Article 6 Section 25 (5)
Php1.5B for the CPLA (Cordillera People’s Liberation Army),
Araullo vs. Aquino (Transfer of Appropriations)
Facts:
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 year’s 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withdrawn by the Executive. Once withdrawn, these funds are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
exposé 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:
Php1.8B 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).
Issue:
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.
Held:
WHEREFORE, the Court PARTIALLY GRANTS the petitions for
certiorari and prohibition; and DECLARES the following acts and
practices under the Disbursement Acceleration Program, National
Budget Circular No. 541 and related executive issuances
UNCONSTITUTIONAL for being in violation of Section 25(5),
Article VI of the 1987 Constitution and the doctrine of separation of
powers, namely:
(a) The withdrawal of unobligated allotments from the implementing
agencies, and the declaration of the withdrawn unobligated
allotments and unreleased appropriations as savings prior to the end
of the fiscal year and without complying with the statutory definition
of savings contained in the General Appropriations Acts;
(b) The cross-border transfers of the savings of the Executive to
augment the appropriations of other offices outside the Executive;
and
(c) The funding of projects, activities and programs that were not
covered by any appropriation in the General Appropriations Act.
The Court further DECLARES VOID the use of unprogrammed
funds despite the absence of a certification by the National Treasurer
that the revenue collections exceeded the revenue targets for non-
compliance with the conditions provided in the relevant General
Appropriations Acts.
Rationale:
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.
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.
Article 6 Section 26 (1)
Tio vs. Videogram Regulatory Board (Subject&Title
of Bills)
Facts:
The petition assails the constitutionality of Decree No. 1987 with
broad powers to regulate and supervise the videogram industry.
On November 5, 1985, a month after the promulgation of the above
mentioned decree, Presidential Decree No. 1994 amended the
National Internal revenue Code providing:
"SEC. 134. Video Tapes. — There shall be collected on each
processed video-tape cassette, ready for playback, regardless of
length, an annual tax of five pesos; Provided, That locally
manufactured or imported blank video tapes shall be subject to sales
tax."
The Petitioner’s attack on the constitutionality of the DECREE rests
on on the ground that Section 10 of the DECREE imposes a tax of
30% on the gross receipts payable to the local government is a
RIDER and the same is not germane to the subject matter thereof.
Issue:
WON Presidential Decree No. 1987 entitled “An Act Creating the
Videogram Regulatory Board” is unconstitutional
Held:
WHEREFORE, the instant Petition is hereby dismissed
Rationale:
We shall consider the foregoing objections in seriatim.
1. The Constitutional requirement that "every bill shall embrace only
one subject which shall be expressed in the title thereof" is
sufficiently complied with if the title be comprehensive enough to
include the general purpose which a statute seeks to achieve. It is not
necessary that the title express each and every end that the statute
wishes to accomplish. The requirement is satisfied if all the parts of
the statute are related, and are germane to the subject matter
expressed in the title, or as long as they are not inconsistent with or
foreign to the general subject and title. An act having a single general
subject, indicated in the title, may contain any number of provisions,
no matter how diverse they may be, so long as they are not
inconsistent with or foreign to the general subject, and may be
considered in furtherance of such subject by providing for the
method and means of carrying out the general object." The rule also
is that the constitutional requirement as to the title of a bill should
not be so narrowly construed as to cripple or impede the power of
legislation. It should be given practical rather than technical
construction.
Tested by the foregoing criteria, petitioner's contention that the tax
provision of the DECREE is a rider is without merit. That section
reads, inter alia:
Section 10. Tax on Sale, Lease or Disposition of
Videograms. — Notwithstanding any provision of law to the
contrary, the province shall collect a tax of thirty percent
(30%) of the purchase price or rental rate, as the case may
be, for every sale, lease or disposition of a videogram
containing a reproduction of any motion picture or
audiovisual program. Fifty percent (50%) of the proceeds of
the tax collected shall accrue to the province, and the other
fifty percent (50%) shall acrrue to the municipality where the
tax is collected; PROVIDED, That in Metropolitan Manila,
the tax shall be shared equally by the City/Municipality and
the Metropolitan Manila Commission.
The foregoing provision is allied and germane to, and is reasonably
necessary for the accomplishment of, the general object of the
DECREE, which is the regulation of the video industry through the
Videogram Regulatory Board as expressed in its title. The tax
provision is not inconsistent with, nor foreign to that general subject
and title. As a tool for regulation it is simply one of the regulatory
and control mechanisms scattered throughout the DECREE. The
express purpose of the DECREE to include taxation of the video
industry in order to regulate and rationalize the heretofore
uncontrolled distribution of videograms is evident from Preambles 2
and 5, supra. Those preambles explain the motives of the lawmaker
in presenting the measure. The title of the DECREE, which is the
creation of the Videogram Regulatory Board, is comprehensive
enough to include the purposes expressed in its Preamble and
reasonably covers all its provisions. It is unnecessary to express all
those objectives in the title or that the latter be an index to the body
of the DECREE.
Article 6 Section 26 (1)
Philippine Judges Association vs. Prado (Journal)
Facts:
The basic issue raised in this petition is the independence of the
Judiciary. It is asserted by the petitioners that this hallmark of
republicanism is impaired by the statute and circular they are here
challenging. The Supreme Court is itself affected by these measures
and is thus an interested party that should ordinarily not also be a
judge at the same time. Under our system of government, however, it
cannot inhibit itself and must rule upon the challenge, because no
other office has the authority to do so. We shall therefore act upon
this matter not with officiousness but in the discharge of an
unavoidable duty and, as always, with detachment and fairness.
The main target of this petition is Section 35 of R.A. No. 7354 as
implemented by the Philippine Postal Corporation through its
Circular No. 92-28. These measures withdraw the franking privilege
from Courts
Issue:
Petition assails the constitutionality of R.A. No. 7354 on the grounds
that (1) its title embraces more than one subject and does not express
its purpose (2) it did not pass the required readings in both Houses of
Congress and printed copies of the bill in its final form were not
distributed among the members before its passage
Held:
ACCORDINGLY, the petition is partially GRANTED and Section
35 of R.A. No. 7354 is declared UNCONSTITUTIONAL. Circular
No. 92-28 is SET ASIDE insofar as it withdraws the franking
privilege from the courts. The temporary restraining order dated June
2, 1992, is made permanent.
Rationale:
We consider first the objection based on Article VI, Sec. 26(l), of the
Constitution providing that "Every bill passed by the Congress shall
embrace only one subject which shall be expressed in the title
thereof."
The purposes of this rule are: (1) to prevent hodge-podge or "log-
rolling" legislation; (2) to prevent surprise or fraud upon the
legislature by means of provisions in bills of which the title gives no
intimation, and which might therefore be overlooked and carelessly
and unintentionally adopted; and (3) to fairly apprise the people,
through such publication of legislative proceedings as is usually
made, of the subject of legislation that is being considered, in order
that they may have opportunity of being heard thereon, by petition or
otherwise, if they shall so desire.
It is the submission of the petitioners that Section 35 of R.A. No.
7354 which withdrew the franking privilege from the Judiciary is not
expressed in the title of the law, nor does it reflect its purposes.
R.A. No. 7354 is entitled "An Act Creating the Philippine Postal
Corporation, Defining its Powers, Functions and Responsibilities,
Providing for Regulation of the Industry and for Other Purposes
Connected Therewith."
The objectives of the law are enumerated in Section 3, which
provides:
The State shall pursue the following objectives of a nationwide
postal system:
a) to enable the economical and speedy transfer of mail and other
postal matters, from sender to addressee, with full recognition of
their privacy or confidentiality;
b) to promote international interchange, cooperation and
understanding through the unhampered flow or exchange of postal
matters between nations;
The title of the bill is not required to be an index to the body of the
act, or to be as comprehensive as to cover every single detail of the
measure. It has been held that if the title fairly indicates the general
subject, and reasonably covers all the provisions of the act, and is not
calculated to mislead the legislature or the people, there is sufficient
compliance with the constitutional requirement. 2

c) to cause or effect a wide range of postal services to cater to

different users and changing needs, including but not limited to,
philately, transfer of monies and valuables, and the like;

d) to ensure that sufficient revenues are generated by and within the

industry to finance the overall cost of providing the varied range of
postal delivery and messengerial services as well as the expansion
and continuous upgrading of service standards by the same.

Sec. 35 of R.A. No. 7354, which is the principal target of the

petition, reads as follows:

Sec. 35. Repealing Clause. — All acts, decrees, orders, executive

orders, instructions, rules and regulations or parts thereof
inconsistent with the provisions of this Act are repealed or modified
accordingly.

All franking privileges authorized by law are hereby repealed, except

those provided for under Commonwealth Act No. 265, Republic
Acts Numbered 69, 180, 1414, 2087 and 5059. The Corporation may
continue the franking privilege under Circular No. 35 dated October
24, 1977 and that of the Vice President, under such arrangements and
conditions as may obviate abuse or unauthorized use thereof.

The petitioners' contention is untenable. We do not agree that the

title of the challenged act violates the Constitution.