G.R. No. 208566 November 19, 2013 G.R. No.

208493 SJS filed a Petition

BELGICA vs. HONORABLE EXECUTIVE for Prohibition seeking that the "Pork
SECRETARY PAQUITO N. OCHOA JR, Barrel System" be declared
et al, Respondents unconstitutional, and a writ of prohibition
be issued permanently
G.R. No. 208566 November 19, G.R. No. 208566 - Belgica, et al filed an
2013 Urgent Petition For Certiorari and
GRECO ANTONIOUS BEDA B. BELGICA Prohibition With Prayer For The
JOSE M. VILLEGAS JR. JOSE L. Immediate Issuance of Temporary
GONZALEZ REUBEN M. ABANTE and Restraining Order and/or Writ of
QUINTIN PAREDES SAN Preliminary Injunction seeking that the
DIEGO, Petitioners, annual "Pork Barrel System," presently
vs. embodied in the provisions of the GAA of
HONORABLE EXECUTIVE SECRETARY 2013 which provided for the 2013 PDAF,
PAQUITO N. OCHOA JR, et al, and the Executives lump-sum,
Respondents discretionary funds, such as the
PERLAS-BERNABE, J.: Malampaya Funds and the Presidential
Social Fund, be declared unconstitutional
NATURE: and null and void for being acts
These are consolidated petitions taken constituting grave abuse of
under Rule 65 of the Rules of Court, all of discretion. Also, they pray that the Court
which assail the constitutionality of the issue a TRO against respondents
Pork Barrel System.
UDK-14951 A Petition filed seeking
FACTS: that the PDAF be declared
The NBI Investigation was spawned by unconstitutional, and a cease and desist
sworn affidavits of six (6) whistle-blowers order be issued restraining President
who declared that JLN Corporation (Janet Benigno Simeon S. Aquino III (President
Lim Napoles) had swindled billions of Aquino) and Secretary Abad from
pesos from the public coffers for "ghost releasing such funds to Members of
projects" using dummy NGOs. Thus, Congress
Criminal complaints were filed before the
Office of the Ombudsman, charging five ISSUES:
(5) lawmakers for Plunder, and three (3) 1. Whether or not the 2013 PDAF
other lawmakers for Malversation, Direct Article and all other Congressional Pork
Bribery, and Violation of the Anti-Graft Barrel Laws similar thereto are
and Corrupt Practices Act. Also unconstitutional considering that they
recommended to be charged in the violate the principles of/constitutional
complaints are some of the lawmakers provisions on (a) separation of powers;
chiefs -of-staff or representatives, the (b) non-delegability of legislative power;
heads and other officials of three (3) (c) checks and balances; (d)
implementing agencies, and the several accountability; (e) political dynasties;
presidents of the NGOs set up by Napoles. and (f) local autonomy.
Whistle-blowers alleged that" at 2. Whether or not the phrases (under
least P900 Million from royalties in the Section 8 of PD 910,116 relating to the
operation of the Malampaya gas project Malampaya Funds, and under Section 12
off Palawan province intended for of PD 1869, as amended by PD 1993,
agrarian reform beneficiaries has gone relating to the Presidential Social Fund,
into a dummy NGO. Several petitions are unconstitutional insofar as they
were lodged before the Court similarly constitute undue delegations of
seeking that the "Pork Barrel System" be legislative power.
declared unconstitutional
HELD:
1. Yes, the PDAF article is
unconstitutional. The post-enactment
measures which govern the areas of
project identification, fund release and
fund realignment are not related to
functions of congressional oversight and,
hence, allow legislators to intervene
and/or assume duties that properly
belong to the sphere of budget execution.
This violates the principle of separation of
powers. Congressrole must be confined
to mere oversight that must be confined
to: (1) scrutiny and (2) investigation and
monitoring of the implementation of laws.
Any action or step beyond that will
undermine the separation of powers
guaranteed by the constitution.
Thus, the court declares the 2013 pdaf
article as well as all other provisions of
law which similarly allow legislators to
wield any form of post-enactment
authority in the implementation or
enforcement of the budget, unrelated to
congressional oversight, as violative of
the separation of powers principle and
thus unconstitutional.
2. Yes. Sec 8 of PD 910- the phrase
and for such other purposes as may be
hereafter directed by the President
constitutes an undue delegation of
legislative power insofar as it does not lay
down a sufficient standard to adequately
determine the limits of the Presidents
authority with respect to the purpose for
which the Malampaya Funds may be
used. It gives the President wide latitude
to use the Malampaya Funds for any other
purpose he may direct and, in effect,
allows him to unilaterally appropriate
public funds beyond the purview of the
law.
Section 12 of PD 1869, as amended by PD
1993- the phrases:
(b) "to finance the priority infrastructure
development projects was declared
constitutional. IT INDICATED PURPOSE
ADEQUATELY CURTAILS THE AUTHORITY
OF THE PRESIDENT TO SPEND THE
PRESIDENTIAL SOCIAL FUND ONLY FOR
RESTORATION PURPOSES WHICH ARISE
FROM CALAMITIES.
(b) and to finance the restoration of
damaged or destroyed facilities due to
calamities, as may be directed and
authorized by the Office of the President
of the Philippines was declared
unconstitutional.IT GIVES THE
PRESIDENT 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
INFRASTRUCTURE DEVELOPMENT
PROJECTS AND HENCE, LEAVES THE
PRESIDENT WITHOUT ANY GUIDELINE
TO CONSTRUE THE SAME.
MARIA CAROLINA ARAULLO VS
BENIGNO AQUINO III
GR No. 209287
July 1, 2014
When President Benigno Aquino III took
office, his administration noticed the
sluggish growth of the economy. The
World Bank advised that the economy
needed a stimulus plan. Budget Secretary
Florencio Butch Abad then came up with
a program called the Disbursement
Acceleration Program (DAP).
The DAP was seen as a remedy to speed
up the funding of government projects.
DAP enables the Executive to realign
funds from slow moving projects to
priority projects instead of waiting for
next years appropriation. So what
happens under the DAP was that if a
certain government project is being
undertaken slowly by a certain executive
agency, the funds allotted therefor will be
withdrawn by the Executive. Once
withdrawn, these funds are declared as
savings by the Executive and said funds
will then be reallotted to other priority
projects. The DAP program did work to
stimulate the economy as economic
growth was in fact reported and portion
of such growth was attributed to the DAP
(as noted by the Supreme Court).
Other sources of the DAP include the
unprogrammed funds from the General
Appropriations Act (GAA).
Unprogrammed funds are standby
appropriations made by Congress in the
GAA.
Meanwhile, in September 2013, Senator
Jinggoy Estrada made an expos claiming
that he, and other Senators, received
Php50M from the President as an
incentive for voting in favor of the
impeachment of then Chief Justice
Renato Corona. Secretary Abad claimed
that the money was taken from the DAP
but was disbursed upon the request of the
Senators.
This apparently opened a can of worms as
it turns out that the DAP does not only
realign funds within the Executive. It
turns out that some non-Executive
projects were also funded; to name a
few: Php1.5B for the CPLA (Cordillera
Peoples Liberation Army), Php1.8B for
the MNLF (Moro National Liberation
Front), P700M for the Quezon Province,
P50-P100M for certain Senators each,
P10B for Relocation Projects, etc.
This prompted Maria Carolina Araullo,
Chairperson of the Bagong Alyansang
Makabayan, and several other concerned
citizens to file various petitions with the
Supreme Court questioning the validity of
the DAP. Among their contentions was:
DAP is unconstitutional because it
violates the constitutional rule which
provides that no money shall be paid out
of the Treasury except in pursuance of an
appropriation made by law.
Secretary Abad argued that the DAP is
based on certain laws particularly the
GAA (savings and augmentation
provisions thereof), Sec. 25(5), Art. VI of
the Constitution (power of the President
to augment), Secs. 38 and 49 of
Executive Order 292 (power of the
President to suspend expenditures and
authority to use savings, respectively).
Issues:
I. Whether or not the DAP violates the
principle no money shall be paid out of
the Treasury except in pursuance of an
appropriation made by law (Sec. 29(1),
Art. VI, Constitution).
II. Whether or not the DAP realignments
can be considered as impoundments by
the executive.
III. Whether or not the DAP
realignments/transfers are constitutional.
IV. Whether or not the sourcing of
unprogrammed funds to the DAP is
constitutional.
V. Whether or not the Doctrine of
Operative Fact is applicable.
HELD:
I. No, the DAP did not violate Section
29(1), Art. VI of the Constitution. DAP
was merely a program by the Executive
and is not a fund nor is it an
appropriation. It is a program for
prioritizing government spending. As
such, it did not violate the Constitutional
provision cited in Section 29(1), Art. VI of
the Constitution. In DAP no additional
funds were withdrawn from the Treasury
otherwise, an appropriation made by law
would have been required. Funds, which
were already appropriated for by the
GAA, were merely being realigned via the
DAP.
II. No, there is no executive
impoundment in the DAP. Impoundment
of funds refers to the Presidents power to
refuse to spend appropriations or to
retain or deduct appropriations for
whatever reason. Impoundment is
actually prohibited by the GAA unless
there will be an unmanageable national
government budget deficit (which did not
happen). Nevertheless, theres no
impoundment in the case at bar because
whats involved in the DAP was the
transfer of funds.
III. No, the transfers made through the
DAP were unconstitutional. It is true that
the President (and even the heads of the
other branches of the government) are
allowed by the Constitution to make
realignment of funds, however, such
transfer or realignment should only be
made within their respective offices.
Thus, no cross-border
transfers/augmentations may be allowed.
But under the DAP, this was violated
because funds appropriated by the GAA
for the Executive were being transferred
to the Legislative and other non-
Executive agencies.
Further, transfers within their respective
offices also contemplate realignment of
funds to an existing project in the GAA.
Under the DAP, even though some
projects were within the Executive, these
projects are non-existent insofar as the
GAA is concerned because no funds were
appropriated to them in the GAA.
Although some of these projects may be
legitimate, they are still non-existent
under the GAA because they were not
provided for by the GAA. As such, transfer
to such projects is unconstitutional and is
without legal basis.
On the issue of what are savings
These DAP transfers are not savings
contrary to what was being declared by
the Executive. Under the definition of
savings in the GAA, savings only occur,
among other instances, when there is an
excess in the funding of a certain project
once it is completed, finally discontinued,
or finally abandoned. The GAA does not
refer to savings as funds withdrawn
from a slow moving project. Thus, since
the statutory definition of savings was not
complied with under the DAP, there is no
basis at all for the transfers. Further,
savings should only be declared at the
end of the fiscal year. But under the DAP,
funds are already being withdrawn from
certain projects in the middle of the year
and then being declared as savings by
the Executive particularly by the DBM.
IV. No. Unprogrammed funds from the
GAA cannot be used as money source for
the DAP because under the law, such
funds may only be used if there is a
certification from the National Treasurer
to the effect that the revenue collections
have exceeded the revenue targets. In
this case, no such certification was
secured before unprogrammed funds
were used.
V. Yes. The Doctrine of Operative Fact,
which recognizes the legal effects of an
act prior to it being declared as
unconstitutional by the Supreme Court, is
applicable. The DAP has definitely helped
stimulate the economy. It has funded
numerous projects. If the Executive is
ordered to reverse all actions under the
DAP, then it may cause more harm than
good. The DAP effects can no longer be
undone. The beneficiaries of the DAP
cannot be asked to return what they
received especially so that they relied on
the validity of the DAP. However, the
Doctrine of Operative Fact may not be
applicable to the authors, implementers,
and proponents of the DAP if it is so found
in the appropriate tribunals (civil,
criminal, or administrative) that they
have not acted in good faith.
Angara v. Electoral Commission, G.R. No. L-
45081, July 15, 1936
LAUREL, J.:
I. THE FACTS
Petitioner Jose Angara was proclaimed winner
and took his oath of office as member of the
National Assembly of the Commonwealth
Government. On December 3, 1935, the
National Assembly passed a resolution
confirming the election of those who have not
been subject of an election protest prior to the
adoption of the said resolution.
On December 8, 1935, however, private
respondent Pedro Ynsua filed an election
protest against the petitioner before the
Electoral Commission of the National
Assembly. The following day, December 9,
1935, the Electoral Commission adopted its
own resolution providing that it will not consider
any election protest that was not submitted on
or before December 9, 1935.
Citing among others the earlier resolution of the
National Assembly, the petitioner sought the
dismissal of respondents protest. The Electoral
Commission however denied his motion.
II. THE ISSUE
Did the Electoral Commission act without or in
excess of its jurisdiction in taking cognizance of
the protest filed against the election of the
petitioner notwithstanding the previous
confirmation of such election by resolution of
the National Assembly?
III. THE RULING
[The Court DENIED the petition.]
NO, the Electoral Commission did not act
without or in excess of its jurisdiction in taking
cognizance of the protest filed against the
election of the petitioner notwithstanding the
previous confirmation of such election by
resolution of the National Assembly.
The Electoral Commission acted within the
legitimate exercise of its constitutional
prerogative in assuming to take cognizance of
the protest filed by the respondent Ynsua
against the election of the petitioner Angara,
and that the earlier resolution of the National
Assembly cannot in any manner toll the time for
filing election protests against members of the
National Assembly, nor prevent the filing of a
protest within such time as the rules of the
Electoral Commission might prescribe.
The grant of power to the Electoral Commission
to judge all contests relating to the election,
returns and qualifications of members of the
National Assembly, is intended to be as
complete and unimpaired as if it had remained
originally in the legislature. The express lodging
of that power in the Electoral Commission is an
implied denial of the exercise of that power by
the National Assembly. xxx.
[T]he creation of the Electoral Commission
carried with it ex necesitate rei the power
regulative in character to limit the time with
which protests intrusted to its cognizance
should be filed. [W]here a general power is
conferred or duty enjoined, every particular
power necessary for the exercise of the one or
the performance of the other is also conferred.
In the absence of any further constitutional
provision relating to the procedure to be
followed in filing protests before the Electoral
Commission, therefore, the incidental power to
promulgate such rules necessary for the proper
exercise of its exclusive power to judge all
contests relating to the election, returns and
qualifications of members of the National
Assembly, must be deemed by necessary
implication to have been lodged also in the
Electoral Commission.
Cocofed vs Republic
Case Digest GR 177857-58 Jan 24 2012
Facts:
In 1971, RA 6260 created the Coconut
Investment Company (CIC) to administer the
Coconut Investment Fund, a fund to be sourced
from levy on the sale of copra. The copra seller
was, or ought to be, issued COCOFUND
receipts. The fund was placed at the disposition
of COCOFED, the national association of
coconut producers having the largest
membership.
When martial law started in 1972, several
presidential decrees were issued to improve the
coconut industry through the collection and use
of the coconut levy fund:
PD 276 established the Coconut Consumers
Stabilization Fund (CCSF) and declared the
proceeds of the CCSF levy as trust fund, to be
utilized to subsidize the sale of coconut-based
products, thus stabilizing the price of edible oil.
PD 582 created the Coconut Industry
Development Fund (CIDF) to finance the
operation of a hybrid coconut seed farm.
In 1973, PD 232 created the Philippine Coconut
Authority (PCA) to accelerate the growth and
development of the coconut and palm oil
industry.
Then came P.D. No. 755 in July 1975, providing
under its Section 1 the policy to provide readily
available credit facilities to the coconut farmers
at preferential rates. Towards achieving this,
Section 2 of PD 755 authorized PCA to utilize
the CCSF and the CIDF collections to acquire a
commercial bank and deposit the CCSF levy
collections in said bank, interest free, the
deposit withdrawable only when the bank has
attained a certain level of sufficiency in its equity
capital. It also decreed that all levies PCA is
authorized to collect shall not be considered
as special and/or fiduciary funds or form
part of the general funds of the government.
Both P.D. Nos. 961 and 1468 also provide that
the CCSF shall not be construed by any law as
a special and/or trust fund, the stated intention
being that actual ownership of the said fund
shall pertain to coconut farmers in their
private capacities.
Shortly before the issuance of PD 755 however,
PCA had already bought from Peping
Cojuangco 72.2% of the outstanding capital
stock of FUB / UCPB. In that contract, it was
also stipulated that Danding Cojuanco shall
receive equity in FUB amounting to 10%, or
7.22 % of the 72.2%, as consideration for PCAs
buy-out of what Danding Conjuanco claim as
his exclusive and personal option to buy the
FUB shares.
The PCA appropriated, out of its own fund, an
amount for the purchase of the said 72.2%
equity. It later reimbursed itself from the
coconut levy fund.
While the 64.98% (72.2 % 7.22%) portion of
the option shares ostensibly pertained to the
farmers, the corresponding stock certificates
supposedly representing the farmers equity
were in the name of and delivered to PCA.
There were, however, shares forming part of
the 64.98% portion, which ended up in the
hands of non-farmers. The remaining 27.8% of
the FUB capital stock were not covered by any
of the agreements.
Through the years, a part of the coconut levy
funds went directly or indirectly to various
projects and/or was converted into different
assets or investments. Of particular relevance
to this was their use to acquire the FUB / UCPB,
and the acquisition by UCPB, through the CIIF
and holding companies, of a large block of San
Miguel Corporation (SMC) shares.
Issue 1: W/N the mandate provided under PD
755, 961 and 1468 that the CCSF shall not be
construed by any law as a special and/or trust
fund is valid
No. The coconut levy funds can only be used
for the special purpose and the balance thereof
should revert back to the general fund.
Article VI, Section 29 (3) of the Constitution
provides that all money collected on any tax
levied for a special purpose shall be treated
as a special fund and paid out for such
purpose only, and if the purpose for which a
special fund was created has been fulfilled or
abandoned, the balance, if any, shall be
transferred to the general funds of the
Government. Here, the CCSF were sourced
from forced exactions with the end-goal of
developing the entire coconut industry.
Therefore, the subsequent reclassification of
the CCSF as a private fund to be owned by
private individuals in their private capacities
under P.D. Nos. 755, 961 and 1468 is
unconstitutional.
Not only is it unconstitutional, but the mandate
is contrary to the purpose or policy for which the
coco levy fund was created.
Issue 2:
W/N the coco levy fund may be owned by the
coconut farmers in their private capacities
No. The coconut levy funds are in the nature of
taxes and can only be used for public purpose.
They cannot be used to purchase shares of
stocks to be given for free to private individuals.
Even if the money is allocated for a special
purpose and raised by special means, it is still
public in character.
Accordingly, the presidential issuances which
authorized the PCA to distribute, for free, the
shares of stock of the bank it acquired to the
coconut farmers under such rules and
regulations the PCA may promulgate is
unconstitutional.
It is unconstitutional because first, it have
unduly delegated legislative power to the PCA,
and second, it allowed the use of the CCSF to
benefit directly private interest by the outright
and unconditional grant of absolute ownership
of the FUB/UCPB shares paid for by PCA
entirely with the CCSF to the undefined
coconut farmers, which negated or
circumvented the national policy or public
purpose declared by P.D. No. 755.
Hence, the so-called Farmers shares do not
belong to the coconut farmers in their private
capacities, but to the Government. The coconut
levy funds are special public funds and any
property purchased by means of the coconut
levy funds should likewise be treated as public
funds or public property, subject to burdens and
restrictions attached by law to such property. ##
Tawang Multi-Purpose Cooperative
vs. La Trinidad Water District [GR No.
166471, March 22, 2011]
FACTS: Petitioner Tawang Multi-Purpose
Cooperative is a cooperative organized to
provide domestic water services in
Barangay Tawang, La Trinidad, Benguet
while respondent La Trinidad Water
District is a local water utility created
under Presidential Decree (PD) No. 198,
as amended. La Trinidad Water District is
authorized to supply water for domestic,
industrial and commercial purposes
within the municipality of La Trinidad,
Benguet. Tawang Multi-Purpose
Cooperative filed with the National Water
Resources Board an application for a
certificate of public convenience (CPC) to
operate and maintain a waterworks
system in Barangay Tawang. La Trinidad
Water District opposed Tawang Multi-
Purpoe Cooperative's application and
claimed that, under Section 47 of PD No.
198, as amended, its franchise is
exclusive.

ISSUE: Whether or not a public utility

franchise may be exclusive in character

RULING: No. The 1935, 1973, and 1987

Constitution expressly and clearly
prohibit thecreation of franchise that are
exclusive in character. The President,
Congress and the Court cannot create
indirectly franchises that are exclusive in
character by allowing the Board of
Directors of a water district and the Local
Water Utilities Administration to create
franchises that are exclusive in character.
Section 47 of PD No. 198, as amended,
allows the Board of Directors of La
Trinidad Water District and Local Water
Utilities Administration to create
franchises that are xclusive in character.
Clearly, Section 47 is patently
unconstitutional.