Political Law Constitutional Law Separation of Powers Fund Realignment Constitutionality of the

Disbursement Acceleration Program

Power of the Purse Executive Impoundment

hen President Benigno Aquino III took office, his administration noticed the sluggish growth of the

economy. The World Bank advised that the economy needed a stimulus plan. Budget Secretary Florencio
Butch Abad then came up with a program called the Disbursement Acceleration Program (DAP).
The DAP was seen as a remedy to speed up the funding of government projects. DAP enables the
Executive to realign funds from slow moving projects to priority projects instead of waiting for next years
appropriation. So what happens under the DAP was that if a certain government project is being
undertaken slowly by a certain executive agency, the funds allotted therefor will be withdrawn by the
Executive. Once withdrawn, these funds are declared as savings by the Executive and said funds will
then be reallotted to other priority projects. The DAP program did work to stimulate the economy as
economic growth was in fact reported and portion of such growth was attributed to the DAP (as noted by
the Supreme Court).
Other sources of the DAP include the unprogrammed funds from the General Appropriations Act (GAA).
Unprogrammed funds are standby appropriations made by Congress in the GAA.
Meanwhile, in September 2013, Senator Jinggoy Estrada made an expos claiming that he, and other
Senators, received Php50M from the President as an incentive for voting in favor of the impeachment of
then Chief Justice Renato Corona. Secretary Abad claimed that the money was taken from the DAP but
was disbursed upon the request of the Senators.
This apparently opened a can of worms as it turns out that the DAP does not only realign funds within the
Executive. It turns out that some non-Executive projects were also funded; to name a few: Php1.5B for
the CPLA (Cordillera Peoples Liberation Army), Php1.8B for the MNLF (Moro National Liberation Front),
P700M for the Quezon Province, P50-P100M for certain Senators each, P10B for Relocation Projects,
etc.
This prompted Maria Carolina Araullo, Chairperson of the Bagong Alyansang Makabayan, and several
other concerned citizens to file various petitions with the Supreme Court questioning the validity of the
DAP. Among their contentions was:
DAP is unconstitutional because it violates the constitutional rule which provides that no money shall be
paid out of the Treasury except in pursuance of an appropriation made by law.
Secretary Abad argued that the DAP is based on certain laws particularly the GAA (savings and
augmentation provisions thereof), Sec. 25(5), Art. VI of the Constitution (power of the President to
augment), Secs. 38 and 49 of Executive Order 292 (power of the President to suspend expenditures and
authority to use savings, respectively).
Issues:
I. Whether or not the DAP violates the principle no money shall be paid out of the Treasury except in
pursuance of an appropriation made by law (Sec. 29(1), Art. VI, Constitution).

II. Whether or not the DAP realignments can be considered as impoundments by the executive.
III. Whether or not the DAP realignments/transfers are constitutional.
IV. Whether or not the sourcing of unprogrammed funds to the DAP is constitutional.
V. Whether or not the Doctrine of Operative Fact is applicable.
HELD:
I. No, the DAP did not violate Section 29(1), Art. VI of the Constitution. DAP was merely a program by the
Executive and is not a fund nor is it an appropriation. It is a program for prioritizing government spending.
As such, it did not violate the Constitutional provision cited in Section 29(1), Art. VI of the Constitution. In
DAP no additional funds were withdrawn from the Treasury otherwise, an appropriation made by law
would have been required. Funds, which were already appropriated for by the GAA, were merely being
realigned via the DAP.
II. No, there is no executive impoundment in the DAP. Impoundment of funds refers to the Presidents
power to refuse to spend appropriations or to retain or deduct appropriations for whatever reason.
Impoundment is actually prohibited by the GAA unless there will be an unmanageable national
government budget deficit (which did not happen). Nevertheless, theres no impoundment in the case at
bar because whats involved in the DAP was the transfer of funds.
III. No, the transfers made through the DAP were unconstitutional. It is true that the President (and even
the heads of the other branches of the government) are allowed by the Constitution to make realignment
of funds, however, such transfer or realignment should only be made within their respective offices.
Thus, no cross-border transfers/augmentations may be allowed. But under the DAP, this was violated
because funds appropriated by the GAA for the Executive were being transferred to the Legislative and
other non-Executive agencies.
Further, transfers within their respective offices also contemplate realignment of funds to an existing
project in the GAA. Under the DAP, even though some projects were within the Executive, these projects
are non-existent insofar as the GAA is concerned because no funds were appropriated to them in the
GAA. Although some of these projects may be legitimate, they are still non-existent under the GAA
because they were not provided for by the GAA. As such, transfer to such projects is unconstitutional and
is without legal basis.
On the issue of what are savings
These DAP transfers are not savings contrary to what was being declared by the Executive. Under the
definition of savings in the GAA, savings only occur, among other instances, when there is an excess in
the funding of a certain project once it is completed, finally discontinued, or finally abandoned. The GAA
does not refer to savings as funds withdrawn from a slow moving project. Thus, since the statutory
definition of savings was not complied with under the DAP, there is no basis at all for the transfers.
Further, savings should only be declared at the end of the fiscal year. But under the DAP, funds are
already being withdrawn from certain projects in the middle of the year and then being declared as
savings by the Executive particularly by the DBM.
IV. No. Unprogrammed funds from the GAA cannot be used as money source for the DAP because under
the law, such funds may only be used if there is a certification from the National Treasurer to the effect

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

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710 SCRA 1 Political Law Constitutional Law Local Government Invalid Delegation
Legislative Department Invalid Delegation of Legislative Power
This case is consolidated with G.R. No. 208493 and G.R. No. 209251.
The so-called pork barrel system has been around in the Philippines since about 1922. Pork Barrel is
commonly known as the lump-sum, discretionary funds of the members of the Congress. It underwent
several legal designations from Congressional Pork Barrel to the latest Priority Development
Assistance Fund or PDAF. The allocation for the pork barrel is integrated in the annual General
Appropriations Act (GAA).
Since 2011, the allocation of the PDAF has been done in the following manner:
a. P70 million: for each member of the lower house; broken down to P40 million for hard projects
(infrastructure projects like roads, buildings, schools, etc.), and P30 million for soft projects (scholarship
grants, medical assistance, livelihood programs, IT development, etc.);
b. P200 million: for each senator; broken down to P100 million for hard projects, P100 million for soft
projects;
c. P200 million: for the Vice-President; broken down to P100 million for hard projects, P100 million for
soft projects.
The PDAF articles in the GAA do provide for realignment of funds whereby certain cabinet members
may request for the realignment of funds into their department provided that the request for realignment is
approved or concurred by the legislator concerned.
Presidential Pork Barrel
The president does have his own source of fund albeit not included in the GAA. The so-called presidential
pork barrel comes from two sources: (a) the Malampaya Funds, from the Malampaya Gas Project this
has been around since 1976, and (b) the Presidential Social Fund which is derived from the earnings of
PAGCOR this has been around since about 1983.
Pork Barrel Scam Controversy
Ever since, the pork barrel system has been besieged by allegations of corruption. In July 2013, six
whistle blowers, headed by Benhur Luy, exposed that for the last decade, the corruption in the pork barrel
system had been facilitated by Janet Lim Napoles. Napoles had been helping lawmakers in funneling
their pork barrel funds into about 20 bogus NGOs (non-government organizations) which would make it
appear that government funds are being used in legit existing projects but are in fact going to ghost
projects. An audit was then conducted by the Commission on Audit and the results thereof concurred with
the exposes of Luy et al.
Motivated by the foregoing, Greco Belgica and several others, filed various petitions before the Supreme
Court questioning the constitutionality of the pork barrel system.
ISSUES:
I. Whether or not the congressional pork barrel system is constitutional.
II. Whether or not presidential pork barrel system is constitutional.

HELD:
I. No, the congressional pork barrel system is unconstitutional. It is unconstitutional because it violates the
following principles:
a. Separation of Powers
As a rule, the budgeting power lies in Congress. It regulates the release of funds (power of the purse).
The executive, on the other hand, implements the laws this includes the GAA to which the PDAF is a
part of. Only the executive may implement the law but under the pork barrel system, whats happening
was that, after the GAA, itself a law, was enacted, the legislators themselves dictate as to which projects
their PDAF funds should be allocated to a clear act of implementing the law they enacted a violation
of the principle of separation of powers. (Note in the older case of PHILCONSA vs Enriquez, it was ruled
that pork barrel, then called as CDF or the Countrywide Development Fund, was constitutional insofar as
the legislators only recommend where their pork barrel funds go).
This is also highlighted by the fact that in realigning the PDAF, the executive will still have to get the
concurrence of the legislator concerned.
b. Non-delegability of Legislative Power
As a rule, the Constitution vests legislative power in Congress alone. (The Constitution does grant the
people legislative power but only insofar as the processes of referendum and initiative are concerned).
That being, legislative power cannot be delegated by Congress for it cannot delegate further that which
was delegated to it by the Constitution.
Exceptions to the rule are:
(i) delegated legislative power to local government units but this shall involve purely local matters;
(ii) 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, or 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.
In this case, the PDAF articles which allow the individual legislator to identify the projects to which his
PDAF money should go to is a violation of the rule on non-delegability of legislative power. The power to
appropriate funds is solely lodged in Congress (in the two houses comprising it) collectively and not
lodged in the individual members. Further, nowhere in the exceptions does it state that the Congress can
delegate the power to the individual member of Congress.
c. Principle of Checks and Balances
One feature in the principle of checks and balances is the power of the president to veto items in the GAA
which he may deem to be inappropriate. But this power is already being undermined because of the fact
that once the GAA is approved, the legislator can now identify the project to which he will appropriate his
PDAF. Under such system, how can the president veto the appropriation made by the legislator if the
appropriation is made after the approval of the GAA again, Congress cannot choose a mode of
budgeting which effectively renders the constitutionally-given power of the President useless.

d. Local Autonomy
As a rule, the local governments have the power to manage their local affairs. Through their Local
Development Councils (LDCs), the LGUs can develop their own programs and policies concerning their
localities. But with the PDAF, particularly on the part of the members of the house of representatives,
whats happening is that a congressman can either bypass or duplicate a project by the LDC and later on
claim it as his own. This is an instance where the national government (note, a congressman is a national
officer) meddles with the affairs of the local government and this is contrary to the State policy
embodied in the Constitution on local autonomy. Its good if thats all that is happening under the pork
barrel system but worse, the PDAF becomes more of a personal fund on the part of legislators.
II. Yes, the presidential pork barrel is valid.
The main issue raised by Belgica et al against the presidential pork barrel is that it is unconstitutional
because it violates Section 29 (1), Article VI of the Constitution which provides:
No money shall be paid out of the Treasury except in pursuance of an appropriation made by law.
Belgica et al emphasized that the presidential pork comes from the earnings of the Malampaya and
PAGCOR and not from any appropriation from a particular legislation.
The Supreme Court disagrees as it ruled that PD 910, which created the Malampaya Fund, as well as PD
1869 (as amended by PD 1993), which amended PAGCORs charter, provided for the appropriation, to
wit:
(i) PD 910: Section 8 thereof provides that all fees, among others, collected from certain energy-related
ventures shall form part of a special fund (the Malampaya Fund) which shall be used to further finance
energy resource development and for other purposes which the President may direct;
(ii) PD 1869, as amended: Section 12 thereof provides that a part of PAGCORs earnings shall be
allocated to a General Fund (the Presidential Social Fund) which shall be used in government
infrastructure projects.
These are sufficient laws which met the requirement of Section 29, Article VI of the Constitution. The
appropriation contemplated therein does not have to be a particular appropriation as it can be a general
appropriation as in the case of PD 910 and PD 1869.
RELATED NEWS: July 1, 2014 | SC strikes down certain provisions of DAP as unconstitutional
Read the DAP Case: Full Text | Case Digest

Garcia-Padilla v. Enrile
121 SCRA 472
FACTS:
The case is an application for the issuance of the writ of habeas corpus on behalf of 14 detainees. Sabino Padilla and
8 others out of the 14 detainees were then having a conference in the dining room at Dr. Parong's residence. Prior
thereto, all the 14 detainees were under surveillance as they were then identified as members of the Communist
Party of the Philippines. engaging in subversive activities. They were arrested and later transferred to a facility only
the PCs know, hence, the present petition of Josefina, mother of Sabina, for writ of habeas corpus.
ISSUE:
Whether or not the arrests done to the present detainees are valid
HELD:
The suspension of the privilege of writ of habeas corpus raises a political, not a judicial, question and that the right to
bail cannot be invoked during such a period. PD 1836 and LOI 1211 have vested, assuming a law is necessary, in
the President the power of preventive arrest incident to the suspension of the privilege of the writ. In addition,
however, it should be noted that the PCO has been replaced by Preventive Detention Action (PDA) pursuant to PD
1877. As provided for in the said decree, a PDA constitute an authority to arrest and preventively detain persons
committing the aforementioned crimes, for a period of one year, with the cause or causes of their arrest subjected to
review by the President or the by the Review Committee created for the purpose.