplied)
It is clear that under Section 12 of R.A. No. 7227 it is only the Subic SEZ which was granted by Congress with tax exemption, investment incentives
and the like. There is no express extension of the aforesaid benefits to other SEZs still to be created at the time via presidential proclamation.
The deliberations of the Senate confirm the exclusivity to Subic SEZ of the tax and investment privileges accorded it under the law, as the following
exchanges between our lawmakers show during the second reading of the precursor bill of R.A. No. 7227 with respect to the investment policies that
would govern Subic SEZ which are now embodied in the aforesaid Section 12 thereof:
xxx
Senator Maceda: This is what I was talking about. We get into problems here because all of these following policies are centered around the concept
of free port. And in the main paragraph above, we have declared both Clark and Subic as special economic zones, subject to these policies which
are, in effect, a free-port arrangement.
Senator Angara: The Gentleman is absolutely correct, Mr. President. So we must confine these policies only to Subic.
May I withdraw then my amendment, and instead provide that THE SPECIAL ECONOMIC ZONE OF SUBIC SHALL BE ESTABLISHED IN
ACCORDANCE WITH THE FOLLOWING POLICIES. Subject to style, Mr. President.
Thus, it is very clear that these principles and policies are applicable only to Subic as a free port.
Senator Paterno: Mr. President.
The President: Senator Paterno is recognized.
Senator Paterno: I take it that the amendment suggested by Senator Angara would then prevent the establishment of other special economic zones
observing these policies.
Senator Angara: No, Mr. President, because during our short caucus, Senator Laurel raised the point that if we give this delegation to the President
to establish other economic zones, that may be an unwarranted delegation.
So we agreed that we will simply limit the definition of powers and description of the zone to Subic, but that does not exclude the possibility of creating
other economic zones within the baselands.
Senator Paterno: But if that amendment is followed, no other special economic zone may be created under authority of this particular bill. Is that
correct, Mr. President?
Senator Angara: Under this specific provision, yes, Mr. President. This provision now will be confined only to Subic.[38]
x x x (Underscoring supplied).
As gathered from the earlier-quoted Section 12 of R.A. No. 7227, the privileges given to Subic SEZ consist principally of exemption from tariff or
customs duties, national and local taxes of business entities therein (paragraphs (b) and (c)), free market and trade of specified goods or properties
(paragraph d), liberalized banking and finance (paragraph f), and relaxed immigration rules for foreign investors (paragraph g). Yet, apart from these,
Proclamation No. 420 also makes available to the John Hay SEZ benefits existing in other laws such as the privilege of export processing zone-based
businesses of importing capital equipment and raw materials free from taxes, duties and other restrictions; [39] tax and duty exemptions, tax holiday, tax
[G.R. No. 129742. September 16, 1998]
TERESITA G. FABIAN petitioner, vs. HON. ANIANO A. DESIERTO, in his capacity as ombudsman; HON. JESUS F. GUERRERO, in his
capacity as Deputy Ombudsman for Luzon; and NESTOR V. AGUSTIN respondents.
DECISION
REGALADO, J:
Petitioner has appealed to us by certiorari under Rule 45 of the Rules of Court from the "Joint Order" issued by public respondents on June 18, 1997
in OMB-Adm. Case No. 0-95-0411 which granted the motion for reconsideration of and absolved private respondents from administrative charges
for inter alia grave misconduct committed by him as then Assistant Regional Director, Region IV-A, Department of Public Works and Highways
(DPWH).
I It appears from the statement and counter-statement of facts of the parties that petitioner Teresita G. Fabian was the major stockholder and
president of PROMAT Construction Development Corporation (PROMAT) which was engaged in the construction business. Private respondents
Nestor V. Agustin was the incumbent District Engineering District (FMED) when he allegedly committed the offenses for which he was administratively
charged in the Office in the office of the Ombudsman.
Promat participated in the bidding for government construction project including those under the FMED, and private respondent, reportedly taking
advantage of his official position, inveigled petitioner into an amorous relationship. Their affair lasted for some time, in the course of which private
respondents gifted PROMAT with public works contracts and interceded for it in problems concerning the same in his office.
Later, misunderstanding and unpleasant incidents developed between the parties and when petitioner tried to terminate their relationship, private
respondent refused and resisted her attempts to do so to the extent of employing acts of harassment, intimidation and threats. She eventually filed the
aforementioned administrative case against him in a letter-complaint dated July 24, 1995.
The said complaint sought the dismissal of private respondent for violation of Section 19, Republic Act No. 6770 (Ombudsman Act of 1989) and
Section 36 of Presidential Decree No. 807 (Civil Service Decree), with an ancillary prayer for his preventive suspension. For purposes of this case, the
charges referred to may be subsumed under the category of oppression, misconduct, and disgraceful or immoral conduct.
On January 31, 1996, Graft Investigator Eduardo R. Benitez issued a resolution finding private respondents guilty of grave misconduct and ordering
his dismissal from the service with forfeiture of all benefits under the law. His resolution bore the approval of Director Napoleon Baldrias and Assistant
Ombudsman Abelardo Aportadera of their office.
Herein respondent Ombudsman, in an Order dated February 26, 1996, approved the aforesaid resolution with modifications, by finding private
respondent guilty of misconduct and meting out the penalty of suspension without pay for one year. After private respondent moved for
reconsideration, respondent Ombudsman discovered that the former's new counsel had been his "classmate and close associate" hence he inhibited
himself. The case was transferred to respondent Deputy Ombudsman Jesus F. Guerrero who, in the now challenged Joint Order of June 18, 1997,
set aside the February 26, 1997 Order of respondent Ombudsman and exonerated private respondents from the administrative charges.
II In the present appeal, petitioner argues that Section 27 of Republic Act No. 6770 (Ombudsman Act of 1989)[1] pertinently provides that -
In all administrative diciplinary cases, orders, directives or decisions of the Office of the Ombudsman may be appealed to the Supreme Court by filing
a petition for certiorari within ten (10) days from receipt of the written notice of the order, directive or decision or denial of the motion for
reconsideration in accordance with Rule 45 of the Rules of Court. (Emphasis supplied)
However, she points out that under Section 7, Rule III of Administrative Order No. 07 (Rules of Procedure of the office of the Ombudsman),[2] when a
respondent is absolved of the charges in an administrative proceeding decision of the ombudsman is final and unappealable. She accordingly submits
that the office of the ombudsman has no authority under the law to restrict, in the manner provided in its aforesaid Rules, the right of appeal allowed
by Republic Act No. 6770, nor to limit the power of review of this Court. Because of the aforecited provision in those Rules of Procedure, she claims
that she found it "necessary to take an alternative recourse under Rule 65 of the Rules of Court, because of the doubt it creates on the availability of
appeals under Rule 45 of the Rules of Court.
Respondents filed their respective comments and rejoined that the Office of the Ombudsman is empowered by the Constitution and the law to
promulgate its own rules of procedure. Section 13(8), Article XI of the 1987 Constitution provides, among others, that the Office of the Ombudsman
can "(p)romulgate its rules of procedure and exercise such other powers or perform such functions or duties as may be provided by law."
Republic Act No. 6770 duly implements the Constitutional mandate with these relevant provisions:
Sec. 14. Restrictions. - x x x No court shall hear any appeal or application for remedy against the decision or findings of the Ombudsman except the
Supreme Court on pure question on law.
Sec. 18. Rules of Procedure. - (1) The Office of the Ombudsman shall promulgate its own rules of procedure for the effective exercise or performance
of its powers, functions, and duties.
Sec. 23. Formal Investigation. - (1) Administrative investigations by the Office of the Ombudsman shall be in accordance with its rules of procedure
and consistent with the due process. x x x
Sec. 27. Effectivity and Finality of Decisions. - All provisionary orders at the Office of the Ombudsman are immediately effective and executory.
A motion for reconsideration of any order, directive or decision of the Office of the Ombudsman must be filed within five (5) days after receipt of
written notice shall be entertained only on any of the following grounds:
Findings of fact by the Office of the Ombudsman when supported by substantial evidence are conclusive. Any order, directive or decision imposing
the penalty of public censure or reprimand, suspension of not more than one month salary shall be final and unappealable.
In all administrative disciplinary cases, orders, directives or decisions of the Office of the Ombudsman may be appealed to the Supreme Court by
filing a petition for certiorari within ten (10) days from receipt of the written notice of the order, directive or decision or denial of the motion
for reconsideration in accordance with Rule 45 of the Rules of Court.
The above rules may be amended or modified by the Office of the Ombudsman as the interest of justice may require.
Respondents consequently contend that, on the foregoing constitutional and statutory authority, petitioner cannot assail the validity of the rules of
procedure formulated by the Office of the Ombudsman governing the conduct of proceeding before it, including those with respect to the availabity or
non-avalability of appeal in administrative cases. Such as Section 7, Rule III of Administrative Order No.07.
Respondents also question the propriety of petitioner's proposition that, although she definitely prefaced her petition by categorizing the same as "an
appeal by certiorari under Rule 45 of the Rules of Court," she makes the aforequoted ambivalent statement which in effect asks that, should the
remedy under Rule 45 be unavailable, her petition be treated in the alternative as an original action for certiorari under Rule 65. The parties thereafter
engage in a discussion of the differences between a petition for review on certiorari under Rule 45 and a special civil action of certiorari under Rule
65.
Ultimately, they also attempt to review and rationalize the decision of this Court applying Section 27 of Republic Act No. 6770 vis--vis Section 7, Rule
III of Administrative Order No. 07. As correctly pointed out by public respondents, Ocampo IV vs. Ombudsman, et al.[3] and Young vs. Office of the
Ombudsman, et al.[4] were original actions for certiorari under Rule 65. Yabut vs. Office of the Ombudsman, et al. [5] was commenced by a petition for
review on certiorari under Rule 45. Then came Cruz, Jr. vs. People, et al.,[6] Olivas vs. Office of the Ombudsman, et al., [7]Olivarez vs. Sandiganbayan,
et al.,[8] and Jao, et al. vs. Vasquez,[9] which were for certiorari, prohibition and/or mandamus under Rule 65. Alba vs. Nitorreda, et al.[10] was initiated
by a pleading unlikely denominated as an "Appeal/Petition for Certiorari and/or Prohibition," with a prayer for ancillary remedies, and ultimately
followed by Constantino vs. Hon. Ombudsman Aniano Desierto, et al.[11] which was a special civil action for certiorari.
Considering, however the view that this Court now takes of the case at bar and the issues therein which will shortly be explained, it refrains from
preemptively resolving the controverted points raised by the parties on the nature and propriety of application of the writ of certiorari when used as a
mode of appeal or as the basis of a special original action, and whether or not they may be resorted to concurrently or alternatively, obvious though
the answers thereto appear to be. Besides, some seemingly obiter statements in Yabuts and Alba could bear reexamination and clarification.Hence,
we will merely observe and lay down the rule at this juncture that Section 27 of Republic Act No. 6770 is involved only whenever an appeal
by certiorari under Rule 45 is taken from a decision in an administrative diciplinary action. It cannot be taken into account where an original action
for certiorari under Rule 65 is resorted to as a remedy for judicial review, such as from an incident in a criminal action.
III After respondents' separate comments had been filed, the Court was intrigued by the fact, which does appear to have been seriously considered
before, that the administrative liability of a public official could fall under the jurisdiction of both the Civil Service Commission and the Office of the
Ombudsman. Thus, the offenses imputed to herein private respondent were based on both Section 19 of Republic Act. No. 6770 and Section 36 of
Presidential Decree No. 807. Yet, pursuant to the amendment of section 9, Batas Pambansa Blg. 129 by Republic Act No. 7902, all adjudications by
Civil Service Commission in administrative disciplinary cases were made appealable to the Court of Appeals effective March 18, 1995, while those of
the Office of the Ombudsman are appealable to this Court.
It could thus be possible that in the same administrative case involving two respondents, the proceedings against one could eventually have been
elevated to the Court of Appeals, while the other may have found its way to the Ombudsman from which it is sought to be brought to this Court. Yet
systematic and efficient case management would dictate the consolidation of those cases in the Court of Appeals, both for expediency and to avoid
possible conflicting decisions.
Then there is the consideration that Section 30, Article VI of the 1987 Constitution provides that "(n)o law shall be passed increasing the appellate
indiction of the Supreme Court as provided in this Constitution without its advice and consent," and that Republic Act No. 6770, with its
challenged Section 27, took effect on November 17, 1989, obviously in spite of that constitutional grounds must be raised by a party to the case,
neither of whom did so in this case, but that is not an inflexible rule, as we shall explain.
Since the constitution is intended fort the observance of the judiciary and other departments of the government and the judges are sworn to support
its provisions, the courts are not at liberty to overlook or disregard its commands or countenance evasions thereof. When it is clear that a statute
trangresses the authority vested in a legislative body, it is the duty of the courts to declare that the constitution, and not the statute, governs in a case
before them for judgement.[12]
Thus, while courts will not ordinarily pass upon constitutional questions which are not raised in the pleadings, [13] the rule has been recognized to admit
of certain exceptions. It does not preclude a court from inquiring into its own jurisdiction or compel it to enter a judgement that it lacks jurisdiction to
enter. If a statute on which a court's jurisdiction in a proceeding depends is unconstitutional, the court has no jurisdiction in the proceeding, and since
it may determine whether or not it has jurisdiction, it necessarily follows that it may inquire into the constitutionality of the statute.[14]
Constitutional question, not raised in the regular and orderly procedure in the trial are ordinarily rejected unless the jurisdiction of the court below or
that of the appellate court is involved in which case it may be raised at any time or on the court's own motion.[15] The Court ex mero motu may take
cognizance of lack of jurisdiction at any point in the case where the fact is developed. [16]The court has a clearly recognized right to determine its own
jurisdiction in any proceeding.[17]
The foregoing authorities notwithstanding, the Court believed that the parties hereto should be further heard on this constitutional
question. Correspondingly, the following resolution was issued on May 14, 1998, the material parts stating as follows:
The Court observes that the present petition, from the very allegations thereof, is "an appeal by certiorari under Rule 45 of the Rules of Court from the
'Joint Order (Re: Motion for Reconsideration)' issued in OMB-Adm. Case No. 0-95-0411, entitled 'Teresita G. Fabian vs. Engr. Nestor V. Agustin,
Asst. Regional Director, Region IV-A, EDSA, Quezon City,' which absolved the latter from the administrative charges for grave misconduct, among
other."
It is further averred therein that the present appeal to this Court is allowed under Section 27 of the Ombudsman Act of 1987 (R.A. No. 6770) and,
pursuant thereto, the Office of the Ombudsman issued its Rules of Procedure, Section 7 whereof is assailed by petitioner in this proceeding. It will be
recalled that R.A. No. 6770 was enacted on November 17, 1989, with Section 27 thereof pertinently providing that all administrative diciplinary cases,
orders, directives or decisions of the Office of the Ombudsman may be appealed to this Court in accordance with Rule 45 of the Rules of Court.
The Court notes, however, that neither the petition nor the two comments thereon took into account or discussed the validity of the aforestated
Section 27 of R.A. No. 8770 in light of the provisions of Section 30, Article VI of the 1987 Constitution that "(n)o law shall be passed increasing the
appellate jurisdiction of the Supreme Court as provided in this Constitution without its advise and consent."
The Court also invites the attention of the parties to its relevant ruling in First Lepanto Ceramics, Inc. vs. The Court of Appeals , et al. (G.R. No.
110571, October 7, 1994, 237 SCRA 519) and the provisions of its former Circular No. 1-95,as now substantially reproduced in Rule 43 of the 1997
revision of the Rules of Civil Procedure.
In view of the fact that the appellate jurisdiction of the Court is invoked and involved and in this case, and the foregoing legal consideration appear to
impugn the constitutionality and validity of the grant of said appellate jurisdiction to it, the Court deems it necessary that the parties be heard thereon
and the issue be first resolved before conducting further proceedings in this appellate review.
ACCORDINGLY, the Court Resolved to require the parties to Submit their position and arguments on the matter subject of this resolution by filing
their corresponding pleadings within ten (10) days from notice hereof.
IV The records do not show that the Office of the Solicitor General has complied with such requirement, hence the Court dispenses with any
submission it should have presented. On the other hand, petitioner espouses the theory that the provision in Section 27 of Republic Act No. 6770
which authorizes an appeal by certiorari to this Court of the aforementioned adjudications of the Ombudsman is not violative of Section 30, Article VI
of the Constitution. She claims that what is proscribed is the passage of law "increasing" the appellate jurisdiction of this Court "as provided in this
Constitution," and such appellate jurisdiction includes "all cases in which only an error or question of law is involved." Since Section 5(2)(e), Article
VIII of the Constitution authorizes this Court to review, revise, reverse, modify, or affirm on appeal or certiorari the aforesaid final judgement or orders
"as the law or the Rules of Court may provide," said Section 27 does not increase this Court may provide," said section 27 does not increase this
Court's appellate jurisdiction since, by providing that the mode of appeal shall be by petition for certiorari under Rule 45, then what may be raised
therein are only questions of law of which this Court already has of which this Court already has jurisdiction.
We are not impressed by this discourse. It overlooks the fact that by jurisprudential developments over the years, this Court has allowed appeals
by certiorari under Rule 45 in a substantial number of cases and instances even if questions of fact are directly involved and have to be resolved by
the appellate court.[18] Also, the very provision cited by petitioner specifies that the appellate jurisdiction of this Court contemplated therein is to be
exercised over "final judgements and orders of lower courts," that is, the courts composing the integrated judicial system. It does not include the
quasi-judicial bodies or agencies, hence whenever the legislature intends that the decisions or resolutions of the quasi-judicial agency shall be
reviewable by the Supreme Court or the Court of Appeals, a specific provision to that effect is included in the law creating that quasi-judicial agency
and, for that matter, any special statutory court. No such provision on appellate procedure is required for the regular courts of the integrated judicial
system because they are what are referred to and already provided for in Section 5, Article VIII of the Constitution.
Apropos to the foregoing, and as correctly observed by private respondent, the revised Rules of Civil Procedure[19] preclude appeals from quasi-
judicial agencies to the Supreme Court via a petition for review on certiorari under Rule 45. In the 1997 Rules of Civil Procedure, Section 1 Rule 45,
on "Appeal by Certiorari to the Supreme Court," explicitly states:
SECTION 1 . Filing of petition with Supreme Court. - A person desiring to appeal by certiorari from a judgement or final order or Resolution of
the Court of Appeals, the Sandiganbayan, the Regional Trial Court or other court whenever authorized by law, may file with the Supreme Court a
verified petition for review on certiorari. The petition shall raise only question of law which must be distinctly set forth. (Italics ours).
This differs from the former Rule 45 of the 1964 Rules of Court which made mention only of the Court of Appeals, and had to be adopted in statutes
creating and providing for appeals from certain administrative or quasi-judicial agencies, whenever the purpose was to restrict the scope of the appeal
to questions of law. That intended limitation on appellate review, as we have just discussed, was not fully subserved by recourse to the former Rule
45 but, then, at that time there was no uniform rule on appeals from quasi-judicial agencies.
Under the present Rule 45, appeals may be brought through a petition for review on certiorari but only from judgments and final orders of the
courts enumerated in Section 1 thereof. Appeals from judgments and final orders of quasi-judicial agencies[20] are now required to be brought to the
Court of Appeals on a verified petition for review, under the requirements and conditions in Rule 43 which was precisely formulated and adopted to
provide for a uniform rule of appellate procedure for quasi-judicial agencies .[21]
It is suggested, however, that the provisions of Rule 43 should apply only to "ordinary" quasi-judicial agencies, but not to the Office of the
Ombudsman which is a "high constitutional body." We see no reason for this distinction for, if hierarchical rank should be a criterion, that proposition
thereby disregards the fact that Rule 43 even includes the Office of the President and the Civil Service Commission, although the latter is even an
independent constitutional commission, unlike the Office of the Ombudsman which is a constitutionally-mandated but statutorily created body.
Regarding the misgiving that the review of the decision of the Office of the Ombudsman by the Court of Appeals would cover questions of law, of fact
or of both, we do not perceive that as an objectionable feature. After all, factual controversies are usually involved in administrative disciplinary
actions, just like those coming from the Civil Service, Commission, and the Court of Appeals as a trier of fact is better prepared than this Court to
resolve the same. On the other hand, we cannot have this situation covered by Rule 45 since it now applies only to appeals from the regular
courts. Neither can we place it under Rule 65 since the review therein is limited to jurisdictional questions.*
The submission that because this Court has taken cognizance of cases involving Section 27 of Republic Act No. 6770, that fact may be viewed as
"acquiescence" or "acceptance" by it of the appellate jurisdiction contemplated in said Section 27, is unfortunately too tenuous. The jurisdiction of a
court is not of acquiescence as a matter of fact but an issue of conferment as a matter of law. Besides, we have already discussed the cases referred
to, including the inaccuracies of some statements therein, and we have pointed out the instances when Rule 45 is involved, hence covered by Section
27 of Republic Act No. 6770 now under discussion, and when that provision would not apply if it is a judicial review under Rule 65.
Private respondent invokes the rule that courts generally avoid having to decide a constitutional question, especially when the case can be decided
on other grounds. As a general proposition that is correct. Here, however, there is an actual case susceptible of judicial determination. Also, the
constitutional question, at the instance of this Court, was raised by the proper parties, although there was even no need for that because the Court
can rule on the matter sua sponte when its appellate jurisdiction is involved. The constitutional question was timely raised, although it could even be
raised any time likewise by reason of the jurisdictional issue confronting the Court. Finally, the resolution of the constitutional issue here is obviously
necessary for the resolution of the present case. [22]
It is, however, suggested that this case could also be decided on other grounds, short of passing upon; the constitutional question. We appreciate the
ratiocination of private respondent but regret that we must reject the same. That private respondent could be absolved of the charge because the
decision exonerating him is final and unappealable assumes that Section 7, Rule III of Administrative Order No. 07 is valid, but that is precisely one of
the issues here. The prevailing rule that the Court should not interfere with the discretion of the Ombudsman in prosecuting or dismissing a complaint
is not applicable in this administrative case, as earlier explained. That two decisions rendered by this Court supposedly imply the validity of the
aforementioned Section 7 of Rule III is precisely under review here because of some statements therein somewhat at odds with settled rules and the
decisions of this Court on the same issues, hence to invoke the same would be to beg the question.
V Taking all the foregoing circumstances in their true legal roles and effects, therefore, Section 27 of Republic Act No. 6770 cannot validly authorize
an appeal to this Court from decisions of the Office of the Ombudsman in administrative disciplinary cases. It consequently violates the proscription in
Section 30, Article VI of the Constitution against a law which increases the Appellatejurisdiction of this Court. No countervailing argument has been
cogently presented to justify such disregard of the constitutional prohibition which, as correctly explained in First Leparto Ceramics, Inc. vs. The Court
of Appeals, el al. [23] was intended to give this Court a measure of control over cases placed under its appellate Jurisdiction. Otherwise, the
indiscriminate enactment of legislation enlarging its appellate jurisdiction would unnecessarily burden the Court [24]
We perforce have to likewise reject the supposed inconsistency of the ruling in First Lepanto Ceramics and some statements in Yabut and Alba, not
only because of the difference in the factual settings, but also because those isolated cryptic statements in Yabut and Alba should best be clarified in
the adjudication on the merits of this case. By way of anticipation, that will have to be undertaken by the proper court of competent jurisdiction.
Furthermore in addition to our preceding discussion on whether Section 27 of Republic Act No. 6770 expanded the jurisdiction of this Court without its
advice and consent, private respondent's position paper correctly yields the legislative background of Republic Act No. 6770. On September 26, 1989,
the Conference Committee Report on S.B. No. 453 and H.B. No. 13646, setting forth the new version of what would later be Republic Act No. 6770,
was approved on second reading by the House of Representatives. [25] The Senate was informed of the approval of the final version of the Act on
October 2, 1989 [26] and the same was thereafter enacted into law by President Aquino on November 17, 1989.
Submitted with said position paper is an excerpt showing that the Senate, in the deliberations on the procedure for appeal from the Office of the
Ombudsman to this Court, was aware of the provisions of Section 30, Article III of the Constitution. It also reveals that Senator Edgardo Angara, as a
co-author and the principal sponsor of S.B. No. 543 admitted that the said provision will expand this Court's jurisdiction, and that the Committee on
Justice and Human Rights had not consulted this Court on the matter, thus:
INTERPELLATION OF SENATOR SHAHANI Thereafter, with reference to Section 22(4) which provides that the decisions of the Office of the
Ombudsman may be appealed to the Supreme Court, in reply to Senator Shahani's query whether the Supreme Court would agree to such provision
in the light of Section 30, Article VI of the Constitution which requires its advice and concurrence in laws increasing its appellate jurisdiction, Senator
Angara informed that the Committee has not yet consulted the Supreme Court regarding the matter. He agreed that the provision will expand the
Supreme Court's jurisdiction by allowing appeals through petitions for review, adding that they should be appeals on certiorari.[27] There is no showing
that even up to its enactment, Republic Act No. 6770 was ever referred to this Court for its advice and consent . [28]
VI As a consequence of our ratiocination that Section 27 of Republic Act No. 6770 should be struck down as unconstitutional, and in line with the
regulatory philosophy adopted in appeals from quasi-judicial agencies in the 1997 Revised Rules of Civil Procedure, appeals from decisions of the
Office of the Ombudsman in administrative disciplinary cases should be taken to the Court of Appeals under the provisions of Rule 43.
There is an intimation in the pleadings, however, that said Section 27 refers to appellate jurisdiction which, being substantive in nature, cannot be
disregarded by this Court under its rule-making power, especially if it results in a diminution, increase or modification of substantive rights. Obviously,
however, where the law is procedural in essence and purpose, the foregoing consideration would not pose a proscriptive issue against the exercise of
the rule-making power of this Court. This brings to fore the question of whether Section 27 of Republic Act No. 6770 is substantive or procedural.
It will be noted that no definitive line can be drawn between those rules or statutes which are procedural, hence within the scope of this Court's rule-
making power, and those which are substantive. In fact, a particular rule may be procedural in one context and substantive in another.[29] It is admitted
that what is procedural and what is substantive is frequently a question of great difficulty. [30] It is not, however, an insurmountable problem if a rational
and pragmatic approach is taken within the context of our own procedural and jurisdictional system.
In determining whether a rule prescribed by the Supreme Court, for the practice and procedure of the lower courts, abridges, enlarges, or modifies
any substantive right, the test is whether the rule really regulates procedure, that is, the judicial process for enforcing rights and duties recognized by
substantive law and for justly administering remedy and redress for a disregard or infraction of them. [31] If the rule takes away a vested right, it is not
procedural. If the rule creates a right such as the right to appeal, it may be classified as a substantive matter; but if it operates as a means o
implementing an existing right then the rule deals merely with procedure. [32] In the situation under consideration, a transfer by the Supreme Court, in
the exercise of its rule-making power, of pending cases involving a review of decisions of the Office of the Ombudsman in administrative disciplinary
actions to the Court of Appeals which shall now be vested with exclusive appellate jurisdiction thereover, relates to procedure only.[33] This is so
because it is not the right to appeal of an aggrieved party which is affected by the law. That right has been preserved. Only the procedure by which
the appeal is to be made or decided has been changed. The rationale for this is that litigant has a vested right in a particular remedy, which may be
changed by substitution without impairing vested rights, hence he can have none in rules of procedure which relate to the remedy.[34]
Furthermore, it cannot be said that transfer of appellate jurisdiction to the Court of Appeals in this case is an act of creating a new right of appeal
because such power of the Supreme Court to transfer appeals to subordinate appellate courts is purely a procedural and not a substantive
power. Neither can we consider such transfer as impairing a vested right because the parties have still a remedy and still a competent tribunal to
administer that remedy.[35] Thus, it has been generally held that rules or statutes involving a transfer of cases from one court to another, are
procedural and remedial merely and that, as such, they are applicable to actions pending at the time the statute went into effect [36] or, in the case at
bar, when its invalidity was declared. Accordingly, even from the standpoint of jurisdiction ex hypothesi the validity of the transfer of appeals in said
cases to the Court of Appeals can be sustained.
WHEREFORE, Section 27 of Republic Act No. 6770 (Ombudsman Act of 1989), together with Section 7, Rule III of Administrative Order No. 07
(Rules of Procedure of the Office of the Ombudsman), and any other provision of law or issuance implementing the aforesaid Act and insofar as they
provide for appeals in administrative disciplinary cases from the Office of the Ombudsman to the Supreme Court, are hereby declared INVALID and of
no further force and effect.
The instant petition is hereby referred and transferred to the Court of Appeals for final disposition, with said petition to be considered by the Court of
Appeals pro hac vice as a petition for review under Rule 43, without prejudice to its requiring the parties to submit such amended or supplemental
pleadings and additional documents or records as it may deem necessary and proper.
SO ORDERED.
[G.R. No. 87636. November 19, 1990.]
NEPTALI A. GONZALES, ERNESTO M. MACEDA, ALBERTO G. ROMULO, HEHERSON T. ALVAREZ, EDGARDO J. ANGARA, AGAPITO A.
AQUINO, TEOFISTO T. GUINGONA, JR., ERNESTO F. HERRERA, JOSE D. LINA, JR., JOHN OSMEÑA, VICENTE T. PATERNO, RENE A.
SAGUISAG, LETICIA RAMOS-SHAHANI, MAMINTAL ABDUL J. TAMANO, WIGBERTO E. TAÑADA, JOVITO R. SALONGA, ORLANDO S.
MERCADO, JUAN PONCE ENRILE, JOSEPH ESTRADA, SOTERO LAUREL, AQUILINO PIMENTEL, JR., SANTANINA RASUL, VICTOR
ZIGA, Petitioners, v. HON. CATALINO MACARAIG, JR., HON. VICENTE JAYME, HON. CARLOS DOMINGUEZ, HON. FULGENCIO
FACTORAN, HON. FIORELLO ESTUAR, HON. LOURDES QUISUMBING, HON. RAUL MANGLAPUS, HON. ALFREDO BENGSON, HON. JOSE
CONCEPCION, HON. LUIS SANTOS, HON. MITA PARDO DE TAVERA, HON. RAINERIO REYES, HON. GUILLERMO CARAGUE, HON.
ROSALINA CAJUCOM and HON. EUFEMIO C. DOMINGO, Respondents.
Gonzales, Batiller, Bilog & Associates for petitioners.
DECISION
MELENCIO-HERRERA, J.: This constitutional controversy between the legislative and executive departments of government stemmed from Senate
Resolution No. 381, adopted on 2 February 1989,
"Authorizing and Directing the Committee on Finance to Bring in the Name of the Senate of the Philippines the Proper Suit with the Supreme Court of
the Philippines contesting the Constitutionality of the Veto by the President of Special and General Provisions, particularly Section 55, of the General
Appropriation Bill of 1989 (H.B. No. 19186) and For Other Purposes."cralaw virtua1aw library
Petitioners are thus before us as members and ex-officio members of the Committee on Finance of the Senate and as "substantial taxpayers whose
vital interests may be affected by this case."cralaw virtua1aw library
Respondents are members of the Cabinet tasked with the implementation of the General Appropriations Act of 1989 and 1990, some of them
incumbents, while others have already been replaced, and include the National Treasurer and the Commission on Audit Chairman, all of whom are
being sued in their official capacities.chanrobles.com:cralaw:red
The Background Facts
On 16 December 1988, Congress passed House Bill No. 19186, or the General Appropriations Bill for the Fiscal Year 1989. As passed, it eliminated
or decreased certain items included in the proposed budget submitted by the President.
Pursuant to the constitutional provision on the passage of bills, Congress presented the said Bill to the President for consideration and approval.
On 29 December 1988, the President signed the Bill into law, and declared the same to have become Rep. Act No. 6688. In the process, seven (7)
Special Provisions and Section 55, a "General Provision," were vetoed.
On 2 February 1989, the Senate, in the same Resolution No. 381 mentioned at the outset, further expressed:jgc:chanrobles.com.ph
"WHEREAS, Be it Resolved, as it is hereby Resolved, That the Senate express its sense that the veto by the President of Section 55 of the
GENERAL PROVISIONS of the General Appropriation Bill of 1989 (H.B. No. 19186) is unconstitutional and, therefore, void and without any force and
effect; hence, the aforesaid Section 55 remains;
Thus it is that, on 11 April 1989, this Petition for Prohibition/ Mandamus was filed, with a prayer for the issuance of a Writ of Preliminary Injunction and
Restraining Order, assailing mainly the constitutionality or legality of the Presidential veto of Section 55, and seeking to enjoin respondents from
implementing Rep. Act No. 6688. No Restraining Order was issued by the Court.
The Comment, submitted by the Solicitor General on 25 August 1989 (after several extensions granted), was considered as the Answer to the Petition
and, on 7 September 1989, the Court Resolved to give due course to the Petition and to require the parties to submit their respective Memoranda.
Petitioners filed their Memorandum on 12 December 1989. But, on 19 January 1990, they filed a Motion for Leave to File and to Admit Supplemental
Petition, which was granted, basically raising the same issue as in the original Petition, this time questioning the President’s veto of certain provisions,
particularly Section 16, of House Bill 26934, or the General Appropriations Bill for Fiscal Year 1990, which the President declared to have become
Rep. Act No. 6831.chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph
The Solicitor General’s Comment on the Supplemental Petition, on behalf of respondent public officials, was submitted on 24 April 1990. On 15 May
1990, the Court required the parties to file simultaneously their consolidated memoranda, to include the Supplemental Petition, within an inextendible
period of thirty (30) days from notice. However, because the original Resolution of 15 May 1990 merely required the filing of a memorandum on the
Supplemental Petition, a revised Resolution requiring consolidated memoranda, within thirty (30) days from notice, was released on 28 June 1990.
The Consolidated Memoranda were respectively filed on 26 June 1990 by petitioners, and on 1 August 1990 by respondents. On 14 August 1990,
both Memoranda were Noted and the case was deemed submitted for deliberation.
On 11 September 1990, the Court heard the case on oral argument and required the submittal of supplemental Memoranda, the last of which was
filed on 26 September 1990.
The Vetoed Provisions and Reasons Therefor
Section 55 of the Appropriations Act of 1989 (Section 55 [FY ‘89] hereinafter), which was vetoed by the President, reads:jgc:chanrobles.com.ph
"SEC. 55. Prohibition Against the Restoration or Increase of Recommended Appropriations Disapproved and/or Reduced by Congress: No item of
appropriation recommended by the President in the Budget submitted to Congress pursuant to Article VII, Section 22 of the Constitution which has
been disapproved or reduced in this Act shall be restored or increased by the use of appropriations authorized for other purposes by augmentation.
An item of appropriation for any purpose recommended by the President in the Budget shall be deemed to have been disapproved by Congress if no
corresponding appropriation for the specific purpose is provided in this Act."cralaw virtua1aw library
We quote below the reason for the Presidential veto:jgc:chanrobles.com.ph
"The provision violates Section 25 (5) of Article VI of the Constitution. If allowed, this Section would nullify not only the constitutional and statutory
authority of the President, but also that of the President of the Senate, the Speaker of the House of Representatives, the Chief Justice of the Supreme
Court, and Heads of Constitutional Commissions, to augment any item in the general appropriations law for their respective offices from savings in
other items of their respective appropriations. A careful review of the legislative action on the budget as submitted shows that in almost all cases, the
budgets of agencies as recommended by the President, as well as those of the Senate, the House of Representatives, and the Constitutional
Commissions, have been reduced. An unwanted consequence of this provision is the inability of the President, the President of the Senate, Speaker
of the House of Representatives, the Chief Justice of the Supreme Court, and the heads of Constitutional Commissions to augment any item of
appropriation of their respective offices from savings in other items of their respective appropriations even in cases of calamity or in the event of
urgent need to accelerate the implementation of essential public services and infrastructure projects.
"Furthermore, this provision is inconsistent with Section 12 and other similar provisions of this General Appropriations Act."cralaw virtua1aw library
A substantially similar provision as the vetoed Section 55 appears in the Appropriations Act of 1990, this time crafted as
follows:jgc:chanrobles.com.ph
"B. GENERAL PROVISIONS
"Sec. 16. Use of Savings. — The President of the Philippines, the President of the Senate, the Speaker of the House of Representatives, the Chief
Justice of the Supreme Court, the Heads of Constitutional Commissions under Article IX of the Constitution and the Ombudsman are hereby
authorized to augment any item in this Act for their respective offices from savings in other items of their appropriations: PROVIDED, THAT NO ITEM
OF APPROPRIATION RECOMMENDED BY THE PRESIDENT IN THE BUDGET SUBMITTED TO CONGRESS PURSUANT TO ARTICLE VII,
SECTION 22 OF THE CONSTITUTION WHICH HAS BEEN DISAPPROVED OR REDUCED BY CONGRESS SHALL BE RESTORED OR
INCREASED BY THE USE OF APPROPRIATIONS AUTHORIZED FOR OTHER PURPOSES IN THIS ACT BY AUGMENTATION. AN ITEM OF
APPROPRIATION FOR ANY PURPOSE RECOMMENDED BY THE PRESIDENT IN THE BUDGET SHALL BE DEEMED TO HAVE BEEN
DISAPPROVED BY CONGRESS IF NO CORRESPONDING APPROPRIATION FOR THE SPECIFIC PURPOSE IS PROVIDED IN THIS
ACT."cralaw virtua1aw library
It should be noted that in the 1989 Appropriations Act, the "Use of Savings" appears in Section 12, separate and apart from Section 55; whereas in
the 1990 Appropriations Act, the "Use of Savings" and the vetoed provision have been commingled in Section 16 only, with the vetoed provision made
to appear as a condition or restriction.
Essentially the same reason was given for the veto of Section 16 (FY ‘90), thus:jgc:chanrobles.com.ph
"I am vetoing this provision for the reason that it violates Section 25 (5) of Article VI of the Constitution in relation to Sections 44 and 45 of P.D. No.
1177 as amended by R.A. No. 6670 which authorizes the President to use savings to augment any item of appropriations in the Executive Branch of
the Government.
"Parenthetically, there is a case pending in the Supreme Court relative to the validity of the President’s veto on Section 55 of the General Provisions
of Republic Act No. 6688 upon which the amendment on this Section was based. Inclusion, therefore, of the proviso in the last sentence of this
section might prejudice the Executive Branch’s position in the case.
"Moreover, if allowed, this Section would nullify not only the constitutional and statutory authority of the President, but also that of the officials
enumerated under Section 25 (5) of Article VI of the Constitution, to augment any item in the general appropriations law for their respective
appropriations.
"An unwanted consequence of this provision would be the inability of the President, the President of the Senate, Speaker of the House of
Representatives, the Chief Justice of the Supreme Court, and heads of Constitutional Commissions to augment any item of appropriation of their
respective offices from savings in other items of their respective appropriations even in cases of national emergency or in the event of urgent need to
accelerate the implementation of essential public services and infrastructure projects."cralaw virtua1aw library
The fundamental issue raised is whether or not the veto by the President of Section 55 of the 1989 Appropriations Bill (Section 55 FY ‘89), and
subsequently of its counterpart Section 16 of the 1990 Appropriations Bill (Section 16 FY ‘90), is unconstitutional and without
effect.chanrobles.com:cralaw:red
The Contending Views
In essence, petitioners’ cause is anchored on the following grounds: (1) the President’s line-veto power as regards appropriation bills is limited to
item/s and does not cover provision/s; therefore, she exceeded her authority when she vetoed Section 55 (FY ‘89) and Section 16 (FY ‘90) which are
provisions; (2) when the President objects to a provision of an appropriation bill, she cannot exercise the item-veto power but should veto the entire
bill; (3) the item-veto power does not carry with it the power to strike out conditions or restrictions for that would be legislation, in violation of the
doctrine of separation of powers; and (4) the power of augmentation in Article VI, Section 25 [5] of the 1987 Constitution, has to be provided for by law
and, therefore, Congress is also vested with the prerogative to impose restrictions on the exercise of that power.
The Solicitor General, as counsel for public respondents, counters that the issue at bar is a political question beyond the power of this Court to
determine; that petitioners had a political remedy, which was to override the veto; that Section 55 is a "rider" because it is extraneous to the
Appropriations Act and, therefore, merits the President’s veto; that the power of the President to augment items in the appropriations for the executive
branches had already been provided for in the Budget Law, specifically Sections 44 and 45 of Pres. Decree No. 1177, as amended by Rep. Act No.
6670 (4 August 1988); and that the President is empowered by the Constitution to veto provisions or other "distinct and severable parts" of an
Appropriations Bill.
Judicial Determination
With the Senate maintaining that the President’s veto is unconstitutional, and that charge being controverted, there is an actual case or justiciable
controversy between the Upper House of Congress and the executive department that may be taken cognizance of by this Court.
"Indeed, where the legislature or the executive branch is acting within the limits of its authority, the judiciary cannot and ought not to interfere with the
former. But where the legislature or the executive 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’ [Art. VIII, Section 1 of the 1935 Constitution; Art. X, Section 1 of the 1973
Constitution and which was adopted as part of the Freedom Constitution, and Art. VIII, Section 1 of the 1987 Constitution] and which power this Court
has exercised in many instances" (Demetria v. Alba, G.R. No. 71977, 27 February 1987, 148 SCRA 209).
We take note as well of what petitioners stress as the "imperative need for a definitive ruling by this Court as to the exact parameters of the exercise
of the item-veto power of the President as regards appropriation bills . . . in order to obviate the recurrence of a similar problem whenever a general
appropriations bill is passed by Congress." Indeed, the contextual reiteration of Section 55 (FY 89) in Section 16 (FY ‘90) and again, its veto by the
President, underscore the need for judicial arbitrament. The Court does not thereby assert its superiority over or exhibit lack of respect due the other
co-ordinate departments but discharges a solemn and sacred duty to determine essentially the scope of intersecting powers in regard which the
Executive and the Senate are in dispute.chanrobles.com : virtual law library
Petitioners have also brought this suit as taxpayers. As ruled in Sanidad v. COMELEC (No. L-44640, 12 October 1976, 73 SCRA 333), this Court
enjoys the open discretion to entertain taxpayers suits or not. In Tolentino v. COMELEC (No. L-34150, 16 October 1961, 41 SCRA 702), it was also
held that a member of the Senate has the requisite personality to bring a suit where a constitutional issue is raised.cralawnad
The political question doctrine neither interposes an obstacle to judicial determination of the rival claims. The jurisdiction to delimit constitutional
boundaries has been given to this Court. It cannot abdicate that obligation mandated by the 1987 Constitution, although said provision by no means
does away with the applicability of the principle in appropriate cases.
"SECTION 1. The judicial power shall be vested in one Supreme Court and in such lower courts as may be established by law.
Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable,
and to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or
instrumentality of the Government."cralaw virtua1aw library
Nor is this the first time that the constitutionality of a Presidential veto is raised to the Court. The two oft-cited cases are Bengson v. Secretary of
Justice (62 Phil. 912 [1936]), penned by Justice George A. Malcolm, which upheld the veto questioned before it, but which decision was reversed by
the U.S. Supreme Court in the same entitled case in 292 U.S. 410, infra, essentially on the ground that an Appropriations Bill was not involved. The
second case is Bolinao Electronics v. Valencia (G.R. No. L-20740, 30 June 1964, 11 SCRA 486), infra, which rejected the President’s veto of a
condition or restriction in an Appropriations Bill.
The Extent of the President’s Item-veto Power
The focal issue for resolution is whether or not the President exceeded the item-veto power accorded by the Constitution. Or differently put, has the
President the power to veto "provisions" of an Appropriations Bill?
Petitioners contend that Section 55 (FY ‘89) and Section 16 (FY ‘90) are provisions and not items and are, therefore, outside the scope of the item-
veto power of the President.chanrobles lawlibrary : rednad
The veto power of the President is expressed in Article VI, Section 27 of the 1987 Constitution reading, in full, as follows:jgc:chanrobles.com.ph
"Sec. 27. (1) Every bill passed by the Congress shall, before it becomes a law, be presented to the President. If he approves the same, he shall sign
it; otherwise, he shall veto it and return the same with his objections to the House where it originated, which shall enter the objections at large in its
Journal and proceed to reconsider it. If, after such reconsideration, two-thirds of all the Members of such House shall agree to pass the bill, it shall be
sent, together with the objections, to the other House by which it shall likewise be reconsidered, and if approved by two-thirds of all the Members of
that House, it shall become a law. In all such cases, the votes of each House shall be determined by yeas or nays, and the names of the Members
voting for or against shall be entered in its Journal. The President shall communicate his veto of any bill to the House where it originated within thirty
days after the date of receipt thereof; otherwise, it shall become a law as if he had signed it.
"(2) The President shall have the power to veto any particular item or items in an appropriation, revenue, or tariff bill, but the veto shall not affect the
item or items to which he does not object."cralaw virtua1aw library
Paragraph (1) refers to the general veto power of the President and if exercised would result in the veto of the entire bill, as a general rule. Paragraph
(2) is what is referred to as the item-veto power or the line-veto power. It allows the exercise of the veto over a particular item or items in an
appropriation, revenue, or tariff bill. As specified, the President may not veto less than all of an item of an Appropriations Bill. In other words, the
power given the executive to disapprove any item or items in an Appropriations Bill does not grant the authority to veto a part of an item and to
approve the remaining portion of the same item.
Originally, item veto exclusively referred to veto of items of appropriation bills and first came into being in the former Organic Act, the Act of Congress
of 29 August 1916. This was followed by the 1935 Constitution, which contained a similar provision in its Section 11(2), Article VI, except that the veto
power was made more expansive by the inclusion of this sentence:jgc:chanrobles.com.ph
". . . When a provision of an appropriation bill affects one or more items of the same, the President can not veto the provision without at the same time
vetoing the particular item or items to which it relates . . ."cralaw virtua1aw library
The 1935 Constitution further broadened the President’s veto power to include the veto of item or items of revenue and tariff bills.
With the advent of the 1973 Constitution, the section took a more simple and compact form, thus:jgc:chanrobles.com.ph
"Section 20 (2). The Prime Minister shall have the power to veto any particular item or items in an appropriation, revenue, or tariff bill, but the veto
shall not affect the item or items to which he does not object."cralaw virtua1aw library
It is to be noted that the counterpart provision in the 1987 Constitution (Article VI, Section 27 [2], supra), is a verbatim reproduction except for the
public official concerned. In other words, also eliminated has been any reference to the veto of a provision. The vital question is: should this exclusion
be interpreted to mean as a disallowance of the power to veto a provision, as petitioners urge?
The terms item and provision in budgetary legislation and practice are concededly different. An item in a bill refers to the particulars, the details, the
distinct and severable parts . . . of the bill (Bengzon, supra, at 916). It is an indivisible sum of money dedicated to a stated purpose (Commonwealth v.
Dodson, 11 S.E., 2d 120, 124, 125, etc., 176 Va. 281). The United States Supreme Court, in the case of Bengzon v. Secretary of Justice (299 U.S.
410, 414, 57 S.Ct 252, 81 L. Ed., 312) declared "that an ‘item’ of an appropriation bill obviously means an item which in itself is a specific
appropriation of money, not some general provision of law, which happens to be put into an appropriation bill."cralaw virtua1aw library
It is our considered opinion that, notwithstanding the elimination in Article VI, Section 27 (2) of the 1987 Constitution of any reference to the veto of a
provision, the extent of the President’s veto power as previously defined by the 1935 Constitution has not changed. This is because the eliminated
proviso merely pronounces the basic principle that a distinct and severable part of a bill may be the subject of a separate veto (Bengzon v. Secretary
of Justice, 62 Phil., 912, 916 (1926); 2 BERNAS, Joaquin, S.J., The Constitution of the Republic of the Philippines, 1st ed., 154-155, [1988]).
The restrictive interpretation urged by petitioners that the President may not veto a provision without vetoing the entire bill not only disregards the
basic principle that a distinct and severable part of a bill may be the subject of a separate veto but also overlooks the Constitutional mandate that any
provision in the general appropriations bill shall relate specifically to some particular appropriation therein and that any such provision shall be limited
in its operation to the appropriation to which it relates (1987 Constitution, Article VI, Section 25 [2]). In other words, in the true sense of the term, a
provision in an Appropriations Bill is limited in its operation to some particular appropriation to which it relates, and does not relate to the entire
bill.chanrobles law library
Petitioners’ further submission that, since the exercise of the veto power by the President partakes of the nature of legislative powers it should be
strictly construed, is negative by the following dictum in Bengzon, supra, reading:jgc:chanrobles.com.ph
"The Constitution is a limitation upon the power of the legislative department of the government, but in this respect it is a grant of power to the
executive department. The Legislature has the affirmative power to enact laws; the Chief Executive has the negative power by the constitutional
exercise of which he may defeat the will of the Legislature. It follows that the Chief Executive must find his authority in the Constitution. But in
exercising that authority he may not be confined to rules of strict construction or hampered by the unwise interference of the judiciary. The courts will
indulge every intendment in favor of the constitutionality of a veto the same as they will presume the constitutionality of an act as originally passed by
the Legislature" (Commonwealth v. Barnett [1901], 199 Pa., 161; 55 L.R.A., 882; People v. Board of Councilmen [1892], 20 N.Y.S., 52; Fulmore v.
Lane [1911], 104 Tex., 499; Texas Co. v. State [1927], 53 A.L.R., 258 [at 917]).
Inappropriateness of the so-called "Provisions"
But even assuming arguendo that provisions are beyond the executive power to veto, we are of the opinion that Section 55 (FY ‘89) and Section 16
(FY ‘90) are not provisions in the budgetary sense of the term. Article VI, Section 25 (2) of the 1987 Constitution provides:jgc:chanrobles.com.ph
"Sec. 25 (2) No provision or enactment shall be embraced in the general appropriations bill unless it relates specifically to some particular
appropriation therein. Any such provision or enactment shall be limited in its operation to the appropriation to which it relates."cralaw virtua1aw library
Explicit is the requirement that a provision in the Appropriations Bill should relate specifically to some" particular appropriation" therein. The
challenged "provisions" fall short of this requirement. Firstly, the vetoed "provisions" do not relate to any particular or distinctive appropriation. They
apply generally to all items disapproved or reduced by Congress in the Appropriations Bill. Secondly, the disapproved or reduced items are nowhere
to be found on the face of the Bill. To discover them, resort will have to be made to the original recommendations made by the President and to the
source indicated by petitioners themselves, i.e., the "Legislative Budget Research and Monitoring Office" (Annex B-1 and B-2, Petition). Thirdly, the
vetoed Sections are more of an expression of Congressional policy in respect of augmentation from savings rather than a budgetary appropriation.
Consequently, Section 55 (FY ‘89) and Section 16 (FY ‘90) although labelled as "provisions," are actually inappropriate provisions that should be
treated as items for the purpose of the President’s veto power. (Henry v. Edwards [1977] 346 S Rep. 2d, 157-158)
"Just as the President may not use his item-veto to usurp constitutional powers conferred on the legislature, neither can the legislature deprive the
Governor of the constitutional powers conferred on him as chief executive officer of the state by including in a general appropriation bill matters more
properly enacted in separate legislation. The Governor’s constitutional power to veto bills of general legislation . . . cannot be abridged by the careful
placement of such measures in a general appropriation bill, thereby forcing the Governor to choose between approving unacceptable substantive
legislation or vetoing ‘items’ of expenditure essential to the operation of government. The legislature cannot by location of a bill give it immunity from
executive veto. Nor can it circumvent the Governor’s veto power over substantive legislation by artfully drafting general law measures so that they
appear to be true conditions or limitations on an item of appropriation. Otherwise, the legislature would be permitted to impair the constitutional
responsibilities and functions of a co-equal branch of government in contravention of the separation of powers doctrine . . . We are no more willing to
allow the legislature to use its appropriation power to infringe on the Governor’s constitutional right to veto matters of substantive legislation than we
are to allow the Governor to encroach on the constitutional powers of the legislature. In order to avoid this result, we hold that, when the legislature
inserts inappropriate provisions in a general appropriation bill, such provisions must be treated as ‘items’ for purposes of the Governor’s item veto
power over general appropriation bills.
". . . Legislative control cannot be exercised in such a manner as to encumber the general appropriation bill with veto-proof ‘logrolling measure,’
special interest provisions which could not succeed if separately enacted, or ‘riders,’ substantive pieces of legislation incorporated in a bill to insure
passage without veto. . . ." (Emphasis supplied)
Inappropriateness of the so-called "Conditions/Restrictions"
Petitioners maintain, however, that Congress is free to impose conditions in an Appropriations Bill and where conditions are attached, the veto power
does not carry with it the power to strike them out, citing Commonwealth v. Dodson (11 SE, 2d 130, supra) and Bolinao Electronics Corporation v.
Valencia (No. L-20740, June 30, 1964, 11 SCRA 486). In other words, their theory is that Section 55 (FY ‘89) and Section 16 (FY ‘90) are such
conditions/restrictions and thus beyond the veto power.chanrobles virtual lawlibrary
There can be no denying that inherent in the power of appropriation is the power to specify how money shall be spent; and that in addition to distinct
"items" of appropriation, the Legislature may include in Appropriation Bills qualifications, conditions, limitations or restrictions on expenditure of funds.
Settled also is the rule that the Executive is not allowed to veto a condition or proviso of an appropriation while allowing the appropriation itself to
stand (Fairfield v. Foster, supra, at 320). That was also the ruling in Bolinao, supra, which held that the veto of a condition in an Appropriations Bill
which did not include a veto of the items to which the condition related was deemed invalid and without effect whatsoever.
However, for the rule to apply, restrictions should be such in the real sense of the term, not some matters which are more properly dealt with in a
separate legislation (Henry v. Edwards, La, 346, So 2d 153). Restrictions or conditions in an Appropriations Bill must exhibit a connection with money
items in a budgetary sense in the schedule of expenditures. Again, the test is appropriateness.
"It is not enough that a provision be related to the institution or agency to which funds are appropriated. Conditions and limitations properly included in
an appropriation bill must exhibit such a connexity with money items of appropriation that they logically belong in a schedule of expenditures . . . the
ultimate test is one of appropriateness" (Henry v. Edwards, supra, at 158).
Tested by these criteria, Section 55 (FY ‘89) and Section 16 (FY ‘90) must also be held to be inappropriate "conditions." While they, particularly,
Section 16 (FY ‘90), have been "artfully drafted" to appear as true conditions or limitations, they are actually general law measures more appropriate
for substantive and, therefore, separate legislation.
Further, neither of them shows the necessary connection with a schedule of expenditures. The reason, as explained earlier, is that items reduced or
disapproved by Congress would not appear on the face of the enrolled bill or Appropriations Act itself. They can only be detected when compared
with the original budgetary submittals of the President. In fact, Sections 55 (FY ‘89) and 16 (FY ‘90) themselves provide that an item "shall be deemed
to have been disapproved by Congress if no corresponding appropriation for the specific purpose is provided in this Act."cralaw virtua1aw library
Considering that the vetoed provisions are not, in the budgetary sense of the term, conditions or restrictions, the case of Bolinao Electronics
Corporation v. Valencia (supra), invoked by petitioners, becomes inapplicable. In that case, a public works bill contained an item appropriating a
certain sum for assistance to television stations, subject to the condition that the amount would not be available to places where there were
commercial television stations. Then President Macapagal approved the appropriation but vetoed the condition. When challenged before this Court, it
was held that the veto was ineffectual and that the approval of the item carried with it the approval of the condition attached to it. In contrast with the
case at bar, there is no condition, in the budgetary sense of the term, attached to an appropriation or item in the appropriation bill which was struck
out. For obviously, Sections 55 (FY ‘89) and 16 (FY ‘90) partake more of a curtailment on the power to augment from savings; in other words, "a
general provision of law, which happens to be put in an appropriation bill" (Bengzon v. Secretary of Justice, supra).
The Power of Augmentation and The Validity of the Veto
The President promptly vetoed Section 55 (FY ‘89) and Section 16 (FY ‘90) because they nullify the authority of the Chief Executive and heads of
different branches of government to augment any item in the General Appropriations Law for their respective offices from savings in other items of
their respective appropriations, as guaranteed by Article VI, Section 25 (5) of the Constitution. Said provision reads:jgc:chanrobles.com.ph
"Sec. 25. (5) No law shall be passed authorizing any transfer of appropriations; however, 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 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"
(Emphasis ours).
Noteworthy is the fact that the power to augment from savings lies dormant until authorized by law.
This Court upheld the validity of the power of augmentation from savings in Demetria v. Alba, which ruled:jgc:chanrobles.com.ph
". . . to afford the heads of the different branches of the government and those of the constitutional commissions considerable flexibility in the use of
public funds and resources, the constitution allowed 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. The leeway granted was thus limited.
The purpose and conditions for which funds may be transferred were specified, i.e., transfer may be allowed for the purpose of augmenting an item
and such transfer may be made only if there are savings from another item in the appropriation of the government branch or constitutional body" (G.R.
No. 71977, 27 February 1987, 148 SCRA 214).
The 1973 Constitution contained an identical authority to augment from savings in its Article VIII, Section 16 (5), except for mention of the Prime
Minister among the officials vested with that power. 1
In 1977, the statutory authority of the President to augment any appropriation of the executive department in the General Appropriations Act from
savings was specifically provided for in Section 44 of Presidential Decree No. 1177, as amended (RA 6670, 4 August 1988), otherwise known as the
"Budget Reform Decree of 1977." It reads:jgc:chanrobles.com.ph
"Sec. 44. . . .
"The President shall, likewise, have the authority to augment any appropriation of the Executive Department in the General Appropriations Act, from
savings in the appropriations of another department, bureau, office or agency within the Executive Branch, pursuant to the provisions of Art. VIII, Sec.
16 (5) of the Constitution (now Sec. 25 (5), Art. VI)" (Emphasis ours), (N.B.: The first paragraph declared void in Demetria v. Alba, supra, has been
deleted).
Similarly, the use by the President of savings to cover deficits is specifically authorized in the same Decree. Thus:jgc:chanrobles.com.ph
"Sec. 45. Authority to Use Savings in Appropriations to Cover Deficits. Except as otherwise provided in the General Appropriations Act, any savings in
the regular appropriations authorized in the General Appropriations Act for programs and projects of any department, office or agency, may, with the
approval of the President be used to cover a deficit in any other item of the regular appropriations: ". . .
A more recent grant is found in Section 12 of the General Appropriations Act of 1989, the text of which is repeated in the first paragraph of Section 16
(FY ‘90). Section 12 reads:chanrobles virtual lawlibrary

"Sec. 12. Use of Savings. — The President, the President of the Senate, the Speaker of the House of Representatives, the Chief Justice of the
Supreme Court, the heads of the Constitutional Commissions, and the Ombudsman are hereby authorized to augment any item in this Act for their
respective offices from savings in other items of their respective appropriations."cralaw virtua1aw library
There should be no question, therefore, that statutory authority has, in fact, been granted. And once given, the heads of the different branches of the
Government and those of the Constitutional Commissions are afforded considerable flexibility in the use of public funds and resources (Demetria v.
Alba, supra). The doctrine of separation of powers is in no way endangered because the transfer is made within a department (or branch of
government) and not from one department (branch) to another (CRUZ, Isagani A., Philippine Political Law [1989] p. 155).
When Sections 55 (FY ‘89) and 16 (FY ‘90), therefore, prohibit the restoration or increase by augmentation of appropriations disapproved or reduced
by Congress, they impair the constitutional and statutory authority of the President and other key officials to augment any item or any appropriation
from savings in the interest of expediency and efficiency. The exercise of such authority in respect of disapproved or reduced items by no means
vests in the Executive the power to rewrite the entire budget, as petitioners contend, the leeway granted being delimited to transfers within the
department or branch concerned, the sourcing to come only from savings.
More importantly, it strikes us, too, that for such a special power as that of augmentation from savings, the same is merely incorporated in the General
Appropriations Bill. An Appropriations Bill is "one the primary and specific aim of which is to make appropriation of money from the public treasury"
(Bengzon v. Secretary of Justice, 292 U.S., 410, 57 S.Ct. 252). It is a legislative authorization of receipts and expenditures. The power of
augmentation from savings, on the other hand, can by no means be considered a specific appropriation of money. It is a non-appropriation item
inserted in an appropriation measure.chanrobles law library : red
The same thing must be said of Section 55 (FY ‘89), taken in conjunction with Section 12, and Section 16 (FY ‘90), which prohibit the restoration or
increase by augmentation of appropriations disapproved and/or reduced by Congress. They are non-appropriation items, an appropriation being a
setting apart by law of a certain sum from the public revenue for a specific purpose (Bengzon v. Secretary of Justice, 62 Phil. 912, 916 [1936]). It
bears repeating that they are more of a substantive expression of a legislative objective to restrict the power of augmentation granted to the President
and other key officials. They are actually matters of general law and more properly the subject of a separate legislation that will embody, define and
delimit the scope of the special power of augmentation from savings instead of being inappropriately incorporated annually in the Appropriation Act.
To sanction this practice would be to give the Legislature the freedom to grant or withhold the power from the Executive and other officials, and thus
put in yearly jeopardy the exercise of that power.
If, indeed, by the later enactments of Section 55 (FY ‘89) and Section 16 (FY ‘90), Congress, as petitioners argue, intended to amend or repeal Pres.
Decree No. 1177, with all the more reason should it have so provided in a separate enactment, it being basic that implied repeals are not favored. For
the same reason, we cannot subscribe to petitioners’ allegation that Pres. Decree No. 1177 has been revoked by the 1987 Constitution. The 1987
Constitution itself provides for the continuance of laws, decrees, executive orders, proclamations, letters of instructions, and other executive
issuances not inconsistent with the Constitution until amended, repealed, or revoked (1987 Constitution, Article XVIII, Section 3).
If, indeed, the legislature believed that the exercise of the veto powers by the executive were unconstitutional, the remedy laid down by the
Constitution is crystal clear. A Presidential veto may be overriden by the votes of two-thirds of members of Congress (1987 Constitution, Article VI,
Section 27[1], supra). But Congress made no attempt to override the Presidential veto. Petitioners’ argument that the veto is ineffectual so that there
is "nothing to override" (citing Bolinao) has lost force and effect with the executive veto having been herein upheld.
As we see it, there need be no future conflict if the legislative and executive branches of government adhere to the spirit of the Constitution, each
exercising its respective powers with due deference to the constitutional responsibilities and functions of the other. Thereby, the delicate equilibrium of
governmental powers remains on even keel.
WHEREFORE, the constitutionality of the assailed Presidential veto is UPHELD and this Petition is hereby DISMISSED. No costs. SO ORDERED.
Narvasa, Gancayco, Bidin, Sarmiento, Griño-Aquino, Medialdea and Regalado, JJ., concur. Fernan, C.J., took no part. Feliciano, J., is on leave.
Separate Opinions
GUTIERREZ, JR., J., dissenting:
I regretfully dissent from the Court’s opinion in this case because fundamental principles underlying the doctrine of separation of powers were violated
when the President vetoed certain provisions of the 1989 and 1990 Appropriation Bills.chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph
I am disturbed by the consequences of the Court’s act of legitimation, among them the following:chanrob1es virtual 1aw library
(1) The traditional power of Congress over the public purse is negated if functions or offices it has abolished or reduced are restored through the grant
of carte blanche authority to shift savings from one department or agency to another. What the Court is sustaining is no longer augmentation within
the purview of the Constitution. It is already fund juggling against the express command of the body in whom fiscal power is vested.
(2) The Court is, in effect, allowing a modified lump sum appropriation for the entire Executive Branch. The Executive is annually given appropriations
ranging from Two Hundred Billion Pesos to Two Hundred Fifty Billion Pesos. Whenever the President calls on all Departments to effect ten percent
(10%) savings, compliance immediately follows. There is thus a built in excess of Two Billion Pesos. This tremendous amount can now be used to
finance projects which Congress declares improvident or of low priority. Secretaries of executive departments can thumb their noses at the legislature
and, by asking for the President’s largesse, implement even that which has been interdicted.
(3) The Constitution does not grant fiscal autonomy to the Executive Branch. There is no comparison between the appropriations for the Judiciary and
other constitutional offices on one hand and for the Executive Branch on the other. There is reason to give flexibility in the use of funds for the
Judiciary and other constitutional creatures. However, tight congressional control over the way executive programs of government are funded is part
of a responsible presidential system of government.
(4) The power to augment is intended for functions, projects, and offices where both Congress and the President expressly or impliedly concur, not
where one specifically exercises its constitutional power to regulate or modify the expenditures of the other. In the same way that Congress cannot
increase the budgetary proposals of the Executive, neither should the Executive restore that which Congress has expressly abolished or reduced.
(5) The Constitution grants the President power to veto any particular item or items of an appropriation bill. The Constitution withholds the power to
veto provisions from the President. We are rewriting the Constitution to restore what the framers have eliminated when we ignore the difference
between an item and a provision.
The Court is interpreting the power to augment under Section 25 (5), Article VI of the Constitution as a grant of near untrammelled authority to shift
savings from appropriated funds for functions and projects never intended by the lawmakers to be funded and worse, for functions and projects which
Congress has expressly stated should not be beneficiaries of public funds for a specific year.chanrobles law library
With a budget of over Two Hundred Billion Pesos (P200,000,000,000.00) annually given to the Executive Department, the implications of the Court’s
ruling are extremely serious, to say the least. The Court’s interpretation of the power of augmentation effectively corrodes the power of Congress over
a function which by its nature is inherently legislative. I don’t believe the Constitution ever intended to give carte blanche authority to the President to
suppress certain activities in the Executive Department already agreed upon with Congress and from the funds thus saved, transfer various amounts
to projects and offices which Congress declares must be abolished or reduced. Why not simply give the President a lump sum allocation of P250
Billion and let it be spent as the Executive wills?
The raising of funds for the expenses of Government is a legislative prerogative. The legislative power also determines through Appropriation Acts
how the revenues collected shall be spent and for what purpose. Congress alone has the power to give the President the necessary funds to
implement Government programs. This vested power of Congress over the financial affairs of Government underlies and colors all interpretations of
budgetary provisions and appropriation laws.
Because of the high profile of Malacañang in the disbursement of funds for public needs, people tend to forget that it is only implementing the law as
passed by Congress. The President has no power to enact or amend statutes, most specifically appropriation statutes. The Executive merely
proposes and submits recommendations. It is Congress which decides.
In the same way that Congress creates public offices, it can also abolish them whenever, in its opinion, bona fide simplicity, economy, and efficiency
would be achieved. By allowing the President through augmentation to re-create public offices abolished or reduced by Congress, the Court is
treading upon time-tested doctrines, the effects of which may, in the future, be regretted.
It is misleading for the respondents to tie up the President’s augmentation authority with the same authority given to the Chief Justice and the heads
of Constitutional Commissions. The Judiciary and these Commissions enjoy fiscal autonomy. Their roles in the constitutional scheme call for
independence and flexibility in the use of appropriated funds. Most of their expenditures are fixed and recurring. The Department of Budget and
Management (DBM) prunes their requests for funds to the bone such that when the budget is presented to Congress, there is nothing more to abolish
or reduce. The Judiciary and Commissions are usually neglected if not forgotten when the financial pie is sliced. Thus the Judiciary with around
23,000 Justices, Judges, Clerks of Court, lawyers, and other supporting personnel is generally allocated a miniscule one (1%) percent of the national
budget by DBM proposals. In the aborted 1991 proposals, the percentage was lowered to 00.67 percent or a little over one-half percent. Any savings
are quite modest and usually result from non-filling of judicial positions. The Constitutional Commissions have the same problems. The Court now
validates the free use of savings by the Executive against the express will of Congress. Since these could easily amount not to one percent but to ten
percent or more of the gargantuan budget for the Executive Branch, the implications are extremely disturbing.
As for the power given to the Senate President and Speaker, it is Congress which enacts the law and the need for augmentation is not really
significant.
The same is not true for the President where the amount from which savings are generated is always beyond P200 Billion. The argument that the
leeway granted is delimited to transfers within the department or branch overlooks the fact that almost the entire budget of the Government is eaten
up by the Executive Branch. It is relatively easy for the Office of the President, for example, to get P100 Million from funds allocated as assistance to
local governments or construction of major public works and augment another item anywhere in the entire Executive Branch. This is indeed the power
to rewrite the entire budget. It is not the legislative power over the public purse which alone is denigrated. The power to fiscalize government
expenses is equally diminished.
The constitutional history of the President’s item veto power shows that it should not be interpreted to include the vetoing of provisions. It must be
limited to items.
The 1935 Constitution granted the power to veto "provisions" provided the particular item or items to which the provision relates are also
vetoed.cralawnad
The 1973 Constitution removed the power to veto "provisions." The Chief Executive was given the power to veto only "any particular item or items" in
an appropriation, revenue, or tariff bill.
The 1987 Constitution follows the 1973 formula. The President may veto any particular item or items in an appropriation, revenue, or tariff bill but the
veto shall not affect the item or items to which he does not object.
The majority opinion correctly concedes that the terms item and provision in budgetary legislation and practice are different.
If that is so, I fail to see how we can rule that the power of the President under the 1935 Constitution to veto "provisions" remains even if it was
expressly eliminated from both the 1973 and 1987 Constitutions. Where the Constitution says "items," the veto power must be limited to "items." It
cannot include "provisions" which was expressly stricken out.
As a general rule, laws passed by Congress can be vetoed by the President only in their entirety or none at all. She cannot select provisions and
sections she does not like and veto them while approving the rest of the statute. The Constitution allows a limited power of veto only when it comes to
appropriation, revenue or tariff bills. The power is limited to items. It should not be interpreted by this Court to mean the expanded power to also veto
"provisions."cralaw virtua1aw library
To state it in another way, the President may veto a distinct and severable part of a bill only — (1) if that severable part is an item and not a provision,
and (2) if that severable part belongs to an appropriation, revenue or tariff bill. All other bills must be vetoed in their entirety.
Regarding the citation from Bengzon v. Secretary of Justice (299 U.S. 410, 414 [1936]) for a liberal construction, the veto power is interpreted in favor
of validity only when it is limited to the items it covers. No amount of liberal interpretation, for instance, can allow the President to veto any item, part,
or section of a bill which has nothing to do with appropriations, revenues, or tariffs.
I must emphasize that the provisions vetoed by the President are not inappropriate and definitely are not riders.
There can be no dispute that Congress has the power to reduce the budgetary proposals prepared by the Executive.
If Congress abolishes, removes, or reduces a project, function, or activity by cutting the funds proposed for it, a provision enforcing that abolition,
removal, or reduction is appropriate and germane to the part thus stricken out. It would be absurd to require that it should appear in separate
legislation.
A rider is a provision which is alien to the bill to which it is attached. An example is the Spooner Amendment which transferred government powers
over the Philippines in 1901 from the military to the civil government, from the Executive to Congress. This section had nothing to do with the Army
Appropriation Bill in which it was included. On the other hand, the vetoed provisions in the instant case specifically refer to appropriations which were
disapproved or reduced in those very same bills.
In fact, the vetoed provisions of the 1989 and 1990 Appropriation Acts are not only germane to these Acts but are precisely authorized under Section
25 (5) of Article VI of the Constitution. Under Section 25 (5), the President, Senate President, Speaker, Chief Justice and heads of Constitutional
Commissions are by law authorized to augment items in the general appropriations law for their respective offices from savings in other items. As
stated by the majority opinion, the power to augment from savings lies dormant until authorized by law. When Congress exercises that dormant power
and by law authorizes these officials to augment items, certainly it has the power to also state what items may not be augmented. I fail to see how the
exercise of this power can be termed an inappropriate rider.
The grant of the power to augment includes the authority to specify what matters are not part of the granted power. I cannot agree that the 1977
authority to augment appropriations from savings can prevail over 1989 and 1990 provisions to the contrary. The 1989 grant of the power to augment
in Section 12 of the 1989 Appropriations Acts is necessarily circumscribed by the withholding of that power in the provisions illegally vetoed. One part
cannot remain if a related part is vetoed.chanrobles law library : red
In closing, I repeat that the Court’s opinion allows the President to denigrate and render ineffective a clear and positive expression of legislative policy
on how the funds of Government shall be spent. Where Congress expressly states that our limited funds should not be spent on a particular function
or office, we should not give the President the power to appropriate through transfers of funds the money to maintain the abolished or greatly reduced
function or office. The power of augmentation is intended to save programs or projects agreed upon by both the President and Congress where the
funds allocated turn out to be inadequate. It was never conceived to render inutile the legislative power over the purse. The power to determine how
public funds should be spent should remain lodged where it rightfully belongs.
Paras, J., dissents.
CRUZ, J., dissenting:
Mme. Justice Herrera has written another opinion that commends itself for its logic and lucidity. Regrettably, there are certain conclusions in the
ponencia that I cannot share.
In justifying her veto, the President says that "the provision violates section 25(5) of Article VI of the Constitution," as if to suggest that she derives her
power of augmentation directly from this section. She does not, of course. This is not a self-executing provision. The said section states that she and
the other officials mentioned therein "may, by law, be authorized to augment any item in the general appropriations law for their respective offices . . ."
This means she needs statutory authority before she can augment.
The President says nevertheless that she has that authority and points to Section 440 of PD No. 1177, otherwise known as the Budget Reform
Decree of 1977, as amended. Significantly, the provision she invokes is precisely the section modified by Congress in the General Appropriations Act
of 1989 (and also of 1990). In vetoing Section 55 of that law, the President is in effect saying that the authorization earlier given her cannot be
revoked.
The authority to augment is not such an extraordinary endowment that, once given, becomes sacrosanct and irrevocable. What the Legislature has
conferred in its discretion, it can also recall in the exercise of that same discretion. The only exception I know to the principle that Congress cannot
pass irrepealable laws is the impairment clause, and even that is fast losing ground.
I am not persuaded that Section 55 of the General Appropriations Law of 1989 is a rider as contended by the respondents. A rider is a provision not
germane to the subject or purpose of the bill where it is included, Section 55 is not irrelevant to the General Appropriations Act of 1989 as it deals,
quite obviously, with appropriations. Its purpose is in fact to limit the powers of the President in the disposition of the funds appropriated in that
measure.
I suggest it is Section 44 of the Budget Reform Decree and not Section 55 of the General Appropriations Act of 1989 that is the rider. Section 44 is
extraneous to the subject and purpose of PD No. 1177, which deals only with "the form, content and manner of preparation of the budget" that are
required to "be prescribed by law" under Article VI, Sec. 25(1) of the Constitution. The budget is only a recommendation of appropriations, not the
appropriation itself. The authority to augment given by Section 44 of PD No. 1177 belongs in the General Appropriations Act and has no place in the
Budget Reform Decree.
The ponencia says that to sanction the inclusion of Section 55 in the General Appropriations Act "would be to give the Legislature the freedom to
grant or withhold the power from the Executive and other officials and thus put in yearly jeopardy the exercise of that power" to augment. I respectfully
submit that the freedom is not ours to give. It was vested in Congress by the Constitution itself, and we ourselves have no authority to grant or
withhold it.
It is needless to debate whatever distinction there may be between the item and the provision. The important consideration is that, whatever its
nature, Section 55 of the General Appropriations Act cannot be vetoed in any case because it seeks to withdraw a delegated power.
The power of the purse belongs to Congress and has been traditionally recognized in the constitutional provision that "no money shall be paid out of
the Treasury except in pursuance of an appropriation made by law." The transfer of funds from one item to another in the General Appropriations Act
is part of that power, except that the Constitution allows Congress to delegate it by law to the President, the Senate President, the Speaker of the
House of Representatives, the Chief Justice and the heads of the Constitutional Commissions. When exercising this authority, the aforementioned
officials act not by virtue of their own competence but only as agents of Congress.
There should be no question that the agency conferred on these officials can be revoked by Congress at any time and for any reason it sees fit. The
delegates cannot challenge this withdrawal and insist on holding on to the authorization that the legislature had the discretion to withhold from them in
the first place. The authority to augment involves the element of confidence. Should Congress choose to withdraw it, a becoming respect for the
doctrine of separation of powers, if not anything else, should persuade the delegates to yield to the wish of the principal.
The challenge to the validity of Section 55 is to me plain quibbling. To argue that no recall has been made is to ignore the obvious. What matters is
the intention of Congress, which should be clear enough if only the respondents would not muddy the waters. The plain and unmistakable intention of
Congress is to withdraw from the President, for its own reasons, the delegated power to augment.chanroblesvirtualawlibrary
The following observations in the Emergency Power Cases, 92 Phil. 603, are appropriate:chanrob1es virtual 1aw library
Although House Bill No. 727 had been vetoed by the President and did not thereby become a regular statute, it may at least be considered as a
concurrent resolution of the Congress formally declaring the termination of the emergency powers. To contend that the Bill needed presidential
acquiescence to produce effect would lead to the anomalous, if not absurd, situation that, while Congress might delegate its powers by a simple
majority, it might not be able to recall them except by two-thirds vote. In other words, it would be easier for Congress to delegate its powers than to
take them back. This is not right and is not, and ought not, to be the law.
I think it would have been more characteristic of the President if she had graciously respected the will of the Legislature and so again recognized her
role in the constitutional scheme of the Republic.
of Representatives, 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."cralaw virtua1aw
library
It will be at once noted that the fundamental policy of the Constitution is against transfer of appropriations even by law, since this "juggling’ of funds is
often a rich source of unbridled patronage, abuse and interminable corruption.
However, the same provision allows the enactment of a law that would authorize the President of the Philippines, the President of the Senate, the
Speaker of the House, the Chief Justice of the Supreme Court, and the heads of Constitutional Commissions to augment from savings realized from
any appropriations for their respective offices, any other item of appropriation also for their offices. In accordance with this Constitutional leave,
Section 12 of the appropriation act of 1989 (also Section 16 (1st part) of the appropriation act of 1990) provides:
"Sec. 12. Use of Savings. — The President, the President of the Senate, the Speaker of the House of Representatives, the Chief Justice of the
Supreme Court, the Heads of the Constitutional Commissions, and the Ombudsman are hereby authorized to augment any item in this Act for their
respective offices from savings in other items of their respective appropriations."cralaw virtua1aw library
Thus, a transfer from savings is allowed to augment any appropriation pertaining to the office which effects the savings.
And yet, Congress as the appropriating and funding department of the Government has seen fit to place a condition or a qualification in the authority
to augment, from savings, any appropriation in the offices concerned. It requires that no such savings can be used to augment an appropriation
previously disapproved by Congress or to restore an appropriation previously reduced by Congress.
I can see no valid reason, in logic or in sound management, why such a condition can not be accepted. It only makes certain that congressional
action disapproving an appropriation or reducing the amount of an appropriation, is not rendered inutile or meaningless by a transfer of savings in an
appropriation to such other items already disapproved or reduced by Congress.
It can hardly be disputed that the condition, restriction or qualification embodied in Sections 55 and 16, here discussed, was enacted by Congress in
the exercise of its legislative power to appropriate funds for government operations. The exercise of that legislative power, in the first instance, should
be accorded due respect and, as I see it, the veto of the said condition is an undue encroachment by the executive on a properly exercised legislative
power. This Court, in delineating power boundaries between the different departments of government, sadly expands, in this case, the bounds of an
already too-powerful executive, at the expense of legislative prerogative. The majority appear to have overlooked that the power to appropriate and
set reasonable conditions incidental thereto is a function entrusted by the Constitution in the legislature and only in the legislature.
In Bolinao v. Valencia, G.R. No. L-20740, 30 June 1964, 11 SCRA 486, this Court already had occasion to uphold a condition laid down by the
legislative in an appropriation measure, to the extent of declaring a presidential veto of such condition as illegal if made separately from the
appropriation itself. This Court held:jgc:chanrobles.com.ph
"It may be observed from the wordings of the Appropriations Act that the amount appropriated for the operation of the Philippine Broadcasting Service
was made subject to the condition that the same shall not be used or expended for operation of television stations in Luzon, where there are already
existing commercial television stations. This gives rise to the question of whether the President may legally veto a condition attached to an
appropriation or item in the appropriation bill. But this is not a novel question. A little effort to research on the subject would have yielded enough
authority to guide action on the matter. For, in the leading case of State v. Holder, it was already declared that such action by the Chief Executive was
illegal. This ruling, that the executive’s veto power does not carry with it the power to strike out conditions or restrictions, has been adhered to in
subsequent cases. If the veto is unconstitutional, it follows that the same produced no effect whatsoever, and the restriction imposed by the
appropriation bill, therefore, remains. Any expenditure made by the intervenor PBS, for the purpose of installing or operating a television station in
Manila, where there are already television stations in operation, would be in violation of the express condition for the release of the appropriation and,
consequently, null and void. . . ."cralaw virtua1aw library
By clear analogy, the President could not veto Sections 55 (FY 1989) and 16 (FY 1990) as conditions, without vetoing the items or appropriations
which are affected by said conditions, meaning the entire appropriation bills.
ACCORDINGLY, I vote to GRANT the petition and to declare the presidential veto of Section 55 (FY 1989) and Section 16 (FY 1990) as null and void
and of no effect whatsoever, for being clearly unconstitutional. It follows that Sections 55 (FY 1989) and 16 (FY 1990) remain as binding conditions in
the disposition of savings in appropriations covered by the appropriation acts for 1989 and 1990.
Paras, J., dissents.

Paras, J., dissents.

PADILLA, J., dissenting:
I dissent mainly for two (2) reasons:
First: the questioned veto has no constitutional basis.
Article VI, Section 27 of the 1987 Constitution provides:jgc:chanrobles.com.ph
"Sec. 27. (1) Every bill passed by the Congress shall, before it becomes a law, be presented to the President. If he approves the same, he shall sign
it; otherwise, he shall veto it and return the same with his objections to the House where it originated, which shall enter the objections at large in its
Journal and proceed to reconsider it. If, after such reconsideration, two-thirds of all the Members of such House shall agree to pass the bill, it shall be
sent, together with the objections, to the other House by which it shall likewise be reconsidered, and if approved by two-thirds of all the Members of
that House, it shall become a law. In all such cases, the votes of each House shall be determined by yeas or nays, and the names of the Members
voting for or against shall be entered in its Journals. The President shall communicate his veto of any bill to the House where it originated within thirty
days after the date of receipt thereof; otherwise, it shall become a law as if he had signed it.
(2) The President shall have the power to veto any particular item or items in an appropriation, revenue, or tariff bill, but the veto shall not affect the
item or items to which he does not object."cralaw virtua1aw library

Section 27 (1) refers to a general veto, where the President objects to an entire bill approved by Congress and returns it to Congress for its
reconsideration. The situation at bar is admittedly not a general veto of the appropriation acts for 1989 and 1990, Section 27 (1) does not, therefore,
apply.

The majority opinion positions the veto questioned in this case within the scope of Section 27 (2) above-quoted. I do not see how this can be done
without doing violence to the constitutional design. The distinction between an item-veto and a provision-veto has been traditionally recognized in
constitutional litigation and budgetary practice. As stated by Mr. Justice Sutherland, speaking for the U.S. Supreme Court in Bengzon v. Secretary of
Justice, 299 U.S. 410-416:jgc:chanrobles.com.ph

". . . An item of an appropriation bill obviously means an item which in itself is a specific appropriation of money, not some general provisions of law
which happens to be put into an appropriation bill. . . ."

When the Constitution in Section 27 (2) empowers the President to veto any particular item or items in the appropriation act, it does not confer — in
fact, it excludes — the power to veto any particular provision or provisions in said act.

In an earlier case, Sarmiento v. Mison, Et Al., 156 SCRA 549, this Court referred to its duty to construe the Constitution, not in accordance with how
the executive or the legislative would want it construed, but in accordance with what it says and provides. When the Constitution states that the
President has the power to veto any particular item or items in the appropriation act, this must be taken as a component of that delicate balance of
power between the executive and the legislative, so that, for this Court to construe Sec. 27 (2) of the Constitution as also empowering the President to
veto any particular provision or provisions in the appropriation act, is to load the scale in favor of the executive, at the expense of that delicate balance
of power.
Stated differently, to stretch the power of the President to veto any item in the appropriation act so as to include the power to veto any particular
provision in the same act, without any conclusive indication that the same was the intent of the constitutional framers and the people who adopted the
1987 Constitution, is for the Court to indulge in spatial constitutional aerobics simply to justify what, to my mind, is an indefensible presidential veto.

Second: Section 55 (FY 1989) and Section 16 (FY 1990) are founded on principles of sound reason and public policy; the attempt to "veto" them is a
grave abuse of discretion amounting to lack or excess of jurisdiction. To begin with, Article VI, Section 25, par. 5 of the 1987 Constitution
provides:chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph

"(5) No law shall be passed authorizing any transfer of appropriations; however, the President, the President of the Senate, the Speaker of the House
G.R. No. 103524 April 15, 1992
CESAR BENGZON, QUERUBE MAKALINTAL, LINO M. PATAJO, JOSE LEUTERIO, ET AL., petitioners,
vs.
HON. FRANKLIN N. DRILON, in his capacity as Executive Secretary, HON. GUILLERMO CARAGUE, in his capacity as Secretary of
Department of Budget and Management, and HON. ROSALINA CAJUCOM, in her capacity as National Treasurer, respondents.
A.M. No. 91-8-225-CA April 15, 1992
REQUEST OF RETIRED JUSTICES MANUEL P. BARCELONA, JUAN P. ENRIQUEZ, JUAN O. REYES, JR. and GUARDSON R. LOOD FOR
READJUSTMENT OF THEIR MONTHLY PENSION.
GUTIERREZ, JR., J.:
The issue in this petition is the constitutionality of the veto by the President of certain provisions in the General Appropriations Act for the Fiscal Year
1992 relating to the payment of the adjusted pensions of retired Justices of the Supreme Court and the Court of Appeals.
The petitioners are retired Justices of the Supreme Court and Court of Appeals who are currently receiving monthly pensions under Republic Act No.
910 as amended by Republic Act No. 1797. They filed the instant petition on their own behalf and in representation of all other retired Justices of the
Supreme Court and the Court of Appeals similarly situated.
Named respondents are Hon. Franklin Drilon the Executive Secretary, Hon. Guillermo Carague as Secretary of the Department of Budget and
Management, and Hon. Rosalinda Cajucom, the Treasurer of the Philippines. The respondents are sued in their official capacities, being officials of
the Executive Department involved in the implementation of the release of funds appropriated in the Annual Appropriations Law.
We treat the Comments of the Office of the Solicitor General (OSG) as an Answer and decide the petition on its merits.
The factual backdrop of this case is as follows:
On June 20, 1953, Republic Act No, 910 was enacted to provide the retirement pensions of Justices of the Supreme Court and of the Court of
Appeals who have rendered at least twenty (20) years service either in the Judiciary or in any other branch of the Government or in both, having
attained the age of seventy (70) years or who resign by reason of incapacity to discharge the duties of the office. The retired Justice shall receive
during the residue of his natural life the salary which he was receiving at the time of his retirement or resignation.
Republic Act No. 910 was amended by Republic Act No. 1797 (approved on June 21, 1957) which provided that:
Sec. 3-A. In case the salary of Justices of the Supreme Court or of the Court of Appeals is increased or decreased, such increased or decreased
salary shall, for purposes of this Act, be deemed to be the salary or the retirement pension which a Justice who as of June twelve, nineteen hundred
fifty-four had ceased to be such to accept another position in the Government or who retired was receiving at the time of his cessation in office.
Provided, that any benefits that have already accrued prior to such increase or decrease shall not be affected thereby.
Identical retirement benefits were also given to the members of the Constitutional Commissions under Republic Act No. 1568, as amended by
Republic Act No. 3595. On November 12, 1974, on the occasion of the Armed Forces Loyalty Day, President Marcos signed Presidential Decree 578
which extended similar retirement benefits to the members of the Armed Forces giving them also the automatic readjustment features of Republic Act
No. 1797 and Republic Act No. 3595.
Two months later, however, President Marcos issued Presidential Decree 644 on January 25, 1975 repealing Section 3-A of Republic Act No. 1797
and Republic Act No. 3595 (amending Republic Act No. 1568 and Presidential Decree No. 578) which authorized the adjustment of the pension of the
retired Justices of the Supreme Court, Court of Appeals, Chairman and members of the Constitutional Commissions and the officers and enlisted
members of the Armed Forces to the prevailing rates of salaries.
Significantly, under Presidential Decree 1638 the automatic readjustment of the retirement pension of officers and enlisted men was subsequently
restored by President Marcos. A later decree Presidential Decree 1909 was also issued providing for the automatic readjustment of the pensions of
members of the Armed Forces who have retired prior to September 10, 1979.
While the adjustment of the retirement pensions for members of the Armed Forces who number in the tens of thousands was restored, that of the
retired Justices of the Supreme Court and Court of Appeals who are only a handful and fairly advanced in years, was not.
Realizing the unfairness of the discrimination against the members of the Judiciary and the Constitutional Commissions, Congress approved in 1990
a bill for the reenactment of the repealed provisions of Republic Act No. 1797 and Republic Act No. 3595. Congress was under the impression that
Presidential Decree 644 became law after it was published in the Official Gazette on April 7, 1977. In the explanatory note of House Bill No. 16297
and Senate Bill No. 740, the legislature saw the need to reenact Republic Act Nos. 1797 and 3595 to restore said retirement pensions and privileges
of the retired Justices and members of the Constitutional Commissions, in order to assure those serving in the Supreme Court, Court of Appeals and
Constitutional Commissions adequate old age pensions even during the time when the purchasing power of the peso has been diminished
substantially by worldwide recession or inflation. This is underscored by the fact that the petitioner retired Chief Justice, a retired Associate Justice of
the Supreme Court and the retired Presiding Justice are presently receiving monthly pensions of P3,333.33, P2,666.66 and P2,333.33 respectively.
President Aquino, however vetoed House Bill No. 16297 on July 11, 1990 on the ground that according to her "it would erode the very foundation of
the Government's collective effort to adhere faithfully to and enforce strictly the policy on standardization of compensation as articulated in Republic
Act No. 6758 known as Compensation and Position Classification Act of 1989." She further said that "the Government should not grant distinct
privileges to select group of officials whose retirement benefits under existing laws already enjoy preferential treatment over those of the vast majority
of our civil service servants."
Prior to the instant petition, however, Retired Court of Appeals Justices Manuel P. Barcelona, Juan P. Enriquez, Juan O. Reyes, Jr. and Guardson R.
Lood filed a letter/petition dated April 22, 1991 which we treated as Administrative Matter No. 91-8-225-CA. The petitioners asked this Court far a
readjustment of their monthly pensions in accordance with Republic Act No. 1797. They reasoned out that Presidential Decree 644 repealing
Republic Act No. 1797 did not become law as there was no valid publication pursuant to Tañada v. Tuvera, (136 SCRA 27 [1985]) and 146 SCRA 446
[1986]). Presidential Decree 644 promulgated on January 24, 1975 appeared for the first time only in the supplemental issue of the Official Gazette,
(Vol. 74, No. 14) purportedly dated April 4, 1977 but published only on September 5, 1983. Since Presidential Decree 644 has no binding force and
effect of law, it therefore did not repeal Republic Act No. 1797.
In a Resolution dated November 28, 1991 the Court acted favorably on the request. The dispositive portion reads as follows:
WHEREFORE, the requests of retired Justices Manuel P. Barcelona, Juan P. Enriquez, Juan O. Reyes and Guardson Lood are GRANTED. It is
hereby AUTHORIZED that their monthly pensions be adjusted and paid on the basis of RA 1797 effective January 1, 1991 without prejudice to the
payment on their pension differentials corresponding to the previous years upon the availability of funds for the purpose.
Pursuant to the above resolution, Congress included in the General Appropriations Bill for Fiscal Year 1992 certain appropriations for the Judiciary
intended for the payment of the adjusted pension rates due the retired Justices of the Supreme Court and Court of Appeals.
The pertinent provisions in House Bill No. 34925 are as follows:
XXVIII. THE JUDICIARY
A. Supreme Court of the Philippines and the Lower Courts.
For general administration, administration of personnel benefits, supervision of courts, adjudication of constitutional questions appealed and other
cases, operation and maintenance of the Judicial and Bar Council in the Supreme Court, and the adjudication of regional court cases, metropolitan
court cases, municipal trial court cases in Cities, municipal circuit court cases, municipal, court cases, Shari'a district court cases and Shari'a circuit
court cases as indicated hereunder P2,095,651,000
xxx xxx xxx
Special Provisions.
1. Augmentation of any Item in the Court's Appropriations. Any savings in the appropriation for the Supreme Court and the Lower Courts may be
utilized by the Chief Justice of the Supreme Court to augment any item of the Court's appropriations for: (a) printing of decisions and publications of
Philippine Reports; b) commutable terminal leaves of Justices and other personnel of the Supreme Court and any payment of adjusted pension rates
to retired Justices entitled thereto pursuant to Administrative Matter No. 91-8-225-CA; (c) repair, maintenance, improvement, and other operating
expenses of the courts' books and periodicals; (d) purchase, maintenance and improvement of printing equipment; e) necessary expenses for the
employment of temporary employees, contractual and casual employees, for judicial administration; f) maintenance and improvement of the Court's
Electronic Data Processing; (g) extraordinary expenses of the Chief Justice, attendance in international conferences and conduct of training
programs; (h) commutable transportation and representation allowances and fringe benefits for Justices, Clerks of Court, Court Administrator, Chief of
Offices and other Court personnel in accordance with the rates prescribed by law; and (i) compensation of attorneys-de-oficio; PROVIDED, that as
mandated by LOI No. 489 any increases in salary and allowances shall be subject to the usual procedures and policies as provided for under P.D.
No. 985 and other pertinent laws. (page 1071, General Appropriations Act, FY 1992; Emphasis supplied)
xxx xxx xxx
4. Payment of Adjusted Pension Rates to Retired Justices. The amount herein appropriated for payment of pensions to retired judges and justices
shall include the payment of pensions at the adjusted rates to retired justices of the Supreme Court entitled thereto pursuant to the ruling of the Court
in Administrative Matter No. 91-8-225-C.A. (page 1071, General Appropriations Act, FY 1992).
xxx xxx xxx
Activities and Purposes
1. General Administration and Support Services.
a. General administrative Services P 43,515,000
b. Payment of retirement gratuity
of national goverment officials
and employees P 206,717,000
c. Payment of terminal leave benefits to
officials and employees antitled thereto P 55,316,000
d. Payment of pension totired jude
and justice entitled thereto P 22,500,000
(page 1071, General Appropriations Act, FY 1992)
C. COURT OF APPEALS
For general administration, administration
of personnel benefit, benefits and the
adjudication of appealed and other cases
as indicated hereunder P114,615,000
Special Provisions.
1. Authority to Use Savings. Subject to the approval of the Chief Justice of the Supreme Court in accordance with Section 25(5), Article VI of the
Constitution of the Republic of the Philippines, the Presiding Justice may be authorized to use any savings in any item of the appropriation for the
Court of Appeals for purposes of: (1) improving its compound and facilities; and (2) for augmenting any deficiency in any item of its appropriation
including its extraordinary expenses and payment of adjusted pension rates to retired justices entitled thereto pursuant to Administrative Matter No.
91-8-225-C.A. (page 1079, General Appropriations Act, FY 1992; Emphasis supplied)
2. Payment of adjustment Pension Rates to Retired Justices. The amount herein appropriated for payment of pensions to retired judges and justices
shall include the payment of pensions at the adjusted rates to retired justices of the Court of Appeals entitled thereto pursuant to the Ruling of the
Supreme Court in Administrative Matter No. 91-6-225-C.A. (page 1079 General Appropriations Act, FY 1992).
XL. GENERAL FUND ADJUSTMENT
For general fund adjustment for
operational and special requirements
as indicated hereunder P500,000,000
xxx xxx xxx
Special Provisions
1. Use of the Fund. This fund shall be used for:
xxx xxx xxx
1.3. Authorized overdrafts and/or valid unbooked obligations, including the payment of back salaries and related personnel benefits arising from
decision of competent authorityincluding the Supreme Court decision in Administrative Matter No. 91-8-225-C.A. and COA decision in No.
1704." (page 11649 Gen. Appropriations Act, FY 1992; Emphasis supplied)
On January 15, 1992, the President vetoed the underlined portions of Section 1 and the entire Section 4 the Special Provisions for the Supreme Court
of the Philippines and the Lower Courts (General Appropriations Act, FY 1992, page 1071) and the underlined portions of Section 1 and the entire
Section 2, of the Special Provisions for the Court of Appeals (page 1079) and the underlined portions of Section 1.3 of Article XLV of the Special
Provisions of the General Fund Adjustments (page 1164, General Appropriations Act, FY 1992).
The reason given for the veto of said provisions is that "the resolution of this Honorable Court in Administrative Matter No. 91-8-225-CA pursuant to
which the foregoing appropriations for the payment of the retired Justices of the Supreme Court and the Court of Appeals have been enacted
effectively nullified the veto of the President on House Bill No. 16297, the bill which provided for the automatic increase in the retirement pensions of
the Justices of the Supreme Court and the Court of Appeals and chairmen of the Constitutional Commissions by re-enacting Republic Act No. 1797
and Republic Act No. 3595. The President's veto of the aforesaid provisions was further justified by reiterating the earlier reasons for vetoing House
Bill No. 16297: "they would erode the very foundation of our collective effort to adhere faithfully to and enforce strictly the policy and standardization of
compensation. We should not permit the grant of distinct privileges to select group of officials whose retirement pensions under existing laws already
enjoy preferential treatment over those of the vast majority of our civil servants."
Hence, the instant petition filed by the petitioners with the assertions that:
1) The subject veto is not an item veto;
2) The veto by the Executive is violative of the doctrine of separation of powers;
3) The veto deprives the retired Justices of their rights to the pensions due them;
4) The questioned veto impairs the Fiscal Autonomy guaranteed by the Constitution.
Raising similar grounds, the petitioners in AM-91-8-225-CA, brought to the attention of this Court that the veto constitutes no legal obstacle to the
continued payment of the adjusted pensions pursuant to the Court's resolution.
On February 14, 1992, the Court resolved to consolidate Administrative Matter No. 91-8-225-CA with G.R. No. 103524.
The petitioners' contentions are well-taken.
I
It cannot be overstressed that in a constitutional government such as ours, the rule of law must prevail. The Constitution is the basic and paramount
law to which all other laws must conform and to which all persons including the highest official of this land must defer. From this cardinal postulate, it
follows that the three branches of government must discharge their respective functions within the limits of authority conferred by the Constitution.
Under the principle of separation of powers, neither Congress, the President nor the Judiciary may encroach on fields allocated to the other branches
of government. The legislature is generally limited to the enactment of laws, the executive to the enforcement of laws and the judiciary to their
interpretation and application to cases and controversies.
The Constitution expressly confers or the judiciary the power to maintain inviolate what it decrees. As the guardian of the Constitution we cannot shirk
the duty of seeing to it that the officers in each branch of government do not go beyond their constitutionally allocated boundaries and that the entire
Government itself or any of its branches does not violate the basic liberties of the people. The essence of this judicial duty was emphatically explained
by Justice Laurel in the leading case of Angara v. Electoral Commission, (63 Phil. 139 [1936]) to wit:
The Constitution is a definition of the powers of government. Who is to determine the nature, scope and extent of such powers? The Constitution itself
has provided for the instrumentality of the judiciary as the rational way. And when the judiciary mediates to allocate constitutional boundaries it does
not assert any superiority over the other department, it does not in reality nullify or invalidate an act of the legislature, but only asserts the solemn and
sacred obligation assigned to it by the Constitution to determine conflicting claims of authority under the Constitution and to establish for the parties in
an actual controversy the rights which that instrument secures and guarantees to them. (Emphasis supplied)
The act of the Executive in vetoing the particular provisions is an exercise of a constitutionally vested power. But even as the Constitution grants the
power, it also provides limitations to its exercise. The veto power is not absolute.
The pertinent provision of the Constitution reads:
The President shall have the power to veto any particular item or items in an appropriation, revenue or tariff bill but the veto shall not affect the item or
items to which he does not object. (Section 27(2), Article VI, Constitution)
The OSG is correct when it states that the Executive must veto a bill in its entirety or not at all. He or she cannot act like an editor crossing out specific
lines, provisions, or paragraphs in a bill that he or she dislikes. In the exercise of the veto power, it is generally all or nothing. However, when it comes
to appropriation, revenue or tariff bills, the Administration needs the money to run the machinery of government and it can not veto the entire bill even
if it may contain objectionable features. The President is, therefore, compelled to approve into law the entire bill, including its undesirable parts. It is
for this reason that the Constitution has wisely provided the "item veto power" to avoid inexpedient riders being attached to an indispensable
appropriation or revenue measure.
The Constitution provides that only a particular item or items may be vetoed. The power to disapprove any item or items in an appropriate bill does
not grant the authority to veto a part of an item and to approve the remaining portion of the same item. (Gonzales v. Macaraig, Jr., 191 SCRA 452,
464 [1990])
We distinguish an item from a provision in the following manner:
The terms item and provision in budgetary legislation and practice are concededly different. An item in a bill refers to the particulars, the details, the
distinct and severable parts . . . of the bill (Bengzon, supra, at 916.) It is an indivisible sum of money dedicated to a stated purpose (Commonwealth v.
Dodson, 11 S.E. 2d 120, 124, 125, etc., 176 Va. 281) The United States Supreme Court, in the case of Bengzon v. Secretary of Justice (299 U.S.
410, 414, 57 Ct. 252, 81 L. Ed, 312) declared "that an "tem"of an appropriation bill obviously means an item which in itself is a specific appropriation
of money, not some general provision of law, which happens to be put into an appropriation bill." (id. at page 465)
We regret having to state that misimpressions or unfortunately wrong advice must have been the basis of the disputed veto.
The general fund adjustment is an item which appropriates P500,000,000.00 to enable the Government to meet certain unavoidable obligations which
may have been inadequately funded by the specific items for the different branches, departments, bureaus, agencies, and offices of the government.
The President did not veto this item. What were vetoed were methods or systems placed by Congress to insure that permanent and continuing
obligations to certain officials would be paid when they fell due.
An examination of the entire sections and the underlined portions of the law which were vetoed will readily show that portions of the item have been
chopped up into vetoed and unvetoed parts. Less than all of an item has been vetoed. Moreover, the vetoed portions are not items. They
are provisions.
Thus, the augmentation of specific appropriations found inadequate to pay retirement payments, by transferring savings from other items of
appropriation is a provision and not an item. It gives power to the Chief Justice to transfer funds from one item to another. There is no specific
appropriation of money involved.
In the same manner, the provision which states that in compliance with decisions of the Supreme Court and the Commission on Audit, funds still
undetermined in amount may be drawn from the general fund adjustment is not an item. It is the "general fund adjustment" itself which is the item.
This was not touched. It was not vetoed.
More ironic is the fact that misinformation led the Executive to believe that the items in the 1992 Appropriations Act were being vetoed when, in fact,
the veto struck something else.
What were really vetoed are:
(1) Republic Act No. 1797 enacted as early as June 21, 1957; and
(2) The Resolution of the Supreme Court dated November 28, 1991 in Administrative Matter No. 91-8-225-CA.
We need no lengthy justifications or citations of authorities to declare that no President may veto the provisions of a law enacted thirty-five (35) years
before his or her term of office. Neither may the President set aside or reverse a final and executory judgment of this Court through the exercise of the
veto power.
A few background facts may be reiterated to fully explain the unhappy situation.
Republic Act No. 1797 provided for the adjustment of pensions of retired Justices which privilege was extended to retired members of Constitutional
Commissions by Republic Act No. 3595.
On January 25, 1975, President Marcos issued Presidential Decree No. 644 which repealed Republic Acts 1797 and 3595. Subsequently, automatic
readjustment of pensions for retired Armed Forces officers and men was surreptitiously restored through Presidential Decree Nos. 1638 and 1909.
It was the impression that Presidential Decree No. 644 had reduced the pensions of Justices and Constitutional Commissioners which led Congress
to restore the repealed provisions through House Bill No. 16297 in 1990. When her finance and budget advisers gave the wrong information that the
questioned provisions in the 1992 General Appropriations Act were simply an attempt to overcome her earlier 1990 veto, she issued the veto now
challenged in this petition.
It turns out, however, that P.D. No. 644 never became valid law. If P.D. No. 644 was not law, it follows that Rep. Act No. 1797 was not repealed and
continues to be effective up to the present. In the same way that it was enforced from 1951 to 1975, so should it be enforced today.
House Bill No. 16297 was superfluous as it tried to restore benefits which were never taken away validly. The veto of House Bill No. 16297 in 1991
did not also produce any effect. Both were based on erroneous and non-existent premises.
From the foregoing discussion, it can be seen that when the President vetoed certain provisions of the 1992 General Appropriations Act, she was
actually vetoing Republic Act No. 1797 which, of course, is beyond her power to accomplish.
Presidential Decree No. 644 which purportedly repealed Republic Act No. 1717 never achieved that purpose because it was not properly published. It
never became a law.
The case of Tañda v. Tuvera (134 SCRA 27 [1985]and 146 SCRA 446 [1986]) specifically requires that "all laws shall immediately upon their approval
or as soon thereafter as possible, be published in full in the Official Gazette, to become effective only after fifteen days from their publication, or on
another date specified by the legislature, in accordance with Article 2 of the Civil Code." This was the Court's answer to the petition of Senator
Lorenzo Tañada and other opposition leaders who challenged the validity of Marcos' decrees which, while never published, were being enforced.
Secret decrees are anathema in a free society.
In support of their request, the petitioners in Administrative Matter No. 91-9-225-CA secured certification from Director Lucita C. Sanchez of the
National Printing Office that the April 4, 1977 Supplement to the Official Gazette was published only on September 5, 1983 and officially released on
September 29, 1983.
On the issue of whether or not Presidential Decree 644 became law, the Court has already categorically spoken in a definitive ruling on the matter, to
wit:
xxx xxx xxx
PD 644 was promulgated by President Marcos on January 24, 1975, but was not immediately or soon thereafter published although preceding and
subsequent decrees were duly published in the Official Gazette. It now appears that it was intended as a secret decree "NOT FOR PUBLICATION" as
the notation on the face of the original copy thereof plainly indicates (Annex B). It is also clear that the decree was published in the back-dated
Supplement only after it was challenged in the Tañada case as among the presidential decrees that had not become effective for lack of the required
publication. The petition was filed on May 7, 1983, four months before the actual publication of the decree.
It took more than eight years to publish the decree after its promulgation in 1975. Moreover, the publication was made in bad faith insofar as it
purported to show that it was done in 1977 when the now demonstrated fact is that the April 4, 1977 supplement was actually published and released
only in September 1983. The belated publication was obviously intended to refute the petitioner's claim in the Tañada case and to support the
Solicitor General's submission that the petition had become moot and academic.
xxx xxx xxx
We agree that PD 644 never became a law because it was not validly published and that, consequently, it did not have the effect of repealing RA
1797. The requesting Justices (including Justice Lood, whose request for the upgrading of his pension was denied on January 15, 1991) are therefore
entitled to be paid their monthly pensions on the basis of the latter measure, which remains unchanged to date.
The Supreme Court has spoken and it has done so with finality, logically and rightly so as to assure stability in legal relations, and avoid confusion.
(see Ver v. Quetullo, 163 SCRA 80 [1988]) Like other decisions of this Court, the ruling and principles set out in the Court resolution constitute binding
precedent. (Bulig-Bulig Kita Kamaganak Association, et al. v. Sulpicio Lines, Inc., Regional Trial Court, etc., G.R. 847500 16 May 1989, En Banc,
Minute Resolution)
The challenged veto has far-reaching implications which the Court can not countenance as they undermine the principle of separation of powers. The
Executive has no authority to set aside and overrule a decision of the Supreme Court.
We must emphasize that the Supreme Court did not enact Rep. Act No. 1797. It is not within its powers to pass laws in the first place. Its duty is
confined to interpreting or defining what the law is and whether or not it violates a provision of the Constitution.
As early as 1953, Congress passed a law providing for retirement pensions to retired Justices of the Supreme Court and the Court of Appeals. This
law was amended by Republic Act 1797 in 1957. Funds necessary to pay the retirement pensions under these statutes are deemed automatically
appropriated every year.
Thus, Congress included in the General Appropriations Act of 1992, provisions identifying funds and savings which may be used to pay the adjusted
pensions pursuant to the Supreme Court Resolution. As long as retirement laws remain in the statute book, there is an existing obligation on the part
of the government to pay the adjusted pension rate pursuant to RA 1797 and AM-91-8-225-CA.
Neither may the veto power of the President be exercised as a means of repealing RA 1797. This is arrogating unto the Presidency legislative powers
which are beyond its authority. The President has no power to enact or amend statutes promulgated by her predecessors much less to repeal existing
laws. The President's power is merely to execute the laws as passed by Congress.
II
There is a matter of greater consequence arising from this petition. The attempt to use the veto power to set aside a Resolution of this Court and to
deprive retirees of benefits given them by Rep. Act No. 1797 trenches upon the constitutional grant of fiscal autonomy to the Judiciary.
Sec. 3, Art. VIII mandates that:
Sec. 3 The Judiciary shall enjoy fiscal autonomy. Appropriations for the Judiciary may not be reduced by the legislature below the amount
appropriated for the previous year and, after approval, shall be automatically and regularly released.
We can not overstress the importance of and the need for an independent judiciary. The Court has on various past occasions explained the
significance of judicial independence. In the case of De la Llana v. Alba (112 SCRA 294 [1982]), it ruled:
It is a cardinal rule of faith of our constitutional regime that it is the people who are endowed with rights, to secure which a government is instituted.
Acting as it does through public officials, it has to grant them either expressly or implicitly certain powers. These they exercise not for their own benefit
but for the body politic. . . .
A public office is a public trust. That is more than a moral adjuration. It is a legal imperative. The law may vest in a public official certain rights. It does
so to enable them to perform his functions and fulfill his responsibilities more efficiently. . . . It is an added guarantee that justices and judges can
administer justice undeterred by any fear of reprisal or untoward consequence. Their judgments then are even more likely to be inspired solely by
their knowledge of the law and the dictates of their conscience, free from the corrupting influence of base or unworthy motives. The independence of
which they are assured is impressed with a significance transcending that of a purely personal right. (At pp. 338-339)
The exercise of the veto power in this case may be traced back to the efforts of the Department of Budget and Management (DBM) to ignore or
overlook the plain mandate of the Constitution on fiscal autonomy. The OSG Comment reflects the same truncated view of the provision.
We have repeatedly in the past few years called the attention of DBM that not only does it allocate less than one percent (1%) of the national budget
annually for the 22,769 Justices, Judges, and court personnel all over the country but it also examines with a fine-toothed come how we spend the
funds appropriated by Congress based on DBM recommendations.
The gist of our position papers and arguments before Congress is as follows:
The DBM requires the Supreme Court, with Constitutional Commissions, and the Ombudsman to submit budget proposals in accordance with
parameters it establishes. DBM evaluates the proposals, asks each agency to defend its proposals during DBM budget hearings, submits its own
version of the proposals to Congress without informing the agency of major alterations and mutilations inflicted on their proposals, and expects each
agency to defend in Congress proposals not of the agency's making.
After the general appropriations bill is passed by Congress and signed into law by the President, the tight and officious control by DBM continues. For
the release of appropriated funds, the Judiciary, Constitutional Commissions, and Ombudsman are instructed through "guidelines", how to prepare
Work and Financial Plans and requests for monthly allotments. The DBM evaluates and approves these plans and requests and on the basis of its
approval authorizes the release of allotments with corresponding notices of cash allocation. These notices specify the maximum withdrawals each
month which the Supreme Court, the Commissions and the Ombudsman may make from the servicing government bank. The above agencies are
also required to submit to DBM monthly, quarterly and year-end budget accountability reports to indicate their performance, physical and financial
operations and income,
The DBM reserves to itself the power to review the accountability reports and when importuned for needed funds, to release additional allotments to
the agency. Since DBM always prunes the budget proposals to below subsistence levels and since emergency situations usually occur during the
fiscal year, the Chief Justices, Chairmen of the Commissions, and Ombudsman are compelled to make pilgrimages to DBM for additional funds to tide
their respective agencies over the emergency.
What is fiscal autonomy?
As envisioned in the Constitution, the fiscal autonomy enjoyed by the Judiciary, the Civil Service Commission, the Commission on Audit, the
Commission on Elections, and the Office of the Ombudsman contemplates a guarantee on full flexibility to allocate and utilize their resources with the
wisdom and dispatch that their needs require. It recognizes the power and authority to levy, assess and collect fees, fix rates of compensation not
exceeding the highest rates authorized by law for compensation and pay plans of the government and allocate and disburse such sums as may be
provided by law or prescribed by them in the course of the discharge of their functions.
Fiscal autonomy means freedom from outside control. If the Supreme Court says it needs 100 typewriters but DBM rules we need only 10 typewriters
and sends its recommendations to Congress without even informing us, the autonomy given by the Constitution becomes an empty and illusory
platitude.
The Judiciary, the Constitutional Commissions, and the Ombudsman must have the independence end flexibility needed in the discharge of their
constitutional duties. The imposition of restrictions and constraints on the manner the independent constitutional offices allocate and utilize the funds
appropriated for their operations is anathema to fiscal autonomy and violative not only of the express mandate of the Constitution but especially as
regards the Supreme Court, of the independence and separation of powers upon which the entire fabric of our constitutional system is based. In the
interest of comity and cooperation, the Supreme Court, Constitutional Commissions, and the Ombudsman have so far limited their objections to
constant reminders. We now agree with the petitioners that this grant of autonomy should cease to be a meaningless provision.
In the case at bar, the veto of these specific provisions in the General Appropriations Act is tantamount to dictating to the Judiciary how its funds
should be utilized, which is clearly repugnant to fiscal autonomy. The freedom of the Chief Justice to make adjustments in the utilization of the funds
appropriated for the expenditures of the judiciary, including the use of any savings from any particular item to cover deficits or shortages in other items
of the Judiciary is withheld. Pursuant to the Constitutional mandate, the Judiciary must enjoy freedom in the disposition of the funds allocated to it in
the appropriations law. It knows its priorities just as it is aware of the fiscal restraints. The Chief Justice must be given a free hand on how to augment
appropriations where augmentation is needed.
Furthermore, in the case of Gonzales v. Macaraig (191 SCRA 452 [1990]), the Court upheld the authority of the President and other key officials to
augment any item or any appropriation from savings in the interest of expediency and efficiency. The Court stated that:
There should be no question, therefore, that statutory authority has, in fact, been granted. And once given, the heads of the different branches of the
Government and those of the Constitutional Commissions are afforded considerable flexibility in the use of public funds and resources (Demetria v.
Alba, supra). The doctrine of separation of powers is in no way endangered because the transfer is made within a department (or branch of
government) and not from one department (branch) to another.
The Constitution, particularly Article VI, Section 25(5) also provides:
Sec. 25. (5) No law shall be passed authorizing any transfer of appropriations; however, 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 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.
In the instant case, the vetoed provisions which relate to the use of savings for augmenting items for the payment of the pension differentials, among
others, are clearly in consonance with the abovestated pronouncements of the Court. The veto impairs the power of the Chief Justice to augment
other items in the Judiciary's appropriation, in contravention of the constitutional provision on "fiscal autonomy."
III
Finally, it can not be denied that the retired Justices have a vested right to the accrued pensions due them pursuant to RA 1797.
The right to a public pension is of statutory origin and statutes dealing with pensions have been enacted by practically all the states in the United
States (State ex rel. Murray v, Riley, 44 Del 505, 62 A2d 236), and presumably in most countries of the world. Statutory provisions for the support of
Judges or Justices on retirement are founded on services rendered to the state. Where a judge has complied with the statutory prerequisite for
retirement with pay, his right to retire and draw salary becomes vested and may not, thereafter, be revoked or impaired. (Gay v. Whitehurst, 44 So ad
430)
Thus, in the Philippines, a number of retirement laws have been enacted, the purpose of which is to entice competent men and women to enter the
government service and to permit them to retire therefrom with relative security, not only those who have retained their vigor but, more so, those who
have been incapacitated by illness or accident. (In re: Amount of the Monthly Pension of Judges and Justices Starting From the Sixth Year of their
Retirement and After the Expiration of the Initial Five-year Period of Retirement, (190 SCRA 315 [1990]).
As early as 1953, Rep. Act No. 910 was enacted to grant pensions to retired Justices of the Supreme Court and Court of Appeals.
This was amended by RA 1797 which provided for an automatic adjustment of the pension rates. Through the years, laws were enacted and
jurisprudence expounded to afford retirees better benefits.
P.D. No. 1438, for one, was promulgated on June 10, 1978 amending RA 910 providing that the lump sum of 5 years gratuity to which the retired
Justices of the Supreme Court and Court of Appeals were entitled was to be computed on the basis of the highest monthly aggregate of
transportation, living and representation allowances each Justice was receiving on the date of his resignation. The Supreme Court in a resolution
dated October 4, 1990, stated that this law on gratuities covers the monthly pensions of retired Judges and Justices which should include the highest
monthly aggregate of transportation, living and representation allowances the retiree was receiving on the date of retirement. (In Re: Amount of the
Monthly Pension of Judges and Justices, supra)
The rationale behind the veto which implies that Justices and Constitutional officers are unduly favored is, again, a misimpression.
Immediately, we can state that retired Armed Forces officers and enlisted men number in the tens of thousands while retired Justices are so few they
can be immediately identified. Justices retire at age 70 while military men retire at a much younger age — some retired Generals left the military at
age 50 or earlier. Yet the benefits in Rep. Act No. 1797 are made to apply equally to both groups. Any ideas arising from an alleged violation of the
equal protection clause should first be directed to retirees in the military or civil service where the reason for the retirement provision is not based on
indubitable and constitutionally sanctioned grounds, not to a handful of retired Justices whose retirement pensions are founded on constitutional
reasons.
The provisions regarding retirement pensions of justices arise from the package of protections given by the Constitution to guarantee and preserve
the independence of the Judiciary.
The Constitution expressly vests the power of judicial review in this Court. Any institution given the power to declare, in proper cases, that act of both
the President and Congress are unconstitutional needs a high degree of independence in the exercise of its functions. Our jurisdiction may not be
reduced by Congress. Neither may it be increased without our advice and concurrence. Justices may not be removed until they reach age 70 except
through impeachment. All courts and court personnel are under the administrative supervision of the Supreme Court. The President may not appoint
any Judge or Justice unless he or she has been nominated by the Judicial and Bar Council which, in turn, is under the Supreme Court's supervision.
Our salaries may not be decreased during our continuance in office. We cannot be designated to any agency performing administrative or quasi-
judicial functions. We are specifically given fiscal autonomy. The Judiciary is not only independent of, but also co-equal and coordinate with the
Executive and Legislative Departments. (Article VIII and section 30, Article VI, Constitution)
Any argument which seeks to remove special privileges given by law to former Justices of this Court and the ground that there should be no "grant of
distinct privileges" or "preferential treatment" to retired Justices ignores these provisions of the Constitution and, in effect, asks that these
Constitutional provisions on special protections for the Judiciary be repealed. The integrity of our entire constitutional system is premised to a large
extent on the independence of the Judiciary. All these provisions are intended to preserve that independence. So are the laws on retirement benefits
of Justices.
One last point.
The Office of the Solicitor General argues that:
. . . Moreover, by granting these benefits to retired Justices implies that public funds, raised from taxes on other citizens, will be paid off to select
individuals who are already leading private lives and have ceased performing public service. Said the United States Supreme Court, speaking through
Mr. Justice Miller: "To lay with one hand the power of the government on the property of the citizen, and with the other to bestow upon favored
individuals . . . is nonetheless a robbery because it is done under the forms of law . . ." (Law Association V. Topeka, 20 Wall. 655) (Comment, p. 16)
The above arguments are not only specious, impolite and offensive; they certainly are unbecoming of an office whose top officials are supposed to
be, under their charter, learned in the law.
Chief Justice Cesar Bengzon and Chief Justice Querube Makalintal, Justices J.B.L. Reyes, Cecilia Muñoz Palma, Efren Plana, Vicente Abad Santos,
and, in fact, all retired Justices of the Supreme Court and the Court of Appeals may no longer be in the active service. Still, the Solicitor General and
all lawyers under him who represent the government before the two courts and whose predecessors themselves appeared before these retirees,
should show some continuing esteem and good manners toward these Justices who are now in the evening of their years.
All that the retirees ask is to be given the benefits granted by law. To characterize them as engaging in "robbery" is intemperate, abrasive, and
disrespectful more so because the argument is unfounded.
If the Comment is characteristic of OSG pleadings today, then we are sorry to state that the then quality of research in that institution has severely
deteriorated.
In the first place, the citation of the case is, wrong. The title is not LAW Association v. Topeka but Citizen's Savings and Loan Association of
Cleveland, Ohio v. Topeka City (20 Wall. 655; 87 U.S. 729; 22 Law. Ed. 455 [1874]. Second, the case involved the validity of a statute authorizing
cities and counties to issue bonds for the purpose of building bridges, waterpower, and other public works to aid private railroads improve their
services. The law was declared void on the ground that the right of a municipality to impose a tax cannot be used for private interests.
The case was decided in 1874. The world has turned over more than 40,000 times since that ancient period. Public use is now equated with public
interest. Public money may now be used for slum clearance, low-cost housing, squatter resettlement, urban and agrarian reform where only private
persons are the immediate beneficiaries. What was "robbery" in 1874 is now called "social justice." There is nothing about retirement benefits in the
cited case. Obviously, the OSG lawyers cited from an old textbook or encyclopedia which could not even spell "loan" correctly. Good lawyers are
expected to go to primary sources and to use only relevant citations.
The Court has been deluged with letters and petitions by former colleagues in the Judiciary requesting adjustments in their pensions just so they
would be able to cope with the everyday living expenses not to mention the high cost of medical bills that old age entails. As Justice Cruz aptly stated
in Teodoro J. Santiago v. COA, (G.R. No. 92284, July 12, 1991);
Retirement laws should be interpreted liberally in favor of the retiree because their intention is to provide for his sustenance, and hopefully even
comfort, when he no longer has the stamina to continue earning his livelihood. After devoting the best years of his life to the public service, he
deserves the appreciation of a grateful government as best concretely expressed in a generous retirement gratuity commensurate with the value and
length of his services. That generosity is the least he should expect now that his work is done and his youth is gone. Even as he feels the weariness
in his bones and glimpses the approach of the lengthening shadows, he should be able to luxuriate in the thought that he did his task well, and was
rewarded for it.
For as long as these retired Justices are entitled under laws which continue to be effective, the government can not deprive them of their vested right
to the payment of their pensions.
WHEREFORE, the petition is hereby GRANTED. The questioned veto is SET ASIDE as illegal and unconstitutional. The vetoed provisions of the
1992 Appropriations Act are declared valid and subsisting. The respondents are ordered to automatically and regularly release pursuant to the grant
of fiscal autonomy the funds appropriated for the subject pensions as well as the other appropriations for the Judiciary. The resolution in
Administrative Matter No. 91-8-225-CA dated November 28, 1991 is likewise ordered to be implemented as promulgated.
SO ORDERED.
G.R. No. L-15138 July 31, 1961
BILL MILLER, petitioner-appellee,
vs.
ATANACIO A. MARDO, and MANUEL GONZALES, respondents-appellants.
x---------------------------------------------------------x
G.R. No. L-15377 July 31, 1961
NUMERIANA RAGANAS, plaintiff-appellant,
vs.
SEN BEE TRADING COMPANY, MACARIO TAN, and SERGIO TAN, defendants-appellees.
x---------------------------------------------------------x
G.R. No. L-16660 July 31, 1961
VICENTE ROMERO, petitioner-appellee,
vs.
ANGEL HERNANDO ETC., and SIA SENG, respondents-appellants.
x---------------------------------------------------------x
G.R. No. L-16781 July 31, 1961
CHIN HUA TRADING COMPANY, and LAO KANG SUY, petitioners-appellees,
vs.
ATANACIO A. MARDO, JORGE BENEDICTO, and CRESENCIO ESTAÑO, respondents-appellants.
x---------------------------------------------------------x
G.R. No. L-17056 July 31, 1961
FRED WILSON & CO., INC., petitioner-appellant,
vs.
MELITON C. PARDUCHO, ETC., and MARIANO PABILIARE, respondents-appellees.
R. L. Resurreccion for petitioner-appellee.
Paciano C. C. Villavieja for respondents-appellants.
BARRERA, J.:
These appeals, although originating from different Courts of First Instance, are here treated together in this single decision because they present but
one identical question of law, namely, the validity of Reorganization Plan No. 20-A, prepared and submitted by the Government Survey and
Reorganization Commission under the authority of Republic Act No. 997, as amended by Republic Act No. 1241, insofar as it confers jurisdiction to
the Regional Offices of the Department of Labor created in said Plan to decide claims of laborers for wages, overtime and separation pay, etc.
In G.R. No. L-15138, Manuel Gonzales filed with Regional Office No. 3 of the Department of Labor, in Manila, a complaint (IS-1148) against Bill Miller
(owner and manager of Miller Motors) claiming to be a driver of Miller from December 1, 1956 to October 31, 1957, on which latter date he was
allegedly arbitrarily dismissed, without being paid separation pay. He prayed for judgement for the amount due him as separation pay plus damages.
Upon receipt of said complaint, Chief Hearing Officer Atanacio Mardo of Regional Office No. 3 of the Department of Labor required Miller to file an
answer. Whereupon, Miller filed with the Court of First Instance of Baguio a petition (Civil Case No. 759) praying for judgment prohibiting the Hearing
Officer from proceeding with the case, for the reason that said Hearing Officer had no jurisdiction to hear and decide the subject matter of the
complaint. The court then required the Hearing Officer and Gonzales to answer and, as prayed for, issued a writ of preliminary injunction. The latter
file their separate motions to dismiss the petition, on the ground of lack of jurisdiction, improper venue, and non-exhaustion of administrative
remedies, it being argued that pursuant to Republic Acts Nos. 997 and 1241, as implemented by Executive Order No. 218, series of 1956 and
Reorganization Plan No. 20-A, regional offices of the Department of labor have exclusive and original jurisdiction over all cases affecting money
claims arising from violations of labor standards or working conditions. Said motions to dismiss were denied by the court. Answers were then filed and
the case was heard. Thereafter, the court rendered a decision holding that Republic Acts Nos. 997 and 1241, as well as Executive Order No. 218,
series of 1956 and Reorganization Plan No. 20-A issued pursuant thereto, did not repeal the provision of the Judiciary Act conferring on courts of first
instance original jurisdiction to take cognizance of money claims arising from violations of labor standards. The question of venue was also dismissed
for being moot, the same having been already raised and decided in a petition for certiorari and prohibition previously filed with this Court in G.R. No.
L-14007 (Mardo, etc. v. De Veyra, etc.) which was dismissed for lack of merit in our resolution of July 7, 1958. From the decision of the Court of First
Instance of Baguio, respondents Hearing Officer and Gonzales interposed the present appeal now before us.
In G.R. No. L-16781, Cresencio Estano filed with Regional Office No. 3 of the Department of Labor, a complaint (RO 3 Ls. Case No. 874) against
Chin Hua Trading Co. and/or Lao Kang Suy and Ke Bon Chiong, as Manager and Assistant Manager thereof, respectively, claiming to have been
their driver from June 17, 1947 to June 4, 1955, for which service he was not paid overtime pay (for work in excess of 8 hours and for Sundays and
legal holidays) and vacation leave pay. He prayed for judgment for the amount due him, plus attorney's fees. Chin Hua Trading, et al., filed their
answer and, issues having been joined, hearing thereof was started before Chief Hearing Officer Atanacio Mardo and Hearing Officer Jorge
Benedicto. Before trial of the case could be terminated, however, Chin Hua Trading, et al., filed with the Court of First Instance of Manila a petition for
prohibition with preliminary injunction (Civil Case No. 26826)), to restrain the hearing officers from proceeding with the disposition of the case, on the
ground that they have no jurisdiction to entertain the same, as Reorganization Plan No. 20-A and Executive Order No. 218, series of 1956, in relation
to Republic Act No. 997, as amended by Republic Act No. 1241, empowering them to adjudicate the complaint, is invalid or unconstitutional. As
prayed for, a preliminary injunction was issued by the court. After due hearing the court rendered a decision holding that Reorganization Plan No. 20-
A is null and void and therefore, granted the writ of prohibition making permanent the preliminary injunction previously issued. From this decision, the
claimant and the hearing officers appealed to the Court of Appeals, which certified the case to us, as it involves only questions of law.
In G.R. No. L-15377, appellant Numeriana Raganas filed with the Court of First Instance of Cebu a complaint (Civil Case No. R-5535) against
appellees Sen Bee Trading Company, Macario Tan and Sergio Tan, claiming that she was employed by appellees as a seamstress from June 5,
1952 to January 11, 1958, for which service she was underpaid and was not given overtime, as well as vacation and sick leave pay. She prayed for
judgment on the amount due her for the same plus damages. To said complaint, appellees filed a motion to dismiss, on the ground that the trial court
has no jurisdiction to hear the case as it involves a money claim and should, under Reorganization Plan No. 20-A be filed with the Regional Office of
the Department of Labor; and there is pending before the regional office of the Department of Labor, a claim for separation vacation, sick and
maternity leave pay filed by the same plaintiff (appellant) against the same defendants-appellees). Acting on said motion, the court dismissed the
case, relying on the provision of Section 25, Article VI of Reorganization Plan No. 20-A and on our resolution in the case of NASSCO v. Arca, et al.
(G.R. No. L-12249, May 6, 1957). From this order, appellant Raganas appealed to the Court of Appeals, but said court certified the case to us.
In G.R. No. L-16660, Vicente B. Romero filed with Regional Officer No. 2 of the Department of Labor a complaint (Wage Case No. 196-W) against Sia
Seng, for recovery of alleged unpaid wages, overtime and separation pay. Sia Seng, filed an answer. At the date set for hearing the latter did not
appear despite due notice to him and counsel. Upon his petition, Romero was allowed to present his evidence. Thereafter, a decision was rendered
by the Hearing Officer in favor of Romero. Upon the latter's motion for execution, the records of the case were referred to Regional Labor
Administrator Angel Hernando for issuance of said writ of execution, being the officer charged with the duty of issuing the same. Hernando, believing
that Sia Seng should be given a chance to present his evidence, refused to issue the writ of execution and ordered a re-hearing. As a consequence,
Romero filed with the Court of First Instance of Isabela a petition for mandamus (Case No. Br. II-35) praying that an order be issued commanding
respondent Regional Labor Administrator to immediately issue a writ of execution of the decision in Wage Case No. 196-W. To this petition,
respondent Regional Labor Administrator filed a motion to dismiss, on the ground that it states no cause of action, but action thereon was deferred
until the case is decided on the merits. Sia Seng filed his answer questioning the validity of the rules and regulations issued under the authority of
Reorganization Plan No. 20-A. After hearing, the court rendered a decision ordering, inter alia, respondent Regional Labor Administrator to forthwith
issue the corresponding writ of execution, as enjoined by Section 48, of the Rules and Regulations No. 1 of the Labor Standards Commission. From
this decision of the Court of First Instance, Sia Seng and Regional Labor Administrator Hernando appealed to us. Appellant Sia Seng urges in his
appeal that the trial court erred in not dismissing the petition, in spite of the fact that the decision sought to be enforced by appellee Romero was
rendered by a hearing officer who had no authority to render the same, and in failing to hold that Reorganization Plan No. 20-A was not validly passed
as a statute and is unconstitutional.
In G.R. No. L-17056, Mariano Pabillare instituted in Regional Office No. 3 of the Department of Labor a complaint (IS-2168) against petitioner Fred
Wilson & Co., Inc., alleging that petitioner engaged his services as Chief Mechanic, Air conditioning Department, from October 1947 to February 19,
1959, when he was summarily dismissed without cause and without sufficient notice and separation pay. He also claimed that during his employment
he was not paid for overtime rendered by him. He prayed for judgment for the amount due him for such overtime and separation pay. Petitioner
moved to dismiss the complaint, on the ground that said regional office "being purely an administrative body, has no power, authority, nor jurisdiction
to adjudicate the claim sought to be recovered in the action." Said motion to dismiss having been denied by respondent Hearing Officer Meliton
Parducho, petitioner Fred Wilson & Co., Inc. filed with the Court of First Instance of Manila a petition for certiorari and prohibition, with preliminary
injunction (Civil Case No. 41954) to restrain respondent hearing officer from proceeding with the case, and praying, among others, that
Reorganization Plan No. 20-A, insofar as it vests original and exclusive jurisdiction over money claims (to the exclusion of regular courts of justice) on
the Labor Standards Commission or the Regional Offices of the Department of Labor, be declared null and void and unconstitutional. As prayed for,
the court granted a writ of preliminary injunction. Respondents Hearing Officer and Pabillare filed answer and the case was heard. After hearing, the
court rendered a decision declaring that "by the force of Section 6 of R.A. No. 997, as amended by R.A. 1241, Plan No. 20-A was deemed approved
by Congress when it adjourned its session in 1956' (Res. of May 6, 1957 in National Shipyards Steel Corporation v. Vicente Area, G.R. No. L-12249).
It follows that the questioned reorganization Plan No. 20-A is valid.".
Petitioner Fred Wilson & Co., Inc. appealed directly to us from this decision.
The specific legal provision invoked for the authority of the regional offices to take cognizance of the subject matter involved in these cases is
paragraph 25 of Article VI of Reorganization Plan No. 20-A, which is hereunder quoted:
25 Each regional office shall have original and exclusive jurisdiction over all cases falling under the Workmen's Compensation law, and cases
affecting all money claims arising from violations of labor standards on working conditions including but not restrictive to: unpaid wages,
underpayment, overtime, separation pay and maternity leave of employees and laborers; and unpaid wages, overtime, separation pay, vacation pay
and payment for medical services of domestic help.
Under this provision, the regional offices have been given original and exclusive jurisdiction over:
(a) all cases falling under the Workmen's Compensation law;
(b) all cases affecting money claims arising from violations of labor standards on working conditions, unpaid wages, underpayment, overtime,
separation pay and maternity leave of employees and laborers; and .
(c) all cases for unpaid wages, overtime, separation pay, vacation pay and payment for medical services of domestic help.
Before the effectivity of Reorganization Plan No. 20-A, however, the Department of Labor, except the Workmen's Compensation Commission with
respect to claims for compensation under the Workmen's Compensation law, had no compulsory power to settle cases under (b) and (c) above, the
only authority it had being to mediate merely or arbitrate when the parties so agree in writing, In case of refusal by a party to submit to such
settlement, the remedy is to file a complaint in the proper court. 1
It is evident, therefore, that the jurisdiction to take cognizance of cases affecting money claims such as those sought to be enforced in these
proceedings, is a new conferment of power to the Department of Labor not theretofore exercised by it. The question thus presented by these cases is
whether this is valid under our Constitution and applicable statutes.
It is true that in Republic Act No. 1241, amending Section 4 of Republic Act 997, which created the Government Survey and Reorganization
Commission, the latter was empowered —
(2) To abolish departments, offices, agencies, or functions which may not be necessary, or create those which way be necessary for the efficient
conduct of the government service, activities, and functions. (Emphasis supplied.)
But these "functions" which could thus be created, obviously refer merely to administrative, not judicial functions. For the Government Survey and
Reorganization Commission was created to carry out the reorganization of the Executive Branch of the National Government (See Section 3 of R.A.
No. 997, as amended by R.A. No. 1241), which plainly did not include the creation of courts. And the Constitution expressly provides that "the Judicial
power shall be vested in one Supreme Court and in such inferior courts as may be established by law.(Sec. 1, Art. VII of the Constitution). Thus,
judicial power rests exclusively in the judiciary. It may be conceded that the legislature may confer on administrative boards or bodies quasi-judicial
powers involving the exercise of judgment and discretion, as incident to the performance of administrative functions. 2 But in so doing, the legislature
must state its intention in express terms that would leave no doubt, as even such quasi-judicial prerogatives must be limited, if they are to be valid,
only to those incidental to or in connection with the performance of jurisdiction over a matter exclusively vested in the courts.3
If a statute itself actually passed by the Congress must be clear in its terms when clothing administrative bodies with quasi-judicial functions, then
certainly such conferment can not be implied from a mere grant of power to a body such as the Government Survey and Reorganization Commission
to create "functions" in connection with the reorganization of the Executive Branch of the Government.
And so we held in Corominas et al. v. Labor Standards Commission, et al. (G.R. No. L-14837 and companion cases, June 30, 1961);
. . . it was not the intention of Congress, in enacting Republic Act No. 997, to authorize the transfer of powers and jurisdiction granted to the courts of
justice, from these to the officials to be appointed or offices to be created by the Reorganization Plan. Congress is well aware of the provisions of the
Constitution that judicial powers are vested 'only in the Supreme Court and in such courts as the law may establish'. The Commission was not
authorized to create courts of justice, or to take away from these their jurisdiction and transfer said jurisdiction to the officials appointed or offices
created under the Reorganization Plan. The Legislature could not have intended to grant such powers to the Reorganization Commission, an
executive body, as the Legislature may not and cannot delegate its power to legislate or create courts of justice any other agency of the Government.
(Chinese Flour Importers Assoc. vs. Price Stabilization Board, G.R. No. L-4465, July 12, 1951; Surigao Consolidated vs. Collector of Internal
Revenue G.R. No. L-5692, March 5, 1954; U.S. vs. Shreveport, 287 U.S. 77, 77 L. ed 175, and Johnson vs. San Diego, 42 P. 249, cited in 11 Am. Jur
921-922.) (Emphasis supplied.)
But it is urged, in one of the cases, that the defect in the conferment of judicial or quasi-judicial functions to the Regional offices, emanating from the
lack of authority of the Reorganization Commission has been cured by the non-disapproval of Reorganization Plan No. 20-A by Congress under the
provisions of Section 6(a) of Republic Act No. 997, as amended. It is, in effect, argued that Reorganization Plan No. 20-A is not merely the creation of
the Reorganization Commission, exercising its delegated powers, but is in fact an act of Congress itself, a regular statute directly and duly passed by
Congress in the exercise of its legislative powers in the mode provided in the enabling act.
The pertinent provision of Republic Act No. 997, as amended, invoked in favor of this argument reads as follows:
SEC. 6 (a) The provisions of the reorganization plan or plans submitted by the President during the Second Session of the Third Congress shall be
deemed approved after the adjournment of the said session, and those of the plan or plans or modifications of any plan or plans to be submitted after
the adjournment of the Second Session, shall be deemed approved after the expiration of the seventy session days of the Congress following the
date on which the plan is transmitted to it, unless between the date of transmittal and the expiration of such period, either House by simple resolution
disapproves the reorganization plan or any, modification thereof. The said plan of reorganization or any modification thereof may, likewise, be
approved by Congress in a concurrent Resolution within such period.
It is an established fact that the Reorganization Commission submitted Reorganization Plan No. 20-A to the President who, in turn, transmitted the
same to Congress on February 14, 1956. Congress adjourned its sessions without passing a resolution disapproving or adopting the said
reorganization plan. It is now contended that, independent of the matter of delegation of legislative authority (discussed earlier in this opinion), said
plan, nevertheless became a law by non-action on the part of Congress, pursuant to the above-quoted provision.
Such a procedure of enactment of law by legislative in action is not countenanced in this jurisdiction. By specific provision of the Constitution —
No bill shall be passed or become a law unless it shall have been printed and copies thereof in its final form furnished the Members at least three
calendar clays prior to its passage by the National Assembly (Congress), except when the President shall have certified to the necessity of its
immediate enactment. Upon the last reading of a bill no amendment thereof shall be allowed, and the question upon its final passage shall be taken
immediately thereafter, and the yeas and nays entered on the Journal. (Sec. 21-[a], Art. VI).
Every bill passed by the Congress shall, before it becomes a law, be presented to the President. If he approves the same, he shall sign it, but if not,
he shall return it with his objections to the House where it originated, which shall enter the objections at large on its Journal and proceed to reconsider
it. If, after such reconsideration, two-thirds of all the Members of such House shall agree to pass the bill, it shall be sent, together with the objections,
to the other House by which it shall likewise be reconsidered, and if approved by two-thirds of all the Members voting for and against shall be entered
on its journal. If any bill shall not be returned by the President as herein provided within twenty days (Sundays excepted) after it shall have been
presented to him, the same shall become a law in like manner as if he has signed it, unless the Congress by adjournment prevent its return, in which
case it shall become a law unless vetoed by the President within thirty days after adjournment. (Sec. 20[1]. Art. VI of the Constitution).
A comparison between the procedure of enactment provided in section 6 (a) of the Reorganization Act and that prescribed by the Constitution will
show that the former is in distinct contrast to the latter. Under the first, consent or approval is to be manifested by silence or adjournment or by
"concurrent resolution." In either case, the contemplated procedure violates the constitutional provisions requiring positive and separate action by
each House of Congress. It is contrary to the "settled and well-understood parliamentary law (which requires that the) two houses are to hold separate
sessions for their deliberations, and the determination of the one upon a proposed law is to be submitted to the separate determination of the other,"
(Cooley, Constitutional Limitations, 7th ed., p. 187).
Furthermore, Section 6 (a) of the Act would dispense with the "passage" of any measure, as that word is commonly used and understood, and with
the requirement presentation to the President. In a sense, the section, if given the effect suggested in counsel's argument, would be a reversal of the
democratic processes required by the Constitution, for under it, the President would propose the legislative action by action taken by Congress. Such
a procedure would constitute a very dangerous precedent opening the way, if Congress is so disposed, because of weakness or indifference, to
eventual abdication of its legislative prerogatives to the Executive who, under our Constitution, is already one of the strongest among constitutional
heads of state. To sanction such a procedure will be to strike at the very root of the tri-departmental scheme four democracy.
Even in the United States (in whose Federal Constitution there is no counterpart to the specific method of passaging laws prescribed in Section 21[2]
of our Constitution) and in England (under whose parliamentary system the Prime Minister, real head of the Government, is a member of Parliament),
the procedure outlined in Section 6(a) herein before quoted, is but a technique adopted in the delegation of the rule-making power, to preserve the
control of the legislature and its share in the responsibility for the adoption of proposed regulations. 4 The procedure has ever been intended or utilized
or interpreted as another mode of passing or enacting any law or measure by the legislature, as seems to be the impression expressed in one these
cases.
On the basis of the foregoing considerations, we hold ad declare that Reorganization Plan No. 20-A, insofar as confers judicial power to the Regional
Offices over cases other than these falling under the Workmen's Compensation on Law, is invalid and of no effect.
This ruling does not affect the resolution of this Court in the case of National Steel & Shipyards Corporation v. Arca et al., G.R. No. L-12249, dated
May 6, 1957, considering that the said case refers to a claim before the Workmen's Compensation Commission, which exercised quasi-judicial
powers even before the reorganization of the Department of Labor.
WHEREFORE
(a) The decision of the Court of First Instance of Baguio involved in case G.R. No. L-15138 is hereby affirmed, without costs;
(b) The decision of the Court of First Instance of Manila questioned in case G.R. No. L-16781 is hereby affirmed, without costs;
(c) The order of dismissal issued by the Court of First Instance of Cebu appealed from in case G.R. No. L-15377 is set aside and the case remanded
to the court of origin for further proceedings, without costs;
(d) In case G.R. No. L-16660, the decision of the Court of First Instance of Isabela, directing the Regional Labor Administrator to issue a writ of
execution of the order of the Regional Office No. 2, is hereby reversed, without costs; and .
(e) In case G.R. No. L-17056, the decision rendered after hearing by the Court of First Instance of Manila, dismissing the complaint for annulment of
the proceedings before the Regional office No. 3, is hereby reversed and the preliminary injunction at first issued by the trial court is revived and
made permanents without costs. SO ORDERED.
Bengzon, C.J., Padilla, Labrador, Reyes, J.B.L., Dizon, De Leon and Natividad, JJ., concur.
Bautista Angelo, J., on leave, took no part.
Concepcion and Paredes JJ., took no part.