EN BANC
2 members Independent
G.R. No. 134577 November 18, 1998
SEN. MIRIAM DEFENSOR SANTIAGO and SEN. FRANCISCO S.
TATAD, petitioners,
vs.
SEN. TEOFISTO T. GUINGONA, JR. and SEN. MARCELO B.
FERNAN, respondents.
PANGANIBAN, J.:
The principle of separation of powers ordains that each of the three great branches
of government has exclusive cognizance of and is supreme in matters falling within
its own constitutionally allocated sphere. Constitutional respect and a becoming
regard for she sovereign acts, of a coequal branch prevents this Court from prying
into the internal workings of the Senate. Where no provision of the Constitution or
the laws or even the Rules of the Senate is clearly shown to have been violated,
disregarded or overlooked, grave abuse of discretion cannot be imputed to Senate
officials for acts done within their competence and authority. This Court will be
neither a tyrant nor a wimp; rather, it will remain steadfast and judicious in
upholding the rule and majesty of the law.
The Case
On July 31, 1998, Senators Miriam Defensor Santiago and Francisco S. Tatad
instituted an original petition forquo warranto under Rule 66, Section 5, Rules of
Court, seeking the ouster of Senator Teofisto T. Guingona, Jr. as minority leader of
the Senate and the declaration of Senator Tatad as the rightful minority leader.
On August 4, 1998, the Court, upon receipt of the Petition, required the respondents
and the solicitor general "to file COMMENT thereon within a non-extendible period of
fifteen (15) days from notice." On August 25, 1998, both respondents and the
solicitor general submitted their respective Comments. In compliance with a
Resolution of the Court dated September 1, 1998, petitioners filed their Consolidated
Reply on September 23, 1998. Noting said pleading, this Court gave due course to
the petition and deemed the controversy submitted for decision, without need of
memoranda, on September 29, 1998.
In the regular course, the regional trial courts and this Court have concurrent
jurisdiction 1 to hear and decide petitions for quo warranto (as well as certiorari,
prohibition and mandamus), and a basic deference to the hierarchy of courts impels
a filing of such petitions in the lower tribunals. 2 However, for special and important
reasons or for exceptional and compelling circumstances, as in the present case, this
Court has allowed exceptions to this doctrine. 3In fact, original petitions for certiorari,
prohibition, mandamus and quo warranto assailing acts of legislative officers like the
Senate President 4 and the Speaker of the House 5 have been recognized as
exceptions to this rule.
The Facts
The Senate of the Philippines, with Sen. John Henry R. Osmea as presiding officer,
convened on July 27, 1998 for the first regular session of the eleventh Congress. At
the time, in terms of party affiliation, the composition of the Senate was as follows: 6
10 members Laban ng Masang Pilipino (LAMP)
7 members Lakas-National Union of Christian Democrats-United
Muslim Democrats of the Philippines (Lakas-NUCD-
UMDP)
1 member Liberal Party (LP)
1 member Aksyon Demokrasya
1 member People's Reform Party (PRP)
1 member Gabay Bayan
23 total number of senators 7 (The last six members are all classified by
petitioners as "independent".)
On the agenda for the day was the election of officers. Nominated by Sen. Blas F.
Ople to the position of Senate President was Sen. Marcelo B. Fernan. Sen. Francisco
S. Tatad was also nominated to the same position by Sen. Miriam Defenser Santiago.
By a vote of 20 to 2, 8 Senator Fernan was declared the duly elected President of the
Senate.
The following were likewise elected: Senator Ople as president pro tempore, and
Sen. Franklin M. Drilon as majority leader.
Senator Tatad thereafter manifested that, with the agreement of Senator Santiago,
allegedly the only other member of the minority, he was assuming the position of
minority leader. He explained that those who had voted for Senator Fernan
comprised the "majority," while only those who had voted for him, the losing
nominee, belonged to the "minority."
During the discussion on who should constitute the Senate "minority," Sen. Juan M.
Flavier manifested that the senators belonging to the Lakas-NUCD-UMDP Party
numbering seven (7) and, thus, also a minority had chosen Senator Guingona as
the minority leader. No consensus on the matter was arrived at. The following
session day, the debate on the question continued, with Senators Santiago and
Tatad delivering privilege speeches. On the third session day, the Senate met in
caucus, but still failed to resolve the issue.
On July 30, 1998, the majority leader informed the body chat he was in receipt of a
letter signed by the seven Lakas-NUCD-UMDP senators, 9 stating that they had
elected Senator Guingona as the minority leader. By virtue thereof, the Senate
President formally recognized Senator Guingona as the minority leader of the
Senate.
The following day, Senators Santiago and Tatad filed before this Court the subject
petition for quo warranto, alleging in the main that Senator Guingona had been
usurping, unlawfully holding and exercising the position of Senate minority leader, a
position that, according to them, rightfully belonged to Senator Tatad.
Issues
From the parties' pleadings, the Court formulated the following issues for resolution:
1. Does the Court have jurisdiction over the petition?
2. Was there an actual violation of the Constitution?
3. Was Respondent Guingona usurping, unlawfully holding and exercising the
position of Senate minority leader?
4. Did Respondent Fernan act with grave abuse of discretion in recognizing
Respondent Guingona as the minority leader?
The Court's Ruling
After a close perusal of the pleadings 10 and a careful deliberation on the
arguments, pro and con, the Court finds that no constitutional or legal infirmity or
grave abuse of discretion attended the recognition of and the assumption into office
by Respondent Guingona as the Senate minority leader.
First Issue:
The Court's Jurisdiction
Petitioners principally invoke Avelino v. Cuenco 11 in arguing that this Court has
jurisdiction to settle the issue of who is the lawful Senate minority leader. They
submit that the definitions of "majority" and "minority" involve an interpretation of
the Constitution, specifically Section 16 (1), Article VI thereof, stating that "[t]he
Santiago v Guingona Page 1 of 106
Senate shall elect its President and the House of Representatives its Speaker, by a
majority vote of all its respective Members."
Respondents and the solicitor general, in their separate Comments, contend in
common that the issue of who is the lawful Senate minority leader is an internal
matter pertaining exclusively to the domain of the legislature, over which the Court
cannot exercise jurisdiction without transgressing the principle of separation of
powers. Allegedly, no constitutional issue is involved, as the fundamental law does
not provide for the office of a minority leader in the Senate. The legislature alone
has the full discretion to provide for such office and, in that event, to determine the
procedure of selecting its occupant.
Respondents also maintain that Avelino cannot apply, because there exists no
question involving an interpretation or application of the Constitution, the laws or
even the Rules of the Senate; neither are there "peculiar circumstances" impelling
the Court to assume jurisdiction over the petition. The solicitor general adds that
there is not even any legislative practice to support the petitioners' theory that a
senator who votes for the winning Senate President is precluded from becoming the
minority leader.
To resolve the issue of jurisdiction, this Court carefully reviewed and deliberated on
the various important cases involving this very important and basic question, which
it has ruled upon in the past.
The early case Avelino v. Cuenco cautiously tackled the scope of the Court's power
of judicial review; that is, questions involving an interpretation or application of a
provision of the Constitution or the law, including the rules of either house of
Congress. Within this scope falls the jurisdiction of the Court over questions on the
validity of legislative or executive acts that are political in nature, whenever the
tribunal "finds constitutionally imposed limits on powers or functions conferred upon
political bodies." 12
In the aforementioned case, the Court initially declined to resolve the question of
who was the rightful Senate President, since it was deemed a political controversy
falling exclusively within the domain of the Senate. Upon a motion for
reconsideration, however, the Court ultimately assumed jurisdiction (1) "in the light
of subsequent events which justify its intervention;" and (2) because the resolution
of the issue hinged on the interpretation of the constitutional provision on the
presence of a quorum to hold a session 13 and therein elect a Senate President.
Justice Feria elucidated in his Concurring Opinion: "[I] concur with the majority that
this Court has jurisdiction over cases like the present . . . so as to establish in this
country the judicial supremacy, with the Supreme Court as the final arbiter, to see
that no one branch or agency of the government transcends the Constitution, not
only in justiceable but political questions as well." 14
Justice Perfecto, also concurring, said in part:
Indeed there is no denying that the situation, as obtaining in the upper chamber of
Congress, is highly explosive. It had echoed in the House of Representatives. It has
already involved the President of the Philippines. The situation has created a
veritable national crisis, and it is apparent that solution cannot be expected from
any quarter other than this Supreme Court, upon which the hopes of the people for
an effective settlement are pinned. 15
. . . This case raises vital constitutional questions which no one can settle or decide
if this Court should refuse to decide them. 16
. . . The constitutional question of quorum should not be left unanswered. 17
In Taada v. Cueno, 18 this Court endeavored to define political question. And we said
that "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 legislative or executive branch of the
government.' It is concerned with issues dependent upon the wisdom, not [the]
legality, of a particular measure." 19
The Court ruled that the validity of the selection of members of the Senate Electoral
Tribunal by the senators was not a political question. The choice of these members
did not depend on the Senate's "full discretionary authority," but was subject to
mandatory constitutional limitations. 20 Thus, the Court held that not only was it
clearly within its jurisdiction to pass upon the validity of the selection proceedings,
but it was also its duty to consider and determine the issue.
In another landmark case, Lansang v. Garcia, 21 Chief Justice Roberto Concepcion
wrote that the Court "had authority to and should inquire into the existence of the
factual bases required by the Constitution for the suspension of the privilege of the
writ [of habeas corpus]." This ruling was made in spite of the previous
pronouncements in Barcelon v. Baker 22 and Montenegro v. Castaeda 23 that "the
authority to decide whether the exigency has arisen requiring suspension (of the
privilege . . .) belongs to the President and his 'decision is final and conclusive' upon
the courts and upon all other persons." But the Chief Justice cautioned: "the function
of the Court is merely to check not to supplant the Executive, or to ascertain
merely whether he has gone beyond the constitutional limits of his jurisdiction, not
to exercise the power vested in him or to determine the wisdom of his act."
The eminent Chief Justice aptly explained later in Javellana v. Executive Secretary: 24
The reason why the issue under consideration and other issues of similar character
are justiciable, not political, is plain and simple. One of the principal bases of the
non-justiciability of so-called political questions is the principle of separation of
powers characteristic of the presidential system of government the functions of
which are classified or divided, by reason of their nature, into three (3) categories,
namely, 1) those involving the making of laws, which are allocated to the legislative
department; 2) those concerning mainly with the enforcement of such laws and of
judicial decisions applying and/or interpreting the same, which belong to the
executive department; and 3) those dealing with the settlement of disputes,
controversies or conflicts involving rights, duties or prerogatives that are legally
demandable and enforceable, which are apportioned to courts of justice. Within its
own sphere but only within such sphere each department is supreme and
independent of the others, and each is devoid of authority not only to encroach upon
the powers or field of action assigned to any of the other departments, but also to
inquire into or pass upon the advisability or wisdom of the acts performed, measures
taken or decisions made by the other departments provided that such acts,
measures or decisions are within the area allocated thereto by the Constitution.
Accordingly, when the grant of power is qualified, conditional or subject to
limitations, the issue of whether or not the prescribed qualifications or conditions
have been met, or the limitations respected is justiciable or non-political, the crux of
the problem being one of legality or validity of the contested act, not its wisdom.
Otherwise, said qualifications, conditions or limitations particularly those
prescribed by the Constitution would be set at naught. What is more, the judicial
inquiry into such issue and the settlement thereof are the main functions of the
courts of justice under the presidential form of government adopted in our 1935
Constitution, and the system of checks and balances, one of its basic predicates. As
a consequence, we have neither the authority nor the discretion to decline passing
upon said issue, but are under the ineluctable obligation made particularly more
exacting and peremptory by our oath, as members of the highest Court of the land,
to support and defend the Constitution to settle it. This explains why, in Miller v.
Johnson [92 Ky. 589, 18 SW 522, 523], it was held that courts have a "duty, rather
than a power," to determine whether another branch of the government has
"kept within constitutional limits."
Santiago v Guingona Page 2 of 106
Unlike our previous constitutions, the 1987 Constitution is explicit in defining the
scope of judicial power. The present Constitution now fortifies the authority of the
courts to determine in an appropriate action the validity of the acts of the political
departments. It speaks of judicial prerogative in terms of duty, viz.:
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. 25
This express definition has resulted in clearer and more resolute pronouncements of
the Court. Daza v. Singson,26 Coseteng v. Mitra, Jr. 27 and Guingona Jr. v.
Gonzales 28 similarly resolved issues assailing the acts of the leaders of both houses
of Congress in apportioning among political parties the seats to which each chamber
was entitled in the Commission on Appointments. The Court held that the issue was
justiciable, "even if the question were political in nature," since it involved "the
legality, not the wisdom, of the manner of filling the Commission on Appointments
as prescribed by [Section 18, Article VI of] the Constitution."
The same question of jurisdiction was raised in Taada v. Angara, 29 wherein the
petitioners sought to nullify the Senate's concurrence in the ratification of the World
Trade Organization (WTO) Agreement. The Court ruled: "Where an action of the
legislative branch is seriously alleged to have infringed the Constitution, it becomes
not only the right but in fact the duty of the judiciary to settle the dispute." The
Court en banc unanimously stressed that in taking jurisdiction over petitions
questioning, an act of the political departments of government, it will not review the
wisdom, merits or propriety of such action, and will strike it down only on either of
two grounds: (1) unconstitutionality or illegality and (2) grave abuse of discretion.
Earlier in Co v. Electoral Tribunal of the House of Representatives 30 (HRET), the
Court refused to reverse a decision of the HRET, in the absence of a showing that
said tribunal had committed grave abuse of discretion amounting to lack of
jurisdiction. The Court ruled that full authority had been conferred upon the electoral
tribunals of the House of Representatives and of the Senate as sole judges of all
contests relating to the election, the returns, and the qualifications of their
respective members. Such jurisdiction is original and exclusive. 31 The Court may
inquire into a decision or resolution of said tribunals only if such "decision or
resolution was rendered without or in excess of jurisdiction, or with grave abuse of
discretion" 32
Recently, the Court, in Arroyo v. De Venecia, 33 was asked to reexamine the enrolled
bill doctrine and to look beyond the certification of the Speaker of the House of
Representatives that the bill, which was later enacted as Republic Act 8240, was
properly approved by the legislative body. Petitioners claimed that certain
procedural rules of the House had been breached in the passage of the bill. They
averred further that a violation of the constitutionally mandated House rules was a
violation of the Constitution itself.
The Court, however, dismissed the petition, because the matter complained of
concerned the internal procedures of the House, with which the Court had no
concern. It enucleated: 34
It would-be an unwarranted invasion of the prerogative of a coequal department for
this Court either to set aside a legislative action as void because the Court thinks
the House has disregarded its own rules of procedure, or to allow those defeated in
the political arena to seek a rematch in the judicial forum when petitioners can find
their remedy in that department itself. The Court has not been invested with a
roving commission to inquire into complaints, real or imagined, of legislative
skullduggery. It would be acting in excess of its power and would itself be guilty of
grave abuse of discretion were it to do so. . . . In the absence of anything to the
contrary, the Court must assume that Congress or any House thereof acted in the
good faith belief that its conduct was permitted by its rules, and deference rather
than disrespect is due the judgment of that body.
In the instant controversy, the petitioners one of whom is Senator Santiago, a
well-known constitutionalist try to hew closely to these jurisprudential
parameters. They claim that Section 16 (1), Article VI of the constitution, has not
been observed in the selection of the Senate minority leader. They also invoke the
Court's "expanded" judicial power "to determine whether or not there has been a
grave abuse of discretion amounting to lack or excess of jurisdiction" on the part of
respondents.
Dissenting in part, Mr. Justice Vicente V. Mendoza submits that the Court has no
jurisdiction over the petition. Well-settled is the doctrine, however, that jurisdiction
over the subject matter of a case is determined by the allegations of the complaint
or petition, regardless of whether the plaintiff or petitioner is entitled to the relief
asserted. 35 In light of the aforesaid allegations of petitioners, it is clear that this
Court has jurisdiction over the petition. It is well within the power and jurisdiction of
the Court to inquire whether indeed the Senate or its officials committed a violation
of the Constitution or gravely abused their discretion in the exercise of their
functions and prerogatives.
Second Issue:
Violation of the Constitution
Having assumed jurisdiction over the petition, we now go to the next crucial
question: In recognizing Respondent Guingona as the Senate minority leader, did the
Senate or its officials, particularly Senate President Fernan, violate the Constitution
or the laws?
Petitioners answer the above question in the affirmative. They contend that the
constitutional provision requiring the election of the Senate President "by majority
vote of all members" carries with it a judicial duty to determine the concepts of
"majority" and "minority," as well as who may elect a minority leader. They argue
that "majority" in the aforequoted constitutional provision refers to that group of
senators who (1) voted for the winning Senate President and (2) accepted
committee chairmanships. Accordingly, those who voted for the losing nominee and
accepted no such chairmanships comprise the minority, to whom the right to
determine the minority leader belongs. As a result, petitioners assert, Respondent
Guingona cannot be the legitimate minority leader, since he voted for Respondent
Fernan as Senate President. Furthermore, the members of the Lakas-NUCD-UMDP
cannot choose the minority leader, because they did not belong to the minority,
having voted for Fernan and accepted committee chairmanships.
We believe, however, that the interpretation proposed by petitioners finds no clear
support from the Constitution, the laws, the Rules of the Senate or even from
practices of the Upper House.
The term "majority" has been judicially defined a number of times. When referring to
a certain number out of a total or aggregate, it simply "means the number greater
than half or more than half of any total." 36 The plain and unambiguous words of the
subject constitutional clause simply mean that the Senate President must obtain the
votes of more than one half of all the senators. Not by any construal does it thereby
delineate who comprise the "majority," much less the "minority," in the said body.
And there is no showing that the framers of our Constitution had in mind other than
the usual meanings of these terms.
In effect, while the Constitution mandates that the President of the Senate must be
elected by a number constituting more than one half of all the members thereof, it
does not provide that the members who will not vote for him shall ipso
Santiago v Guingona Page 3 of 106
facto constitute the "minority," who could thereby elect the minority leader. Verily,
no law or regulation states that the defeated candidate shall automatically become
the minority leader.
The Comment 37 of Respondent Guingona furnishes some relevant precedents, which
were not contested in petitioners' Reply. During the eighth Congress, which was the
first to convene after the ratification of the 1987 Constitution, the nomination of Sen.
Jovito R Salonga as Senate President was seconded by a member of the minority,
then Sen. Joseph E. Estrada. 38 During the ninth regular session, when Sen. Edgardo
J. Angara assumed the Senate presidency in 1993, a consensus was reached to
assign committee chairmanships to all senators, including those belonging to the
minority. 39 This practice continued during the tenth Congress, where even the
minority leader was allowed to chair a committee. 40 History would also show that
the "majority" in either house of Congress has referred to the political party to which
the most number of lawmakers belonged, while the "minority" normally referred to a
party with a lesser number of members.
Let us go back to the definitions of the terms "majority" and "minority." Majority may
also refer to "the group, party, or faction with the larger number of votes," 41 not
necessarily more than one half. This is sometimes referred to as plurality. In
contrast, minority is "a group, party, or faction with a smaller number of votes or
adherents than the majority." 42 Between two unequal parts or numbers comprising a
whole or totality, the greater number would obviously be the majority while the
lesser would be the minority. But where there are more than two unequal groupings,
it is not as easy to say which is the minority entitled to select the leader
representing all the minorities. In a government with a multi-party system such as in
the Philippines (as pointed out by petitioners themselves), there could be several
minority parties, one of which has to be indentified by the Comelec as the "dominant
minority party" for purposes of the general elections. In the prevailing composition
of the present Senate, members either belong to different political parties or are
independent. No constitutional or statutory provision prescribe which of the many
minority groups or the independents or a combination thereof has the right to select
the minority leader.
While the Constitution is explicit on the manner of electing a Senate President and a
House Speaker, it is, however, dead silent on the manner of selecting the other
officers in both chambers of Congress. All that the Charter says is that "[e]ach House
shall choose such other officers as it may deem necessary." 43 To our mind,
themethod of choosing who will be such other officers is merely a derivative of the
exercise of the prerogative conferred by the aforequoted constitutional provision.
Therefore, such method must be prescribed by the Senate itself, not by this Court.
In this regard, the Constitution vests in each house of Congress the power "to
determine the rules of its proceedings." 44 Pursuant thereto, the Senate formulated
and adopted a set of rules to govern its internal affairs. 45Pertinent to the instant
case are Rules I and II thereof, which provide:
Rule I
ELECTIVE OFFICERS
Sec 1. The Senate shall elect, in the manner hereinafter provided, a President, a
President Pro Tempore, a Secretary, and a Sergeant-at-Arms.
These officers shall take their oath of office before entering into the discharge of
their duties.
Rule II
ELECTION OF OFFICER
Sec. 2. The officers of the Senate shall be elected by the majority vote of all its
Members. Should there be more than one candidate for the same office, a nominal
vote shall be taken; otherwise, the elections shall be by viva voce or by resolution.
Notably, the Rules of the Senate do not provide for the positions of majority and
minority leaders. Neither is there an open clause providing specifically for such
offices and prescribing the manner of creating them or of choosing the holders
thereof, At any rate, such offices, by tradition and long practice, are actually extant.
But, in the absence of constitutional or statutory guidelines or specific rules, this
Court is devoid of any basis upon which to determine the legality of the acts of the
Senate relative thereto. On grounds of respect for the basic concept of separation of
powers, courts may not intervene in the internal affairs of the legislature; it is not
within the province of courts to direct Congress how to do its work. 46 Paraphrasing
the words of Justice Florentino P. Feliciano, this Court is of the opinion that where no
specific, operable norms and standards are shown to exist, then the legislature must
be given a real and effective opportunity to fashion and promulgate as well as to
implement them, before the courts may intervene. 47
Needless to state, legislative rules, unlike statutory laws, do not have the imprints of
permanence and obligatoriness during their effectivity. In fact, they "are subject to
revocation, modification or waiver at the pleasure of the body adopting
them." 48 Being merely matters of procedure, their observance are of no concern to
the courts, for said rules may be waived or disregarded by the legislative body 49 at
will, upon the concurrence of a majority.
In view of the foregoing, Congress verily has the power and prerogative to provide
for such officers as it may deem. And it is certainly within its own jurisdiction and
discretion to prescribe the parameters for the exercise of this prerogative. This Court
has no authority to interfere and unilaterally intrude into that exclusive realm,
without running afoul of constitutional principles that it is bound to protect and
uphold the very duty that justifies the Court's being. Constitutional respect and a
becoming regard for the sovereign acts of a coequal branch prevents this Court from
prying into the internal workings of the Senate. To repeat, this Court will be neither a
tyrant nor a wimp; rather, it will remain steadfast and judicious in upholding the rule
and majesty of the law.
To accede, then, to the interpretation of petitioners would practically amount to
judicial legislation, a clear breach of the constitutional doctrine of separation of
powers. If for this argument alone, the petition would easily fail.
While no provision of the Constitution or the laws or the rules and even the practice
of the Senate was violated, and while the judiciary is without power to decide
matters over which full discretionary authority has been lodged in the legislative
department, this Court may still inquire whether an act of Congress or its officials
has been made with grave abuse of discretion. 50 This is the plain implication of
Section 1, Article VIII of the Constitution, which expressly confers upon the judiciary
the power and the duty not only "to settle actual controversies involving rights
which are legally demandable and enforceable," but likewise "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."
Explaining the above-quoted clause, former Chief Justice Concepcion, who was a
member of the 1986 Constitutional Commission, said in part: 51
. . . 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[, the] 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
Santiago v Guingona Page 4 of 106
jurisdiction or lack of jurisdiction. This is not only a judicial power but a duty to pass
judgment on 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.
With this paradigm, we now examine the two other issues challenging the actions,
first, of Respondent Guingona and, second, of Respondent Fernan.
Third Issue:
Usurpation of Office
Usurpation generally refers to unauthorized arbitrary assumption and exercise of
power 52 by one without color of title or who is not entitled by law thereto. 53 A quo
warranto proceeding is the proper legal remedy to determine the right or title to the
contested public office and to oust the holder from its enjoyment. 54 The action may
be brought by the solicitor general or a public prosecutor 55 or any person claiming
to be entitled to the public office or position usurped or unlawfully held or exercised
by another. 56 The action shall be brought against the person who allegedly usurped,
intruded into or is unlawfully holding of exercising such office. 57
In order for a quo warranto proceeding to be successful, the person suing must show
that he or she has a clearright to the contested office or to use or exercise the
functions of the office allegedly usurped or unlawfully held by the respondent. 58 In
this case, petitioners present no sufficient proof of a clear and indubitable franchise
to the office of the Senate minority leader.
As discussed earlier, the specific norms or standards that may be used in
determining who may lawfully occupy the disputed position has not been laid down
by the Constitution, the statutes, or the Senate itself in which the power has been
vested. Absent any clear-cut guideline, in no way can it be said that illegality or
irregularity tainted Respondent Guingona's assumption and exercise of the powers
of the office of Senate minority leader. Furthermore, no grave abuse of discretion
has been shown to characterize any of his specific acts as minority leader.
Fourth Issue:
Fernan's Recognition of Guingona
The all-embracing and plenary power and duty of the Court "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" is
restricted only by the definition and confines of the term "grave abuse of discretion."
By grave abuse of discretion is meant such capricious or whimsical exercise of
judgment as is equivalent to lack of jurisdiction. The abuse of discretion must be
patent and gross as to amount to an evasion of positive duty or a virtual refusal to
perform a duty enjoined by law, or to act at all in contemplation of law as where the
power is exercised in an arbitrary and despotic manner by reason of passion and
hostility. 59
By the above standard, we hold that Respondent Fernan did not gravely abuse his
discretion as Senate President in recognizing Respondent Guingona as the minority
leader. Let us recall that the latter belongs to one of the minority parties in the
Senate, the Lakas-NUCD-UMDP. By unanimous resolution of the members of this
party that he be the minority leader, he was recognized as such by the Senate
President. Such formal recognition by Respondent Fernan came only after at least
two Senate sessions and a caucus, wherein both sides were liberally allowed to
articulate their standpoints.
Under these circumstances, we believe that the Senate President cannot be accused
of "capricious or whimsical exercise of judgment" or of "an arbitrary and despotic
manner by reason of passion or hostility." Where no provision of the Constitution, the
laws or even the rules of the Senate has been clearly shown to have been violated,
disregarded or overlooked, grave abuse of discretion cannot be imputed to Senate
officials for acts done within their competence and authority.
WHEREFORE, for the above reasons, the petition is hereby DISMISSED.
SO ORDERED.
Narvasa, C.J., Davide, Jr., Melo, Puno, Martinez, Quisumbing and Pardo, JJ., concur.
Romero, J., Please see separate opinion.
Bellosillo, J., No part. Did not take part in deliberation.
Vitug, J., Pls. see separate opinion.
Kapunan, J., I concur with Justice Mendoza's concurring and dissenting opinion.
Mendoza, J., Please see concurring and dissenting opinion.
Purisima, J., Join concurring and dissenting opinion of Justice Mendoza.
[G.R. No. 130240.February 5, 2002]
DE VENECIA, JR., et al., vs. SANDIGANBAYAN (1st DIV.)
EN BANC
Gentlemen:
Quoted hereunder, for your information, is a resolution of this Court
dated FEB 5 2002.
G.R. No. 130240(Jose de Venecia, Jr., in his capacity as Speaker of the
House of Representatives; Roberto P. Nazareno, in his capacity as
Secretary-General of the House of Representatives; Jose Ma. Antonio B.
Tuao, Cashier, House of Representatives; Antonio M. Chan, Chief, Property
Division, House of Representatives, petitioners, vs. The Honorable
Sandiganbayan (First Division), respondent.)
The principal issue in this petitioner for certiorari [1]cralaw is whether of not the
Sandiganbayan may cite in contempt of court the Speaker of the House of
Representatives for refusing to implement the preventive suspension order it issued
in a criminal case against a member of the House.
Petitioners seek the annulment of:
(1) the Order dated August 18, 1997 of the Sandiganbayan (First Division),
[2]
cralaw directing Speaker Jose de Venecia of the House of Representatives, to
implement the preventive suspension of then Congressman Ceferino S. Paredes, Jr.,
in connection with Criminal Case No. 18857 entitled "People of the Philippines v.
Ceferino S. Paredes, Jr. and Gregorio S. Branzuela"; and
(2) the Resolution dated August 29, 1997, [3]cralaw also of the Sandiganbayan,
declaring Speaker de Venecia in contempt of court for refusing to implement the
preventive suspension order.
The facts are as follows:
On March 12, 1993, an Information (docketed as Criminal Case No. 18857) was filed
with the Sandiganbayan (First Division) against then Congressman Ceferino S.
Paredes, Jr., of Agusan del Sur for violation of Section 3 (e) of Republic Act No. 3019
(The Anti-Graft and Corrupt Practices Act, as amended).
After the accused pleaded not guilty, the prosecution filed a "Motion To Suspend The
Accused Pendente Lite."
In its Resolution dated June 6, 1997, the Sandiganbayan granted the motion and
ordered the Speaker to suspend the accused.But the Speaker did not comply.Thus,
on August 12, 1997, the Sandiganbayan issued a Resolution requiring him to appear
before it, on August 18, 1997 at 8:00 o'clock in the morning, to show cause why he
should not be held in contempt of court.
Unrelenting, the Speaker filed, through counsel, a motion for reconsideration,
invoking the rule on separation of powers and claiming that he can only act as may
Santiago v Guingona Page 5 of 106
be dictated by the House as a body pursuant to House Resolution No. 116 adopted
on August 13, 1997.
On August 29, 1997, the Sandiganbayan rendered the now assailed
Resolution[4]cralaw declaring Speaker Jose C. de Venecia, Jr. in contempt of court and
ordering him to pay a fine of P10,000.00 within 10 days from notice.
Hence, the instant recourse.
The issue before us had long been settled by this Court in Ceferino S. Paredes, Jr. v.
Sandiganbayan in G.R. No. 118354 (August 8, 1995).We ruled that the suspension
provided for in the Anti-Graft law ismandatory and is of different nature and
purpose.It is imposed by the court, not as a penalty, but as a precautionary
measure resorted to upon the filing of a valid Information.Its purpose is to prevent
the accused public officer from frustrating his prosecution by influencing witnesses
or tampering with documentary evidence and from committing further acts of
malfeasance while in office.It is thus an incident to the criminal proceedings before
the court.On the other hand, the suspension or expulsion contemplated in the
Constitution is a House-imposed sanction against its members.It is, therefore,
apenalty for disorderly behavior to enforce discipline, maintain order in its
proceedings, or vindicate its honor and integrity.
Just recently, in Miriam Defensor Santiago v. Sandiganbayan, et al., this Court en
banc, through Justice Jose C. Vitug, held that the doctrine of separation of powers
does not exclude the members of Congress from the mandate of R.A. 3019, thus:
"The order of suspension prescribed by Republic Act No. 3019 is distinct
from the power of Congress to discipline its own ranks under the
Constitution. x x x.
"The suspension contemplated in the above constitutional provision is a punitive
measure that is imposed upon a determination by the Senate or the House of
Representatives, as the case may be, upon an erring member. x x x.
"The doctrine of separation of powers by itself may not be deemed to have
effectively excluded members of Congress from Republic Act No. 3019 nor
from its sanctions.The maxim simply recognizes that each of the three co-
equal and independent, albeit coordinate, branches of the government
- the Legislative, the Executive and the Judiciary - has exclusive prerogatives and
cognizance within its own sphere of influence and effectively prevents one
branch from unduly intruding into the internal affairs of either
branch."(Emphasis ours)
We note that the term of then Congressman Ceferino Paredes, Jr. expired on June 30,
1988.This rendered moot and academic the instant case.
WHEREFORE, for being moot, this case is deemed CLOSED and TERMINATED.
(Quisumbing, J., no part.Quisumbing and Carpio, JJ., abroad on official business)
Very truly yours,
LUZVIMINDA D. PUNO
Clerk of Court
(Sgd.) MA. LUISA D. VILLARAMA
Asst. Clerk of Court
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-19721 May 10, 1962
CARLOS CUNANAN, petitioner,
vs.
JORGE TAN, JR., respondents.
PER CURIAM:
Gentlemen:
For your information and guidance, the resolution of this Court on even date is
quoted below:
In Civil Case G.R. No. L-19721 "Carlos Cunanan vs. Jorge Tan, Jr." the
facts are:
Petitioner Carlos Cunanan who claims to be a career employee, with more than
thirty (30) years in the government service was, on June 6 or 8, 1961, appointed
by the President of the Philippines as acting Deputy Administrator of the
Reforestation Administration, Department of Agriculture and Natural Resources.
Thereupon, he qualified and assumed the duties and functions of said office. On
November 6, 1961, the President extended to him an ad interim appointment as
Deputy Administrator of the Reforestation Administration, Department of Agriculture
and Natural Resources. On April 3, 1962, six (6) Senators and seven (7) members of
the House of Representatives, purporting to act as the Commission on
Appointments, rejected said ad interim appointment. On April 11, 1962, respondent
Jorge Tan, Jr. was designated by the President as Acting Deputy Administrator of the
Reforestation Administration, Department of Agriculture and Natural Resources, and
performed the function of said office, without the consent of petitioner herein.
Hence, soon thereafter, or on April 27, 1962, petitioner commenced the present quo
warranto proceeding against respondent, contending that the latter's designation is
invalid, the office of Deputy Administrator of the Reforestation Administration,
Department of Agriculture and Natural Resources, not being vacant when he was
designated thereto, because the aforesaid rejection of petitioner's ad
interim appointment is invalid for several reasons.
When the first session of the Fifth Congress of the Philippines opened on January 22,
1962, the members of the Senate were evenly divided into two (2) groups: there
were twelve (12) Senators affiliated with the Liberal Party, on the one hand, and on
the other were twelve (12) Senators affiliated with the Nacionalista Party and
Nationalist-Citizens' Party. Hence, the Senate has been unable to elect a new Senate
President, and Senator Eulogio Rodriguez, Sr., who was President of the Senate
during the immediately preceding Congress, continued to hold said office in an
acting capacity. The House of Representatives, consisting of seventy-two (72)
members affiliated with the Nacionalista Party, twenty-nine (29) affiliated with the
Liberal Party and one (1) not affiliated with any political party, elected Congressman
Daniel F. Romualdez as Speaker of said chamber.
In due course, the Commission on Appointments was constituted pursuant to the
Constitution, on the basis of proportional representation of the political parties in
each House of Congress, as follows:
On the Part of the Senate
Nacionalista Party Liberal Party
Hon. Alejandro Almendras Hon. Eulogio Balao
Hon. Fernando Lopez Hon. Mariano J. Cuenco
Hon. Genaro Magsaysay Hon. Ferdinand Marcos
Santiago v Guingona Page 6 of 106
 Hon. Cipriano Primicias Hon. Camilo Osias (b) Four (4) Congressmen affiliated with the same party, to wit: Hon. Eladio T. Balite,
Hon. Manuel T. Cases, Hon. Floro Crisologo, and Hon. Gerardo M. Roxas; and
(c) Three (3) Congressmen affiliated with the Nacionalista Party, but identified with
Hon. Jose Roy Hon. Francisco (Soc) Rodrigo the 'Allied Majority': Hon. Jose Alberto, Hon. Reynaldo Honrado and Hon. Jose
Cojuangco Jr.
Was the rejection of petitioner's ad interim appointment by the aforementioned
Hon. Gil J. Puyat Hon. Rogelio de la Rosa thirteen (13) members of Congress, purporting to act as the Commission on
Appointments, valid or not? The determination of this issue depends upon: (1) the
legality of the resolution of the House of Representatives of March 21, 1962,
On the Part of the House of Representatives declaring the seats of its twelve (12) members in the Commission on Appointments
vacant; and (2) the legality of the action of the House of Representatives in
Nacionalista Party Liberal Party reconstituting the membership of the Commission on Appointments for said House.
In view of the conclusion we have reached with respect to the first question, we
deem it unnecessary to pass upon the second question.
Hon. Jose M. Aldeguer Hon. Eladio T. Balite With respect to the first question, we hold that the same should be resolved in the
negative. The Commission on Appointments is it creature of the Constitution.
Although its membership is confined to members of Congress, said Commission is
Hon. Wenceslao R. Lagumbay Hon. Manuel T. Cases independent of Congress. The powers of the Commission do not come from
Congress, but emanate directly from the Constitution. Hence, it is not an agent of
Congress. In fact, the functions of the Commissioner are purely executive in nature.
Hon. Felix A. Fuentebella Hon. Floro Crisologo In order that the members of the Commission could properly discharge their duties
as such, it is essential that their tenure therein be provided with a certain measure
of stability to insure the necessary freedom of action.1wph1.t
Hon. Rodolfo Ganzon Hon. Gerardo M. Roxas 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
Hon. Agustin Gatuslao
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
Hon. Rasid Lucman 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
Hon. Apolonio V. Marasigan 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
Hon. Maximo Noel 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
On March 21, 1962, by the vote of twenty-nine (29) Congressmen affiliated with the
Constitution.
Liberal Party and twenty-five (25) Congressmen affiliated with the Nacionalista Party,
One thing, however, is to take these measures owing to changes of permanent
forming what is commonly known as the "Allied Majority," declared vacant the seats
character in the representation of the political parties in the House, and another
of the twelve (12) members of the House of Representatives in the Commission of
thing for some members thereof affiliated with a political party to make common
Appointments and re-elected, as members thereof for said Chamber, its former
cause in certain matters with members of the House belonging to another political
representatives in said Commission, except Congressmen Ganzon, Lucman and
party. In other words, a shifting of votes at a given time, even if due to
Lagumbay, in lieu of whom said "Allied Majority" elected Congressmen Jose Alberto,
arrangements of a more or less temporary nature, like the one that has led to the
Reynaldo Honrado and Jose Cojuangco, Jr. although still affiliated with the
formation of the so-called "Allied Majority", does not suffice to authorize a
Nacionalista Party, these three (3) Congressmen form part of the "Allied Majority".
reorganization of the membership of the Commission for said House. Otherwise, the
The members of Congress who took part in the alleged session of the Commission
Commission on Appointments may have to be reorganized as often as votes shift
on Appointments on April 3, 1962, and rejected the ad interimappointment of
from one side to another in the House. The framers of our Constitution could not
petitioner herein were:
have intended to thus place a constitutional organ, like the Commission on
(a) Six (6) Senators affiliated with the Liberal Party, namely: Hon. Eulogio Balao, Hon.
Appointments, at the mercy of each House of Congress.
Mariano J. Cuenco, Hon. Ferdinand Marcos, Hon. Camilo Osias, Hon. Francisco (Soc)
We are aware of the statements made on the floor of our Constitutional Convention
Rodrigo, Hon. Rogelio de la Rosa;
indicating the opinion of some officers thereof or delegates thereto that members of
the Commission on Appointments were to serve at the pleasure of the legislature. It

Santiago v Guingona Page 7 of 106

should be noted, however, that said statements were made with reference to the
Commission on Appointments of the National Assembly, the unicameral legislature
under our original Constitution. The statements did not refer and do not necessarily
apply to the Commission on Appointments under the present Constitution, as
amended, for we now have a bicameral Congress, both Houses of which are
represented in the Commission on Appointments. If a House of Congress were free,
at any time, to declare vacant the position of its members in the Commission on
Appointments, such House could, in effect, paralyze the entire Commission, without
the consent of the other House. Such possibility could not have been countenanced
by the Constitutional Convention.
In his amended petition petitioner alleges that on April 27, 1962, his ad
interim appointment was confirmed by the "legitimate" Commission on
Appointments, in a meeting said to have been presided over by its chairman ex
oficio, Hon. Eulogio Rodriguez, Sr., and attended by six (6) Senators namely.
Senators Almendras, Lopez, Magsaysay, Primicias, Roy and Puyat and eight (8)
Congressmen namely, Congressmen Aldeguer, Lagumbay, Fuentebella, Ganzon,
Gatuslao, Lucman, Marasigan and Noel. Respondent has denied such allegation, but
this cannot affect our foregoing view.
Without prejudice to an extended decision later on, the Court holds, therefore, that
the resolution of the House of Representatives of March 21, 1962, declining vacant
the seats of the twelve (12) members of the House of Representatives in the
Commission on Appointments and appointing others in lieu of some of them, as well
as the rejection of the ad interim appointment of petitioner by thirteen (13) alleged
members of the Commission on Appointments as thus reorganized, and the
designation of respondent Jorge Tan, Jr., as Acting Deputy Administrator of the
Reforestation Administration, Department of Agriculture and Natural Resources, on
April 16, 1962, when said office was not vacant, are null and void; that petitioner is
entitled to hold said office; and that respondent should vacate the same and turn it
over to petitioner, with costs against said respondent.
Mr. Justice Padilla voted to dismiss the petition, upon the ground that the effectivity
of petitioner's ad interim appointment expired on December 30, 1961, for the
reasons given in his concurring opinion in Aytona vs. Castillo, G.R. No. L-18313
(January 19, 1962).
Yours truly,
(SGD.) PAULINO S. MARQUEZ
Clerk of Court
EN BANC
[G.R. No. 150605. December 10, 2002]
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 4th 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 4 th 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 4 th 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.
Santiago v Guingona Page 8 of 106
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
4th 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
Santiago v Guingona Page 9 of 106
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 invalidsaid 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 areconsidered 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]
Santiago v Guingona Page 10 of 106
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 4 th 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 bancresolution annulling the proclamation of respondent Locsin, and
proclaiming him as the duly-elected Representative of the 4 th 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 4 th 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
Santiago v Guingona Page 11 of 106
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 COMELECen 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 recommendation of the hearing officer concerned, the Clerk of the Commission shall
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.
xxxxxxxxx
(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
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
Santiago v Guingona Page 12 of 106
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
xxxxxxxxx
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 Urgent Motion to the petitioner but
it does not appear when the petitioner received a copy thereof. That same day, the
COMELEC Second Division 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 andconsidering 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.
Santiago v Guingona Page 13 of 106
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 tocontinue 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 banc correctly 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 4 th 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]
Santiago v Guingona Page 14 of 106
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.
xxxxxxxxx
(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
Santiago v Guingona Page 15 of 106
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] InDomino 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 candidate, after
winning the election, based on personal circumstances or section 68 of the Omnibus
Election Code is the same: the second placer could not take the place of the
disqualified winner.
Santiago v Guingona Page 16 of 106
II
Whether the proclamation of respondent Locsin divested the COMELEC en banc of
jurisdiction to review its validity.
Respondent Locsin submits that the COMELEC en banc has no jurisdiction to annul
her proclamation. She maintains that the COMELEC en banc was been divested of
jurisdiction to review the validity of her proclamation because she has become a
member of the House of Representatives. Thus, she contends that the proper forum
to question her membership to the House of Representatives is the House of
Representative Electoral Tribunal (HRET).
We find no merit in these contentions.
First. The validity of the respondents proclamation was a core issue in the Motion for
Reconsideration seasonably filed by the petitioner.
In his timely Motion for Reconsideration with the COMELEC en banc, petitioner
argued that the COMELEC Second Division erred thus:
(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
4th 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 4th 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
Santiago v Guingona Page 17 of 106
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
4th 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]
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 the 4 th 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: petitioner garnered 71,350
votes as against respondent Locsin who only got 53, 447 votes in the May 14, 2001
elections. The COMELEC Second Division initially ordered the proclamation of
respondent Locsin; on Motion for Reconsideration the COMELEC en banc set aside
the order of its Second Division and ordered the proclamation of the petitioner. The
Decision of the COMELEC en banc has not been challenged before this Court by
respondent Locsin and said Decision has become final and executory.
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 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 alternative to the rule of law except the reign of
chaos and confusion.
IN VIEW WHEREOF, the Petition for Mandamus is granted. Public Speaker of the
House of Representatives shall administer the oath of petitioner EUFROCINO M.
CODILLA, SR., as the duly-elected Representative of the 4 th legislative district of
Leyte. Public respondent Secretary-General shall 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 shall be immediately executory.
SO ORDERED.
Davide, Jr., C.J., Bellosillo, Vitug, Mendoza, Panganiban, Quisumbing, Ynares-
Santiago, Sandoval-Gutierrez, Austria-Martinez, Corona, Carpio-Morales, Callejo,
Sr., and Azcuna, JJ.,concur.
Carpio, J., no part.
EN BANC
[G.R. No. 150605. December 10, 2002]
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 4th 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 4 th 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 4 th 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
Santiago v Guingona Page 18 of 106
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
4th 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
Santiago v Guingona Page 19 of 106
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 invalidsaid 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 areconsidered 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,
Santiago v Guingona Page 20 of 106
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 4 th 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 bancresolution annulling the proclamation of respondent Locsin, and
proclaiming him as the duly-elected Representative of the 4 th 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 4 th 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
Santiago v Guingona Page 21 of 106
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 COMELECen 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
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.
xxxxxxxxx
(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
Santiago v Guingona Page 22 of 106
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
xxxxxxxxx
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 Urgent Motion to the petitioner but
it does not appear when the petitioner received a copy thereof. That same day, the
COMELEC Second Division 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
Santiago v Guingona Page 23 of 106
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 andconsidering 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 tocontinue 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 banc correctly 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 4 th 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
Santiago v Guingona Page 24 of 106
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.
xxxxxxxxx
(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,
Santiago v Guingona Page 25 of 106
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] InDomino 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
Santiago v Guingona Page 26 of 106
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 candidate, after
winning the election, based on personal circumstances or section 68 of the Omnibus
Election Code is the same: the second placer could not take the place of the
disqualified winner.
II
Whether the proclamation of respondent Locsin divested the COMELEC en banc of
jurisdiction to review its validity.
Respondent Locsin submits that the COMELEC en banc has no jurisdiction to annul
her proclamation. She maintains that the COMELEC en banc was been divested of
jurisdiction to review the validity of her proclamation because she has become a
member of the House of Representatives. Thus, she contends that the proper forum
to question her membership to the House of Representatives is the House of
Representative Electoral Tribunal (HRET).
We find no merit in these contentions.
First. The validity of the respondents proclamation was a core issue in the Motion for
Reconsideration seasonably filed by the petitioner.
In his timely Motion for Reconsideration with the COMELEC en banc, petitioner
argued that the COMELEC Second Division erred thus:
(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
4th 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 4th 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
Santiago v Guingona Page 27 of 106
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
4th 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]
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 the 4 th 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: petitioner garnered 71,350
votes as against respondent Locsin who only got 53, 447 votes in the May 14, 2001
elections. The COMELEC Second Division initially ordered the proclamation of
respondent Locsin; on Motion for Reconsideration the COMELEC en banc set aside
the order of its Second Division and ordered the proclamation of the petitioner. The
Decision of the COMELEC en banc has not been challenged before this Court by
respondent Locsin and said Decision has become final and executory.
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 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 alternative to the rule of law except the reign of
chaos and confusion.
IN VIEW WHEREOF, the Petition for Mandamus is granted. Public Speaker of the
House of Representatives shall administer the oath of petitioner EUFROCINO M.
CODILLA, SR., as the duly-elected Representative of the 4 th legislative district of
Leyte. Public respondent Secretary-General shall 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 shall be immediately executory.
SO ORDERED. 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., and THE HOUSE OF
REPRESENTATIVES ELECTORAL 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-AQUIO, 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
Santiago v Guingona Page 28 of 106
ascertain whether the two coordinate branches have adhered to the mandate of the
Associate Justice
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 Supreme Court
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 FLORENTINO P. FELICIANO Member
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." Associate Justice
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 Supreme Court
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
HONORATO Y. AQUINO Member
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 Congressman
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 1st District
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 Benguet LDP
the canvass made by the Provincial Board of Canvassers of Pampanga:
Marciano M. Pineda.................... 31,700 votes
Emigdio A. Bondoc..................... 28,400 votes DAVID A. PONCE DE LEON Member
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
Congressman
( 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 1st District Palawan
represented therein (Sec. 17, Art. VI, 1987 Constitution) as follows:

LDP
AMEURFINA M. HERRERA Chairman

SIMEON E. GARCIA, JR. Member

Associate Justice

Congressman
Supreme Court

2nd District Nueva Ecija

ISAGANI A. CRUZ Member

LDP

Santiago v Guingona Page 29 of 106

 Moved by candor and honesty, Congressman Camasura revealed on March 4, 1991,
to his 'Chief," Congressman Jose S. Cojuangco, Jr., LDP 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 to honor a "gentlemen's agreement" among
JUANITO G. CAMASURA, JR. Member the members of the HRET that they would "abide by the result of the appreciation of
the contested ballot 1Congressman Camasura's revelation stirred a hornets' nest in
the LDP which went into a flurry of plotting appropriate moves to neutralize the pro-
Congressman Bondoc majority in the Tribunal.
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 was received by
Bondoc's counsel on March 6, 1991.
1st District Davao del Sur
On March 13, 1991, the eve of the promulgation of the Bondoc decision,
Congressman Cojuangco informed Congressman Camasura by letter 2 that on
February 28, 1991 yet, the LDP Davao del Sur Chapter at Digos, Davao del Sur, by
LDP Resolution No. 03-91 had already expelled him and Congressman Benjamin Bautista
from the LDP for having allegedly helped to organize the Partido Pilipino of Eduardo
"Danding" Cojuangco, and for allegedly having invited LDP members in Davao del
JOSE E. CALINGASAN Member Sur to join said political party; and that as those acts are "not only inimical uncalled
for, unethical and immoral, but also a complete betrayal to (sic) the cause and
objectives, and loyalty to LDP," in a meeting on March 12, 1991, the LDP Executive
Congressman Committee unanimously confirmed the expulsions. 3
At the same time, Congressman Cojuangco notified Speaker Ramon V. Mitra about
the ouster of the two congressmen from the LDP, and asked the House of
4th District Batangas Representatives, through the Speaker, to take note of it 'especially in matters where
party membership is a prerequisite. 4
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 13, 1991, from the
LDP
Office of the Secretary General of the House of Representatives, informing the
Tribunal that on the basis of the letter from the LDP, the House of Representatives,
during its plenary session on March 13, 1991, decided to withdraw the nomination
ANTONIO H. CERILLES Member and rescind the election of Congressman Camasura, Jr. to the House of Electoral
Tribunal. The letter reads as follows:
13 March 1991
Congressman Honorable Justice Ameurfina Melencio-Herrera Chairman
House of Representatives Electoral Tribunal Constitution Hills Quezon City
Dear Honorable Justice Melencio-Herrera:
2nd District Zamboanga del Sur 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
(formerly GAD, now NP) the House Electoral Tribunal on the basis of an LDP communication which is self-
explanatory and copies of which are hereto attached.
Thank you.
After the revision of the ballots, the presentation of evidence, and submission of For the Secretary-General
memoranda, Bondoc's protest was submitted for decision in July, 1989. (SGD.) Josefina D. Azarcon Officer-in-charge Operations Department (p. 10, Rollo.)
By October 1990, a decision had been reached in which Bondoc won over Pineda by Justices Herrera, Cruz, and Feliciano promptly apprised the Chief Justice and
a margin of twenty-three (23) votes. At that point, the LDP members in the Tribunal Associate Justices of the Supreme Court in writing, of this "distressing development'
insisted on a reappreciation and recount of the ballots cast in some precincts, and asked to be relieved from their assignments in the HRET because
thereby delaying by at least four (4) months the finalization of the decision in the By the above action (of the House) the promulgation of the decision of the Tribunal
case. in the electoral protest entitled "Bondoc v. Pineda" (HRET Case No. 25), previously
The reexamination and re-appreciation of the ballots resulted in increasing Bondoc's scheduled for 14 March 1991, is sought to be aborted (See the Consolidated Bank
lead over Pineda to 107 votes. Congressman Camasura voted with the Supreme and Trust Corporation v. Hon. Intermediate Appellate Court, G.R. No. 73777-78
Court Justices and Congressman Cerilles to proclaim Bondoc the winner of the promulgated 12 September 1990). Even if there were no legal impediment to its
contest. promulgation, the decision which was reached on a 5 to 4 vote may now be

Santiago v Guingona Page 30 of 106

confidently expected to be overturned on a motion for reconsideration by the party-
litigant which would have been defeated.
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 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 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 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 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 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 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 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 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.
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 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 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 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.
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:
... 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 the cases before them and that
in the contemplation of the Constitution the members-legislators, thereof, upon
assumption of their duties therein, sit in the Tribunal no longer as representatives of
their respective political parties but as impartial judges. The view was also
submitted that, to further bolster the independence of the Tribunals, the term of
office of every member thereof should be considered co-extensive with the
corresponding legislative term and may not be legally terminated except only by
death, resignation, permanent disability, or removal for valid cause, not including
political disloyalty.
ACCORDINGLY, the Court Resolved: a) to DECLINE the request of justices Herrera,
Cruz, and Feliciano to be relieved from their membership in the House of
Representatives Electoral Tribunal and instead to DIRECT them to resume their
duties therein: b) to EXPRESS its concern over the intrusion of non-judicial factors in
the proceedings of the House of Representatives Electoral Tribunal, which performs
functions purely judicial in character 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 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 REQUIRE the Justices-members of the Tribunal to submit the
issue to the said Tribunal in the first instance.
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 protestant Bondoc,
otherwise a political and judicial travesty will take place.' Melencio-Herrera, Cruz and
Feliciano, JJ., took no part. Gancayco, J., is on leave.
On March 21, 1991, a petition for certiorari, prohibition and mandamus was filed by
Dr. Emigdio A. Bondoc against Representatives Marciano M. Pineda, Magdaleno M.
Palacol, Juanita G. Camasura, Jr., or any other representative who may be appointed
Vice Representative Juanita G. Camasura, Jr., and the House of Representatives
Electoral Tribunal, praying this Court to:
Santiago v Guingona Page 31 of 106
1. Annul the decision of the House of Representatives of March 13, 1991, 'to
withdraw the nomination and to rescind the nomination of Representative Juanita G.
Camasura, Jr. to the House of Representatives Electoral Tribunal;"
2. Issue a wilt of prohibition restraining respondent Palacol or whomsoever may be
designated in place of respondent Camasura from assuming, occupying and
discharging functions as a member of the House of Representatives Electoral
Tribunal;
3. Issue a writ of mandamus ordering respondent Camasura to immediately
reassume and discharge his functions as a member of the House of Representatives
Electoral Tribunal; and
4. Grant such other relief as may be just and equitable.
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 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:
Santiago v Guingona Page 32 of 106
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.
Santiago v Guingona Page 33 of 106
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.
EN BANC
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.
Santiago v Guingona Page 34 of 106
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 systems
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 legislators 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. 7 Some 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 considered11 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 312 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 legislators 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 1960s, 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 P500,000.00. 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 assemblymans 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 P480 Million and P240 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 ofP2.3 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
Santiago v Guingona Page 35 of 106
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 receivingP12.5 Million each in CDF
funds, while Senators were receiving P18 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 P12.5 Million each in CDF funds, Senators, P18 Million each, and the Vice-
President, P20 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 ministrations 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 Nio 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 Highways 51 (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-enacted 56 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 Congress 61anent 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 P250 Million of the P500
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 regulations 65 of RA
9184,66 the Government Procurement Reform Act, to include, as a form of negotiated
procurement,67 the procedure whereby the Procuring Entity 68 (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
Santiago v Guingona Page 36 of 106
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 P70 Million each,
broken down into P40 Million for "hard projects" and P30 Million for "soft projects";
while P200 Million was given to each Senator as well as the Vice-President, with
a P100 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 allocations 75 as well as fund realignment 76 were included in
the 2012 and 2013 PDAF Articles; but the allocation for the Vice-President, which
was pegged at P200 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 terms 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
IV84 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 P3.6 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 P10 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 investigation99 covering 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 P8.374 Billion in PDAF and P32.664
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
Santiago v Guingona Page 37 of 106
period.102 Accordingly, the Co As 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 latters
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 P6.156 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 P900
Million from royalties in the operation of the Malampaya gas project off Palawan
province intended for agrarian reform beneficiaries has gone into a dummy
NGO."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 Executives 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 Executives 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 Courts 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
Santiago v Guingona Page 38 of 106
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 Courts 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 Courts 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 Courts 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 119 and, 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 Presidents 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.
Santiago v Guingona Page 39 of 106
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. Youve 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 systems flaws
have never before been magnified. To the Courts mind, the coalescence of the CoA
Report, the accounts of numerous whistle-blowers, and the governments 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 CoAs 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 systems 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." 137The 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
Santiago v Guingona Page 40 of 106
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 Courts 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 Chairpersons 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.
Santiago v Guingona Page 41 of 106
On the other hand, the focal point of stare decisis is the doctrine created. The
principle, entrenched under Article 8 152 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,
Philconsas 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 Vitugs 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.
Purisima155 (Abakada) has effectively overturned Philconsas 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
funds 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.
Santiago v Guingona Page 42 of 106
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,164 belongs the power to make laws; to the
executive branch of government, through the President, 165belongs 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 others
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
departments 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 Executives 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 interference 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.1wphi1 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.
Santiago v Guingona Page 43 of 106
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 Industry190 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 legislators 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
Santiago v Guingona Page 44 of 106
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, 197 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.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."
xxxx
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 Auditor 202 (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 Presidents
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
Presidents item-veto power is found in Section 27(2), Article VI of the 1987
Constitution which reads as follows:
Sec. 27. x x x.
xxxx
(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 Presidents 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
Santiago v Guingona Page 45 of 106
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 Presidents 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 branchs role in the budgetary
process.208 In Immigration and Naturalization Service v. Chadha, the US Supreme
Court characterized the Presidents 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 Presidents 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 legislators 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 P24.79 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 Presidents power of item veto. As
petitioners aptly point out, the above-described system forces the President to
Santiago v Guingona Page 46 of 106
decide between (a) accepting the entireP24.79 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 P24.79 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 Presidents
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 peoples 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 legislators control of his PDAF per se would allow him
to perpetuate himself in office. Indeed, while the Congressional Pork Barrel and a
legislators 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 formers
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 Systems 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.226Therefore, since there appears to be no standing law which crystallizes the
Santiago v Guingona Page 47 of 106
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 States 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.
xxxx
(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 peoples 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."231Drawing 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 Barrels 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."
Santiago v Guingona Page 48 of 106
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 determinable240 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 concluded that (a) Section 8 of PD 910, which creates a Special Fund comprised of
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 sufficient 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 P150,000,000.00 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--vis the above-mentioned principles, it may then be
"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 thanP150,000,000.00" (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
Santiago v Guingona Page 49 of 106
not the P24.79 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 Executive245 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 delegates
authority and prevent the delegation from running riot. 247 To be sufficient, the
standard must specify the limits of the delegates 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 Presidents
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, finance 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
Executives 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
Santiago v Guingona Page 50 of 106
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 latters 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 Courts 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 custodians 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 Executives 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 Courts 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:
Santiago v Guingona Page 51 of 106
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 Courts 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 Courts
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 DBMs 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 DBMs 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 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 representative during the Oral Arguments:265
Justice Bernabe: Is the notice of allocation issued simultaneously with the SARO?
xxxx
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 Decisions 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 Courts 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
Santiago v Guingona Page 52 of 106
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 Courts bounden duty and no
others.
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 previous PDAF and CDF
Articles and the various Congressional Insertions, which authorize/d legislators
whether individually or collectively organized 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 the areas of project identification, modification
and revision of project identification, fund release and/or fund realignment,
unrelated to the power of congressional oversight; (c) all legal provisions of past and
present Congressional Pork Barrel Laws, such as the previous PDAF and CDF Articles
and the various Congressional Insertions, which confer/red personal, lump-sum
allocations to legislators from which they are able to fund specific projects 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 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 President" under Section 8 of Presidential
Decree No. 910 and (2) "to finance the priority infrastructure development projects"
under Section 12 of Presidential Decree No. 1869, as amended by Presidential
Decree No. 1993, for both failing the sufficient standard test in violation of the
principle of non-delegability of legislative power.
Accordingly, the Courts temporary injunction dated September 10, 2013 is hereby
declared to be PERMANENT. Thus, the disbursement/release of the 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 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 Presidential Social Fund under the phrase
"to finance the priority infrastructure development projects" pursuant to Section 12
of Presidential Decree 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 (NCAs) but only by Special Allotment Release Orders (SAROs), whether
obligated or not, are hereby ENJOINED. The remaining PDAF funds covered by this
permanent injunction shall not be disbursed/released but instead reverted to the
unappropriated surplus of the general fund, while the funds under the Malampaya
Funds and the Presidential Social Fund shall remain therein to be utilized for their
respective special purposes not otherwise declared as unconstitutional.
On the other hand, due to improper recourse and lack of proper substantiation, the
Court hereby DENIES petitioners prayer seeking that the Executive Secretary and/or
the Department of Budget and Management be ordered to provide the public and
the Commission on Audit complete lists/schedules or detailed reports related to the
availments and utilization of the funds subject of these cases. Petitioners access to
official documents already available and of public record which are related to these
funds must, however, not be prohibited but merely subjected to the custodians
reasonable regulations or any valid statutory prohibition on the same. This denial is
without prejudice to a proper mandamus case which they or the Commission on
Audit may choose to pursue through a separate petition.
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 same is a matter
left to the prerogative of the political branches of government.
Finally, the Court hereby DIRECTS all prosecutorial organs of the government to,
within the bounds of reasonable dispatch, investigate and accordingly prosecute all
government officials and/or private individuals for possible criminal offenses related
to the irregular, improper and/or unlawful disbursement/utilization of all funds under
the Pork Barrel System.
This Decision is immediately executory but prospective in effect.
SO ORDERED.
EN BANC
G.R. No. L-2821 March 4, 1949
JOSE AVELINO, petitioner,
vs.
MARIANO J. CUENCO, respondent.
Vicente J. Francisco for petitioner.
Office of the Solicitor General Felix Angelo Bautista, Ramon Diokno and
Lorenzo M. Taada for respondent.
Teehankee, Fernando, Sunico & Rodrigo; Vera, Montesines & Navarro;
Felixberto M. Serrano and Vicente del Rosario as amici curiae.
RESOLUTION
In G.R. No. L-2821, Avelino vs. Cuenco, the Court by a vote of six justices against
four resolved to deny the petition.
Santiago v Guingona Page 53 of 106
Without prejudice to the promulgation of a more extended opinion, this is now
written briefly to explain the principal grounds for the denial.
The Court believes the following essential facts have been established:
In the session of the Senate of February 18, 1949, Senator Lorenzo M. Taadare
quested that his right to speak on the next session day, February 21, 1949, to
formulate charges against the then Senate President Jose Avelino be reserved. His
request was approved.
On February 21, 1949, hours before the opening of the session Senator Taada and
Senator Taada and Senator Prospero Sanidad filed with the Secretary of the Senate
a resolution enumerating charges against the then Senate President and ordering
the investigation thereof.
Although a sufficient number of senators to constitute a quorum were at the Senate
session hall at the appointed time (10:00 A.M.), and the petitioner was already in his
office, said petitioner delayed his appearance at the session hall until about 11:35
A.M. When he finally ascended the rostrum, he did not immediately open the
session, but instead requested from the Secretary a copy of the resolution submitted
by Senators Taada and Sanidad and in the presence of the public he read slowly
and carefully said resolution, after which he called and conferred with his colleagues
Senator Francisco and Tirona.
Shortly before 12:00 noon, due to the session be opened, the petitioner finally called
the meeting to order. Except Senator Sotto who was confined in a hospital and
Senator Confesor who is in the United States, all the Senator were present.
Senator Sanidad, following a long established practice, moved that the roll call be
dispensed with, but Senator Tirona opposed said motion, obviously in pursuance of a
premeditated plan of petitioner and his partisans to make use of dilatory tactics to
prevent Senator Taada from delivering his privilege speech. The roll was called.
Senator Sanidad next moved, as is the usual practice, to dispense with the reading
of the minutes, but this motion was likewise opposed by Senator Tirona and David,
evidently, again, in pursuance of the above-mentioned conspiracy.
Before and after the roll call and before and after the reading of the minutes,
Senator Taada repeatedly stood up to claim his right to deliver his one-hour
privilege speech but the petitioner, then presiding, continuosly ignored him; and
when after the reading of the minutes, Senator Taada instead on being recognized
by the Chair, the petitioner announced that he would order the arrest of any senator
who would speak without being previously recognized by him, but all the while,
tolerating the actions of his follower, Senator Tirona, who was continuously shouting
at Senator Sanidad "Out of order!" everytime the latter would ask for recognition of
Senator Taada.
At this juncture, some disorderly conduct broke out in the Senate gallery, as if by
pre-arrangement. At about this same time Senator Pablo Angeles David, one of the
petitioner's followers, was recognized by petitioner, and he moved for adjournment
of session, evidently, again, in pursuance of the above-mentioned conspiracy to
muzzle Senator Taada.
Senator Sanidad registered his opposition to the adjournment of the session and this
opposition was seconded by herein respondent who moved that the motion of
adjournment be submitted to a vote. Another commotion ensued.
Senator David reiterated his motion for adjournment and herein respondent also
reiterated his opposition to the adjournment and again moved that the motion of
Senator David be submitted to a vote.
Suddenly, the petitioner banged the gavel and abandoning the Chair hurriedly
walked out of the session hall followed by Senator David, Tirona, Francisco, Torres,
Magalona and Clarin, while the rest of the senators remained. Whereupon Senator
Melencio Arranz, Senate President Pro-tempore, urged by those senators present
took the Chair and proceeded with the session.
Senator Cabili stood up, and asked that it be made of record it was so made
that the deliberate abandonment of the Chair by the petitioner, made it incumbent
upon Senate President Pro-tempore Arranz and the remaining members of the
Senate to continue the session in order not to paralyze the functions of the Senate.
Senate President Pro-tempore Arranz then suggested that respondent be designated
to preside over the session which suggestion was carried unanimously. the
respondent thereupon took the Chair.
Upon motion of Senator Arranz, which was approved Gregorio Abad was
appointedActing Secretary, because the Assistance Secretary, who was then acting
as Secretary, had followed the petitioner when the latter abandoned the session.
Senator Taada, after being recognized by the Chair, was then finally able to deliver
his privilege speech. Thereafter Senator Sanidad read aloud the complete text of
said Resolution (No. 68), and submitted his motion for approval thereof and the
same was unanimously approved.
With Senate President Pro-tempore Arranz again occupying the Chair, after the
respondent had yielded it to him, Senator Sanidad introduced Resolution No. 67,
entitled "Resolution declaring vacant the position of the President of the Senate and
designated the Honorable Mariano Jesus Cuenco Acting President of the Senate." Put
to a vote, the said resolution was unanimously approved.
Senator Cuenco took the oath.
The next day the President of the Philippines recognized the respondent as acting
president of the Philippines Senate.
By his petition in this quo warranto proceeding petitioners asked the Court to
declare him the rightful President of the Philippines senate and oust respondent.
The Court has examined all principal angles of the controversy and believes that
these are the crucial points:
a. Does the Court have jurisdiction over the subject-matter?
b. If it is has, were resolution Nos. 68 and 67 validly approved?
c. Should the petition be granted?
To the first question, the answer is in the negative, in view of the separation of
powers, the political nature of the controversy (Alejandrino vs. Quezon, 46 Phil., 83;
Vera vs. Avelino, 77 Phil., 192; Mabanag vs. Lopez Vito, 78 Phil., 1) and the
constitutional grant to the Senate of the power to elect its own president, which
power should not be interfered with, nor taken over, by the judiciary. We refused to
take cognizance of the Vera case even if the rights of the electors of the suspended
senators were alleged affected without any immediate remedy. A fortiori we should
abstain in this case because the selection of the presiding officer affect only the
Senators themselves who are at liberty at any time to choose their officers, change
or reinstate them. Anyway, if, as the petition must imply to be acceptable, the
majority of the Senators want petitioner to preside, his remedy lies in the Senate
Session Hall not in the Supreme Court.
The Court will not sally into the legitimate domain of the Senate on the plea that our
refusal to intercede might lead into a crisis, even a resolution. No state of things has
been proved that might change the temper of the Filipino people as a peaceful and
law-abiding citizens. And we should not allow ourselves to be stampeded into a rash
action inconsistent with the calm that should characterized judicial deliberations.
The precedent of Werts vs. Roger does not apply, because among other reasons, the
situation is not where two sets of senators have constituted themselves into two
senates actually functioning as such, (as in said Werts case), there being no
question that there is presently one Philippines Senate only. To their credit be it
recorded that petitioner and his partisans have not erected themselves
Santiago v Guingona Page 54 of 106
into another Senate. The petitioner's claim is merely that respondent has not been MARIA CAROLINA P. ARAULLO, CHAIRPERSON, BAGONG ALYANSANG
duly elected in his place in the same one Philippines Senate. MAKABAYAN; JUDY M. TAGUIWALO, PROFESSOR, UNIVERSITY OF THE
It is furthermore believed that the recognition accorded by the Chief Executive to PHILIPPINES DILIMAN, CO-CHAIRPERSON, PAGBABAGO; HENRI KAHN,
the respondent makes it advisable, more than ever, to adopt the hands-off policy CONCERNED CITIZENS MOVEMENT; REP. LUZ ILAGAN, GABRIELA WOMEN'S
wisely enunciated by this Court in matters of similar nature. PARTY REPRESENTATIVE; REP. CARLOS ISAGANI ZARATE, BAY AN MUNA
The second question depends upon these sub-questions. (1) Was the session of the PARTY-LIST REPRESENTATIVE; RENATO M. REYES, JR., SECRETARY GENERAL
so-called rump Senate a continuation of the session validly assembled with twenty OF BAYAN; MANUEL K. DAYRIT, CHAIRMAN, ANG KAPATIRAN PARTY; VENCER
two Senators in the morning of February 21, 1949?; (2) Was there a quorum in that MARI E. CRISOSTOMO, CHAIRPERSON, ANAKBAYAN; VICTOR VILLANUEVA,
session? Mr. Justice Montemayor and Mr. Justice Reyes deem it useless, for the CONVENOR, YOUTH ACT NOW, Petitioners,
present to pass on these questions once it is held, as they do, that the Court has no vs.
jurisdiction over the case. What follows is the opinion of the other four on those four BENIGNO SIMEON C. AQUINO III, PRESIDENT OF THE REPUBLIC OF THE
on those sub-questions. PHILIPPINES; PAQUITO N. OCHOA, JR., EXECUTIVE SECRETARY; AND
Supposing that the Court has jurisdiction, there is unanimity in the view that the FLORENCIO B. ABAD, SECRETARY OF THE DEPARTMENT OF BUDGET AND
session under Senator Arranz was a continuation of the morning session and that a MANAGEMENT, Respondents.
minority of ten senators may not, by leaving the Hall, prevent the other twelve x-----------------------x
senators from passing a resolution that met with their unanimous endorsement. The G.R. No. 209135
answer might be different had the resolution been approved only by ten or less. AUGUSTO L. SY JUCO JR., Ph.D., Petitioner,
If the rump session was not a continuation of the morning session, was it validly vs.
constituted? In other words, was there the majority required by the Constitution for FLORENCIO B. ABAD, IN HIS CAPACITY AS THE SECRETARY OF DEPARTMENT
the transaction of the business of the Senate? Justice Paras, Feria, Pablo and OF BUDGET AND MANAGEMENT; AND HON. FRANKLIN MAGTUNAO DRILON,
Bengzon say there was, firstly because the minute say so, secondly, because at the IN HIS CAP A CITY AS THE SENATE PRESIDENT OF THE
beginning of such session there were at least fourteen senators including Senators PHILIPPINES, Respondents.
Pendatun and Lopez, and thirdly because in view of the absence from the country of x-----------------------x
Senator Tomas Confesor twelve senators constitute a majority of the Senate of G.R. No. 209136
twelve three senators. When the Constitution declares that a majority of "each MANUELITO R. LUNA, Petitioner,
House" shall constitute aquorum, "the House: does not mean "all" the members. vs.
Even a majority of all the members constitute "the House". (Missouri Pac. vs. Kansas, SECRETARY FLORENCIO ABAD, IN HIS OFFICIAL CAPACITY AS HEAD OF THE
63 Law ed. [U. S.], p. 239). There is a difference between a majority of "the House", DEPARTMENT OF BUDGET AND MANAGEMENT; AND EXECUTIVE SECRETARY
the latter requiring less number than the first. Therefore an absolute majority (12) of PAQUITO OCHOA, IN HIS OFFICIAL CAPACITY AS ALTER EGO OF THE
all the members of the Senate less one (23), constitutes constitutional majority of PRESIDENT, Respondents.
the Senate for the purpose of a quorum. Mr. Justice Pablo believes furthermore than x-----------------------x
even if the twelve did not constitute a quorum, they could have ordered the arrest of G.R. No. 209155
one, at least, of the absent members; if one had been so arrested, there would be no ATTY. JOSE MALV AR VILLEGAS, JR., Petitioner,
doubt Quorum then, and Senator Cuenco would have been elected just the same vs.
inasmuch as there would be eleven for Cuenco, one against and one abstained. THE HONORABLE EXECUTIVE SECRETARY PAQUITO N. OCHOA, JR.; AND THE
In fine, all the four justice agree that the Court being confronted with the practical SECRETARY OF BUDGET AND MANAGEMENT FLORENCIO B.
situation that of the twenty three senators who may participate in the Senate ABAD, Respondents.
deliberations in the days immediately after this decision, twelve senators will x-----------------------x
support Senator Cuenco and, at most, eleven will side with Senator Avelino, it would G.R. No. 209164
be most injudicious to declare the latter as the rightful President of the Senate, that PHILIPPINE CONSTITUTION ASSOCIATION (PHILCONSA), REPRESENTED BY
office being essentially one that depends exclusively upon the will of the majority of DEAN FROILAN M. BACUNGAN, BENJAMIN E. DIOKNO AND LEONOR M.
the senators, the rule of the Senate about tenure of the President of that body being BRIONES, Petitioners,
amenable at any time by that majority. And at any session hereafter held with vs.
thirteen or more senators, in order to avoid all controversy arising from the DEPARTMENT OF BUDGET AND MANAGEMENT AND/OR HON. FLORENCIO B.
divergence of opinion here aboutquorum and for the benefit of all concerned,the ABAD, Respondents.
said twelve senators who approved the resolutions herein involved could ratify all x-----------------------x
their acts and thereby place them beyond the shadow of a doubt. G.R. No. 209260
As already stated, the six justices hereinabove mentioned voted to dismiss the INTEGRATED BAR OF THE PHILIPPINES (IBP), Petitioner,
petition. Without costs. vs.
SECRETARY FLORENCIO B. ABAD OF THE DEPARTMENT OF BUDGET AND
EN BANC MANAGEMENT (DBM),Respondent.
G.R. No. 209287 July 1, 2014 x-----------------------x
G.R. No. 209442

Santiago v Guingona Page 55 of 106

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 P50 Million each as "incentive" for voting in favor of the
impeachment of Chief Justice Renato C. Corona.
Responding to Sen. Estradas 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 Services 4 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 DAPs 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 representatives district" 7 excited the Nation as heatedly as
the pork barrel controversy.
Santiago v Guingona Page 56 of 106
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 Courts 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 Presidents 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 Presidents 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
Santiago v Guingona Page 57 of 106
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 Generals 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,
Santiago v Guingona Page 58 of 106
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 Commissioners 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 Kings 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
courts judgment was rendered without authority. The errors were of such a nature
Santiago v Guingona Page 59 of 106
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
entitys or persons 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 Executives 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
Santiago v Guingona Page 60 of 106
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 Administrations 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
DAPs 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
representatives 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 first laid down in Beauchamp v. Silk, where it was
held that the plaintiff in a taxpayers suit is in a different category from the plaintiff
in a citizens 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, howeverthe people are the real partiesIt 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
taxpayers suits, Terr v. Jordan held that "the right of a citizen and a taxpayer to
Santiago v Guingona Page 61 of 106
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 Courts 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 States 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 countrys past as a colony successively
of Spain and the United States for a long period of time. Many aspects of the
countrys 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
Presidents 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 Governments
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.
Santiago v Guingona Page 62 of 106
Each phase is distinctly separate from the others but they overlap in the
implementation of the budget during the budget year.
67
c.1.Budget Preparation
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 DBMs senior officials. The discussions of the Executive Review
Board cover the prioritization of programs and their corresponding support vis--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
Governments 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 Presidents 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. General Income
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
fiscal 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 defraythe 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 Smiths 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
Specific Income
Subsidy Income from Income Taxes
National
Government
Property Taxes
Subsidy from Central Office
Taxes on Goods and Services
Subsidy from Regional
Office/Staff Bureaus Taxes on International Trade an
Santiago v Guingona Page 63 of 106
Income from Transactions
Government After transmission, the Senate conducts its own committee hearings on the GAB. To
Services expedite proceedings, the Senate may conduct its committee hearings
simultaneously with the House of Representatives deliberations. The Senates
Other Taxes 6.Fines and Penalties-Tax Revenue Finance Committee and its Sub-Committees may submit the proposed amendments
Income from Government to the GAB to the plenary of the Senate only after the House of Representatives has
Business Operations Other Specific Income formally transmitted its version to the Senate. The Senate version of the GAB is
likewise approved on Third Reading.89
Sales Revenue The House of Representatives and the Senate then constitute a panel each to sit in
the Bicameral Conference Committee for the purpose of discussing and harmonizing
the conflicting provisions of their versions of the GAB. The "harmonized" version of
Rent Income
the GAB is next presented to the President for approval. 90 The President reviews the
GAB, and prepares the Veto Message where budget items are subjected to direct
Insurance Income veto,91 or are identified for conditional implementation.
If, by the end of any fiscal year, the Congress shall have failed to pass the GAB for
Dividend Income the ensuing fiscal year, the GAA for the preceding fiscal year shall be deemed re-
enacted and shall remain in force and effect until the GAB is passed by the
Congress.92
Interest Income c.3. Budget Execution93
With the GAA now in full force and effect, the next step is the implementation of the
Sale of Confiscated Goods and budget. The Budget Execution Phase is primarily the function of the DBM, which is
Properties tasked to perform the following procedures, namely: (1) to issue the programs and
guidelines for the release of funds; (2) to prepare an Allotment and Cash Release
Program; (3) to release allotments; and (4) to issue disbursement authorities.
Foreign Exchange (FOREX)
The implementation of the GAA is directed by the guidelines issued by the DBM.
Gains
Prior to this, the various departments and agencies are required to submit Budget
Execution Documents(BED) to outline their plans and performance targets by laying
Miscellaneous Operating and down the physical and financial plan, the monthly cash program, the estimate of
Service Income 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
Fines and Penalties-Government Release Program (CRP).The ARP sets a limit for allotments issued in general and to a
Services and Business Operations 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
Income from Grants and DBM. Allotments are lesser in scope than appropriations, in that the latter embrace
Donations the general legislative authority to spend. Allotments may be released in two forms
through a comprehensive Agency Budget Matrix (ABM), 94 or, individually, by
SARO.95
Armed with either the ABM or the SARO, agencies become authorized to incur
c.2. Budget Legislation86 obligations96 on behalf of the Government in order to implement their PAPs.
The Budget Legislation Phase covers the period commencing from the time Obligations may be incurred in various ways, like hiring of personnel, entering into
Congress receives the Presidents Budget, which is inclusive of the NEPand the BESF, contracts for the supply of goods and services, and using utilities.
up to the Presidents approval of the GAA. This phase is also known as the Budget In order to settle the obligations incurred by the agencies, the DBM issues a
Authorization Phase, and involves the significant participation of the Legislative disbursement authority so that cash may be allocated in payment of the obligations.
through its deliberations. A cash or disbursement authority that is periodically issued is referred to as a Notice
Initially, the Presidents Budget is assigned to the House of Representatives of Cash Allocation (NCA),97 which issuance is based upon an agencys submission of
Appropriations Committee on First Reading. The Appropriations Committee and its its Monthly Cash Program and other required documents. The NCA specifies the
various Sub-Committees schedule and conduct budget hearings to examine the PAPs maximum amount of cash that can be withdrawn from a government servicing bank
of the departments and agencies. Thereafter, the House of Representatives drafts for the period indicated. Apart from the NCA, the DBM may issue a Non-Cash
the General Appropriations Bill (GAB).87 Availment Authority(NCAA) to authorize non-cash disbursements, or a Cash
The GABis sponsored, presented and defended by the House of Representatives Disbursement Ceiling(CDC) for departments with overseas operations to allow the
Appropriations Committee and Sub-Committees in plenary session. As with other use of income collected by their foreign posts for their operating requirements.
laws, the GAB is approved on Third Reading before the House of Representatives Actual disbursement or spending of government funds terminates the Budget
version is transmitted to the Senate.88 Execution Phase and is usually accomplished through the Modified Disbursement

Santiago v Guingona Page 64 of 106

Scheme under which disbursements chargeable against the National Treasury are funded under the DAP were chosen for this reason based on their: (1) multiplier
coursed through the government servicing banks. impact on the economy and infrastructure development; (2) beneficial effect on the
98
c.4. Accountability poor; and (3) translation into disbursements. 114
Accountability is a significant phase of the budget cycle because it ensures that the b. History of the implementation of
government funds have been effectively and efficiently utilized to achieve the the DAP, and sources of funds
States socio-economic goals. It also allows the DBM to assess the performance of under the DAP
agencies during the fiscal year for the purpose of implementing reforms and How the Administrations economic managers conceptualized and developed the
establishing new policies. DAP, and finally presented it to the President remains unknown because the relevant
An agencys accountability may be examined and evaluated through (1) documents appear to be scarce.
performance targets and outcomes; (2) budget accountability reports; (3) review of The earliest available document relating to the genesis of the DAP was the
agency performance; and (4) audit conducted by the Commission on Audit(COA). memorandum of October 12,2011 from Sec. Abad seeking the approval of the
2. President to implement the proposed DAP. The memorandum, which contained a list
Nature of the DAP as a fiscal plan of the funding sources for P72.11 billion and of the proposed priority projects to be
a. DAP was a program designed to funded,115reads:
promote economic growth MEMORANDUM FOR THE PRESIDENT
Policy is always a part of every budget and fiscal decision of any xxxx
Administration.99 The national budget the Executive prepares and presents to SUBJECT: FY 2011 PROPOSED DISBURSEMENT ACCELERATION PROGRAM (PROJECTS
Congress represents the Administrations "blueprint for public policy" and reflects AND SOURCES OF FUNDS)
the Governments goals and strategies. 100 As such, the national budget becomes a DATE: OCTOBER 12, 2011
tangible representation of the programs of the Government in monetary terms, Mr. President, this is to formally confirm your approval of the Disbursement
specifying therein the PAPs and services for which specific amounts of public funds Acceleration Program totaling P72.11 billion. We are already working with all the
are proposed and allocated. 101 Embodied in every national budget is government agencies concerned for the immediate execution of the projects therein.
spending.102 A. Fund Sources for the Acceleration Program
When he assumed office in the middle of 2010, President Aquino made efficiency
and transparency in government spending a significant focus of his Administration.
Yet, although such focus resulted in an improved fiscal deficit of 0.5% in the gross Amount
Action
domestic product (GDP) from January to July of 2011, it also unfortunately Fund Sources (In million Description
Requested
decelerated government project implementation and payment schedules. The 103
Php)
World Bank observed that the Philippines 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
FY 2011 30,000 Unreleased Personnel Declare
economic situation prevailing in the middle of 2011 thus paved the way for the
Unreleased Services (PS) savings a
development and implementation of the DAP as a stimulus package intended to fast-
Personal appropriations which approve/
track public spending and to push economic growth by investing on high-impact
Services (PS) will lapse at the end of authorize its u
budgetary PAPs to be funded from the "savings" generated during the year as well
Appropriations FY 2011 but may be for the 20
as from unprogrammed funds.105 In that respect, the DAP was the product of "plain
pooled as savings and Disbursement
executive policy-making" to stimulate the economy by way of accelerated
106 realigned for priority Acceleration
spending. The Administration would thereby accelerate government spending by:
programs that require Program
(1) streamlining the implementation process through the clustering of infrastructure
immediate funding
projects of the Department of Public Works and Highways (DPWH) and the
Department of Education (DepEd),and (2) front loading PPP-related projects 107 due
for implementation in the following year.108
Did the stimulus package work? FY 2011 482 Unreleased
The March 2012 report of the World Bank,109 released after the initial implementation Unreleased appropriations (slow
of the DAP, revealed that the DAP was partially successful. The disbursements under Appropriations moving projects and
the DAP contributed 1.3 percentage points to GDP growth by the fourth quarter of programs for
2011.110 The continued implementation of the DAP strengthened growth by 11.8% discontinuance)
year on year while infrastructure spending rebounded from a 29% contraction to a
34% growth as of September 2013.111
The DAP thus proved to be a demonstration that expenditure was a policy
FY 2010 12,336 Supported by the GFI Approve a
instrument that the Government could use to direct the economies towards growth
112 Unprogrammed Dividends authorize its u
and development. The Government, by spending on public infrastructure, would
for the 20
signify its commitment of ensuring profitability for prospective investors. 113 The PAPs

Santiago v Guingona Page 65 of 106

 Disbursement 500
Acceleration 10,000
Program
along dangerous 100
d. Relocation sites for informal settlers
along Iloilo River and its tributaries
2010 21,544 Unreleased With prior
3. PHIL. HEART CENTER: Upgrading of 357
rryover appropriations (slow approval from
ageing physical plant and medical equipment
propriation moving projects and the President in
programs for November 2010
discontinuance) and to declare as
savings from Zero-based Budgeting savings and 4.with CREDIT INFO CORP: Establishment of 75
Initiative authority to centralized
use credit information system
for priority
projects
5. PIDS: purchase of land to relocate the PIDS 100
office and building construction
2011 Budget 7,748 FY 2011 Agency For information
ms for Budget items that can
alignment be realigned within the 6. HGC: Equity infusion for credit insurance 400
agency to fund new fast and mortgage guaranty operations of HGC
disbursing projects
DPWH-3.981 Billion
DA 2.497 Billion 7. PHIC: Obligations incurred (premium 1,496
DOT 1.000 Billion subsidy for indigent families) in January-June
DepEd 270 Million 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
TAL 72.110 pay the full amount.

B. Projects in the Disbursement Acceleration Program

8. Philpost: Purchase of foreclosed property. 644
(Descriptions of projects attached as Annex A)
Payment of Mandatory Obligations, (GSIS,
PhilHealth, ECC), Franking Privilege
GOCCs and GFIs

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

Agency/Project Allotment capitalization under the BSP Law
(SARO and NCA Release) (in Million Php)

10. PCMC: Capital and Equipment Renovation 280

1. LRTA: Rehabilitation of LRT 1 and 2 1,868

11. LCOP: 105

2. NHA: 11,050 a. Pediatric Pulmonary Program
b. Bio-regenerative Technology Program
a. Resettlement of North Triangle residents to (Stem-Cell Research subject to legal 35
Camarin A7 450
b. Housing for BFP/BJMP
c. On-site development for families living

Santiago v Guingona Page 66 of 106

 70 17. DAR: 1,293 1,293
a. Agrarian Reform
review and presentation) Communities Project 2 1,293 132
12. TIDCORP: NG Equity infusion 570 b. Landowners Compensation 5,432

TOTAL 26,945 18. DBM: Conduct of National

Survey of
Farmers/Fisherfolks/Ips 625 625

19. DOJ: Operating requirements

NGAs/LGUs of 50 investigation agents and
15 state attorneys 11 11

Agency/Project Allotment
(SARO) Cash 20. DOT: Preservation of the Cine
(In Million Requirement Corregidor Complex 25 25
Php) (NCA)

21. OPAPP: Activities for Peace

13. DOF-BIR: NPSTAR Process (PAMANA- Project
centralization of data details: budget breakdown,
processing and others (To be implementation plan, and
synchronized with GFMIS conditions on fund release
activities) 758 758 attached as Annex B) 1,819 1,819

14. COA: IT infrastructure 22. DOST 425 425

program and hiring of a. Establishment of National
additional litigational experts 144 144 Meterological and Climate
Center 275 275
b. Enhancement of Doppler
15. DND-PAF: On Base Housing Radar Network for National
Facilities and Communication Weather Watch, Accurate
Equipment 30 30 Forecasting and Flood Early
Warning 190 190

16. DA: 2,959 2,223

a. Irrigation, FMRs and 23. DOF-BOC: To settle the
Integrated Community Based Multi-Species principal obligations with
Hatchery and Aquasilvi PDIC consistent with the
Farming 1,629 1,629 agreement with the CISS and
b. Mindanao Rural SGS 2,800 2,800
Development Project 919 183

c. NIA Agno River Integrated

Irrigation Project 411 411

Santiago v Guingona Page 67 of 106

24. OEO-FDCP: Establishment of TOTAL 45,165 44,000
the National Film Archive and
local cinematheques, and other
local activities 20 20 C. Summary

Fund Sources
25. DPWH: Various infrastructure Identified for Allotments Cash
projects 5,500 5,500 Approval for Release Requirements for
(In Million Release in FY
Php) 2011
26. DepEd/ERDT/DOST: Thin
Client Cloud Computing
Project 270 270 Total 72,110 72,110 70,895

27. DOH: Hiring of nurses and GOCCs 26,895 26,895

midwives 294 294

NGAs/LGUs 45,165 44,000

28. TESDA: Training Program in
partnership with BPO industry
and other sectors 1,100 1,100 For His Excellencys Consideration
(Sgd.) FLORENCIO B. ABAD
[/] APPROVED
29. DILG: Performance Challenge [ ] DISAPPROVED
Fund (People Empowered (Sgd.) H.E. BENIGNO S. AQUINO, III
Community Driven OCT 12, 2011
Development with DSWD and The memorandum of October 12, 2011 was followed by another memorandum for
NAPC) 250 50 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:
30. ARMM: Comprehensive Peace MEMORANDUM FOR THE PRESIDENT
and Development Intervention 8,592 8,592 xxxx
SUBJECT: Omnibus Authority to Consolidate Savings/Unutilized Balances and its
Realignment
31. DOTC-MRT: Purchase of DATE: December 12, 2011
additional MRT cars 4,500 - 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
32. LGU Support Fund 6,500 6,500 their implementation carries over to 2012 without necessarily impacting on our
budget deficit cap next year.
BACKGROUND
33. Various Other Local Projects 6,500 6,500 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
34. Development Assistance to the General Appropriations Act. Said savings correspond to completed or discontinued
Province of Quezon 750 750 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

Santiago v Guingona Page 68 of 106

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 PRESIDENTS APPROVAL
8.0 Foregoing considered, may we respectfully request for the Presidents 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 Excellencys 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, 2012,119May 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
Santiago v Guingona Page 69 of 106
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 agencys 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 agencys latest report available shall be used by DBM as basis for withdrawal of
allotment. The DBM shall compute/approximate the agencys 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 P1,600 M (i.e., P800 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 Presidents 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
Santiago v Guingona Page 70 of 106
As can be seen, NBC No. 541 specified that the unobligated allotments of all defined as nothing more than the legislative authorization prescribed by the
agencies and departments as of June 30, 2012 that were charged against the Constitution that money may be paid out of the Treasury, while appropriation made
continuing appropriations for fiscal year 2011 and the 2012 GAA (R.A. No. 10155) by law refers to the act of the legislature setting apart or assigning to a particular
were subject to withdrawal through the issuance of negative SAROs, but such use a certain sum to be used in the payment of debt or dues from the State to its
allotments could be either: (1) reissued for the original PAPs of the concerned creditors."126
agencies from which they were withdrawn; or (2) realigned to cover additional On the other hand, the President, in keeping with his duty to faithfully execute the
funding for other existing PAPs of the concerned agencies; or (3) used to augment laws, had sufficient discretion during the execution of the budget to adapt the
existing PAPs of any agency and to fund priority PAPs not considered in the 2012 budget to changes in the countrys economic situation. 127 He could adopt a plan like
budget but expected to be started or implemented in 2012. Financing the other the DAP for the purpose. He could pool the savings and identify the PAPs to be
priority PAPs was made subject to the approval of the President. Note here that NBC funded under the DAP. The pooling of savings pursuant to the DAP, and the
No. 541 used terminologies like "realignment" and "augmentation" in the application identification of the PAPs to be funded under the DAP did not involve appropriation in
of the withdrawn unobligated allotments. the strict sense because the money had been already set apart from the public
Taken together, all the issuances showed how the DAP was to be implemented and treasury by Congress through the GAAs. In such actions, the Executive did not usurp
funded, that is (1) by declaring "savings" coming from the various departments the power vested in Congress under Section 29(1), Article VI of the Constitution.
and agencies derived from pooling unobligated allotments and withdrawing 3.
unreleased appropriations; (2) releasing unprogrammed funds; and (3) applying the Unreleased appropriations and withdrawn
"savings" and unprogrammed funds to augment existing PAPs or to support other unobligated allotments under the DAP
priority PAPs. were not savings, and the use of such
c. DAP was not an appropriation appropriations contravened Section 25(5),
measure; hence, no appropriation Article VI of the 1987 Constitution.
law was required to adopt or to Notwithstanding our appreciation of the DAP as a plan or strategy validly adopted by
implement it the Executive to ramp up spending to accelerate economic growth, the challenges
Petitioners Syjuco, Luna, Villegas and PHILCONSA state that Congress did not enact posed by the petitioners constrain us to dissect the mechanics of the actual
a law to establish the DAP, or to authorize the disbursement and release of public execution of the DAP. The management and utilization of the public wealth inevitably
funds to implement the DAP. Villegas, PHILCONSA, IBP, Araullo, and COURAGE demands a most careful scrutiny of whether the Executives implementation of the
observe that the appropriations funded under the DAP were not included in the DAP was consistent with the Constitution, the relevant GAAs and other existing laws.
2011, 2012 and 2013 GAAs. To petitioners IBP, Araullo, and COURAGE, the DAP, a. Although executive discretion
being actually an appropriation that set aside public funds for public use, should and flexibility are necessary in
require an enabling law for its validity. VACC maintains that the DAP, because it the execution of the budget, any
involved huge allocations that were separate and distinct from the GAAs, transfer of appropriated funds
circumvented and duplicated the GAAs without congressional authorization and should conform to Section 25(5),
control. Article VI of the Constitution
The petitioners contend in unison that based on how it was developed and We begin this dissection by reiterating that Congress cannot anticipate all issues and
implemented the DAP violated the mandate of Section 29(1), Article VI of the 1987 needs that may come into play once the budget reaches its execution stage.
Constitution that "[n]o money shall be paid out of the Treasury except in pursuance Executive discretion is necessary at that stage to achieve a sound fiscal
of an appropriation made by law." administration and assure effective budget implementation. The heads of offices,
The OSG posits, however, that no law was necessary for the adoption and particularly the President, require flexibility in their operations under performance
implementation of the DAP because of its being neither a fund nor an appropriation, budgeting to enable them to make whatever adjustments are needed to meet
but a program or an administrative system of prioritizing spending; and that the established work goals under changing conditions. 128 In particular, the power to
adoption of the DAP was by virtue of the authority of the President as the Chief transfer funds can give the President the flexibility to meet unforeseen events that
Executive to ensure that laws were faithfully executed. may otherwise impede the efficient implementation of the PAPs set by Congress in
We agree with the OSGs position. the GAA.
The DAP was a government policy or strategy designed to stimulate the economy Congress has traditionally allowed much flexibility to the President in allocating
through accelerated spending. In the context of the DAPs adoption and funds pursuant to the GAAs,129particularly when the funds are grouped to form lump
implementation being a function pertaining to the Executive as the main actor sum accounts.130 It is assumed that the agencies of the Government enjoy more
during the Budget Execution Stage under its constitutional mandate to faithfully flexibility when the GAAs provide broader appropriation items. 131 This flexibility
execute the laws, including the GAAs, Congress did not need to legislate to adopt or comes in the form of policies that the Executive may adopt during the budget
to implement the DAP. Congress could appropriate but would have nothing more to execution phase. The DAP as a strategy to improve the countrys economic
do during the Budget Execution Stage. Indeed, appropriation was the act by which position was one policy that the President decided to carry out in order to fulfill his
Congress "designates a particular fund, or sets apart a specified portion of the public mandate under the GAAs.
revenue or of the money in the public treasury, to be applied to some general object Denying to the Executive flexibility in the expenditure process would be
of governmental expenditure, or to some individual purchase or expense." 124 As counterproductive. In Presidential Spending Power,132 Prof. Louis Fisher, an American
pointed out in Gonzales v. Raquiza: 125 "In a strict sense, appropriation has been

Santiago v Guingona Page 71 of 106

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, 135was
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 Presidents 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 Presidents
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 P1,000,000.00 threshold, saying that the amount was
arbitrary and might not be reasonable in the future. The Committee agreed to
eliminate theP1,000,000.00 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 final 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
Santiago v Guingona Page 72 of 106
appropriations of another department, bureau, office or agency within the Executive determining the applicability of the rule to inquire whether, in a particular case, it
Branch, pursuant to the provisions of Article VIII, Section 16 (5) of the Constitution. accords with reason and justice.
In Demetria v. Alba, however, the Court struck down the first paragraph of Section The appropriate and natural office of the exception is to exempt something from the
44 for contravening Section 16(5)of the 1973 Constitution, ruling: scope of the general words of a statute, which is otherwise within the scope and
Paragraph 1 of Section 44 of P.D. No. 1177 unduly over-extends the privilege granted meaning of such general words. Consequently, the existence of an exception in a
under said Section 16. It empowers the President to indiscriminately transfer funds statute clarifies the intent that the statute shall apply to all cases not excepted.
from one department, bureau, office or agency of the Executive Department to any Exceptions are subject to the rule of strict construction; hence, any doubt will be
program, project or activity of any department, bureau or office included in the resolved in favor of the general provision and against the exception. Indeed, the
General Appropriations Act or approved after its enactment, without regard as to liberal construction of a statute will seem to require in many circumstances that the
whether or not the funds to be transferred are actually savings in the item from exception, by which the operation of the statute is limited or abridged, should
which the same are to be taken, or whether or not the transfer is for the purpose of receive a restricted construction.
augmenting the item to which said transfer is to be made. It does not only Accordingly, we should interpret Section 25(5), supra, in the context of a limitation
completely disregard the standards set in the fundamental law, thereby amounting on the Presidents discretion over the appropriations during the Budget Execution
to an undue delegation of legislative powers, but likewise goes beyond the tenor Phase.
thereof. Indeed, such constitutional infirmities render the provision in question null b. Requisites for the valid transfer of
and void.143 appropriated funds under Section
It is significant that Demetria was promulgated 25 days after the ratification by the 25(5), Article VI of the 1987
people of the 1987 Constitution, whose Section 25(5) of Article VI is identical to Constitution
Section 16(5), Article VIII of the 1973 Constitution, to wit: The transfer of appropriated funds, to be valid under Section 25(5), supra, must be
Section 25. x x x made upon a concurrence of the following requisites, namely:
xxxx (1) There is a law authorizing the President, the President of the Senate, the Speaker
5) No law shall be passed authorizing any transfer of appropriations; however, the of the House of Representatives, the Chief Justice of the Supreme Court, and the
President, the President of the Senate, the Speaker of the House of Representatives, heads of the Constitutional Commissions to transfer funds within their respective
the Chief Justice of the Supreme Court, and the heads of Constitutional Commissions offices;
may, by law, be authorized to augment any item in the general appropriations law (2) The funds to be transferred are savings generated from the appropriations for
for their respective offices from savings in other items of their respective their respective offices; and (3) The purpose of the transfer is to augment an item in
appropriations. the general appropriations law for their respective offices.
xxxx b.1. First RequisiteGAAs of 2011 and
The foregoing history makes it evident that the Constitutional Commission included 2012 lacked valid provisions to
Section 25(5), supra, to keep a tight rein on the exercise of the power to transfer authorize transfers of funds under
funds appropriated by Congress by the President and the other high officials of the the DAP; hence, transfers under the
Government named therein. The Court stated in Nazareth v. Villar: 144 DAP were unconstitutional
In the funding of current activities, projects, and programs, the general rule should Section 25(5), supra, not being a self-executing provision of the Constitution, must
still be that the budgetary amount contained in the appropriations bill is the extent have an implementing law for it to be operative. That law, generally, is the GAA of a
Congress will determine as sufficient for the budgetary allocation for the proponent given fiscal year. To comply with the first requisite, the GAAs should expressly
agency. The only exception is found in Section 25 (5), Article VI of the Constitution, authorize the transfer of funds.
by which the President, the President of the Senate, the Speaker of the House of Did the GAAs expressly authorize the transfer of funds?
Representatives, the Chief Justice of the Supreme Court, and the heads of In the 2011 GAA, the provision that gave the President and the other high officials
Constitutional Commissions are authorized to transfer appropriations to augmentany the authority to transfer funds was Section 59, as follows:
item in the GAA for their respective offices from the savings in other items of their Section 59. Use of Savings. The President of the Philippines, the Senate President,
respective appropriations. The plain language of the constitutional restriction leaves the Speaker of the House of Representatives, the Chief Justice of the Supreme Court,
no room for the petitioners posture, which we should now dispose of as untenable. the Heads of Constitutional Commissions enjoying fiscal autonomy, and the
It bears emphasizing that the exception in favor of the high officials named in Ombudsman are hereby authorized to augment any item in this Act from savings in
Section 25(5), Article VI of the Constitution limiting the authority to transfer savings other items of their respective appropriations.
only to augment another item in the GAA is strictly but reasonably construed as In the 2012 GAA, the empowering provision was Section 53, to wit:
exclusive. As the Court has expounded in Lokin, Jr. v. Commission on Elections: Section 53. Use of Savings. The President of the Philippines, the Senate President,
When the statute itself enumerates the exceptions to the application of the general the Speaker of the House of Representatives, the Chief Justice of the Supreme Court,
rule, the exceptions are strictly but reasonably construed. The exceptions extend the Heads of Constitutional Commissions enjoying fiscal autonomy, and the
only as far as their language fairly warrants, and all doubts should be resolved in Ombudsman are hereby authorized to augment any item in this Act from savings in
favor of the general provision rather than the exceptions. Where the general rule is other items of their respective appropriations.
established by a statute with exceptions, none but the enacting authority can curtail In fact, the foregoing provisions of the 2011 and 2012 GAAs were cited by the DBM
the former. Not even the courts may add to the latter by implication, and it is a rule as justification for the use of savings under the DAP.145
that an express exception excludes all others, although it is always proper in

Santiago v Guingona Page 73 of 106

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 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.
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. 146The 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 appropriationfree 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 Presidents 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
Santiago v Guingona Page 74 of 106
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--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 DBMs 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 DBMs 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 departments
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
Santiago v Guingona Page 75 of 106
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 DBMs
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
Presidents 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 agencys latest report available shall be used by DBM as basis for withdrawal of
allotment. The DBM shall compute/approximate the agencys 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 P1,600 M (i.e., P800 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
Santiago v Guingona Page 76 of 106
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.1wphi1 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 P144.4 billion worth of PAPs were implemented through the
DAP.161
Of this amount P82.5 billion were released in 2011 and P54.8 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) P1.5 billion for the Cordillera Peoples Liberation Army;
(ii) P1.8 billion for the Moro National Liberation Front;
(iii) P700 million for assistance to Quezon Province; 164
(iv) P50 million to P100 (million) each to certain senators;165
(v) P10 billion for the relocation of families living along dangerous zones under the
National Housing Authority;
(vi) P10 billion and P20 billion equity infusion under the Bangko Sentral;
(vii) P5.4 billion landowners compensation under the Department of Agrarian
Reform;
(viii) P8.6 billion for the ARMM comprehensive peace and development program;
(ix) P6.5 billion augmentation of LGU internal revenue allotments
(x) P5 billion for crucial projects like tourism road construction under the Department
of Tourism and the Department of Public Works and Highways;
(xi) P1.8 billion for the DAR-DPWH Tulay ng Pangulo;
(xii) P1.96 billion for the DOH-DPWH rehabilitation of regional health units; and
(xiii) P4 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
Santiago v Guingona Page 77 of 106
 adopted by the DBM.167 In support of its argument, the OSG has submitted seven knowledge and
evidence packets containing memoranda, SAROs, and other pertinent documents technologies and
relative to the implementation and fund transfers under the DAP. 168 research
Upon careful review of the documents contained in the seven evidence packets, we capability building
conclude that the "savings" pooled under the DAP were allocated to PAPs that were in
not covered by any appropriations in the pertinent GAAs. priority areas
For example, the SARO issued on December 22, 2011 for the highly vaunted identified as
Disaster Risk, Exposure, Assessment and Mitigation (DREAM) project under the strategic to
Department of Science and Technology (DOST) covered the amount ofP1.6 National
Billion,169 broken down as follows: Development 0 0

PROPRIATION PARTICULARS AMOUNT Aside from this transfer under the DAP to the DREAM project exceeding by almost
DE AUTHORIZED 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
03.a.01.a Generation of new knowledge and technologies and services and capital outlays. The Executive thereby substituted its will to that of
research capability building in priority areas identified Congress. Worse, the Executive had not earlier proposed any amount for personnel
as strategic to National Development services and capital outlays in the NEP that became the basis of the 2011 GAA. 170
Personnel Services It is worth stressing in this connection that the failure of the GAAs to set aside any
Maintenance and Other Operating Expenses P amounts for an expense category sufficiently indicated that Congress purposely did
43,504,024
Capital Outlays 1,164,517,589 not see fit to fund, much less implement, the PAP concerned. This indication
391,978,387 becomes clearer when even the President himself did not recommend in the NEP to
P 1,600,000,000 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.
the pertinent provision of the 2011 GAA (R.A. No. 10147) showed that Congress had That happened in some instances under the DAP.
appropriated onlyP537,910,000 for MOOE, but nothing for personnel services and In relation to the December 22, 2011 SARO issued to the Philippine Council for
capital outlays, to wit: Industry, Energy and Emerging Technology Research and Development (DOST-
PCIEETRD)171 for Establishment of the Advanced Failure Analysis Laboratory, which
Personnel Maintenanc Capital TOTAL reads:
Services e Outlays
and Other APPROPRIATI PARTICULARS AMOUNT
Operating AUTHORIZED
Expenditur
es

Development, integration and coordination of the National Research

III. Operations System for Industry, Energy and Emerging Technology and Related
Fields
Capital Outlays P 300,000,000
a Funding Assistance to 177,406,0 1,887,365, 49,090,0 2,113,861,0
. Science 00 000 00 00
and Technology the appropriation code and the particulars appearing in the SARO did not correspond
Activities 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
1 Central Office 1,554,238, 1,554,238,0 and Technology Information; and (3) Management of PCIERD Information System for
. 000 00 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
a. Generation of 537,910,00 537,910,00 the broad program description of Research and Management Services as appearing
new in the SARO, it would nonetheless remain a new activity by reason of its not being

Santiago v Guingona Page 78 of 106

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.180 For 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." 181 To 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 dont 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; thats 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, thats your
feeling.
Santiago v Guingona Page 79 of 106
 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 P143,700,000.00
and P250,000,000.00 were transferred under the DAP respectively to the COA 184 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
AMOUNT
(In thousand pesos)
DATE
PURPOSE RELEAS
ED
Reserve
Imposed
sion IT Infrastructure Program and hiring of additional 11/11/1
litigation experts 1 HONORABLE MENDOZA:
s Completion of the construction of the Legislative 07/23/1 207,034
of Library and Archives Building/Congressional e- 2 (Savings of HOR)
ntati library
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 latters 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
188
autonomy is guaranteed by the Constitution.
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. Hes 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 Im
not mistaken, aid not augmentation. Am I correct in my hearing of your argument?
HONORABLE MENDOZA:
Thats our submission, if Your Honor, please.
Releases 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
143,700 in the Constitution can we situate this?
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.
250,000 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

Santiago v Guingona Page 80 of 106

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 DBMs 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
Santiago v Guingona Page 81 of 106
General Sales, Turnover or VAT 2011 and 2012, and only the P10 billion in target revenues in the form of dividends
Selected Excises on Goods from stocks in 2013.
Selected Taxes on Services However, the requirement that revenue collections exceed the original revenue
Taxes on the Use of Goods or Property or Permission to Perform Activities targets was to be construed in light of the purpose for which the unprogrammed
Other Taxes funds were incorporated in the GAAs as standby appropriations to support additional
Taxes on International Trade and Transactions expenditures for certain priority PAPs should the revenue collections exceed the
NON-TAX REVENUES resource targets assumed in the budget or when additional foreign project loan
Fees and Charges proceeds were realized. The unprogrammed funds were included in the GAAs to
BTR Income provide ready cover so as not to delay the implementation of the PAPs should new or
Government Services additional revenue sources be realized during the year. 200 Given the tenor of the
Interest on NG Deposits certifications, the unprogrammed funds were thus not yet supported by the
Interest on Advances to Government Corporations corresponding resources.201
Income from Investments The revenue targets stated in the BESF were intended to address the funding
Interest on Bond Holdings requirements of the proposed programmed appropriations. In contrast, the
Guarantee Fee unprogrammed funds, as standby appropriations, were to be released only when
Gain on Foreign Exchange there were revenues in excess of what the programmed appropriations required. As
NG Income Collected by BTr such, the revenue targets should be considered as a whole, not individually;
Dividends on Stocks otherwise, we would be dealing with artificial revenue surpluses. The requirement
NG Share from Airport Terminal Fee that revenue collections must exceed revenue target should be understood to mean
NG Share from PAGCOR Income that the revenue collections must exceed the total of the revenue targets stated in
NG Share from MIAA Profit the BESF. Moreover, to release the unprogrammed funds simply because there was
Privatization an excess revenue as to one source of revenue would be an unsound fiscal
Foreign Grants management measure because it would disregard the budget plan and foster
Thus, when the Court required the respondents to submit a certification from the budget deficits, in contravention of the Governments surplus budget policy. 202
Bureau of Treasury (BTr) to the effect that the revenue collections had exceeded the We cannot, therefore, subscribe to the respondents view.
original revenue targets,195 they complied by submitting certifications from the BTr 5.
and Department of Finance (DOF) pertaining to only one identified source of revenue Equal protection, checks and balances,
the dividends from the shares of stock held by the Government in government- and public accountability challenges
owned and controlled corporations. The DAP is further challenged as violative of the Equal Protection Clause, the system
To justify the release of the unprogrammed funds for 2011, the OSG presented the of checks and balances, and the principle of public accountability.
certification dated March 4, 2011 issued by DOF Undersecretary Gil S. Beltran, as With respect to the challenge against the DAP under the Equal Protection
follows: Clause,203 Luna argues that the implementation of the DAP was "unfair as it [was]
This is to certify that under the Budget for Expenditures and Sources of Financing for selective" because the funds released under the DAP was not made available to all
2011, the programmed income from dividends from shares of stock in government- the legislators, with some of them refusing to avail themselves of the DAP funds,
owned and controlled corporations is 5.5 billion. and others being unaware of the availability of such funds. Thus, the DAP practised
This is to certify further that based on the records of the Bureau of Treasury, the "undue favoritism" in favor of select legislators in contravention of the Equal
National Government has recorded dividend income amounting to P23.8 billion as of Protection Clause.
31 January 2011.196 Similarly, COURAGE contends that the DAP violated the Equal Protection Clause
For 2012, the OSG submitted the certification dated April 26, 2012 issued by because no reasonable classification was used in distributing the funds under the
National Treasurer Roberto B. Tan, viz: DAP; and that the Senators who supposedly availed themselves of said funds were
This is to certify that the actual dividend collections remitted to the National differently treated as to the amounts they respectively received.
Government for the period January to March 2012 amounted to P19.419 billion Anent the petitioners theory that the DAP violated the system of checks and
compared to the full year program of P5.5 billion for 2012.197 balances, Luna submits that the grant of the funds under the DAP to some
And, finally, for 2013, the OSG presented the certification dated July 3, 2013 issued legislators forced their silence about the issues and anomalies surrounding the DAP.
by National Treasurer Rosalia V. De Leon, to wit: Meanwhile, Belgica stresses that the DAP, by allowing the legislators to identify
This is to certify that the actual dividend collections remitted to the National PAPs, authorized them to take part in the implementation and execution of the
Government for the period January to May 2013 amounted to P12.438 billion GAAs, a function that exclusively belonged to the Executive; that such situation
compared to the full year program of P10.0198 billion for 2013. constituted undue and unjustified legislative encroachment in the functions of the
Moreover, the National Government accounted for the sale of the right to build and Executive; and that the President arrogated unto himself the power of appropriation
operate the NAIA expressway amounting to P11.0 billion in June 2013.199 vested in Congress because NBC No. 541 authorized the use of the funds under the
The certifications reflected that by collecting dividends amounting to P23.8 billion in DAP for PAPs not considered in the 2012 budget.
2011, P19.419 billion in 2012, and P12.438 billion in 2013 the BTr had exceeded only Finally, the petitioners insist that the DAP was repugnant to the principle of public
the P5.5 billion in target revenues in the form of dividends from stocks in each of accountability enshrined in the Constitution, 204 because the legislators relinquished

Santiago v Guingona Page 82 of 106

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
Santiago v Guingona Page 83 of 106
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
Santiago v Guingona Page 84 of 106
Constitution. To declare the implementation of the DAP unconstitutional without VINCENT S. ALBANO,
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 Petitioners, Present:
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 DAVIDE, JR., C.J.,
alleviates such burden.
The other side of the coin is that it has been adequately shown as to be beyond PUNO,
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 PANGANIBAN,
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 QUISUMBING,
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
YNARES-SANTIAGO,
wastefulness.
Nonetheless, as Justice Brion has pointed out during the deliberations, the doctrine
SANDOVAL-GUTIERREZ,
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 - versus - CARPIO,
injustice;212 but where no such result would ensue, the general rule that an
unconstitutional law is totally ineffective should apply. AUSTRIA-MARTINEZ,
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 CORONA,
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 CARPIO-MORALES,
their favor by the proper tribunals determining their criminal, civil, administrative
and other liabilities. CALLEJO, SR.,
WHEREFORE, the Court PARTIALLY GRANTS the petitions for certiorari and
prohibition; and DECLARES the following acts and practices under the Disbursement AZCUNA,
Acceleration Program, National Budget Circular No. 541 and related executive
issuances UNCONSTITUTIONAL for being in violation of Section 25(5), Article VI of TINGA,
the 1987 Constitution and the doctrine of separation of powers, namely:
(a) The withdrawal of unobligated allotments from the implementing agencies, and CHICO-NAZARIO, and
the declaration of the withdrawn unobligated allotments and unreleased
appropriations as savings prior to the end of the fiscal year and without complying GARCIA, JJ.
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 THE HONORABLE EXECUTIVE SECRETARY
appropriations of other offices outside the Executive; and EDUARDO ERMITA; HONORABLE SECRETARY OF
(c) The funding of projects, activities and programs that were not covered by any THE DEPARTMENT OF FINANCE CESAR PURISIMA;
appropriation in the General Appropriations Act. and HONORABLE COMMISSIONER OF INTERNAL
The Court further DECLARES VOID the use of unprogrammed funds despite the REVENUE GUILLERMO PARAYNO, JR.,
absence of a certification by the National Treasurer that the revenue collections
exceeded the revenue targets for non-compliance with the conditions provided in Respondents.
the relevant General Appropriations Acts.
SO ORDERED.

x-------------------------x
EN BANC

ABAKADA GURO PARTY LIST (Formerly AASJAS) G.R. No. 168056

AQUILINO Q. PIMENTEL, JR., LUISA P. EJERCITO- G.R. No. 168207
OFFICERS SAMSON S. ALCANTARA and ED

Santiago v Guingona Page 85 of 106

ESTRADA, JINGGOY E. ESTRADA, PANFILO M. name and style of CMA MOTORISTS CENTER;
LACSON, ALFREDO S. LIM, JAMBY A.S. MADRIGAL, SUSAN M. ENTRATA doing business under the
AND SERGIO R. OSMEA III, name and style of LEONAS GASOLINE STATION
and SERVICE CENTER; CARMELITA BALDONADO
Petitioners, doing business under the name and style of FIRST
CHOICE SERVICE CENTER; MERCEDITAS A. GARCIA
doing business under the name and style of
LORPED SERVICE CENTER; RHEAMAR A. RAMOS
- versus - doing business under the name and style of
RJRAM PTT GAS STATION; MA. ISABEL VIOLAGO
doing business under the name and style of
VIOLAGO-PTT SERVICE CENTER; MOTORISTS
EXECUTIVE SECRETARY EDUARDO R. ERMITA, HEART CORPORATION represented by its Vice-
CESAR V. PURISIMA, SECRETARY OF FINANCE, President for Operations, JOSELITO F.
GUILLERMO L. PARAYNO, JR., COMMISSIONER OF FLORDELIZA; MOTORISTS HARVARD
THE BUREAU OF INTERNAL REVENUE, CORPORATION represented by its Vice-President
for Operations, JOSELITO F. FLORDELIZA;
Respondents. MOTORISTS HERITAGE CORPORATION represented
by its Vice-President for Operations, JOSELITO F.
FLORDELIZA; PHILIPPINE STANDARD OIL
CORPORATION represented by its Vice-President
for Operations, JOSELITO F. FLORDELIZA; ROMEO
x-------------------------x
MANUEL doing business under the name and style
of ROMMAN GASOLINE STATION; ANTHONY
ALBERT CRUZ III doing business under the name
and style of TRUE SERVICE STATION,
ASSOCIATION OF PILIPINAS SHELL DEALERS, INC. G.R. No. 168461
represented by its President, ROSARIO ANTONIO; Petitioners,
PETRON DEALERS ASSOCIATION represented by
its President, RUTH E. BARBIBI; ASSOCIATION OF
CALTEX DEALERS OF THE PHILIPPINES
represented by its President, MERCEDITAS A.
- versus -
GARCIA; ROSARIO ANTONIO doing business under
the name and style of ANB NORTH SHELL SERVICE
STATION; LOURDES MARTINEZ doing business
under the name and style of SHELL GATE N.
DOMINGO; BETHZAIDA TAN doing business under CESAR V. PURISIMA, in his capacity as Secretary
the name and style of ADVANCE SHELL STATION; of the Department of Finance and GUILLERMO L.
REYNALDO P. MONTOYA doing business under the PARAYNO, JR., in his capacity as Commissioner of
name and style of NEW LAMUAN SHELL SERVICE Internal Revenue,
STATION; EFREN SOTTO doing business under the
name and style of RED FIELD SHELL SERVICE Respondents.
STATION; DONICA CORPORATION represented by
its President, DESI TOMACRUZ; RUTH E. MARBIBI
doing business under the name and style of R&R
PETRON STATION; PETER M. UNGSON doing x-------------------------x
business under the name and style of CLASSIC
STAR GASOLINE SERVICE STATION; MARIAN
SHEILA A. LEE doing business under the name
and style of NTE GASOLINE & SERVICE STATION; FRANCIS JOSEPH G. ESCUDERO, VINCENT G.R. No. 168463
JULIAN CESAR P. POSADAS doing business under CRISOLOGO, EMMANUEL JOEL J. VILLANUEVA,
the name and style of STARCARGA ENTERPRISES; RODOLFO G. PLAZA, DARLENE ANTONINO-
ADORACION MAEBO doing business under the CUSTODIO, OSCAR G. MALAPITAN, BENJAMIN C.

Santiago v Guingona Page 86 of 106

AGARAO, JR. JUAN EDGARDO M. ANGARA, JUSTIN
MARC SB. CHIPECO, FLORENCIO G. NOEL, MUJIV S.
HATAMAN, RENATO B. MAGTUBO, JOSEPH A.
SANTIAGO, TEOFISTO DL. GUINGONA III, RUY
ELIAS C. LOPEZ, RODOLFO Q. AGBAYANI and
TEODORO A. CASIO,
Petitioners,
- versus -
CESAR V. PURISIMA, in his capacity as Secretary
of Finance, GUILLERMO L. PARAYNO, JR., in his
capacity as Commissioner of Internal Revenue,
and EDUARDO R. ERMITA, in his capacity as
Executive Secretary,
Respondents.
x-------------------------x
BATAAN GOVERNOR ENRIQUE T. GARCIA, JR.
Petitioner,
- versus -
HON. EDUARDO R. ERMITA, in his capacity as the
Executive Secretary; HON. MARGARITO TEVES, in
his capacity as Secretary of Finance; HON. JOSE
MARIO BUNAG, in his capacity as the OIC
Commissioner of the Bureau of Internal Revenue;
and HON. ALEXANDER AREVALO, in his capacity as
the OIC Commissioner of the Bureau of Customs,
Respondents.
x-----------------------------------------------------------x
DECISION
AUSTRIA-MARTINEZ, J.:
The expenses of government, having for their object the interest of all, should be
borne by everyone, and the more man enjoys the advantages of society, the more
he ought to hold himself honored in contributing to those expenses.
-Anne Robert Jacques Turgot (1727-1781)
French statesman and economist
Mounting budget deficit, revenue generation, inadequate fiscal allocation for
education, increased emoluments for health workers, and wider coverage for full
value-added tax benefits these are the reasons why Republic Act No. 9337 (R.A. No.
9337)[1] was enacted. Reasons, the wisdom of which, the Court even with its
extensive constitutional power of review, cannot probe. The petitioners in these
cases, however, question not only the wisdom of the law, but also perceived
constitutional infirmities in its passage.
Every law enjoys in its favor the presumption of constitutionality. Their arguments
notwithstanding, petitioners failed to justify their call for the invalidity of the law.
Hence, R.A. No. 9337 is not unconstitutional.
LEGISLATIVE HISTORY
R.A. No. 9337 is a consolidation of three legislative bills namely, House Bill Nos.
3555 and 3705, and Senate Bill No. 1950.
House Bill No. 3555[2] was introduced on first reading on January 7, 2005. The House
G.R. No. 168730 Committee on Ways and Means approved the bill, in substitution of House Bill No.
1468, which Representative (Rep.) Eric D. Singson introduced on August 8, 2004.
The President certified the bill on January 7, 2005 for immediate enactment.
On January 27, 2005, the House of Representatives approved the bill on second and
third reading.
House Bill No. 3705[3] on the other hand, substituted House Bill No. 3105 introduced
by Rep. Salacnib F. Baterina, and House Bill No. 3381 introduced by Rep. Jacinto V.
Paras. Its mother bill is House Bill No. 3555. The House Committee on Ways and
Means approved the bill on February 2, 2005. The President also certified it as
urgent onFebruary 8, 2005. The House of Representatives approved the bill on
second and third reading on February 28, 2005.
Meanwhile, the Senate Committee on Ways and Means approved Senate Bill No.
1950[4] on March 7, 2005, in substitution of Senate Bill Nos. 1337, 1838 and 1873,
taking into consideration House Bill Nos. 3555 and 3705. Senator Ralph G. Recto
sponsored Senate Bill No. 1337, while Senate Bill Nos. 1838 and 1873 were both
sponsored by Sens. Franklin M. Drilon, Juan M. Flavier and Francis N. Pangilinan. The
Promulgated: President certified the bill on March 11, 2005, and was approved by the Senate on
second and third reading on April 13, 2005.
September 1, 2005
On the same date, April 13, 2005, the Senate agreed to the request of the House of
Representatives for a committee conference on the disagreeing provisions of the
proposed bills.
Santiago v Guingona Page 87 of 106

Before long, the Conference Committee on the Disagreeing Provisions of House Bill
No. 3555, House Bill No. 3705, and Senate Bill No. 1950, after having met and
discussed in full free and conference, recommended the approval of its report, which
the Senate did on May 10, 2005, and with the House of Representatives agreeing
thereto the next day, May 11, 2005.
On May 23, 2005, the enrolled copy of the consolidated House and Senate version
was transmitted to the President, who signed the same into law on May 24, 2005.
Thus, came R.A. No. 9337.
[5]
July 1, 2005 is the effectivity date of R.A. No. 9337. When said date came, the
Court issued a temporary restraining order, effective immediately and continuing
until further orders, enjoining respondents from enforcing and implementing the law.
Oral arguments were held on July 14, 2005. Significantly, during the hearing, the
Court speaking through Mr. Justice Artemio V. Panganiban, voiced the rationale for its
issuance of the temporary restraining order on July 1, 2005, to wit:
J. PANGANIBAN : . . . But before I go into the details of your presentation, let me just
tell you a little background. You know when the law took effect on July 1, 2005, the
Court issued a TRO at about 5 oclock in the afternoon. But before that, there was a
lot of complaints aired on television and on radio. Some people in a gas station were
complaining that the gas prices went up by 10%. Some people were complaining
that their electric bill will go up by 10%. Other times people riding in domestic air
carrier were complaining that the prices that theyll have to pay would have to go up
by 10%. While all that was being aired, per your presentation and per our own
understanding of the law, thats not true. Its not true that the e-vat law necessarily
increased prices by 10% uniformly isnt it?
ATTY. BANIQUED : No, Your Honor.
J. PANGANIBAN : It is not?
ATTY. BANIQUED : Its not, because, Your Honor, there is an Executive Order that
granted the Petroleum companies some subsidy . . . interrupted
J. PANGANIBAN : Thats correct . . .
ATTY. BANIQUED : . . . and therefore that was meant to temper the impact . . .
interrupted
J. PANGANIBAN : . . . mitigating measures . . .
ATTY. BANIQUED : Yes, Your Honor.
J. PANGANIBAN : As a matter of fact a part of the mitigating measures would be the
elimination of the Excise Tax and the import duties. That is why, it is not correct to
say that the VAT as to petroleum dealers increased prices by 10%.
ATTY. BANIQUED : Yes, Your Honor.
J. PANGANIBAN : And therefore, there is no justification for increasing the retail price
by 10% to cover the E-Vat tax. If you consider the excise tax and the import duties,
the Net Tax would probably be in the neighborhood of 7%? We are not going into
exact figures I am just trying to deliver a point that different industries, different
products, different services are hit differently. So its not correct to say that all prices
must go up by 10%.
ATTY. BANIQUED : Youre right, Your Honor.
J. PANGANIBAN : Now. For instance, Domestic Airline companies, Mr. Counsel, are at
present imposed a Sales Tax of 3%. When this E-Vat law took effect the Sales Tax
was also removed as a mitigating measure. So, therefore, there is no justification to
increase the fares by 10% at best 7%, correct?
ATTY. BANIQUED : I guess so, Your Honor, yes.
J. PANGANIBAN : There are other products that the people were complaining on that
first day, were being increased arbitrarily by 10%. And thats one reason among
many others this Court had to issue TRO because of the confusion in the
implementation. Thats why we added as an issue in this case, even if its tangentially
taken up by the pleadings of the parties, the confusion in the implementation of the
E-vat. Our people were subjected to the mercy of that confusion of an across the
board increase of 10%, which you yourself now admit and I think even the
Government will admit is incorrect. In some cases, it should be 3% only, in some
cases it should be 6% depending on these mitigating measures and the location and
situation of each product, of each service, of each company, isnt it?
ATTY. BANIQUED : Yes, Your Honor.
J. PANGANIBAN : Alright. So thats one reason why we had to issue a TRO pending the
clarification of all these and we wish the government will take time to clarify all
these by means of a more detailed implementing rules, in case the law is upheld by
this Court. . . .[6]
The Court also directed the parties to file their respective Memoranda.
G.R. No. 168056
Before R.A. No. 9337 took effect, petitioners ABAKADA GURO Party List, et al., filed a
petition for prohibition on May 27, 2005. They question the constitutionality of
Sections 4, 5 and 6 of R.A. No. 9337, amending Sections 106, 107 and 108,
respectively, of the National Internal Revenue Code (NIRC). Section 4 imposes a 10%
VAT on sale of goods and properties, Section 5 imposes a 10% VAT on importation of
goods, and Section 6 imposes a 10% VAT on sale of services and use or lease of
properties. These questioned provisions contain a uniform proviso authorizing the
President, upon recommendation of the Secretary of Finance, to raise the VAT rate to
12%, effective January 1, 2006, after any of the following conditions have been
satisfied, to wit:
. . . That the President, upon the recommendation of the Secretary of Finance, shall,
effective January 1, 2006, raise the rate of value-added tax to twelve percent (12%),
after any of the following conditions has been satisfied:
Santiago v Guingona Page 88 of 106
(i) Value-added tax collection as a percentage of Gross Domestic Product (GDP) of
the previous year exceeds two and four-fifth percent (2 4/5%); or
(ii) National government deficit as a percentage of GDP of the previous year exceeds
one and one-half percent (1 %).
Petitioners argue that the law is unconstitutional, as it constitutes abandonment by
Congress of its exclusive authority to fix the rate of taxes under Article VI, Section
28(2) of the 1987 Philippine Constitution.
G.R. No. 168207
On June 9, 2005, Sen. Aquilino Q. Pimentel, Jr., et al., filed a petition
for certiorari likewise assailing the constitutionality of Sections 4, 5 and 6 of R.A. No.
9337.
Aside from questioning the so-called stand-by authority of the President to increase
the VAT rate to 12%, on the ground that it amounts to an undue delegation of
legislative power, petitioners also contend that the increase in the VAT rate to 12%
contingent on any of the two conditions being satisfied violates the due process
clause embodied in Article III, Section 1 of the Constitution, as it imposes an unfair
and additional tax burden on the people, in that: (1) the 12% increase is ambiguous
because it does not state if the rate would be returned to the original 10% if the
conditions are no longer satisfied; (2) the rate is unfair and unreasonable, as the
people are unsure of the applicable VAT rate from year to year; and (3) the increase
in the VAT rate, which is supposed to be an incentive to the President to raise the
VAT collection to at least 2 4/5 of the GDP of the previous year, should only be based
on fiscal adequacy.
Petitioners further claim that the inclusion of a stand-by authority granted to the
President by the Bicameral Conference Committee is a violation of the no-
amendment rule upon last reading of a bill laid down in Article VI, Section 26(2) of
the Constitution.
G.R. No. 168461
Thereafter, a petition for prohibition was filed on June 29, 2005, by the Association
of Pilipinas Shell Dealers, Inc., et al., assailing the following provisions of R.A. No.
9337:
1) Section 8, amending Section 110 (A)(2) of the NIRC, requiring that the input tax
on depreciable goods shall be amortized over a 60-month period, if the acquisition,
excluding the VAT components, exceeds One Million Pesos (P1, 000,000.00);
2) Section 8, amending Section 110 (B) of the NIRC, imposing a 70% limit on the
amount of input tax to be credited against the output tax; and
3) Section 12, amending Section 114 (c) of the NIRC, authorizing the Government or
any of its political subdivisions, instrumentalities or agencies, including GOCCs, to
deduct a 5% final withholding tax on gross payments of goods and services, which
are subject to 10% VAT under Sections 106 (sale of goods and properties) and 108
(sale of services and use or lease of properties) of the NIRC.
Petitioners contend that these provisions are unconstitutional for being arbitrary,
oppressive, excessive, and confiscatory.
Petitioners argument is premised on the constitutional right of non-deprivation of
life, liberty or property without due process of law under Article III, Section 1 of the
Constitution. According to petitioners, the contested sections impose limitations on
the amount of input tax that may be claimed. Petitioners also argue that the input
tax partakes the nature of a property that may not be confiscated, appropriated, or
limited without due process of law. Petitioners further contend that like any other
property or property right, the input tax credit may be transferred or disposed of,
and that by limiting the same, the government gets to tax a profit or value-added
even if there is no profit or value-added.
Petitioners also believe that these provisions violate the constitutional guarantee of
equal protection of the law under Article III, Section 1 of the Constitution, as the
limitation on the creditable input tax if: (1) the entity has a high ratio of input tax; or
(2) invests in capital equipment; or (3) has several transactions with the
government, is not based on real and substantial differences to meet a valid
classification.
Lastly, petitioners contend that the 70% limit is anything but progressive, violative
of Article VI, Section 28(1) of the Constitution, and that it is the smaller businesses
with higher input tax to output tax ratio that will suffer the consequences thereof for
it wipes out whatever meager margins the petitioners make.
G.R. No. 168463
Several members of the House of Representatives led by Rep. Francis Joseph G.
Escudero filed this petition for certiorari on June 30, 2005. They question the
constitutionality of R.A. No. 9337 on the following grounds:
1) Sections 4, 5, and 6 of R.A. No. 9337 constitute an undue delegation of legislative
power, in violation of Article VI, Section 28(2) of the Constitution;
2) The Bicameral Conference Committee acted without jurisdiction in deleting the no
pass on provisions present in Senate Bill No. 1950 and House Bill No. 3705; and
3) Insertion by the Bicameral Conference Committee of Sections 27, 28, 34, 116,
117, 119, 121, 125,[7] 148, 151, 236, 237 and 288, which were present in Senate Bill
No. 1950, violates Article VI, Section 24(1) of the Constitution, which provides that
all appropriation, revenue or tariff bills shall originate exclusively in the House of
Representatives
G.R. No. 168730
On the eleventh hour, Governor Enrique T. Garcia filed a petition for certiorari and
prohibition on July 20, 2005, alleging unconstitutionality of the law on the ground
that the limitation on the creditable input tax in effect allows VAT-registered
establishments to retain a portion of the taxes they collect, thus violating the
principle that tax collection and revenue should be solely allocated for public
purposes and expenditures. Petitioner Garcia further claims that allowing these
Santiago v Guingona Page 89 of 106
establishments to pass on the tax to the consumers is inequitable, in violation of
Article VI, Section 28(1) of the Constitution.
RESPONDENTS COMMENT
The Office of the Solicitor General (OSG) filed a Comment in behalf of respondents.
Preliminarily, respondents contend that R.A. No. 9337 enjoys the presumption of
constitutionality and petitioners failed to cast doubt on its validity.
Relying on the case of Tolentino vs. Secretary of Finance, 235 SCRA
630 (1994), respondents argue that the procedural issues raised by petitioners, i.e.,
legality of the bicameral proceedings, exclusive origination of revenue measures and
the power of the Senate concomitant thereto, have already been settled. With
regard to the issue of undue delegation of legislative power to the President,
respondents contend that the law is complete and leaves no discretion to the
President but to increase the rate to 12% once any of the two conditions provided
therein arise.
Respondents also refute petitioners argument that the increase to 12%, as well as
the 70% limitation on the creditable input tax, the 60-month amortization on the
purchase or importation of capital goods exceeding P1,000,000.00, and the 5% final
withholding tax by government agencies, is arbitrary, oppressive, and confiscatory,
and that it violates the constitutional principle on progressive taxation, among
others.
Finally, respondents manifest that R.A. No. 9337 is the anchor of the governments
fiscal reform agenda. A reform in the value-added system of taxation is the core
revenue measure that will tilt the balance towards a sustainable macroeconomic
environment necessary for economic growth.
ISSUES
The Court defined the issues, as follows:
PROCEDURAL ISSUE
Whether R.A. No. 9337 violates the following provisions of the Constitution:
a. Article VI, Section 24, and
b. Article VI, Section 26(2)
SUBSTANTIVE ISSUES
1. Whether Sections 4, 5 and 6 of R.A. No. 9337, amending Sections 106, 107 and
108 of the NIRC, violate the following provisions of the Constitution:
a. Article VI, Section 28(1), and
b. Article VI, Section 28(2)
2. Whether Section 8 of R.A. No. 9337, amending Sections 110(A)(2) and 110(B) of
the NIRC; and Section 12 of R.A. No. 9337, amending Section 114(C) of the NIRC,
violate the following provisions of the Constitution:
a. Article VI, Section 28(1), and
b. Article III, Section 1
RULING OF THE COURT
As a prelude, the Court deems it apt to restate the general principles and concepts
of value-added tax (VAT), as the confusion and inevitably, litigation, breeds from a
fallacious notion of its nature.
The VAT is a tax on spending or consumption. It is levied on the sale, barter,
exchange or lease of goods or properties and services. [8] Being an indirect tax on
expenditure, the seller of goods or services may pass on the amount of tax paid to
the buyer,[9] with the seller acting merely as a tax collector. [10] The burden of VAT is
intended to fall on the immediate buyers and ultimately, the end-consumers.
In contrast, a direct tax is a tax for which a taxpayer is directly liable on the
transaction or business it engages in, without transferring the burden to someone
else.[11]Examples are individual and corporate income taxes, transfer taxes, and
residence taxes.[12]
In the Philippines, the value-added system of sales taxation has long been in
existence, albeit in a different mode. Prior to 1978, the system was a single-stage
tax computed under the cost deduction method and was payable only by the
original sellers. The single-stage system was subsequently modified, and a mixture
of the cost deduction method and tax credit method was used to determine the
value-added tax payable.[13] Under the tax credit method, an entity can credit
against or subtract from the VAT charged on its sales or outputs the VAT paid on its
purchases, inputs and imports.[14]
It was only in 1987, when President Corazon C. Aquino issued Executive Order No.
273, that the VAT system was rationalized by imposing a multi-stage tax rate of 0%
or 10% on all sales using the tax credit method.[15]
E.O. No. 273 was followed by R.A. No. 7716 or the Expanded VAT Law, [16] R.A. No.
8241 or the Improved VAT Law,[17] R.A. No. 8424 or the Tax Reform Act of 1997,
[18]
and finally, the presently beleaguered R.A. No. 9337, also referred to by
respondents as the VAT Reform Act.
The Court will now discuss the issues in logical sequence.
PROCEDURAL ISSUE
I.
Whether R.A. No. 9337 violates the following provisions of the Constitution:
a. Article VI, Section 24, and
b. Article VI, Section 26(2)
A. The Bicameral Conference Committee
Petitioners Escudero, et al., and Pimentel, et al., allege that the Bicameral
Conference Committee exceeded its authority by:
Santiago v Guingona Page 90 of 106

1) Inserting the stand-by authority in favor of the President in Sections 4, 5, and 6 of
R.A. No. 9337;
2) Deleting entirely the no pass-on provisions found in both the House and Senate
bills;
3) Inserting the provision imposing a 70% limit on the amount of input tax to be
credited against the output tax; and
4) Including the amendments introduced only by Senate Bill No. 1950 regarding
other kinds of taxes in addition to the value-added tax.
Petitioners now beseech the Court to define the powers of the Bicameral Conference
Committee.
It should be borne in mind that the power of internal regulation and discipline are
intrinsic in any legislative body for, as unerringly elucidated by Justice Story, [i]f the
power did not exist, it would be utterly impracticable to transact the business of the
nation, either at all, or at least with decency, deliberation, and order. [19] Thus, Article
VI, Section 16 (3) of the Constitution provides that each House may determine the
rules of its proceedings. Pursuant to this inherent constitutional power to promulgate
and implement its own rules of procedure, the respective rules of each house of
Congress provided for the creation of a Bicameral Conference Committee.
Thus, Rule XIV, Sections 88 and 89 of the Rules of House of Representatives provides
as follows:
Sec. 88. Conference Committee. In the event that the House does not agree with the
Senate on the amendment to any bill or joint resolution, the differences may be
settled by the conference committees of both chambers.
In resolving the differences with the Senate, the House panel shall, as much as
possible, adhere to and support the House Bill. If the differences with the Senate are
so substantial that they materially impair the House Bill, the panel shall report such
fact to the House for the latters appropriate action.
Sec. 89. Conference Committee Reports. . . . Each report shall contain a detailed,
sufficiently explicit statement of the changes in or amendments to the subject
measure.
...
The Chairman of the House panel may be interpellated on the Conference
Committee Report prior to the voting thereon. The House shall vote on the
Conference Committee Report in the same manner and procedure as it votes on a
bill on third and final reading.
Rule XII, Section 35 of the Rules of the Senate states:
Sec. 35. In the event that the Senate does not agree with the House of
Representatives on the provision of any bill or joint resolution, the differences shall
be settled by a conference committee of both Houses which shall meet within ten
(10) days after their composition. The President shall designate the members of the
Senate Panel in the conference committee with the approval of the Senate.
Each Conference Committee Report shall contain a detailed and sufficiently explicit
statement of the changes in, or amendments to the subject measure, and shall be
signed by a majority of the members of each House panel, voting separately.
A comparative presentation of the conflicting House and Senate provisions and a
reconciled version thereof with the explanatory statement of the conference
committee shall be attached to the report.
...
The creation of such conference committee was apparently in response to a
problem, not addressed by any constitutional provision, where the two houses of
Congress find themselves in disagreement over changes or amendments introduced
by the other house in a legislative bill. Given that one of the most basic powers of
the legislative branch is to formulate and implement its own rules of proceedings
and to discipline its members, may the Court then delve into the details of how
Congress complies with its internal rules or how it conducts its business of passing
legislation? Note that in the present petitions, the issue is not whether provisions of
the rules of both houses creating the bicameral conference committee are
unconstitutional, but whether the bicameral conference committee has strictly
complied with the rules of both houses, thereby remaining within the jurisdiction
conferred upon it by Congress.
In the recent case of Farias vs. The Executive Secretary,[20] the Court En
Banc, unanimously reiterated and emphasized its adherence to the enrolled bill
doctrine, thus, declining therein petitioners plea for the Court to go behind the
enrolled copy of the bill. Assailed in said case was Congresss creation of two sets of
bicameral conference committees, the lack of records of said committees
proceedings, the alleged violation of said committees of the rules of both houses,
and the disappearance or deletion of one of the provisions in the compromise bill
submitted by the bicameral conference committee. It was argued that such
irregularities in the passage of the law nullified R.A. No. 9006, or the Fair Election
Act.
Striking down such argument, the Court held thus:
Under the enrolled bill doctrine, the signing of a bill by the Speaker of the House and
the Senate President and the certification of the Secretaries of both Houses of
Congress that it was passed are conclusive of its due enactment. A review of cases
reveals the Courts consistent adherence to the rule. The Court finds no reason to
deviate from the salutary rule in this case where the irregularities alleged by the
petitioners mostly involved the internal rules of Congress, e.g., creation of the 2nd or
3rd Bicameral Conference Committee by the House. This Court is not the proper
forum for the enforcement of these internal rules of Congress, whether House or
Senate. Parliamentary rules are merely procedural and with their observance the
courts have no concern. Whatever doubts there may be as to the formal validity of
Santiago v Guingona Page 91 of 106
Rep. Act No. 9006 must be resolved in its favor. The Court reiterates its ruling
inArroyo vs. De Venecia, viz.: With regard to Stand-By Authority in favor of President

But the cases, both here and abroad, in varying forms of expression, all deny to the
courts the power to inquire into allegations that, in enacting a law, a House of Provides for 12% Provides for 12% VAT in Provides for a single rate
Congress failed to comply with its own rules, in the absence of showing that there VAT on every sale of general on sales of of 10% VAT on sale of
was a violation of a constitutional provision or the rights of private goods or properties goods or properties and goods or properties
individuals. InOsmea v. Pendatun, it was held: At any rate, courts have declared that (amending Sec. 106 reduced rates for sale of (amending Sec. 106 of
the rules adopted by deliberative bodies are subject to revocation, modification or of NIRC); 12% VAT certain locally NIRC), 10% VAT on sale
waiver at the pleasure of the body adopting them. And it has been said that on importation of manufactured goods of services including sale
Parliamentary rules are merely procedural, and with their observance, the courts goods (amending and petroleum products of electricity by
have no concern. They may be waived or disregarded by the legislative body. Sec. 107 of NIRC); and raw materials to be generation companies,
Consequently, mere failure to conform to parliamentary usage will not invalidate the and 12% VAT on sale used in the transmission and
action (taken by a deliberative body) when the requisite number of members have of services and use manufacture thereof distribution companies,
agreed to a particular measure.[21] (Emphasis supplied) or lease of (amending Sec. 106 of and use or lease of
properties NIRC); 12% VAT on properties (amending
(amending Sec. 108 importation of goods Sec. 108 of NIRC)
The foregoing declaration is exactly in point with the present cases, where of NIRC) and reduced rates for
petitioners allege irregularities committed by the conference committee in certain imported
introducing changes or deleting provisions in the House and Senate bills. Akin to products including
the Farias case,[22] the present petitions also raise an issue regarding the actions petroleum products
taken by the conference committee on matters regarding Congress compliance with (amending Sec. 107 of
its own internal rules. As stated earlier, one of the most basic and inherent power of NIRC); and 12% VAT on
the legislature is the power to formulate rules for its proceedings and the discipline sale of services and use
of its members. Congress is the best judge of how it should conduct its own business or lease of properties
expeditiously and in the most orderly manner. It is also the sole and a reduced rate for
concern of Congress to instill discipline among the members of its conference certain services
committee if it believes that said members violated any of its rules of proceedings. including power
Even the expanded jurisdiction of this Court cannot apply to questions regarding generation (amending
only the internal operation of Congress, thus, the Court is wont to deny a review of Sec. 108 of NIRC)
the internal proceedings of a co-equal branch of government.

Moreover, as far back as 1994 or more than ten years ago, in the case of Tolentino
vs. Secretary of Finance, [23] the Court already made the pronouncement that [i]f a With regard to the no pass-on provision
change is desired in the practice [of the Bicameral Conference Committee] it must
be sought in Congress since this question is not covered by any constitutional
provision but is only an internal rule of each house. [24] To date, Congress has not No similar provision Provides that the VAT Provides that the VAT
seen it fit to make such changes adverted to by the Court. It seems, therefore, that imposed on power imposed on sales of
Congress finds the practices of the bicameral conference committee to be very generation and on the electricity by generation
useful for purposes of prompt and efficient legislative action. sale of petroleum companies and services
products shall be of transmission
Nevertheless, just to put minds at ease that no blatant irregularities tainted the absorbed by generation companies and
proceedings of the bicameral conference committees, the Court deems it necessary companies or sellers, distribution companies,
to dwell on the issue. The Court observes that there was a necessity for a respectively, and shall as well as those of
conference committee because a comparison of the provisions of House Bill Nos. not be passed on to franchise grantees of
3555 and 3705 on one hand, and Senate Bill No. 1950 on the other, reveals that consumers electric utilities shall not
there were indeed disagreements. As pointed out in the petitions, said apply to residential
disagreements were as follows: end-users. VAT shall be
absorbed by generation,
transmission, and
House Bill No. 3555 House Bill No.3705 Senate Bill No. 1950 distribution companies.

With regard to 70% limit on input tax credit

Santiago v Guingona Page 92 of 106
 (4) and whether the NIRC provisions on corporate income taxes, percentage,
franchise and excise taxes should be amended.

There being differences and/or disagreements on the foregoing provisions of the

Provides that the No similar provision Provides that the input
House and Senate bills, the Bicameral Conference Committee was mandated by the
input tax credit for tax credit for capital
rules of both houses of Congress to act on the same by settling said differences
capital goods on goods on which a VAT
and/or disagreements. The Bicameral Conference Committee acted on the
which a VAT has has been paid shall be
disagreeing provisions by making the following changes:
been paid shall be equally distributed over
equally distributed 5 years or the
1. With regard to the disagreement on the rate of VAT to be imposed, it would
over 5 years or the depreciable life of such
appear from the Conference Committee Report that the Bicameral Conference
depreciable life of capital goods; the input
Committee tried to bridge the gap in the difference between the 10% VAT rate
such capital goods; tax credit for goods and
proposed by the Senate, and the various rates with 12% as the highest VAT rate
the input tax credit services other than
proposed by the House, by striking a compromise whereby the present 10% VAT rate
for goods and capital goods shall not
would be retained until certain conditions arise, i.e., the value-added tax collection
services other than exceed 90% of the
as a percentage of gross domestic product (GDP) of the previous year exceeds 2
capital goods shall output VAT.
4/5%, or National Government deficit as a percentage of GDP of the previous year
not exceed 5% of
exceeds 1%, when the President, upon recommendation of the Secretary of Finance
the total amount of
shall raise the rate of VAT to 12% effective January 1, 2006.
such goods and
services; and for
2. With regard to the disagreement on whether only the VAT imposed on electricity
persons engaged in
generation, transmission and distribution companies should not be passed on to
retail trading of
consumers or whether both the VAT imposed on electricity generation, transmission
goods, the allowable
and distribution companies and the VAT imposed on sale of petroleum products may
input tax credit shall
be passed on to consumers, the Bicameral Conference Committee chose to settle
not exceed 11% of
such disagreement by altogether deleting from its Report any no pass-on provision.
the total amount of
goods purchased.
3. With regard to the disagreement on whether input tax credits should be limited or
not, the Bicameral Conference Committee decided to adopt the position of the
House by putting a limitation on the amount of input tax that may be credited
against the output tax, although it crafted its own language as to the amount of the
limitation on input tax credits and the manner of computing the same by providing
With regard to amendments to be made to NIRC provisions regarding income and thus:
excise taxes
(A) Creditable Input Tax. . . .
No similar provision No similar provision Provided for ...
amendments to several
NIRC provisions Provided, The input tax on goods purchased or imported in a calendar month for use
regarding corporate in trade or business for which deduction for depreciation is allowed under this Code,
income, percentage, shall be spread evenly over the month of acquisition and the fifty-nine (59)
franchise and excise succeeding months if the aggregate acquisition cost for such goods, excluding the
taxes VAT component thereof, exceeds one million Pesos (P1,000,000.00): PROVIDED,
however, that if the estimated useful life of the capital good is less than five (5)
years, as used for depreciation purposes, then the input VAT shall be spread over
such shorter period: . . .
The disagreements between the provisions in the House bills and the Senate bill
were with regard to (1) what rate of VAT is to be imposed; (2) whether only the VAT (B) Excess Output or Input Tax. If at the end of any taxable quarter the output tax
imposed on electricity generation, transmission and distribution companies should exceeds the input tax, the excess shall be paid by the VAT-registered person. If the
not be passed on to consumers, as proposed in the Senate bill, or both the VAT input tax exceeds the output tax, the excess shall be carried over to the succeeding
imposed on electricity generation, transmission and distribution companies and the quarter or quarters: PROVIDED that the input tax inclusive of input VAT carried over
VAT imposed on sale of petroleum products should not be passed on to consumers, from the previous quarter that may be credited in every quarter shall not exceed
as proposed in the House bill; (3) in what manner input tax credits should be limited; seventy percent (70%) of the output VAT: PROVIDED, HOWEVER, THAT any input tax

Santiago v Guingona Page 93 of 106

attributable to zero-rated sales by a VAT-registered person may at his option be
refunded or credited against other internal revenue taxes, . . .
4. With regard to the amendments to other provisions of the NIRC on corporate
income tax, franchise, percentage and excise taxes, the conference committee
decided to include such amendments and basically adopted the provisions found in
Senate Bill No. 1950, with some changes as to the rate of the tax to be imposed.
Under the provisions of both the Rules of the House of Representatives and Senate
Rules, the Bicameral Conference Committee is mandated to settle the differences
between the disagreeing provisions in the House bill and the Senate bill. The term
settle is synonymous to reconcile and harmonize. [25] To reconcile or harmonize
disagreeing provisions, the Bicameral Conference Committee may then (a) adopt the
specific provisions of either the House bill or Senate bill, (b) decide that neither
provisions in the House bill or the provisions in the Senate bill would
be carried into the final form of the bill, and/or (c) try to arrive at a compromise
between the disagreeing provisions.
In the present case, the changes introduced by the Bicameral Conference
Committee on disagreeing provisions were meant only to reconcile and harmonize
the disagreeing provisions for it did not inject any idea or intent that is wholly
foreign to the subject embraced by the original provisions.
The so-called stand-by authority in favor of the President, whereby the rate of 10%
VAT wanted by the Senate is retained until such time that certain conditions arise
when the 12% VAT wanted by the House shall be imposed, appears to be a
compromise to try to bridge the difference in the rate of VAT proposed by the two
houses of Congress. Nevertheless, such compromise is still totally within the subject
of what rate of VAT should be imposed on taxpayers.
The no pass-on provision was deleted altogether. In the transcripts of the
proceedings of the Bicameral Conference Committee held on May 10, 2005, Sen.
Ralph Recto, Chairman of the Senate Panel, explained the reason for deleting the no
pass-on provision in this wise:
. . . the thinking was just to keep the VAT law or the VAT bill simple. And we were
thinking that no sector should be a beneficiary of legislative grace, neither should
any sector be discriminated on. The VAT is an indirect tax. It is a pass on-tax. And
lets keep it plain and simple. Lets not confuse the bill and put a no pass-on
provision. Two-thirds of the world have a VAT system and in this two-thirds of the
globe, I have yet to see a VAT with a no pass-though provision. So, the thinking of
the Senate is basically simple, lets keep the VAT simple.[26] (Emphasis supplied)
Rep. Teodoro Locsin further made the manifestation that the no pass-on provision
never really enjoyed the support of either House.[27]
With regard to the amount of input tax to be credited against output tax, the
Bicameral Conference Committee came to a compromise on the percentage rate of
the limitation or cap on such input tax credit, but again, the change introduced by
the Bicameral Conference Committee was totally within the intent of both houses
to put a cap on input tax that may be
credited against the output tax. From the inception of the subject revenue bill in the
House of Representatives, one of the major objectives was to plug a glaring loophole
in the tax policy and administration by creating vital restrictions on the claiming of
input VAT tax credits . . . and [b]y introducing limitations on the claiming of tax
credit, we are capping a major leakage that has placed our collection efforts at an
apparent disadvantage.[28]
As to the amendments to NIRC provisions on taxes other than the value-added tax
proposed in Senate Bill No. 1950, since said provisions were among those referred to
it, the conference committee had to act on the same and it basically adopted the
version of the Senate.
Thus, all the changes or modifications made by the Bicameral Conference
Committee were germane to subjects of the provisions referred
to it for reconciliation. Such being the case, the Court does not see any grave abuse
of discretion amounting to lack or excess of jurisdiction committed by the Bicameral
Conference Committee. In the earlier cases of Philippine Judges Association vs.
Prado[29] and Tolentino vs. Secretary of Finance, [30] the Court recognized the long-
standing legislative practice of giving said conference committee ample latitude for
compromising differences between the Senate and the House. Thus, in
the Tolentino case, it was held that:
. . . it is within the power of a conference committee to include in its report an
entirely new provision that is not found either in the House bill or in the Senate bill. If
the committee can propose an amendment consisting of one or two provisions, there
is no reason why it cannot propose several provisions, collectively considered as an
amendment in the nature of a substitute, so long as such amendment is germane to
the subject of the bills before the committee. After all, its report was not final but
needed the approval of both houses of Congress to become valid as an act of the
legislative department. The charge that in this case the Conference Committee
acted as a third legislative chamber is thus without any basis. [31] (Emphasis supplied)
B. R.A. No. 9337 Does Not Violate Article VI, Section 26(2) of the Constitution on the
No-Amendment Rule
Article VI, Sec. 26 (2) of the Constitution, states:
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.
Petitioners argument that the practice where a bicameral conference committee is
allowed to add or delete provisions in the House bill and the Senate bill after these
had passed three readings is in effect a circumvention of the no amendment rule
(Sec. 26 (2), Art. VI of the 1987 Constitution), fails to convince the Court to deviate
from its ruling in the Tolentino case that:
Santiago v Guingona Page 94 of 106
Nor is there any reason for requiring that the Committees Report in these cases
must have undergone three readings in each of the two houses. If that be the case,
236 Registration requirements
there would be no end to negotiation since each house may seek modification of the
compromise bill. . . .
237 Issuance of receipts or sales or commercial invoices
Art. VI. 26 (2) must, therefore, be construed as referring only to bills introduced for
the first time in either house of Congress, not to the conference committee report. [32] 288 Disposition of Incremental Revenue
(Emphasis supplied)

The Court reiterates here that the no-amendment rule refers only to the procedure
to be followed by each house of Congress with regard to bills initiated in each of said
respective houses, before said bill is transmitted to the other house for its
concurrence or amendment. Verily, to construe said provision in a way as to
proscribe any further changes to a bill after one house has voted on it would lead to
absurdity as this would mean that the other house of Congress would be deprived of
its constitutional power to amend or introduce changes to said bill. Thus, Art. VI, Sec.
26 (2) of the Constitution cannot be taken to mean that the introduction by the
Bicameral Conference Committee of amendments and modifications to disagreeing
provisions in bills that have been acted upon by both houses of Congress is
prohibited.
Petitioners claim that the amendments to these provisions of the NIRC did not at all
originate from the House. They aver that House Bill No. 3555 proposed amendments
only regarding Sections 106, 107, 108, 110 and 114 of the NIRC, while House Bill No.
3705 proposed amendments only to Sections 106, 107,108, 109, 110 and 111 of the
NIRC; thus, the other sections of the NIRC which the Senate amended but which
amendments were not found in the House bills are not intended to be amended by
the House of Representatives. Hence, they argue that since the proposed
amendments did not originate from the House, such amendments are a violation of
Article VI, Section 24 of the Constitution.
The argument does not hold water.

C. R.A. No. 9337 Does Not Violate Article VI, Section 24 of the Constitution on Article VI, Section 24 of the Constitution reads:
Exclusive Origination of Revenue Bills
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
Coming to the issue of the validity of the amendments made regarding the NIRC the House of Representatives but the Senate may propose or concur with
provisions on corporate income taxes and percentage, excise taxes. Petitioners refer amendments.
to the following provisions, to wit:
In the present cases, petitioners admit that it was indeed House Bill Nos. 3555 and
Section 27 3705 that initiated the move for amending provisions of the NIRC dealing mainly
with the value-added tax. Upon transmittal of said House bills to the Senate, the
Rates of Income Tax on Domestic Corporation
Senate came out with Senate Bill No. 1950 proposing amendments not only to NIRC
provisions on the value-added tax but also amendments to NIRC provisions on other
28(A)(1) Tax on Resident Foreign Corporation
kinds of taxes. Is the introduction by the Senate of provisions not dealing directly
with the value- added tax, which is the only kind of tax being amended in the House
28(B)(1) Inter-corporate Dividends
bills, still within the purview of the constitutional provision authorizing the Senate to
propose or concur with amendments to a revenue bill that originated from the
34(B)(1) Inter-corporate Dividends House?
116 Tax on Persons Exempt from VAT The foregoing question had been squarely answered in the Tolentino case, wherein
the Court held, thus:
117 Percentage Tax on domestic carriers and keepers of Garage
. . . To begin with, it is not the law but the revenue bill which is required by the
119 Tax on franchises Constitution to originate exclusively in the House of Representatives. It is important
to emphasize this, because a bill originating in the House may undergo such
121 Tax on banks and Non-Bank Financial Intermediaries extensive changes in the Senate that the result may be a rewriting of the whole. . . .
At this point, what is important to note is that, as a result of the Senate action, a
148 Excise Tax on manufactured oils and other fuels distinct bill may be produced. To insist that a revenue statute and not only the bill
which initiated the legislative process culminating in the enactment of the law must
151 Excise Tax on mineral products substantially be the same as the House bill would be to deny the Senates power not

Santiago v Guingona Page 95 of 106

only to concur with amendments but also to propose amendments. It would be to
violate the coequality of legislative power of the two houses of Congress and in fact
make the House superior to the Senate.
Given, then, the power of the Senate to propose amendments, the Senate can
propose its own version even with respect to bills which are required by the
Constitution to originate in the House.
...
Indeed, what the Constitution simply means is that the initiative for filing revenue,
tariff or tax bills, bills authorizing an increase of the public debt, private bills and
bills of local application must come from the House of Representatives on the theory
that, elected as they are from the districts, the members of the House can be
expected to be more sensitive to the local needs and problems. On the other hand,
the senators, who are elected at large, are expected to approach the same problems
from the national perspective. Both views are thereby made to bear on the
enactment of such laws.[33] (Emphasis supplied)
Since there is no question that the revenue bill exclusively originated in the House of
Representatives, the Senate was acting within its
constitutional power to introduce amendments to the House bill when it included
provisions in Senate Bill No. 1950 amending corporate income taxes, percentage,
excise and franchise taxes. Verily, Article VI, Section 24 of the Constitution does not
contain any prohibition or limitation on the extent of the amendments that may be
introduced by the Senate to the House revenue bill.
Furthermore, the amendments introduced by the Senate to the NIRC provisions that
had not been touched in the House bills are still in furtherance of the intent of the
House in initiating the subject revenue bills. The Explanatory Note of House Bill No.
1468, the very first House bill introduced on the floor, which was later substituted by
House Bill No. 3555, stated:
One of the challenges faced by the present administration is the urgent and
daunting task of solving the countrys serious financial problems. To do this,
government expenditures must be strictly monitored and controlled and revenues
must be significantly increased. This may be easier said than done, but our fiscal
authorities are still optimistic the government will be operating on a balanced
budget by the year 2009. In fact, several measures that will result to significant
expenditure savings have been identified by the administration. It is supported with
a credible package of revenue measures that include measures to improve tax
administration and control the leakages in revenues from income taxes and the
value-added tax (VAT). (Emphasis supplied)
Rep. Eric D. Singson, in his sponsorship speech for House Bill No. 3555, declared
that:
In the budget message of our President in the year 2005, she reiterated that we all
acknowledged that on top of our agenda must be the restoration of the health of our
fiscal system.
In order to considerably lower the consolidated public sector deficit and eventually
achieve a balanced budget by the year 2009, we need to seize windows of
opportunities which might seem poignant in the beginning, but in the long run prove
effective and beneficial to the overall status of our economy. One such opportunity is
a review of existing tax rates, evaluating the relevance given our present conditions.
[34]
(Emphasis supplied)
Notably therefore, the main purpose of the bills emanating from the House of
Representatives is to bring in sizeable revenues for the government
to supplement our countrys serious financial problems, and improve tax
administration and control of the leakages in revenues from income taxes and value-
added taxes. As these house bills were transmitted to the Senate, the latter,
approaching the measures from the point of national perspective, can introduce
amendments within the purposes of those bills. It can provide for ways that would
soften the impact of the VAT measure on the consumer, i.e., by distributing the
burden across all sectors instead of putting it entirely on the shoulders of the
consumers. The sponsorship speech of Sen. Ralph Recto on why the provisions on
income tax on corporation were included is worth quoting:
All in all, the proposal of the Senate Committee on Ways and Means will raise P64.3
billion in additional revenues annually even while by mitigating prices of power,
services and petroleum products.
However, not all of this will be wrung out of VAT. In fact, only P48.7 billion amount is
from the VAT on twelve goods and services. The rest of the tab P10.5 billion- will be
picked by corporations.
What we therefore prescribe is a burden sharing between corporate Philippines and
the consumer. Why should the latter bear all the pain? Why should the fiscal
salvation be only on the burden of the consumer?
The corporate worlds equity is in form of the increase in the corporate income tax
from 32 to 35 percent, but up to 2008 only. This will raise P10.5 billion a year. After
that, the rate will slide back, not to its old rate of 32 percent, but two notches lower,
to 30 percent.
Clearly, we are telling those with the capacity to pay, corporations, to bear with this
emergency provision that will be in effect for 1,200 days, while we put our fiscal
house in order. This fiscal medicine will have an expiry date.
For their assistance, a reward of tax reduction awaits them. We intend to keep the
length of their sacrifice brief. We would like to assure them that not because there is
a light at the end of the tunnel, this government will keep on making the tunnel
long.
The responsibility will not rest solely on the weary shoulders of the small man. Big
business will be there to share the burden. [35]
As the Court has said, the Senate can propose amendments and in fact, the
amendments made on provisions in the tax on income of corporations are germane
to the purpose of the house bills which is to raise revenues for the government.
Santiago v Guingona Page 96 of 106

Likewise, the Court finds the sections referring to other percentage and excise taxes
germane to the reforms to the VAT system, as these sections would cushion the
effects of VAT on consumers. Considering that certain goods and services which
were subject to percentage tax and excise tax would no longer be VAT-exempt, the
consumer would be burdened more as they would be paying the VAT in addition to
these taxes. Thus, there is a need to amend these sections to soften the impact of
VAT. Again, in his sponsorship speech, Sen. Recto said:
However, for power plants that run on oil, we will reduce to zero the present excise
tax on bunker fuel, to lessen the effect of a VAT on this product.
For electric utilities like Meralco, we will wipe out the franchise tax in exchange for a
VAT.
And in the case of petroleum, while we will levy the VAT on oil products, so as not to
destroy the VAT chain, we will however bring down the excise tax on socially
sensitive products such as diesel, bunker, fuel and kerosene.
...
What do all these exercises point to? These are not contortions of giving to the left
hand what was taken from the right. Rather, these sprang from our concern of
softening the impact of VAT, so that the people can cushion the blow of higher prices
they will have to pay as a result of VAT.[36]
The other sections amended by the Senate pertained to matters of tax
administration which are necessary for the implementation of the changes in the
VAT system.
To reiterate, the sections introduced by the Senate are germane to the subject
matter and purposes of the house bills, which is to supplement our countrys fiscal
deficit, among others. Thus, the Senate acted within its power to propose those
amendments.
SUBSTANTIVE ISSUES
I.
Whether Sections 4, 5 and 6 of R.A. No. 9337, amending Sections 106, 107 and 108
of the NIRC, violate the following provisions of the Constitution:
a. Article VI, Section 28(1), and
b. Article VI, Section 28(2)
A. No Undue Delegation of Legislative Power
Petitioners ABAKADA GURO Party List, et al., Pimentel, Jr., et al., and Escudero, et
al. contend in common that Sections 4, 5 and 6 of R.A. No. 9337, amending Sections
106, 107 and 108, respectively, of the NIRC giving the President the stand-by
authority to raise the VAT rate from 10% to 12% when a certain condition is met,
constitutes undue delegation of the legislative power to tax.
The assailed provisions read as follows:
SEC. 4. Sec. 106 of the same Code, as amended, is hereby further amended to read
as follows:
SEC. 106. Value-Added Tax on Sale of Goods or Properties.
(A) Rate and Base of Tax. There shall be levied, assessed and collected on every
sale, barter or exchange of goods or properties, a value-added tax equivalent to ten
percent (10%) of the gross selling price or gross value in money of the goods or
properties sold, bartered or exchanged, such tax to be paid by the seller or
transferor: provided, that the President, upon the recommendation of the Secretary
of Finance, shall, effective January 1, 2006, raise the rate of value-added tax to
twelve percent (12%), after any of the following conditions has been satisfied.
(i) value-added tax collection as a percentage of Gross Domestic Product
(GDP) of the previous year exceeds two and four-fifth percent (2 4/5%) or
(ii) national government deficit as a percentage of GDP of the previous year exceeds
one and one-half percent (1 %).
SEC. 5. Section 107 of the same Code, as amended, is hereby further amended to
read as follows:
SEC. 107. Value-Added Tax on Importation of Goods.
(A) In General. There shall be levied, assessed and collected on every importation of
goods a value-added tax equivalent to ten percent (10%) based on the total value
used by the Bureau of Customs in determining tariff and customs duties, plus
customs duties, excise taxes, if any, and other charges, such tax to be paid by the
importer prior to the release of such goods from customs custody: Provided, That
where the customs duties are determined on the basis of the quantity or volume of
the goods, the value-added tax shall be based on the landed cost plus excise taxes,
if any: provided, further, that the President, upon the recommendation of the
Secretary of Finance, shall, effective January 1, 2006, raise the rate of value-added
tax to twelve percent (12%) after any of the following conditions has been satisfied.
(i) value-added tax collection as a percentage of Gross Domestic Product (GDP) of
the previous year exceeds two and four-fifth percent (2 4/5%) or
(ii) national government deficit as a percentage of GDP of the previous year exceeds
one and one-half percent (1 %).
SEC. 6. Section 108 of the same Code, as amended, is hereby further amended to
read as follows:
SEC. 108. Value-added Tax on Sale of Services and Use or Lease of Properties
(A) Rate and Base of Tax. There shall be levied, assessed and collected, a value-
added tax equivalent to ten percent (10%) of gross receipts derived from the sale or
exchange of services: provided, that the President, upon the recommendation of the
Secretary of Finance, shall, effective January 1, 2006, raise the rate of value-added
tax to twelve percent (12%), after any of the following conditions has been satisfied.
(i) value-added tax collection as a percentage of Gross Domestic Product (GDP) of
the previous year exceeds two and four-fifth percent (2 4/5%) or
Santiago v Guingona Page 97 of 106
(ii) national government deficit as a percentage of GDP of the previous year exceeds
one and one-half percent (1 %). (Emphasis supplied)
Petitioners allege that the grant of the stand-by authority to the President to
increase the VAT rate is a virtual abdication by Congress of its exclusive power to tax
because such delegation is not within the purview of Section 28 (2), Article VI of the
Constitution, which provides:
The Congress may, by law, authorize the President to fix within specified limits, and
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.
They argue that the VAT is a tax levied on the sale, barter or exchange of goods and
properties as well as on the sale or exchange of services, which cannot be included
within the purview of tariffs under the exempted delegation as the latter refers to
customs duties, tolls or tribute payable upon merchandise to the government and
usually imposed on goods or merchandise imported or exported.
Petitioners ABAKADA GURO Party List, et al., further contend that delegating to the
President the legislative power to tax is contrary to republicanism. They insist that
accountability, responsibility and transparency should dictate the actions of
Congress and they should not pass to the President the decision to impose taxes.
They also argue that the law also effectively nullified the Presidents power of
control, which includes the authority to set aside and nullify the acts of her
subordinates like the Secretary of Finance, by mandating the fixing of the tax rate by
the President upon the recommendation of the Secretary of Finance.
Petitioners Pimentel, et al. aver that the President has ample powers to cause,
influence or create the conditions provided by the law to bring about either or both
the conditions precedent.
On the other hand, petitioners Escudero, et al. find bizarre and revolting the
situation that the imposition of the 12% rate would be subject to the whim of the
Secretary of Finance, an unelected bureaucrat, contrary to the principle of no
taxation without representation. They submit that the Secretary of Finance is not
mandated to give a favorable recommendation and he may not even give his
recommendation. Moreover, they allege that no guiding standards are provided in
the law on what basis and as to how he will make his recommendation. They claim,
nonetheless, that any recommendation of the Secretary of Finance can easily be
brushed aside by the President since the former is a mere alter ego of the latter,
such that, ultimately, it is the President who decides whether to impose the
increased tax rate or not.
A brief discourse on the principle of non-delegation of powers is instructive.
The principle of separation of powers ordains that each of the three great branches
of government has exclusive cognizance of and is supreme in matters falling within
its own constitutionally allocated sphere.[37] A logical
corollary to the doctrine of separation of powers is the principle of non-delegation of
powers, as expressed in the Latin maxim: potestas delegata non
delegari potest which means what has been delegated, cannot be delegated. [38] This
doctrine is based on the ethical principle that such as delegated power constitutes
not only a right but a duty to be performed by the delegate through the
instrumentality of his own judgment and not through the intervening mind of
another.[39]
With respect to the Legislature, Section 1 of Article VI of the Constitution provides
that the Legislative power shall be vested in the Congress of the Philippines which
shall consist of a Senate and a House of Representatives. The powers which
Congress is prohibited from delegating are those which are strictly, or inherently and
exclusively, legislative. Purely legislative power, which can never be delegated, has
been described as the authority to make a complete law complete as to the time
when it shall take effect and as to whom it shall be applicable and to determine the
expediency of its enactment.[40] Thus, the rule is that in order that a court may be
justified in holding a statute unconstitutional as a delegation of legislative power, it
must appear that the power involved is purely legislative in nature that is, one
appertaining exclusively to the legislative department. It is the nature of the power,
and not the liability of its use or the manner of its exercise, which determines the
validity of its delegation.
Nonetheless, the general rule barring delegation of legislative powers is subject to
the following recognized limitations or exceptions:
(1) Delegation of tariff powers to the President under Section 28 (2) of Article VI of
the Constitution;
(2) Delegation of emergency powers to the President under Section 23 (2) of Article
VI of the Constitution;
(3) Delegation to the people at large;
(4) Delegation to local governments; and
(5) Delegation to administrative bodies.
In every case of permissible delegation, there must be a showing that the delegation
itself is valid. It is valid only if the law (a) is complete in itself, setting forth therein
the policy to be executed, carried out, or implemented by the delegate; [41] and (b)
fixes a standard the limits of which are sufficiently determinate and determinable to
which the delegate must conform in the performance of his functions. [42] A sufficient
standard is one which defines legislative policy, marks its limits, maps out its
boundaries and specifies the public agency to apply it. It indicates the circumstances
under which the legislative command is to be effected. [43] Both tests are intended to
prevent a total transference of legislative authority to the delegate, who is not
allowed to step into the shoes of the legislature and exercise a power essentially
legislative.[44]
In People vs. Vera,[45] the Court, through eminent Justice Jose P. Laurel, expounded on
the concept and extent of delegation of power in this wise:
In testing whether a statute constitutes an undue delegation of legislative power or
not, it is usual to inquire whether the statute was complete in all its terms and
provisions when it left the hands of the legislature so that nothing was left to the
judgment of any other appointee or delegate of the legislature.
...
Santiago v Guingona Page 98 of 106
The true distinction, says Judge Ranney, is between the delegation of power to make
the law, which necessarily involves a discretion as to what it shall be, and conferring
an 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.
...
It is contended, however, that a legislative act may be made to the effect as law
after it leaves the hands of the legislature. It is true that laws may be made effective
on certain contingencies, as by proclamation of the executive or the adoption by the
people of a particular community. In Wayman vs. Southard, the Supreme Court of
the United States ruled that the legislature may delegate a power not legislative
which it may itself rightfully exercise. The power to ascertain facts is such a power
which may be delegated. There is nothing essentially legislative in ascertaining the
existence of facts or conditions as the basis of the taking into effect of a law. That is
a mental process common to all branches of the government.Notwithstanding the
apparent tendency, however, to relax the rule prohibiting delegation of legislative
authority on account of the complexity arising from social and economic forces at
work in this modern industrial age, the orthodox pronouncement of Judge Cooley in
his work on Constitutional Limitations finds restatement in Prof. Willoughby's treatise
on the Constitution of the United States in the following language speaking of
declaration of legislative power to administrative agencies: The principle which
permits the legislature to provide that the administrative agent may determine
when the circumstances are such as require the application of a law is defended
upon the ground that at the time this authority is granted, the rule of public policy,
which is the essence of the legislative act, is determined by the legislature. In other
words, the legislature, as it is its duty to do, determines that, under given
circumstances, certain executive or administrative action is to be taken, and that,
under other circumstances, different or no action at all is to be taken. What is thus
left to the administrative official is not the legislative determination of what public
policy demands, but simply the ascertainment of what the facts of the case require
to be done according to the terms of the law by which he is governed. The efficiency
of an Act as a declaration of legislative will must, of course, come from Congress,
but the ascertainment of the contingency upon which the Act shall take effect may
be left to such agencies as it may designate. The legislature, then, may provide that
a law shall take effect upon the happening of future specified contingencies leaving
to some other person or body the power to determine when the specified
contingency has arisen. (Emphasis supplied).[46]
In Edu vs. Ericta,[47] the Court reiterated:
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 inquiry must be directed to
the scope and definiteness of the measure enacted. The legislative does not
abdicate its functions 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 be the only way
in which the legislative process can go forward. A distinction has rightfully been
made between delegation of power to make the laws which necessarily involves a
discretion as to what it shall be, which constitutionally may not be done, and
delegation of authority or discretion as to its execution to be exercised under and in
pursuance of the law, to which no valid objection can be made. The Constitution is
thus not to be regarded as denying the legislature the necessary resources of
flexibility and practicability. (Emphasis supplied). [48]
Clearly, the legislature may delegate to executive officers or bodies the power to
determine certain facts or conditions, or the happening of contingencies, on which
the operation of a statute is, by its terms, made to depend, but the legislature must
prescribe sufficient standards, policies or limitations on their authority. [49] While the
power to tax cannot be delegated to executive agencies, details as to the
enforcement and administration of an exercise of such power may be left to them,
including the power to determine the existence of facts on which its operation
depends.[50]
The rationale for this is that the preliminary ascertainment of facts as basis for the
enactment of legislation is not of itself a legislative function, but is simply ancillary
to legislation. Thus, the duty of correlating information and making
recommendations is the kind of subsidiary activity which the legislature may
perform through its members, or which it may delegate to others to perform.
Intelligent legislation on the complicated problems of modern society is impossible
in the absence of accurate information on the part of the legislators, and any
reasonable method of securing such information is proper. [51] The Constitution as a
continuously operative charter of government does not require that Congress find
for itself
every fact upon which it desires to base legislative action or that it make for itself
detailed determinations which it has declared to be prerequisite to application of
legislative policy to particular facts and circumstances impossible for Congress itself
properly to investigate.[52]
In the present case, the challenged section of R.A. No. 9337 is the
common proviso in Sections 4, 5 and 6 which reads as follows:
That the President, upon the recommendation of the Secretary of Finance, shall,
effective January 1, 2006, raise the rate of value-added tax to twelve percent (12%),
after any of the following conditions has been satisfied:
(i) Value-added tax collection as a percentage of Gross Domestic Product (GDP) of
the previous year exceeds two and four-fifth percent (2 4/5%); or
(ii) National government deficit as a percentage of GDP of the previous year exceeds
one and one-half percent (1 %).
The case before the Court is not a delegation of legislative power. It is simply a
delegation of ascertainment of facts upon which enforcement and administration of
the increase rate under the law is contingent. The legislature has made the
operation of the 12% rate effective January 1, 2006, contingent upon a specified fact
or condition. It leaves the entire operation or non-operation of the 12% rate upon
factual matters outside of the control of the executive.
No discretion would be exercised by the President. Highlighting the absence of
discretion is the fact that the word shall is used in the common proviso. The use of
the word shall connotes a mandatory order. Its use in a statute denotes an
Santiago v Guingona Page 99 of 106
imperative obligation and is inconsistent with the idea of discretion. [53] Where the law
is clear and unambiguous, it must be taken to mean exactly what it says, and courts
have no choice but to see to it that the mandate is obeyed.[54]
Thus, it is the ministerial duty of the President to immediately impose the 12% rate
upon the existence of any of the conditions specified by Congress. This is a duty
which cannot be evaded by the President. Inasmuch as the law specifically uses the
word shall, the exercise of discretion by the President does not come into play. It is a
clear directive to impose the 12% VAT rate when the specified conditions are
present. The time of taking into effect of the 12% VAT rate is based on the
happening of a certain specified contingency, or upon the ascertainment of certain
facts or conditions by a person or body other than the legislature itself.
The Court finds no merit to the contention of petitioners ABAKADA GURO Party List,
et al. that the law effectively nullified the Presidents power of control over the
Secretary of Finance by mandating the fixing of the tax rate by the President upon
the recommendation of the Secretary of Finance. The Court cannot also subscribe to
the position of petitioners
Pimentel, et al. that the word shall should be interpreted to mean may in view of the
phrase upon the recommendation of the Secretary of Finance. Neither does the
Court find persuasive the submission of petitioners Escudero, et al. that any
recommendation by the Secretary of Finance can easily be brushed aside by the
President since the former is a mere alter ego of the latter.
When one speaks of the Secretary of Finance as the alter ego of the President, it
simply means that as head of the Department of Finance he is the assistant and
agent of the Chief Executive. The multifarious executive and administrative
functions of the Chief Executive are performed by and through the executive
departments, and the acts of the secretaries of such departments, such as the
Department of Finance, performed and promulgated in the regular course of
business, are, unless disapproved or reprobated by the Chief Executive,
presumptively the acts of the Chief Executive. The Secretary of Finance, as such,
occupies a political position and holds office in an advisory capacity, and, in the
language of Thomas Jefferson, "should be of the President's bosom confidence" and,
in the language of Attorney-General Cushing, is subject to the direction of the
President."[55]
In the present case, in making his recommendation to the President on the existence
of either of the two conditions, the Secretary of Finance is not acting as the alter ego
of the President or even her subordinate. In such instance, he is not subject to the
power of control and direction of the President. He is acting as the agent of the
legislative department, to determine and declare the event upon which its
expressed will is to take effect.[56] The Secretary of Finance becomes the means or
tool by which legislative policy is determined and implemented, considering that he
possesses all the facilities to gather data and information and has a much broader
perspective to properly evaluate them. His function is to gather and collate
statistical data and other pertinent information and verify if any of the two
conditions laid out by Congress is present. His personality in such instance is in
reality but a projection of that of Congress. Thus, being the agent of Congress and
not of the President, the President cannot alter or modify or nullify, or set aside the
findings of the Secretary of Finance and to substitute the judgment of the former for
that of the latter.
Congress simply granted the Secretary of Finance the authority to ascertain the
existence of a fact, namely, whether by December 31, 2005, the value-added tax
collection as a percentage of Gross Domestic Product (GDP) of the previous year
exceeds two and four-fifth percent (2 4/5%) or the national government deficit as a
percentage of GDP of the previous year exceeds one and one-half percent (1%). If
either of these two instances has occurred, the Secretary of Finance, by legislative
mandate, must submit such information to the President. Then the 12% VAT rate
must be imposed by the President effective January 1, 2006. There is no undue
delegation of legislative power but only of the discretion as to the execution of a law.
This is constitutionally permissible.[57] Congress does not abdicate its functions or
unduly delegate power when it describes what job must be done, who must do it,
and what is the scope of his authority; in our complex economy that is frequently
the only way in which the legislative process can go forward.[58]
As to the argument of petitioners ABAKADA GURO Party List, et al. that delegating to
the President the legislative power to tax is contrary to the principle of
republicanism, the same deserves scant consideration. Congress did not delegate
the power to tax but the mere implementation of the law. The intent and will to
increase the VAT rate to 12% came from Congress and the task of the President is to
simply execute the legislative policy. That Congress chose to do so in such a manner
is not within the province of the Court to inquire into, its task being to interpret the
law.[59]
The insinuation by petitioners Pimentel, et al. that the President has ample powers
to cause, influence or create the conditions to bring about either or both the
conditions precedent does not deserve any merit as this argument is highly
speculative. The Court does not rule on allegations which are manifestly conjectural,
as these may not exist at all.The Court deals with facts, not fancies; on realities, not
appearances. When the Court acts on appearances instead of realities, justice and
law will be short-lived.
B. The 12% Increase VAT Rate Does Not Impose an Unfair and Unnecessary
Additional Tax Burden
Petitioners Pimentel, et al. argue that the 12% increase in the VAT rate imposes an
unfair and additional tax burden on the people. Petitioners also argue that the 12%
increase, dependent on any of the 2 conditions set forth in the contested provisions,
is ambiguous because it does not state if the VAT rate would be returned to the
original 10% if the rates are no longer satisfied. Petitioners also argue that such rate
is unfair and unreasonable, as the people are unsure of the applicable VAT rate from
year to year.
Under the common provisos of Sections 4, 5 and 6 of R.A. No. 9337, if any of the two
conditions set forth therein are satisfied, the President shall increase the VAT rate to
12%. The provisions of the law are clear. It does not provide for a return to the 10%
rate nor does it empower the President to so revert if, after the rate is increased to
12%, the VAT collection goes below the 2 4/5 of the GDP of the previous year or that
the national government deficit as a percentage of GDP of the previous year does
not exceed 1%.
Santiago v Guingona Page 100 of 106
Therefore, no statutory construction or interpretation is needed. Neither can
conditions or limitations be introduced where none is provided for. Rewriting the law
is a forbidden ground that only Congress may tread upon. [60]
Thus, in the absence of any provision providing for a return to the 10% rate, which in
this case the Court finds none, petitioners argument is, at best, purely speculative.
There is no basis for petitioners fear of a fluctuating VAT rate because the law itself
does not provide that the rate should go back to 10% if the conditions provided in
Sections 4, 5 and 6 are no longer present. The rule is that where the provision of the
law is clear and unambiguous, so that there is no occasion for the court's seeking
the legislative intent, the law must be taken as it is, devoid of judicial addition or
subtraction.[61]
Petitioners also contend that the increase in the VAT rate, which was allegedly an
incentive to the President to raise the VAT collection to at least 2 4/5 of the GDP of
the previous year, should be based on fiscal adequacy.
Petitioners obviously overlooked that increase in VAT collection is not
the only condition. There is another condition, i.e., the national government deficit
as a percentage of GDP of the previous year exceeds one and one-half percent (1
%).
Respondents explained the philosophy behind these alternative conditions:
1. VAT/GDP Ratio > 2.8%
The condition set for increasing VAT rate to 12% have economic or fiscal meaning. If
VAT/GDP is less than 2.8%, it means that government has weak or no capability of
implementing the VAT or that VAT is not effective in the function of the tax
collection. Therefore, there is no value to increase it to 12% because such action will
also be ineffectual.
2. Natl Govt Deficit/GDP >1.5%
The condition set for increasing VAT when deficit/GDP is 1.5% or less means the
fiscal condition of government has reached a relatively sound position or is towards
the direction of a balanced budget position. Therefore, there is no need to increase
the VAT rate since the fiscal house is in a relatively healthy position. Otherwise
stated, if the ratio is more than 1.5%, there is indeed a need to increase the VAT
rate.[62]
That the first condition amounts to an incentive to the President to increase the VAT
collection does not render it unconstitutional so long as there is a public purpose for
which the law was passed, which in this case, is mainly to raise revenue. In
fact, fiscal adequacy dictated the need for a raise in revenue.
The principle of fiscal adequacy as a characteristic of a sound tax system was
originally stated by Adam Smith in his Canons of Taxation (1776), as:
IV. Every tax ought to be so contrived as both to take out and to keep out of the
pockets of the people as little as possible over and above what it brings into the
public treasury of the state.[63]
It simply means that sources of revenues must be adequate to meet government
expenditures and their variations.[64]
The dire need for revenue cannot be ignored. Our country is in a quagmire of
financial woe. During the Bicameral Conference Committee hearing, then Finance
Secretary Purisima bluntly depicted the countrys gloomy state of economic affairs,
thus:
First, let me explain the position that the Philippines finds itself in right now. We are
in a position where 90 percent of our revenue is used for debt service. So, for every
peso of revenue that we currently raise, 90 goes to debt service. Thats interest plus
amortization of our debt. So clearly, this is not a sustainable situation. Thats the first
fact.
The second fact is that our debt to GDP level is way out of line compared to other
peer countries that borrow money from that international financial markets. Our
debt to GDP is approximately equal to our GDP. Again, that shows you that this is not
a sustainable situation.
The third thing that Id like to point out is the environment that we are presently
operating in is not as benign as what it used to be the past five years.
What do I mean by that?
In the past five years, weve been lucky because we were operating in a period of
basically global growth and low interest rates. The past few months, we have seen
an inching up, in fact, a rapid increase in the interest rates in the leading economies
of the world. And, therefore, our ability to borrow at reasonable prices is going to be
challenged. In fact, ultimately, the question is our ability to access the financial
markets.
When the President made her speech in July last year, the environment was not as
bad as it is now, at least based on the forecast of most financial institutions. So, we
were assuming that raising 80 billion would put us in a position where we can then
convince them to improve our ability to borrow at lower rates. But conditions have
changed on us because the interest rates have gone up. In fact, just within this
room, we tried to access the market for a billion dollars because for this year alone,
the Philippines will have to borrow 4 billion dollars. Of that amount, we have
borrowed 1.5 billion. We issued last January a 25-year bond at 9.7 percent cost. We
were trying to access last week and the market was not as favorable and up to now
we have not accessed and we might pull back because the conditions are not very
good.
So given this situation, we at the Department of Finance believe that we really need
to front-end our deficit reduction. Because it is deficit that is causing the increase of
the debt and we are in what we call a debt spiral. The more debt you have, the more
deficit you have because interest and debt service eats and eats more of your
revenue. We need to get out of this debt spiral. And the only way, I think, we can get
out of this debt spiral is really have a front-end adjustment in our revenue base. [65]
Santiago v Guingona Page 101 of 106
The image portrayed is chilling. Congress passed the law hoping for rescue from an
inevitable catastrophe. Whether the law is indeed sufficient to answer the states
economic dilemma is not for the Court to judge. In the Farias case, the Court refused
to consider the various arguments raised therein that dwelt on the wisdom of
Section 14 of R.A. No. 9006 (The Fair Election Act), pronouncing that:
. . . policy matters are not the concern of the Court. Government policy is within the
exclusive dominion of the political branches of the government. It is not for this
Court to look into the wisdom or propriety of legislative determination. Indeed,
whether an enactment is wise or unwise, whether it is based on sound economic
theory, whether it is the best means to achieve the desired results, whether, in
short, the legislative discretion within its prescribed limits should be exercised in a
particular manner are matters for the judgment of the legislature, and the serious
conflict of opinions does not suffice to bring them within the range of judicial
cognizance.[66]
In the same vein, the Court in this case will not dawdle on the purpose of Congress
or the executive policy, given that it is not for the judiciary to "pass upon questions
of wisdom, justice or expediency of legislation. [67]
II.
Whether Section 8 of R.A. No. 9337, amending Sections 110(A)(2) and 110(B) of the
NIRC; and Section 12 of R.A. No. 9337, amending Section 114(C) of the NIRC, violate
the following provisions of the Constitution:
a. Article VI, Section 28(1), and
b. Article III, Section 1
A. Due Process and Equal Protection Clauses
Petitioners Association of Pilipinas Shell Dealers, Inc., et al. argue that Section 8 of
R.A. No. 9337, amending Sections 110 (A)(2), 110 (B), and Section 12 of R.A. No.
9337, amending Section 114 (C) of the NIRC are arbitrary, oppressive, excessive and
confiscatory. Their argument is premised on the constitutional right against
deprivation of life, liberty of property without due process of law, as embodied in
Article III, Section 1 of the Constitution.
Petitioners also contend that these provisions violate the constitutional guarantee of
equal protection of the law.
The doctrine is 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.[68]
Section 8 of R.A. No. 9337, amending Section 110(B) of the NIRC imposes a
limitation on the amount of input tax that may be credited against the output tax. It
states, in part: [P]rovided, that the input tax inclusive of the input VAT carried over
from the previous quarter that may be credited in every quarter shall not exceed
seventy percent (70%) of the output VAT:
Input Tax is defined under Section 110(A) of the NIRC, as amended, as the value-
added tax due from or paid by a VAT-registered person on the importation of goods
or local purchase of good and services, including lease or use of property, in the
course of trade or business, from a VAT-registered person, and Output Tax is the
value-added tax dueon the sale or lease of taxable goods or properties or services
by any person registered or required to register under the law.
Petitioners claim that the contested sections impose limitations on the amount of
input tax that may be claimed. In effect, a portion of the input tax that has already
been paid cannot now be credited against the output tax.
Petitioners argument is not absolute. It assumes that the input tax exceeds 70% of
the output tax, and therefore, the input tax in excess of 70% remains uncredited.
However, to the extent that the input tax is less than 70% of the output tax, then
100% of such input tax is still creditable.
More importantly, the excess input tax, if any, is retained in a businesss books of
accounts and remains creditable in the succeeding quarter/s. This is explicitly
allowed by Section 110(B), which provides that if the input tax exceeds the output
tax, the excess shall be carried over to the succeeding quarter or quarters. In
addition, Section 112(B) allows a VAT-registered person to apply for the issuance of a
tax credit certificate or refund for any unused input taxes, to the extent that such
input taxes have not been applied against the output taxes. Such unused input tax
may be used in payment of his other internal revenue taxes.
The non-application of the unutilized input tax in a given quarter is not ad infinitum,
as petitioners exaggeratedly contend. Their analysis of the effect of the 70%
limitation is incomplete and one-sided. It ends at the net effect that there will be
unapplied/unutilized inputs VAT for a given quarter. It does not proceed further to
the fact that such unapplied/unutilized input tax may be credited in the subsequent
periods as allowed by the carry-over provision of Section 110(B) or that it may later
on be refunded through a tax credit certificate under Section 112(B).
Therefore, petitioners argument must be rejected.
On the other hand, it appears that petitioner Garcia failed to comprehend the
operation of the 70% limitation on the input tax. According to petitioner, the
limitation on the creditable input tax in effect allows VAT-registered establishments
to retain a portion of the taxes they collect, which violates the principle that tax
collection and revenue should be for public purposes and expenditures
As earlier stated, the input tax is the tax paid by a person, passed on to him by the
seller, when he buys goods. Output tax meanwhile is the tax due to the person when
he sells goods. In computing the VAT payable, three possible scenarios may arise:
First, if at the end of a taxable quarter the output taxes charged by the seller are
equal to the input taxes that he paid and passed on by the suppliers, then no
payment is required;
Second, when the output taxes exceed the input taxes, the person shall be liable for
the excess, which has to be paid to the Bureau of Internal Revenue (BIR); [69] and
Santiago v Guingona Page 102 of 106
Third, if the input taxes exceed the output taxes, the excess shall be carried over to
the succeeding quarter or quarters. Should the input taxes result from zero-rated or
effectively zero-rated transactions, any excess over the output taxes shall instead be
refunded to the taxpayer or credited against other internal revenue taxes, at the
taxpayers option.[70]
Section 8 of R.A. No. 9337 however, imposed a 70% limitation on the input tax.
Thus, a person can credit his input tax only up to the extent of 70% of the output
tax. In laymans term, the value-added taxes that a person/taxpayer paid and passed
on to him by a seller can only be credited up to 70% of the value-added taxes that is
due to him on a taxable transaction. There is no retention of any tax collection
because the person/taxpayer has already previously paid the input tax to a seller,
and the seller will subsequently remit such input tax to the BIR. The party directly
liable for the payment of the tax is the seller. [71] What only needs to be done is for
the person/taxpayer to apply or credit these input taxes, as evidenced by receipts,
against his output taxes.
Petitioners Association of Pilipinas Shell Dealers, Inc., et al. also argue that the input
tax partakes the nature of a property that may not be confiscated, appropriated, or
limited without due process of law.
The input tax is not a property or a property right within the constitutional purview
of the due process clause. A VAT-registered persons entitlement to the creditable
input tax is a mere statutory privilege.
The distinction between statutory privileges and vested rights must be borne in
mind for persons have no vested rights in statutory privileges. The state may
change or take away rights, which were created by the law of the state, although it
may not take away property, which was vested by virtue of such rights. [72]
Under the previous system of single-stage taxation, taxes paid at every level of
distribution are not recoverable from the taxes payable, although it becomes part of
the cost, which is deductible from the gross revenue. When Pres. Aquino issued E.O.
No. 273 imposing a 10% multi-stage tax on all sales, it was then that the crediting of
the input tax paid on purchase or importation of goods and services by VAT-
registered persons against the output tax was introduced. [73] This was adopted by
the Expanded VAT Law (R.A. No. 7716),[74] and The Tax Reform Act of 1997 (R.A. No.
8424).[75] The right to credit input tax as against the output tax is clearly a privilege
created by law, a privilege that also the law can remove, or in this case, limit.
Petitioners also contest as arbitrary, oppressive, excessive and confiscatory, Section
8 of R.A. No. 9337, amending Section 110(A) of the NIRC, which provides:
SEC. 110. Tax Credits.
(A) Creditable Input Tax.
Provided, That the input tax on goods purchased or imported in a calendar month for
use in trade or business for which deduction for depreciation is allowed under this
Code, shall be spread evenly over the month of acquisition and the fifty-nine (59)
succeeding months if the aggregate acquisition cost for such goods, excluding the
VAT component thereof, exceeds One million pesos (P1,000,000.00): Provided,
however, That if the estimated useful life of the capital goods is less than five (5)
years, as used for depreciation purposes, then the input VAT shall be spread over
such a shorter period: Provided, finally, That in the case of purchase of services,
lease or use of properties, the input tax shall be creditable to the purchaser, lessee
or license upon payment of the compensation, rental, royalty or fee.
The foregoing section imposes a 60-month period within which to amortize the
creditable input tax on purchase or importation of capital goods with acquisition cost
of P1 Million pesos, exclusive of the VAT component. Such spread out only poses a
delay in the crediting of the input tax. Petitioners argument is without basis because
the taxpayer is not permanently deprived of his privilege to credit the input tax.
It is worth mentioning that Congress admitted that the spread-out of the creditable
input tax in this case amounts to a 4-year interest-free loan to the government. [76] In
the same breath, Congress also justified its move by saying that the provision was
designed to raise an annual revenue of 22.6 billion. [77] The legislature also dispelled
the fear that the provision will fend off foreign investments, saying that foreign
investors have other tax incentives provided by law, and citing the case of China,
where despite a 17.5% non-creditable VAT, foreign investments were not deterred.
[78]
Again, for whatever is the purpose of the 60-month amortization, this involves
executive economic policy and legislative wisdom in which the Court cannot
intervene.
With regard to the 5% creditable withholding tax imposed on payments made by the
government for taxable transactions, Section 12 of R.A. No. 9337, which amended
Section 114 of the NIRC, reads:
SEC. 114. Return and Payment of Value-added Tax.
(C) Withholding of Value-added Tax. The Government or any of its political
subdivisions, instrumentalities or agencies, including government-owned or
controlled corporations (GOCCs) shall, before making payment on account of each
purchase of goods and services which are subject to the value-added tax imposed in
Sections 106 and 108 of this Code, deduct and withhold a final value-added tax at
the rate of five percent (5%) of the gross payment thereof: Provided, That the
payment for lease or use of properties or property rights to nonresident owners shall
be subject to ten percent (10%) withholding tax at the time of payment. For
purposes of this Section, the payor or person in control of the payment shall be
considered as the withholding agent.
The value-added tax withheld under this Section shall be remitted within ten (10)
days following the end of the month the withholding was made.
Section 114(C) merely provides a method of collection, or as stated by respondents,
a more simplified VAT withholding system. The government in this case is
constituted as a withholding agent with respect to their payments for goods and
services.
Prior to its amendment, Section 114(C) provided for different rates of value-added
taxes to be withheld -- 3% on gross payments for purchases of goods; 6% on gross
payments for services supplied by contractors other than by public works
contractors; 8.5% on gross payments for services supplied by public work
Santiago v Guingona Page 103 of 106
contractors; or 10% on payment for the lease or use of properties or property rights
to nonresident owners. Under the present Section 114(C), these different rates,
except for the 10% on lease or property rights payment to nonresidents, were
deleted, and a uniform rate of 5% is applied.
The Court observes, however, that the law the used the word final. In tax
usage, final, as opposed to creditable, means full. Thus, it is provided in Section
114(C): final value-added tax at the rate of five percent (5%).
In Revenue Regulations No. 02-98, implementing R.A. No. 8424 (The Tax Reform Act
of 1997), the concept of final withholding tax on income was explained, to wit:
SECTION 2.57. Withholding of Tax at Source
(A) Final Withholding Tax. Under the final withholding tax system the amount of
income tax withheld by the withholding agent is constituted as full and final
payment of the income tax due from the payee on the said income. The liability for
payment of the tax rests primarily on the payor as a withholding agent. Thus, in
case of his failure to withhold the tax or in case of underwithholding, the deficiency
tax shall be collected from the payor/withholding agent.
(B) Creditable Withholding Tax. Under the creditable withholding tax system, taxes
withheld on certain income payments are intended to equal or at least approximate
the tax due of the payee on said income. Taxes withheld on income payments
covered by the expanded withholding tax (referred to in Sec. 2.57.2 of these
regulations) and compensation income (referred to in Sec. 2.78 also of these
regulations) are creditable in nature.
As applied to value-added tax, this means that taxable transactions with the
government are subject to a 5% rate, which constitutes as full payment of the tax
payable on the transaction. This represents the net VAT payable of the seller. The
other 5% effectively accounts for the standard input VAT (deemed input VAT), in lieu
of the actual input VAT directly or attributable to the taxable transaction. [79]
The Court need not explore the rationale behind the provision. It is clear that
Congress intended to treat differently taxable transactions with the government.
[80]
This is supported by the fact that under the old provision, the 5% tax withheld by
the government remains creditable against the tax liability of the seller or
contractor, to wit:
SEC. 114. Return and Payment of Value-added Tax.
(C) Withholding of Creditable Value-added Tax. The Government or any of its political
subdivisions, instrumentalities or agencies, including government-owned or
controlled corporations (GOCCs) shall, before making payment on account of each
purchase of goods from sellers and services rendered by contractors which are
subject to the value-added tax imposed in Sections 106 and 108 of this Code,
deduct and withhold the value-added tax due at the rate of three percent (3%) of
the gross payment for the purchase of goods and six percent (6%) on gross receipts
for services rendered by contractors on every sale or installment payment which
shall be creditable against the value-added tax liability of the seller or contractor:
Provided, however, That in the case of government public works contractors, the
withholding rate shall be eight and one-half percent (8.5%): Provided, further, That
the payment for lease or use of properties or property rights to nonresident owners
shall be subject to ten percent (10%) withholding tax at the time of payment. For
this purpose, the payor or person in control of the payment shall be considered as
the withholding agent.
The valued-added tax withheld under this Section shall be remitted within ten (10)
days following the end of the month the withholding was made. (Emphasis supplied)
As amended, the use of the word final and the deletion of the
word creditable exhibits Congresss intention to treat transactions with the
government differently. Since it has not been shown that the class subject to the 5%
final withholding tax has been unreasonably narrowed, there is no reason to
invalidate the provision. Petitioners, as petroleum dealers, are not the only ones
subjected to the 5% final withholding tax. It applies to all those who deal with the
government.
Moreover, the actual input tax is not totally lost or uncreditable, as petitioners
believe. Revenue Regulations No. 14-2005 or the Consolidated Value-Added Tax
Regulations 2005 issued by the BIR, provides that should the actual input tax exceed
5% of gross payments, the excess may form part of the cost. Equally, should the
actual input tax be less than 5%, the difference is treated as income. [81]
Petitioners also argue that by imposing a limitation on the creditable input tax, the
government gets to tax a profit or value-added even if there is no profit or value-
added.
Petitioners stance is purely hypothetical, argumentative, and again, one-sided. The
Court will not engage in a legal joust where premises are what ifs, arguments,
theoretical and facts, uncertain. Any disquisition by the Court on this point will only
be, as Shakespeare describes life in Macbeth,[82] full of sound and fury, signifying
nothing.
Whats more, petitioners contention assumes the proposition that there is no profit or
value-added. It need not take an astute businessman to know that it is a matter of
exception that a business will sell goods or services without profit or value-added. It
cannot be overstressed that a business is created precisely for profit.
The equal protection clause under the Constitution means that no person or class of
persons shall be deprived of the same protection of laws which is enjoyed by other
persons or other classes in the same place and in like circumstances. [83]
The power of the State to make reasonable and natural classifications for the
purposes of taxation has long been established. Whether it relates to the subject of
taxation, the kind of property, the rates to be levied, or the amounts to be raised,
the methods of assessment, valuation and collection, the States power is entitled to
presumption of validity. As a rule, the judiciary will not interfere with such power
absent a clear showing of unreasonableness, discrimination, or arbitrariness. [84]
Petitioners point out that the limitation on the creditable input tax if the entity has a
high ratio of input tax, or invests in capital equipment, or has several transactions
Santiago v Guingona Page 104 of 106
with the government, is not based on real and substantial differences to meet a
valid classification.
The argument is pedantic, if not outright baseless. The law does not make any
classification in the subject of taxation, the kind of property, the rates to be levied or
the amounts to be raised, the methods of assessment, valuation and collection.
Petitioners alleged distinctions are based on variables that bear different
consequences. While the implementation of the law may yield varying end results
depending on ones profit margin and value-added, the Court cannot go beyond what
the legislature has laid down and interfere with the affairs of business.
The equal protection clause does not require the universal application of the laws on
all persons or things without distinction. This might in fact sometimes result in
unequal protection. What the clause requires is equality among equals as
determined according to a valid classification. By classification is meant the
grouping of persons or things similar to each other in certain particulars and
different from all others in these same particulars.[85]
Petitioners brought to the Courts attention the introduction of Senate Bill No. 2038
by Sens. S.R. Osmea III and Ma. Ana Consuelo A.S. Madrigal on June 6, 2005, and
House Bill No. 4493 by Rep. Eric D. Singson. The proposed legislation seeks to
amend the 70% limitation by increasing the same to 90%. This, according to
petitioners, supports their stance that the 70% limitation is arbitrary and
confiscatory. On this score, suffice it to say that these are still proposed legislations.
Until Congress amends the law, and absent any unequivocal basis for its
unconstitutionality, the 70% limitation stays.
B. Uniformity and Equitability of Taxation
Article VI, Section 28(1) of the Constitution reads:
The rule of taxation shall be uniform and equitable. The Congress shall evolve a
progressive system of taxation.
Uniformity in taxation means that all taxable articles or kinds of property of the
same class shall be taxed at the same rate. Different articles may be taxed at
different amounts provided that the rate is uniform on the same class everywhere
with all people at all times.[86]
In this case, the tax law is uniform as it provides a standard rate of 0% or 10% (or
12%) on all goods and services. Sections 4, 5 and 6 of R.A. No. 9337, amending
Sections 106, 107 and 108, respectively, of the NIRC, provide for a rate of 10% (or
12%) on sale of goods and properties, importation of goods, and sale of services and
use or lease of properties. These same sections also provide for a 0% rate on certain
sales and transaction.
Neither does the law make any distinction as to the type of industry or trade that will
bear the 70% limitation on the creditable input tax, 5-year amortization of input tax
paid on purchase of capital goods or the 5% final withholding tax by the
government. It must be stressed that the rule of uniform taxation does not deprive
Congress of the power to classify subjects of taxation, and only demands uniformity
within the particular class.[87]
R.A. No. 9337 is also equitable. The law is equipped with a threshold margin. The
VAT rate of 0% or 10% (or 12%) does not apply to sales of goods or services with
gross annual sales or receipts not exceeding P1,500,000.00.[88] Also, basic marine
and agricultural food products in their original state are still not subject to the tax,
[89]
thus ensuring that prices at the grassroots level will remain accessible. As was
stated in Kapatiran ng mga Naglilingkod sa Pamahalaan ng Pilipinas, Inc. vs. Tan:[90]
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.
It is admitted that R.A. No. 9337 puts a premium on businesses with low profit
margins, and unduly favors those with high profit margins. Congress was not
oblivious to this. Thus, to equalize the weighty burden the law entails, the law, under
Section 116, imposed a 3% percentage tax on VAT-exempt persons under Section
109(v), i.e., transactions with gross annual sales and/or receipts not exceeding P1.5
Million. This acts as a equalizer because in effect, bigger businesses that qualify for
VAT coverage and VAT-exempt taxpayers stand on equal-footing.
Moreover, Congress provided mitigating measures to cushion the impact of the
imposition of the tax on those previously exempt. Excise taxes on petroleum
products[91]and natural gas[92] were reduced. Percentage tax on domestic carriers was
removed.[93] Power producers are now exempt from paying franchise tax.[94]
Aside from these, Congress also increased the income tax rates of corporations, in
order to distribute the burden of taxation. Domestic, foreign, and non-resident
corporations are now subject to a 35% income tax rate, from a previous 32%.
[95]
Intercorporate dividends of non-resident foreign corporations are still subject to
15% final withholding tax but the tax credit allowed on the corporations domicile
was increased to 20%.[96] The Philippine Amusement and Gaming Corporation
(PAGCOR) is not exempt from income taxes anymore. [97] Even the sale by an artist of
his works or services performed for the production of such works was not spared.
All these were designed to ease, as well as spread out, the burden of taxation, which
would otherwise rest largely on the consumers. It cannot therefore be gainsaid that
R.A. No. 9337 is equitable.
C. Progressivity of Taxation
Lastly, petitioners contend that the limitation on the creditable input tax is anything
but regressive. It is the smaller business with higher input tax-output tax ratio that
will suffer the consequences.
Progressive taxation is built on the principle of the taxpayers ability to pay. This
principle was also lifted from Adam Smiths Canons of Taxation, and it states:
Santiago v Guingona Page 105 of 106
I. The subjects of every state ought to contribute towards the support of the
government, as nearly as possible, in proportion to their respective abilities; that is,
in proportion to the revenue which they respectively enjoy under the protection of
the state.
Taxation is progressive when its rate goes up depending on the resources of the
person affected.[98]
The VAT is an antithesis of progressive taxation. By its very nature, it is regressive.
The principle of progressive taxation has no relation with the VAT system inasmuch
as the VAT paid by the consumer or business for every goods bought or services
enjoyed is the same regardless of income. In
other words, the VAT paid eats the same portion of an income, whether big or small.
The disparity lies in the income earned by a person or profit margin marked by a
business, such that the higher the income or profit margin, the smaller the portion of
the income or profit that is eaten by VAT. A converso, the lower the income or profit
margin, the bigger the part that the VAT eats away. At the end of the day, it is really
the lower income group or businesses with low-profit margins that is always hardest
hit.
Nevertheless, the Constitution does not really prohibit the imposition of indirect
taxes, like the VAT. What it simply provides is that Congress shall "evolve a
progressive system of taxation." The Court stated in the Tolentino case, thus:
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)[99]
CONCLUSION
It has been said that taxes are the lifeblood of the government. In this case, it is just
an enema, a first-aid measure to resuscitate an economy in distress. The Court is
neither blind nor is it turning a deaf ear on the plight of the masses. But it does not
have the panacea for the malady that the law seeks to remedy. As in other cases,
the Court cannot strike down a law as unconstitutional simply because of its yokes.
Let us not be overly influenced by the plea that for every wrong there is a remedy,
and that the judiciary should stand ready to afford relief. There are undoubtedly
many wrongs the judicature may not correct, for instance, those involving political
questions. . . .
Let us likewise disabuse our minds from the notion that the judiciary is the
repository of remedies for all political or social ills; We should not forget that the
Constitution has judiciously allocated the powers of government to three distinct and
separate compartments; and that judicial interpretation has tended to the
preservation of the independence of the three, and a zealous regard of the
prerogatives of each, knowing full well that one is not the guardian of the others and
that, for official wrong-doing, each may be brought to account, either by
impeachment, trial or by the ballot box.[100]
The words of the Court in Vera vs. Avelino[101] holds true then, as it still holds true
now. All things considered, there is no raison d'tre for the unconstitutionality of R.A.
No. 9337.
WHEREFORE, Republic Act No. 9337 not being unconstitutional, the petitions in G.R.
Nos. 168056, 168207, 168461, 168463, and 168730, are hereby DISMISSED.
There being no constitutional impediment to the full enforcement and
implementation of R.A. No. 9337, the temporary restraining order issued by the
Court on July 1, 2005 is LIFTED upon finality of herein decision.
SO ORDERED.
Santiago v Guingona Page 106 of 106