DISBURSEMENT

ACCELERATION
CONSTITUTIONAL
PROGRAM
LAW - 1
JUDGE DANTE
CORMINAL

DEFINITION OF TERMS:

SAVINGS- refers to portions or balances of any programmed appropriation in

this Act free from any obligation and 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.

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.

Allotement-refers to an authorization issued by the Department of Budget to

an agency, which allows it to incur obligations for specified amounts contained
in a legislative appropriation.

SUSPEND-means to cause to stop temporarily; to set aside or make

temporarily inoperative; to defer to a later time on specified conditions; to
stop temporarily; to discontinue or to cause to be intermitted or interrupted.

 STOP-

means to cause to give up

or change a course of action; to keep
from carrying out a proposed action,
to bring or come to an end.

IMPOUNDMENT-

refers to the
refusal by the president, for
whatever reason, to spend funds
made available by the congress.

What is DAP?

Disbursement Acceleration
Program or DAP- is a program
designed by the Department of
Budget and Management to
ramp up spending after sluggish
disbursements had caused the
growth of gross domestic
product (GDP) to slow down.

The DAP were usually taken from:

1. Unreleased appropriations
under Personnel Services;
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

DBM listed the following as the legal

bases for the DAPs use of savings
namely:
Section 25(5), Article VI of the 1987
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 the
General Appropriations Acts of
2011,2012,2013 (GAAs)
As for the use of unprogrammed funds
under the DAP, the DBM cited as the

Controversy
-At the core of the controversy is the contravention of DAP in
Section 29(1) of Article VI of the 1987 constitution, a provisionof
the fundamental law that firmly ordains that no money shall be
paid out of the Treasury except in pursuance of an appropriation
made by law.
-precipitated the controversy was on September 25,2013 when
Sen. Jinggoy Ejercito Estrada revealed that some senators,
including himself ,had been allotted an additional P 50 million each
as incentive for voting for in favour of the impeachment of of
Chef Justice Executive Renato C. Corona
-Nine petitions assailing the constitutionality of the DAP were
filed .

ISSUES
-Procedural Issue
A. Whether or not certiorari,prohibition,
and mandamus are proper remedies to
assail the constitutionality and validity of
the DAP, NBC no. 541 and all other
executive issuances allegedly
implementing the DAP. Subsumed in this
issues are whether there is a controversy
ripe for judicial determination, and the
standing of petitioners.

RULIN
ProceduralG
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.

The respondents
arguments and
submissions on
the procedural
issue are bereft of
merit.

Requisites for the exercise of

the power of judicial review
were complied with:
Requisites for the exercise of judicial
review are:
1. There must be an actual case or justiciable
controversy before the court
2. The question before the court must be ripe.

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.
-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
4. When the case was capable of repetition yet evading review.
3. The person challenging the act must be a proper party.
4. The issue constitutionality must be raised at the earliest
opportunity and must be the very lis mota of the case.

Legal Standing or locus standi, as a requisite for the exercise of

judicial review, refers to a right of appearance in a court of
justice on a given question.
Except for PHILCONSA, the petitioners have invoked their
capacities as taxpayers who, by averring that issuance and
implementation of the DAP and its relevant issuances involved
the illegal disbursements of public funds, have in interest in
preventing the further dissipation of public funds. The petitioners
in
Araullo and Beglica also assert their right as citizens to sue for
the enforcement and observance of the constitutional limitations
on political branches on the Government
PHILCONSA-legal standing to bring upon constitutional issues.
Luna- in his additional capacity as a lawyer
IBP- its avowed duty to work for the rule of law and of
paramount importance of the question in this action, not to

Transcendental Importance

Overview of the Budget

a.Origin of the Budget System
Budget
b. Evolution of the Philippine Budget System
c. The Philippine Budget Cycle
Four Phases comprises the Philippine Budget process:
-Budget Preparation
-Budget Legislation
-Budget Execution
-Accountability

SUBSTANTIVE ISSUES

2. Nature of DAP as a fiscal plan

a. DAP was a program designed to promote economic
growth
b. History of the implementation of the Dap, and
source of funds
-Memorandum for the President (October 12, 2011)
-Memorandum for the President (December 12, 2011)
-National Budget Circular No. 541 (July 18, 2012)
c. DAP was not an appropriation measure; hence no
appro

SUBSTANTIVE

Unreleased appropriations and withdrawn unobligated

allotment under the DAP were not savings, and the use
of such appropriation contravened Section 25(5),
Article VI of the 1987 Constitution

Although

executive discretion and flexibility are

necessary in the execution of the budget, any
transfer of appropriated funds should conform to
Section 25(5), Article VI of the Constitution.

Section 25(5), Article VI of the Constitution No law shall

be passed authorizing any transactions; however, the
President, President of the Senate, the Speaker of the
House of Representatives, the Chief Justice of the Supreme
Court, and the heads of Constitution Commissions may, by
law, be authorized to augment any item in the general
appropriation law for their respective offices from savings
in other items of their respective appropriations.

Requisites for the valid transfer of appropriated funds

under Section 25(5), Article VI of the 1987 Constitution.

The transfer of appropriated funds, to be valid under Section

25(5), supra, must be made upon a concurrence of the
following requisites, namely:

1. There is a law authorizing the President, the President of

the Senate, the Speaker of the House of the
Representatives, the Chief Justice of the Supreme Court,
and the heads of the Constitutional Commissions to
transfer funds within their respective offices.
2. The funds to be transferred are savings generated from
the appropriations for their respective offices; and
3. The purpose of the transfer is to augment an item in the
general appropriations law for their respective offices.

1 First Requisites GAAs of 2011 and 2012

lacked valid provisions to authorize transfer of
funds under the DAP; hence, transfers under
the DAP were unconstitutional.
Did

the GAAs expressly authorize the

transfer of funds?

The provisions of the 2011 and 2012 GAAs were cited by the DBM as
justification for the use of savings under the DAP.
In the 2011 GAA, the provision that gave the President and the
other high officials the authority to transfer funds was Section 59,
as follows:

Section 59. Use of Savings. The President of the Philippines, the

Senate President, the Speaker of the House of Representatives,
the Chief Justice of the Supreme Court, the Heads of
Constitutional Commissions enjoying fiscal autonomy, and the
Ombudsman are hereby authorized to augment any item in this
Act from savings in other items of their respective appropriations.

2 Second Requisites There were no

savings from which funds could be
sourced for the DAP.

Were

the funds used in

the DAP actually
savings?

 The

definition of savings in the GAAs, particularly for the 2011,

2012 and 2013, reflected this interpretation and made it operational,
viz:
Savings refer to the portions or balances of any programmed
appropriation in this Act free from any obligation or encumbrances
which are: (i) still available after the completion or final
discontinuance or abandonment of the work, activity or
purpose for which the appropriation is authorized; (ii) from
appropriations balances arising from unpaid compensation
and related cost 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 lesser cost.

ON THE AUHORITY TO WITHDRAW UNOBLIGATED

ALLOTMENTS
It may be emphasized that the allotments to 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 NBC (National Budget Circular) No. 541 did not set in clear
terms the criteria for the withdrawal of unobligated allotments,
viz:
Worse, NBC No. 541 immediately considered for withdrawal all
released allotments in 2011 charged against the 2011 charged
against the 2011 GAA that had remained unobligated based on
the following considerations, to wit:

3 Third Requisites No funds from savings

could be transferred under the DAP to
augment deficient items not provided in the
GAA.
The

GAAs for 2011, 2012 and 2013 set as a

condition for augmentation that the appropriation
for the PAP item to be augmented be deficient, to
wit;
xxx 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 nonexistent program, activity, or project, be funded by
augmentation from savings or by the use of
appropriations otherwise authorized in this act.

Fourth Requisites Cross-border

augmentations from savings were
prohibited by the constitution.
By

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 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 foe one office are prohibited
from crossing over to another office even in the
guise of augmentation of a deficient item or items.
Regardless of the variant characterizations of the crossborder transfers of funds, the plain text of section 25(5),
supra, disallowing cross-border transfer was disobeyed.
Cross-border transfer, whether as augmentation, or as aid,
were prohibited under Section 25(5), supra

DECISION
4. Sourcing the DAP from unprogrammed funds the
despite original revenue targets not having been
exceeded was invalid (page 77)
Funding under the DAP were also sourced from
unprogrammed funds provided in the GAAs for 2011,
2012, and 2013.
Unprogrammed Funds
were not brought under DAP as savings, but as separate
sources of funds;
its release and use were not subject to the restrictions
under Section 25(5), supra
Evidence Packets by the OSG have confirmed that the

Release and use of unprogrammed

funds were still subject to restrictions
(GAAs precisely specified the instances
when the unprogrammed funds could
be released and the purposes for which
they could be used)
Petitioners point out that the release of
the unprogrammed funds was illegal
(revenue collection must exceed
revenue targets)
Respondents disagree holding that
the release and use of the

DBM avers three instances where unprogrammed funds could be availed of

while BESF envisioned only two. (These two instances was bolstered by the
texts of the Special Provisions of the 2011 and 2012 GAAs)
Provisos in both 2011 and 2012 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.
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.)
This meant that the collection of additional revenues did not warrant the
release of the unprogrammed funds.

revenue targets must still be complied with in order to justify the release of
the unprogrammed funds.
The present controversy on the unprogrammed funds was rooted in the
correct interpretation of the phrase revenue collections should exceed the
original revenue targets.
Petitioners take the phrase to mean that total revenue collections must
exceed the total revenue target stated in the BESF.
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 particular target.
Respondents submitted certifications from the BTr and Department of
Finance pertaining to only one identified source of revenue (the dividends
from the shares of stock held by the Government in government-owned and
controlled corporations) to justify the release of unprogrammed funds for
2011, 2012 and 2013.

The certifications reflected that by collecting dividends amounting to Php

23.8 billion in 2011, Php 19.419 billion in 2012, and Php 12.438 billion in 2013
the BTr had exceeded only the Php 5.5 billion in target revenues in the form of
dividends from stocks in each of 2011 and 2012 and only the Php 10 billion in
target revenues in the form of dividends from stocks in 2013.
Given the tenor of the certifications, the unprogrammed funds were thus
not yet supported by the corresponding resources. (Revenue targets
should be considered as a whole and not individually; otherwise we would
be dealing with artificial revenue surpluses.)
The requirement that revenue collections must exceed revenue target
should be understood to mean that the revenue collections must exceed
the total of the revenue targets stated in the BESF.
Moreover, to release the unprogrammed funds simply because there was
an excess revenue as to one source of revenue would be an unsound fiscal
management measure because it would disregard the budget plan and
foster budget deficits, in contravention of the Governments surplus
budget policy.

Equal Protection, checks and

balances, and public
accountability challenges

The DAP is further violative of the Equal Protection

Clause, the system of checks and balances, and the
principle of public accountability.
DAP violated the Equal Protection Clause:

OSG: The allegations about Senators and Congressman

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.

the DAP practiced undue favoritism in favor of select legislators

in contravention of the Equal Protection Clause
OSG: The supposed discrimination in the release of funds under
the DAP could be raised only by the affected Members of Congress
themselves.
no reasonable classification was used in distributing the funds
under the DAP; and that the senators who supposedly availed
themselves of said funds were differently treated as to the amounts
they respectively received
OSG: 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.

DAP violated the system of

checks and balances
DAP was repugnant to the
principle of public accountability

Doctrine of
Operative Fact

it nullifies the void law or executive act but sustains its effects
it provides an exception to the general rule that a void or unconstitutional law
produces no effect
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
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
The implementation of DAP resulted into the use of savings pooled by the Executive
to finance the PAPs that were not covered in the GAA, or that did not have proper
appropriation covers, as well as to augment items pertaining to other departments of
the Government in clear violation of the Constitution.

To declare the implementation of the DAP unconstitutional

without recognizing that its prior implementation constituted an
operative fact that produced consequences in the real as well as
juristic worlds of the Government and the Nation is to be
impractical and unfair.
The other side of the coin is that it has been adequately shown
as to be beyond debate that the implementation of the DAP
yielded undeniably positive results that enhanced the economic
welfare of the country.
Nonetheless, as Justice Brion has pointed out, the doctrine of
operative fact does not always apply, and it is not always the
consequence of every declaration of constitutional invalidity.
the doctrine of operative fact can apply only to PAPs that can no
longer be undone, and whose beneficiaries relied in good faith on
the validity of the DAP
it cannot apply to the authors, proponents and implementers of
the DAP, unless there are concrete findings of good faith in their
favor by the proper tribunals determining their criminal, civil,
administrative and other liabilities

prohibition; and DECLARES the following acts and practices under

the Disbursement Acceleration Program, National Budget Circular No.
541and 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 noncompliance with the conditions provided in the relevant General
Appropriations Acts.

Associate Justice Antonio T.

Carpio
SEPARATE
OPINION ON

THE
UNCONSTITUTIONALITY
OF DAP

I. Introduction
Consolidated special civil actions for certiorari
and prohibition
Petitioners (Augusto L. Syjuco, Jr., Ph.D., et
al.) as taxpayers and Filipino citizens
Challenging the constitutionality of the
Disbursement Acceleration Program (DAP),
National Budget Circular No. 541 and Other
Executive Issuances
Respondents
are
the
President,
the
Department of Budget and Management
Secretary Florencio Abad, et al.

Grounds for Assailing

Constitutionality of DAP by
Petitioners
1.

2.

There is no law passed for the creation of

the DAP, contrary to Section 29, Article VI of
the Constitution;
The realignment of funds which are not
savings, the augmentation of non-existing
items in the General Appropriations ACT
(GAA), and the transfer of appropriations
from the Executive branch to the Legislative
branch and constitutional bodies all violate
Section 25(5), Article VI of the Constitution

Argument of the
Respondents
Respondents

as represented by the
OSG argued that no law is required
for the creation of the DAP, which is
a fund management system, and the
DAP is a constitutional exercise of
the Presidents power to augment or
realign.

Sources of DAP
Under

NBC 541, the sources of DAP funds are as

follows:
Unobligated allotments as of June 30, 2012 of all

national government agencies (NGAs) charged against

FY 2011 Continuing Appropriation Act (R.A. 10147) and
FY 2012 Current Appropriation (R.A. No. 10155),
pertaining to:
Capital Outlays
Maintenance and Other Operating Expenses (MOOE) related to
the implementation of programs and projects, as well
capitalized MOOE; and
Personal Services corresponding to unutilized pension benefits.

Unprogrammed Fund in the GAAs

Justice Carpios Opinion

Section 60, Section 54, and Section 53 of the 2011,

2012, and 2013 GAAs define savings as follows:

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 implementations
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.

Justice Carpios Opinion

From

the definition, savings must be portions or

allowances from any programmed appropriation
free from any obligation or encumbrance which
means there is no contract obligating payment
out of such portions or balances of the
appropriation.

Further,

it can be contemplated that the 1 st

source of savings are excess funds after the
completion of the work, activity, or project or
when there is final discontinuance of the work,
activity, or project

Justice Carpios Opinion

Funds left after temporary discontinuance of work,

activity or project under Section 38, Chapter 5, Book VI
of the Administrative Code of 1987 as contended by
respondents cannot be considered as savings because
what can qualify are those only under Section 60, Section
54, and Section 53 of the General Provisions of the 2011,
2012, and 2013 GAAs.
Thus, the President though given the authority to
temporarily suspend further expenditure of funds allotted
for any agency, or any other expenditures authorized in
the GAA in case of anomalies cannot realign such funds
because they are not savings. There must be final
discontinuance for it to be considered as savings.

Unobligated Allotments are

not Savings
The

DAP and NBC 541 directed the

withdrawal of unobligated allotments
of agencies with low level of
obligations, MOOE and Capital
Outlays as of June 30, 2012 to
augment or fund priority and/or fast
moving programs/projects of the
national government.

Justice Carpios Opinion

In

his opinion, the unobligated allotments of agencies

with low-level of obligations as of June 30, 2012 are not
savings as defined in the GAAs, with the exception of
MOOE from January to June 2012, excluding Mandatory
Expenditures and Expenditures for Business-type
Activities because there are still ample time to obligate
the funds thru the conduct of public bidding.
The realignment of these funds to augment items in the
GAAs patently contravenes Section 25(5), Article VI of
the Constitution.
Thus, such realignment under the DAP, NBC 541 and
other Executive Issuances related to DAP is clearly
unconstitutional

Justice Carpios Opinion

In his opinion, the withdrawal of unobligated allotments for

MOOE and Capital Outlays as of June 30, 2012 violates the
General Provisions of the 2011 and 2012 GAAs particularly
Section 65 and Section 63, respectively which prescribe a
two-year life span for such expenditures because the
President cannot validly declare Capital Outlays and future
MOOE as savings in the middle of the fiscal year, long
before the two-year period when such funds can still be
obligated thru a public bidding.
Thus, the realignment under the DAP of unobligated
Capital Outlays as of June 30, 2012, as well as the
realignment of MOOE allocated for the second semester of
the fiscal year, violates Section 25(5),Art. VI of the
Constitution, and is therefore unconstitutional.

Unlawful Release of the

Unprogrammed Fund
Unprogrammed

Fund as one of the sources of

DAP can be released only under the condition
set under the provisions of the 2011, 2012
and 2013 GAAs when the revenue collections,
as certified by the National Treasurer, must
exceed the original revenue targets submitted
by the President to Congress.
However, the certifications submitted by the
OSG do not state that the revenue collections
exceeded the original revenue targets as
submitted by the President to Congress.

Justice Carpios Opinion

The

DBM miserably failed to show

any excess revenue collections
during the period the DAP was
implemented.
Thus, this is in clear violation of the
provisions of the GAAs for noncomplying of the express condition
and such use of the Unprogrammed
Fund under DAP is unlawful or void.

DAP prohibits CROSSBORDER TRANSFERS

Budget

Secretary Florencio Abad expressly

admitted the existence of cross-border transfers
of funds when they granted to the requests of the
following (citing two instances):
House of Representatives to fund around 43
Million pesos to complete their e-library building
to avoid from serious deterioration, and
Commission on Audit to finance its information
technology equipment as well as hire consultants
and litigators for the speedy and convenient
conduct of their audits as well as review of
financial reports of many agencies

DAP also Augmented

PDAF
The

Memorandum of the President dated

December 12, 2011 stated that correspond to
completed or discontinued projects may be
pooled, among others, to augment deficiencies
under the Special Purpose Funds which include
PDAF in the amount of 6.5 Billion pesos.
In his opinion, the transfer of DAP funds in the
amount of 6.5 Billion to augment the
unconstitutional PDAF is also unconstitutional
because it is an augmentation of an
unconstitutional appropriation.

OSGs Contention
The

OSG submits that in relation to

the DAP, the President made
available to the Commission on
Audit, House of Representatives, and
the Commission on Elections the
savings of his department upon their
request for funds, but it was those
institutions that applied such savings
to augment items in their respective
appropriations.

Justice Carpios Opinion

The

OSGs arguments are obviously untenable.

Section 25(5), Art. VI of the Constitution does not
distinguish whether the recipient entity requested
or did not request additional funds from the
Executive branch to augment items in the
recepient entitys appropriations.
The Constitution clearly prohibits the President
from transferring appropriations of the Executive
branch to other branches of government or to
constitutional bodies for whatever reason.
Congress cannot even enact a law allowing such
transfers.

Justice Carpios Opinion

The

fundamental policy of the

Constitution is against transfer of
appropriations even by law, since this
juggling of funds is often a rich source of
unbridled patronage, abuse and
interminable corruption.
Moreover, the cross-border transfer of
appropriations to constitutional bodies
impairs the independence of the
constitutional bodies.

No Presidential Power of
Impoundent
Section

38, Chapter V, Book VI of the Administrative Code

of 1987 cannot be used by the President to stop
permanently the expenditure of unobligated appropriated
funds because that would amount to a Presidential power
to impound funds appropriated in the GAA.
The President has no power to impound unobligated funds
in the GAA for two reasons:
The GAA once it becomes law cannot be amended by the

President and an impoundment of unobligated funds is an

amendment of the GAA since it reverses the will of the Congress;
The Constitution gives the President the power to prevent
unsound appropriations by Congress only through his line item
veto power, which he can exercise only when the GAA is
submitted to him by Congress for approval.

Justice Carpios Opinion

If

the court allows the President to impound

the funds appropriated by Congress under a
law, then the constitutional power of
Congress to override the Presidents veto
becomes inutile and meaningless.
Under our Constitutional scheme, the
Presidents line item veto is the checking
mechanism to unsound congressional
appropriations, not any implied power of
impoundment which certainly does not exist
in the Constitution.

Doctrine of Operative
Fact
An

unconstitutional act confers no rights, imposes no duties,

and affords no protection. (Chavez v. Judicial and Bar Council)
The exception to this rule is the Doctrine of Operative Fact.
The doctrine of operative fact is applicable only if nullifying the
effects of the unconstitutional law or administrative issuance
will result to injustice or serious prejudice to the public or
innocent third parties. So, innocent contractors who built the
school houses funded by DAP in good faith can invoke this
doctrine while it would not apply for DAP funds used to augment
PDAF of members of Congress whose identified projects were in
fact non-existent or anomalously implemented.
Thus, only those whose who merely relied in good faith on the
illegal or unconstitutional act, without any direct participation in
the commission of the illegal or unconstitutional act, can invoke
the doctrine.

Conclusion
Associate

Justice Carpio voted to declare

the following acts and practices under
the Disbursement Acceleration Program
and the National Budget Circular No. 541
dated July 18, 2012 UNCONSTITUTIONAL
for violating Section 25(5), Article VI of
the Constitution:
Transfers of appropriations from the

Executive to the Legislature, the Commission

on Elections and the Commission on Audit;

Conclusion
Disbursements of unobligated allotments for

MOOE as savings and their realignment to other

items in the GAAs, where the MOOE that are the
sources of savings are appropriations for
months still to lapse;
Disbursements of unobligated allotments for
Capital Outlay as savings and their realignment
to other items in the GAA, prior to the last two
months of the fiscal year if the period to
obligate is one year, or prior to the last two
months of the second year if the period to
obligate is two years; and

Conclusion
Disbursements of unobligated

allotments as savings and their

realignment to items or projects not
found in the GAA.
In addition, the use of the Unprogrammed
Fund without the certification by the
National Treasurer that the revenue
collections for the fiscal year exceeded
the revenue target for that year is VOID
for being contrary to the express
condition for the use of the

Associate Justice Arturo D. Brion

SEPARATE OPINION

Following the lead of J. Antonio Carpio, submittal of original separate opinion on April
2014, duing the courts Baguio Session after the promised ponencia was not
issued. Two reasons were compelled: (1) the Court failed to meaningfully consider
the petitioners prayer for a Temporary Restraining Order (TRO); delay intervened
until it was too late to consider whether or would not a TRO would be issued; (2) no
dilly-dallying, together with the closely-related Priority Development Assistance
Fund (PDAF) case, the present DAP case is a part of the countrys biggest scandal
and, on its own, precedent-setting case with profound impact on the nation
involving funds amounting to almost p150 Billion or almost 15 times the PDAF
case, entanglement with the PDAF; personalities at the very highest level in both
Executive and Legislative Departments, and the demonstration of lack of respect
for the public funds, institutions and the Constitution.
Separate from these circumstances, many principles underlying the Republic are at
stake. Among them are the regime of rules of law; the system of checks and
balances and the separation of powers that indicate the health of the
constitutionalism and democracy in the country; the stability of the government in
light of the possible effect that the ruling, either way, will have on the institutions
and officials involved; and the moral values and the level of trust of the people.

ISSUES
Procedural

Issue:
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 the petitioners.
Substantive Issues:
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.
Whether or not the DAP, NBC No. 514 and all other executive issuances allegedly implementing the DAP violate Sec
25(5), Art VI of the 1987 Constitution insofar as:
) They treat the unreleased appropriations and unobligated allotments withdrawn from the government agencies as
savings as the term is issued in Sec 25(5), in relation to the provisions of the GAAs of 2011, 2012 and 2013;
) They authorize the disbursement of funds for projects or programs not provided in the GAAs for the Executive
Department, and;
) They augment discretionary lump sum appropriations in the GAAs.
Whether or not the DAP violates (1) the Equal Protection Clause, (2) the system of checks and balances, and (3) the
principle of the public accountability enshrined in the 1987 Constitution considering that it authorizes the release of
funds upon the request of the legislators.
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 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. 2019442 (Belgica) dwelled
on unprogrammed funds in their respective memoranda. Hence, an additional issue for the oral arguments is stated
as follows:
Whether or not the release on unprogrammed funds under the DAP was in accord with the Constitution.
Whether

POSITION
The

DAP is unconstitutional. Specifically, he holds that:

The Court has jurisdiction to hear and decide the petitions under
its expanded power of the judicial review, as provided under Sec
1, Art VIII of the Constitution and as explained below;
The DAP violates the principles of checks and balances anf the
separation of powers that the 1987 Constitution integrates into
budgetary process;
The DAP violates the constitutional prohibitions against the
transfer of appropriations and against the transfer of funds from
one branch of the government to another, both under Sec 25 (5)
of the Art VI of the Constitution; and
The DAP violates the special conditions for the release of the
Unprogrammed Fund.
Further, he generally agree with the ponentes conclusion
regarding the applicability of the operative fact doctrine,
subject to the details discussed in this Opinion.

BACKGROUND
The DAP. Like the PDAF, involved the implementation of the national budget nut
focused largely on how the Executive implemented the General
Appropriations Act (GAA). As in the PDAF, the charges involved the
unconstitutional intrusion by one branch of government (the Executive) into the
exclusive prerogatives of another (the Legislative) in the budgetary process.
The present petitioners charge that the DAP was used as the means to allow
the Executive to intrude into the legislative budgetary process, thereby
subverting and rendering useless the appropriations Congress made
under the GAA. In short, through the DAP, the Executive effectively
exercised the power of appropriation exclusively reserved by the
Constitution to Congress.
The DAP, in parallel with the PDAF but going the other way, allegedly
allowed the Executive to disregard the GAA so that the latter could
determine the projects, activities and plans (PAPs) where national funds
would be deployed and spent, creating thereby a budget independently
determined by the Executive within the congressionally- determined
budget.

For ease of presentation, this Concurring and Dissenting

Opinion shall proceed under the following structure:

Factual

Antecedents

The DAP and its Origins

On

September 28, 2013, Secretary Abad released an official

statement, through the DBM website, explaining that the
amounts released to Senators on top of their regular PDAF
allocations towards the end of 2012 were part of a fund he
called the DAP. He claimed that these releases were, in fact,
not the first time that releases from DAP were made to fund
project requests from legislators because the DAP had
been in existence since the latter part of 2011.
In the course of hearing these petitions, the respondents
submitted evidence packets explaining the DAP came into
existence and how it operated. Thus, authoritatively and
with sufficient factual bases discuss these points.

MEMORANDUM

The Memoranda from Secretary Abad to the President

The President approved these requests.

Subsequently, Secretary Abad sent to the President another

Memorandum dated December 12, 2011, requesting for omnibus
authority to consolidate savings/ unutilized balances in the fiscal year (FY)
2011 corresponding the completed or discontinued projects and their
realignment.

In yet another Memorandum dated June 25, 2012 , Secretary Abad

asked the President for the grant of authority: (i) to consolidate savings/
unutilized balances in FY 2012 corresponding the unfilled positions and
completed the discontinued projects; and (ii) for the withdrawal and
pooling of the available and unobligated balances, for both
continuing and current allotments, of national government agencies as
of June 30, 2012.

Among the priority projects identified was the construction of the

Legislative Library and Archive Building/ Congressional E- Library
with the House of Representatives as the identified agency.

Consistent with these memoranda, on July 08, 2012, the DBM

issued National Budget Circular (NBC) No. 541, entitled
Adoption of Operational Efficiency Measure Withdrawal of
Agencies Unobligated Allotments as of June 30, 2012.
Per the Presidents directive dated June 27, 2012, NBC No.
541 authorized Secretary Abad to withdraw the
unobligated allotments of agencies that had low
level of obligations as of June 30, 2012. These
unobligated allotments referred to two kinds of allotments:
one is the continuing allotment that is charged against the
GAA for FY 2011, and the other is the current allotment that
is charged against the GAA of FY 2012.

Based on the earlier memoranda, NBC No. 541, the DAP

funds were sourced from : (1) savings generated by
the government, as well as (ii) the Unprogrammed
Fund. The savings were sourced from:
Unreleased

appropriations for unfilled positions which

will lapse at the end of the year;
Available balances from the completed or discontinued
projects;
Unreleased appropriations of slow- moving
projects and discontinued projects;
Withdrawn unobligated allotments which have
earlier been released to NGA.

 In

May 20, 2013 Memorandum

The President likewise granted
this request.

Based on the antecedents, the

petitioners claim that the DAP is
unconstitutional for violating
Section 25, paragraph 5, and Section
29, paragraph 1, Article VI, as well as
Section 17, Article VII of the 1987

DISCUSSION
Preliminary

Matters
-The Courts expanded power of judicial review

Section

1, Article VIII, of the 1987 Constitution reads:

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.
Under these terms, the present Constitution not only integrates the
traditional definition of judicial power, but introduces as well a
completely new power and duty to the Judiciary.
-Prima facie showing of grave abuse of discretion

A)

The lack of audit findings does not negate the grave abuse of
discretion

-Transcendental importance of the issues presented by the

petitions
)The

Court should find it significant that it was from the COA Chairperson
herself lends credence to the respondents claim that NBC No. 541 is
not really the face of the DAP. NBC No. 541 only formalized
what the Executive had been doin even prior to the issuance.

)Secretary

Abads official, public and unrefuted statement that part

of the releases of DAP funds in 2012 was based entirely on letter
of requests submitted to us by the Senators should neither escape the
Courtss attention nor should the Court gloss over it.

-Justiciability and Political Questions

Justiciability refers to the fitness on propriety of undertaking the judicial review of particular
matters or cases; it describes the character of the issues that are inherently susceptible of
being decided on grounds recognized by law.
-The Courts boundary-keeping role in times of political upheaval

Substantive Matters

Definition of terms:

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.
Impoundment refers to the refusal by the President, for whatever reason, to spend funds made available by
Congress. It is failure to spend of obligate budgetary authority of any type. The President may conceivably
impound appropriated funds in order to avoid wastage of public funds without ignoring legislative will (routine
impoundments) or because he disagrees with congressional policy (policy impoundments).

The DAP violates the principles of checks and balances

and the separation of powers that the 1987
Constitution integrated in the budgetary process

The DAP violates the principles of checks and balances and the separation
of powers that the 1987 Constitution integrated in the budgetary process

a.) The principle of separation of powers and checks and balances in the
budgetary process

1.

2. How the DAP violates these principles

a.) The power to augment is a very narrow exception to the general prohibition
against the transfer of appropriations
b.) The need for actual savings before the power to augment may be exercised
c.) Savings cannot be used to fund programs and projects not appropriated by
Congress
d.) Additional limitations imposed by Congress under the GAA

DEFINITION OF SAVINGS

Savings refer to portions or balances of any programmed

appropriation in this Act free from any obligation or encumbrance
which are:

Still available after the completion or final discontinuance or

abandonment of the work, activity or purpose for which the
appropriation is authorized;
From appropriations balances arising from the unpaid
compensation and related costs pertaining to vacant positions and
leaves of absence without pay; and
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.

Two-year period within which appropriations for Capital Outlay and Maintenance
and other Operating Expense (MOOE) may be spent

General prohibition against impoundment of releases

e.)The sources of DAP funds cannot qualify as savings

Unobligated allotments

Funds allotted for particular appropriations may only be used to augment other items
in the GAA when there are actual savings. The DAP, by pooling funds together to
fast-track priority projects of the government, violated this critical requirement as
the sources of DAP funds cannot qualify as savings
1 .final discontinuance or abandonment
2. use of section 38 as justification

f.) The DAP violates the prohibition against

impoundment
g.) Qualifications to the Presidents flexibilities in
budget execution
h.) The DAP, in funding items not found in the GAA
violated the Constitution
3. The DAP violates the special conditions for the
release of the Unprogrammed Fund in the 2011 and
2012 GAAs
4.The operative fact doctrine: concept, limits and
applications to the DAPs unconstitutionality

Associate Justice Mariano C. Del

Castillo

Concurring and
Dissenting

PROVISION AND PRINCIPLE

Article VI, Section 25(5) of the Constitution

provides:
No law shall be passed authorizing any transfer of
appropriations; however, the president, the president of
the Senate, the Speaker of the House of Representatives,
the Chief Justice of the Supreme Court, and the
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 requisites must concur:

There must be a law authorizing the head of offices to
transfer savings for augmentation purposes,
There must be savings from an item/s in the appropriations
of the office,

 In

sum, the power to augment under Article VI,

Section 25(5) of the Constitution serves two principal
purposes: (1) negatively, as an integral component
of the system of checks and balances under our plan
of government and (2) positively, as a fiscal
management tool for the effective and efficient use
of public funds to promote the common good. For
these reasons, as preliminarily intimated, the just
resolution of this case hinges on the balancing of two
paramount State interests: (1) the prevention of
abuse or misuse of the power to augment, and (2)
the promotion of the general welfare through the
power to augment.

DEFINITION OF TERMS
AUTHORITY

TO AUGMENT

SAVINGS-

refers to portions or balances of any programmed appropriation in this

Act free from any obligation and 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; (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.

Requisites

must be met:

The

appropriation must be a programmed appropriation in the GAA;

The appropriation must be free from any obligation or encumbrances;
The appropriation must still be available after the completion or final discontinuance
or abandonment of the work, activity or purposes for which the appropriation is
authorized.


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 appropriation
otherwise authorized by this Act.

Requisite
The

must concur:

program, activity, or project to be augmented by savings must be a

program, activity, or project in the GAA;
The program, activity, or project to be augmented by savings must refer to
a program, activity, or project within or under the same office from which
the savings were generated;
Upon implementation or subsequent evaluation of needed resources, the
appropriation of the program, activity, or project to be augmented by the
savings must be shown to be deficient.

ISSUES

POWER TO FINALLY DISCONTINUE OR ABANDON THE WORK, ACTIVITY OR

PURPOSE FOR WHICH THE APPROPRIATION IS AUTHORIZED

POWER OF THE PRESIDENT TO SUSPEND OR OTHERWISE STOP

BOOK VI, Chapter V, Section 38 of the Administrative Code:

Section 38. Suspension of Expenditure of Appropriations- except as otherwise provided

in the General Appropriation Act and whenever in his judgment the public interest so
requires, the President, upon notice to the head of the office concerned, is
authorized to suspend or otherwise stop further expenditure of funds allotted for any
agency, or any other expenditure authorize in the General Appropriation Act, except
for personal services appropriations used for permanent officials and employees.

SUSPEND means to cause to stop temporarily; to set aside or make temporarily

inoperative; to defer to a later time on specified conditions; to stop temporarily; to
discontinue or to cause to be intermitted or interrupted.

STOP means to cause to give up or change a course of action; to keep from

carrying out a proposed action, to bring or come to an end.

BOOK VI, Chapter V, Section 2(2)

of the Administrative Code:

SECTION 2. Definition of Terms.

(2) Allotement refers to an authorization issued by the

Department of Budget to an agency, which allows it to incur
obligations for specified amounts contained in a legislative
appropriation.

When read in relation to the above definition of allotment, the

phrase funds allotted in section 38, therefore, refers to both
unobligated and obligated allotments for, precisely, an
unobligated allotment refers to an authorization to incur
obligations issued by the Department of Budget and
Management(DBM). The laws says to suspend or otherwise stop
further expenditure of funds allotted for any agency without
qualification, and not to suspend or otherwise stop further
expenditure of obligated allotments for any agency. The power of
the President to suspend or to permanently stop expenditure in
section 38 is, thus, broad enough to cover both unobligated and
obligated allotments.

Was the withdrawal of the unobligated allotments from

the slow-moving projects under Section 5 of NBC 541,
equivalent to the final discontinuance or abandonment
of these slow-moving projects which gave rise to
savings under the GAA?
Relevant

provisions of NBC 541 state:

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-thanprogrammed implementation capacity or [that the] agency
tends to implement projects within a two-year timeframe.

5.7 The withdrawn allotment may be:

5.7.1 Reissued for the original programs and projects of

the agencies/ OUs concerned, from which the allotment
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 program 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.

Did the president validly order the final discontinuance

or abandonment of the subject slow-moving projects
pursuant to his power to permanently stop expenditure
under Section 38 of the Administrative Code?

The

challenged act enjoys the presumption of

constitutionality. The burden of proof rests on
petitioners to show that the permanent
stoppage of expenditure on slow-moving
projects does not meet the public interest
standard under Section 38. At the very least,
the move by the Executive Department to
solve the systemic problems in the
implementation of its projects shows good
faith in seeking to abide by the
appropriations set by Congress in the GAA.

The power to permanently stop further expenditure

under Section 38 and, hence, finally discontinue or
abandon a work, activity or purpose vis--vis the twoyear availability for release of appropriations under the
GAA.
The

power to permanently stop expenditure under Section 38 and the prohibition

on impoundment under Sections 64 and 65 of the GAA.

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 GAA, except for
personal services appropriations used for permanent officials and employees.
Section 64. 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 65. Unmanageable National 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.

Sourcing of Funds for DAP

Funds

used for programs and projects

through DAP were sourced from savings
generated by the government, the
reallocation of which is subject to the
approval of the President; as well as the
Unprogrammed Fund that can be tapped
when government has windfall revenue
collections, e.g., unexpected remittance of
divided from the GOCCs and Government
Financial Institutions (GFIs), sale of
government assets.

Section 38, insofar as it allows the president to permanently

stop expenditures, is a valid legislative grant of the power of
impoundment to the President.

The power to finally discontinue or abandon a work, activity or

purpose in the GAA vis--vis section 38.

The enormous powers of the President to: (a) permanently stop

expenditures under Section 38 and (b) to finally discontinue or
abandon a work activity or purpose under the GAA definitions of
savings.

On the use unreleased appropriations under DAP

On the augmentation of project activity or program( PAP) not

covered by any appropriations in the pertinent GAAs

On CROSS-BORDER TRANSFER OF SAVINGS

On the Unprogrammed Fund

Unprogrammed Fund under the 2011, 2012, 2013 GAAs, respectively

state.

2011 GAA (Article XLV):

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 agreement for the 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

2012 GAA (Article XLVI)

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: PROVIDED, That collections arising
from sources not considered 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 foreignassisted 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.

2013 GAA (Article XLV)

Release

of Fund. The amounts authorized herein shall be

release 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 original revenue targets,
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.

On

the applicability of the OPERATIVE FACT DOCTRINE

CONCLUSION

The Disbursement Acceleration Program is Partially Granted and it is

Partially Unconstitutional:

Section 5.4, and 5.7 of National Budget Circular No. 541 are VOID insofar as they
(1) allowed the withdrawal of unobligated allotments from slow-moving projects
which were not finally discontinued or abandoned, and (2) violating the definition
of savings under the 2011, 2012 and 2013 general appropriations acts.
The

admitted cross-border transfers of savings from the Executive Department,

on the one hand, to the Commission on Audit, House of the Representatives and
Commission on Elections, respectively, on the other, are VOID for violating Article
VI, Section 25(5) of the constitution.

The

phrase to find priority programs and projects not considered in the 2012
budget but expected to be started or implemented during the current year in
Section 5.7.3 of National Budget Circular No. 541 is VOID for contravening Article
VI, section 29(1) of the constitution and Section 54 of the 2012 General
Appropriations Act.

Associate Justice Estela M. Perlas-Bernabe

Separate Concurring
Opinion

 ACCORDINGLY,

I concur with the ponencia that the following acts

andd/ or practices taken under the Disbursement Allocation Program,
implemented through National Budget Circular No. 541 and other
related executive issuances, are UNCONSTITUTIONAL.

a.) the withdrawal of unobligated allotments from the implementing

agencies not considered as savings of the Executive to augment
appropriations of other offices outside the executive, and the
augmentation of the items without any existing appropriation others to
the extent that the acts and/or practices violated Section 25(5) of the
1987 Philippine Constitution.
b.) the use of the Unprogrammed Fund despite the absence of any proof
that the general condition for its use under the relevant GAAs, i.e,
revenue collections were in excess of the original revenue targets, was
complied with and without any justification that the exceptive
conditions for such use did concur.

Associate Justice MARVIC MARIO VICTOR F. LEONEN

CONCURRING OPINION

I concur the result.

I agree that the means and practices covered by the

Disbursement Acceleration Program as articulated in
National Budget Circular No. 541 and in related executive
issuances and memoranda are unconstitutional. We
declare these principles for guidance of bench and bar
considering that the petitions were mooted. The
application of these principles to the 116 expenditures
contained in the evidence packet submitted by the
Solicitor General as well as the application of the doctrine
of operative fact should await proper appraisal in the
proper forum.

Included in fiscal responsibilities is the duty to

prevent irregular, unnecessary, excessive, or
extravagant expenses.

Thus:
Section 33. Prevention of irregular,
unnecessary, excessive, or extravagant
expenditures of funds or uses. Of property;
power to disallow such expenditures. The
Commission shall promulgate such auditing
and accounting rules and regulations as shall
prevent irregular, unnecessary, excessive, or
extravagant expenditures or uses of
government funds or property.

FINAL NOTE

ACCORDINGLY for guidance of the bench and bar, I vote to declare the following acts and practices under
the Disbursement Acceleration Program (DAP); National Budget Circular No. 541 dated July 18, 2012; and
related executive issuance as unconstitutional:

(a) any implementation of section 5.7.3 insofar as it relates to activities not related to any existing
appropriation item even if in anticipation of future projects;
(b) any augmentation by the President of items appropriated for offices outside the executive branch;

any augmentation of any item, even within the executive department, which is sourced from funds
withdrawn from activities which have not yet been (1) completed, (2) finally discontinued, or (3)
abandoned; and

(d) any use of unprogrammed funds without all the conditions in the General Appropriations Act being
present.

Let a copy of this decision be served on all the other officers covered in Article VI, Section 25(5) of the 1987
Constitution for their guidance.

The evidence packets submitted by respondents should also be transmitted to the Commission on Audit for
their appropriate action.

FROM: TEAM DAP

TEAM DAP MEMBERS:

ERIC ELPA
MARNELLE NICOLAS
JUN PEREZ
CARMIL PLATIL
IAN CABRAJALES
ARNIEL ATIENZA
FREIZL ROSALEJOS
MARIETTA L. JUANITE
JIM SULAPAS
EDSA BANTILAN

DECISION
SEPARATE
OPINION
CONCURRING AND
DISSENTING OPINION
CONCURRING