G.R. No. 113105. August 19, 1994
PHILIPPINE CONSTITUTION ASSOCIATION, EXEQUIEL B. GARCIA AND RAMON A. GONZALES, PETITIONERS, VS. HON. SALVADOR ENRIQUEZ, AS SECRETARY OF BUDGET AND MANAGEMENT; HON. VICENTE T. TA…
QUIASON, J.:
Once again this Court is called upon to rule on the conflicting
claims of authority between the Legislative and the Executive in the clash of
the powers of the purse and the sword. Providing the focus for the contest between the President and the
Congress over control of the national budget are the four cases at bench. Judicial intervention is being sought by a
group of concerned taxpayers on the claim that Congress and the President have
impermissibly exceeded their respective authorities, and by several Senators on
the claim that the President has committed grave abuse of discretion or acted
without jurisdiction in the exercise of his veto power.
I
House Bill No. 10900, the General Appropriation Bill of 1994 (GAB
of 1994), was passed and approved by both houses of Congress on December 17,
1993. As passed, it imposed conditions
and limitations on certain items of appropriations in the proposed budget
previously submitted by the President. It also authorized members of Congress to propose and identify projects
in the “pork barrels” allotted to them and to realign their
respective operating budgets.
Pursuant to the procedure on the passage and enactment of bills
as prescribed by the Constitution, Congress presented the said bill to the
President for consideration and approval.
On December 30, 1993, the President signed the bill into law, and
declared the same to have become Republic Act No. 7663, entitled “AN ACT
APPROPRIATING FUNDS FOR THE OPERATION OF THE GOVERNMENT OF THE PHILIPPINES FROM
JANUARY ONE TO DECEMBER THIRTY ONE, NINETEEN HUNDRED AND NINETY-FOUR, AND FOR
OTHER PURPOSES” (GAA of 1994). On
the same day, the President delivered his Presidential Veto Message, specifying
the provisions of the bill he vetoed and on which he imposed certain conditions.
No step was taken in either House of Congress to override the
vetoes.
In G.R. No. 113105, the Philippine Constitution Association,
Exequiel B. Garcia and Ramon A. Gonzales as taxpayers, prayed for a writ of
prohibition to declare as unconstitutional and void: (a) Article XLI on the Countrywide Development Fund, the special
provision in Article I entitled Realignment of Allocation for Operational
Expenses, and Article XLVIII on the Appropriation for Debt Service or the
amount appropriated under said Article XLVIII in excess of the P37.9 Billion allocated
for the Department of Education, Culture and Sports; and (b) the veto of the
President of the Special Provision of Article XLVIII of the GAA of 1994 (Rollo,
pp. 88-90, 104-105)
In G.R. No. 113174, sixteen members of the Senate led by Senate
President Edgardo J. Angara, Senator Neptali A. Gonzales, the Chairman of the
Committee on Finance, and Senator Raul S. Roco, sought the issuance of the
writs of certiorari, prohibition and mandamus against the
Executive Secretary, the Secretary of the Department of Budget and Management,
and the National Treasurer.
Suing as members of the Senate and taxpayers, petitioners
question: (1) the constitutionality of
the conditions imposed by the President in the items of the GAA of 1994: (a) for the Supreme Court, (b) Commission on
Audit (COA), (c) Ombudsman, (d) Commission on Human Rights (CHR), (e) Citizen
Armed Forces Geographical Units (CAFGU’S) and (f) State Universities and
Colleges (SUC’s); and (2) the constitutionality of the veto of the special
provision in the appropriation for debt service.
In G.R. No. 113766, Senators Alberto G. Romulo and Wigberto
Tanada (a co-petitioner in G.R. No. 113174), together with the Freedom from
Debt Coalition, a non-stock domestic corporation, sought the issuance of the
writs of prohibition and mandamus against the Executive Secretary, the
Secretary of the Department of Budget and Management, the National Treasurer,
and the COA.
Petitioners Tanada and Romulo sued as members of the Philippine
Senate and taxpayers, while petitioner Freedom from Debt Coalition sued as a
taxpayer. They challenge the
constitutionality of the Presidential veto of the special provision in the
appropriations for debt service and the automatic appropriation of funds
therefor.
In G.R. No. 113888, Senators Tanada and Romulo sought the
issuance of the writs of prohibition and mandamus against the same
respondents in G.R. No. 113766. In this
petition, petitioners contest the constitutionality of: (1) the veto on four special provisions
added to items in the GAA of 1994 for the Armed Forces of the Philippines (AFP)
and the Department of Public Works and Highways (DPWH); and (2) the conditions
imposed by the President in the implementation of certain appropriations for
the CAFGU’s, the DPWH, and the National Housing Authority (NHA).
Petitioners also sought the issuance of temporary restraining
orders to enjoin respondents Secretary of Budget and Management, National
Treasurer and COA from enforcing the questioned provisions of the GAA of 1994,
but the Court declined to grant said provisional reliefs on the time-honored
principle of according the presumption of validity to statutes and the
presumption of regularity to official acts.
In view of the importance and novelty of most of the issues
raised in the four petitions, the Court invited former Chief Justice Enrique M.
Fernando and former Associate Justice Irene Cortes to submit their respective
memoranda as Amicus Curiae, which they graciously did.
II
Locus Standi
When issues of constitutionality are raised, the Court can
exercise its power of judicial review only if the following requisites are
compresent: (1) the existence of an
actual and appropriate case; (2) a personal and substantial interest of the
party raising the constitutional question; (3) the exercise of judicial review
is pleaded at the earliest opportunity; and (4) the constitutional question is
the lis mota of the case (Luz Farms v. Secretary of the
Department of Agrarian Reform, 192 SCRA 51 [1990]; Dumlao v. Commission on
Elections, 95 SCRA 392 [1980]; People v. Vera, 65 Phil. 56 [1937]).
While the Solicitor General did not question the locus standi
of petitioners in G.R. No. 113105, he claimed that the remedy of the Senators
in the other petitions is political (i.e., to override the vetoes) in effect
saying that they do not have the requisite legal standing to bring the suits.
The legal standing of the Senate, as an institution, was
recognized in Gonzales v. Macaraig, Jr., 191 SCRA
452 (1990). In said case, 23 Senators,
comprising the entire membership of the Upper House of Congress, filed a
petition to nullify the presidential veto of Section 55 of the GAA of 1989. The filing of the suit was authorized by
Senate Resolution No. 381, adopted on February 2, 1989, and which reads as
follows:
“Authorizing and Directing the Committee on Finance to Bring
in the Name of the Senate of the Philippines the Proper Suit with the Supreme
Court of the Philippines contesting the Constitutionality of the Veto by the
President of Special and General Provisions, particularly Section 55, of the
General Appropriation Bill of 1989 (H.B. No. 19186) and For Other
Purposes.”
In the United States, the legal standing of a House of Congress
to sue has been recognized (United States v. American Tel. & Tel. Co., 551
F. 2d 384, 391 [1976]; Notes: Congressional
Access To The Federal Courts, 90 Harvard Law
Review 1632 [1977]).
While the petition in G.R. No. 113174 was filed by 16 Senators,
including the Senate President and the Chairman of the Committee on Finance,
the suit was not authorized by the Senate itself. Likewise, the petitions in G.R. Nos. 113766 and 113888 were filed
without an enabling resolution for the purpose.
Therefore, the question of the legal standing of petitioners in
the three cases becomes a preliminary issue before this Court can inquire into
the validity of the presidential veto and the conditions for the implementation
of some items in the GAA of 1994.
We rule that a member of the Senate, and of the House of
Representatives for that matter, has the legal standing to question the
validity of a presidential veto or a condition imposed on an item in an
appropriation bill.
Where the veto is claimed to have been made without or in excess
of the authority vested on the President by the Constitution, the issue of an
impermissible intrusion of the Executive into the domain of the Legislature
arises (Notes: Congressional Standing
To Challenge Executive Action, 122 University of
Pennyslvania Law Review 1366 [1974]).
To the extent the powers of Congress are impaired, so is the
power of each member thereof, since his office confers a right to participate
in the exercise of the powers of that institution (Coleman v. Miller, 307 U.S.
433 [1939]; Holtzman v. Schlesinger, 484 F. 2d 1307 [1973]).
An act of the Executive which injures the institution of Congress
causes a derivative but nonetheless substantial injury, which can be questioned
by a member of Congress (Kennedy v. Jones, 412 F. Supp. 353 [1976]). In such a case, any member of Congress can
have a resort to the courts.
Former Chief Justice Enrique M. Fernando, as Amicus Curiae,
noted:
“This is, then, the clearest case of the Senate as a whole or
individual Senators as such having a substantial interest in the question at
issue. It could likewise be said that
there was the requisite injury to their rights as Senators. It would then be futile to raise any locus
standi issue. Any intrusion into
the domain appertaining to the Senate is to be resisted. Similarly, if the situation were reversed,
and it is the Executive Branch that could allege a transgression, its officials
could likewise file the corresponding action. What cannot be denied is that a Senator has standing to maintain
inviolate the prerogatives, powers and privileges vested by the Constitution in
his office” (Memorandum, p. 14).
It is true that the Constitution provides a mechanism for
overriding a veto (Art. VI, Sec. 27 [1]). Said remedy, however, is available only when the presidential veto is
based on policy or political considerations but not when the veto is claimed to
be ultra vires. In the
latter case, it becomes the duty of the Court to draw the dividing line where
the exercise of executive power ends and the bounds of legislative jurisdiction
begin.
III
G.R. NO. 113105
1. Countrywide Development Fund
Article XLI of the GAA of 1994 sets up a Countrywide Development
Fund of P2,977,000,000.00 to “be used for infrastructure, purchase of ambulances
and computers and other priority projects and activities and credit facilities
to qualified beneficiaries.” Said Article provides:
“COUNTRYWIDE
DEVELOPMENT FUND
For Fund requirements of countrywide
development projects…………………………………………………………………………………………………. P2,977,000,000
New Appropriations, by Purpose Current Operating Expenditures
A. PURPOSE
Maintenance
and Other
Personal Operating
Capital
Services Expenses Outlays Total
1. For
Countrywide
Development
Projects P250,000,000 P2,727,000,000 P2,977,000,000
TOTAL NEW
APPROPRIATIONS P250,000,000 P2,727,000,000 P2,977,000,000
Special Provisions
1. Use and Release
of Funds. The amount herein
appropriated shall be used for infrastructure, purchase of ambulances and
computers and other priority projects and activities, and credit facilities to
qualified beneficiaries as proposed and identified by officials concerned
according to the following allocations: Representatives, P12,500,000 each; Senators, P18,000,000 each;
Vice-President, P20,000,000; PROVIDED, That, the said credit facilities shall
be constituted as a revolving fund to be administered by a government financial
institution (GFI) as a trust fund for lending operations. Prior years releases to local government
units and national government agencies for this purpose shall be turned over to
the government financial institution which shall be the sole administrator of
credit facilities released from this fund.
The fund shall be automatically released quarterly by way of Advice
of Allotments and Notice of Cash Allocation directly to the assigned
implementing agency not later than five (5) days after the beginning of each
quarter upon submission of the list of projects and activities by the officials
concerned.
2. Submission of Quarterly Reports. The Department of Budget and Management
shall submit within thirty (30) days after the end of each quarter a report to
the Senate Committee on Finance and the House Committee on Appropriations on
the releases made from this Fund. The report
shall include the listing of the projects, locations, implementing agencies and
the endorsing officials” (GAA of 1994, p. 1245).
Petitioners claim that the power given to the members of Congress
to propose and identify the projects and activities to be funded by the
Countrywide Development Fund is an encroachment by the legislature on executive
power, since said power in an appropriation act is in implementation of a
law. They argue that the proposal and
identification of the projects do not involve the making of laws or the repeal
and amendment thereof, the only function given to the Congress by the
Constitution (Rollo, pp. 78-86).
Under the Constitution, the spending power called by James
Madison as “the power of the purse,” belongs to Congress, subject
only to the veto power of the President. The President may propose the budget, but still the final say on the
matter of appropriations is lodged in the Congress.
The power of appropriation carries with it the power to specify
the project or activity to be funded under the appropriation law. It can be as detailed and as broad as
Congress wants it to be.
The Countrywide Development Fund is explicit that it shall be
used “for infrastructure, purchase of ambulances and computers and other
priority projects and activities and credit facilities to qualified
beneficiaries xxx.” It was Congress itself that determined the purposes
for the appropriation.
Executive function under the Countrywide Development Fund
involves implementation of the priority projects specified in the law.
The authority given to the members of Congress is only to propose
and identify projects to be implemented by the President. Under Article XLI of the GAA of 1994, the
President must perforce examine whether the proposals submitted by the members
of Congress fall within the specific items of expenditures for which the Fund
was set up, and if qualified, he next determines whether they are in line with
other projects planned for the locality. Thereafter, if the proposed projects qualify for funding under the Fund,
it is the President who shall implement them. In short, the proposals and identifications made by the members of
Congress are merely recommendatory.
The procedure of proposing and identifying by members of Congress
of particular projects or activities under Article XLI of the GAA of 1994 is
imaginative as it is innovative.
The Constitution is a framework of a workable government and its
interpretation must take into account the complexities, realities and politics
attendant to the operation of the political branches of government. Prior to the GAA of 1991, there was an
uneven allocation of appropriations for the constituents of the members of
Congress, with the members close to the Congressional leadership or who hold
cards for “horse-trading,” getting more than their less favored
colleagues. The members of Congress
also had to reckon with an unsympathetic President, who could exercise his veto
power to cancel from the appropriation bill a pet project of a Representative
or Senator.
The Countrywide Development Fund attempts to make equal the
unequal. It is also a recognition that
individual members of Congress, far more than the President and their
congressional colleagues are likely to be knowledgeable about the needs of
their respective constituents and the priority to be given each project.
2. Realignment of Operating
Expenses
Under the GAA of 1994, the appropriation for the Senate is
P472,000,000.00 of which P464,447,000.00 is appropriated for current operating
expenditures, while the appropriation for the House of Representatives is
P1,171,924,000.00 of which P1,165,297,000.00 is appropriated for current
operating expenditures (GAA of 1994, pp. 2, 4, 9, 12).
The 1994 operating expenditures for the Senate are as follows:
“Personal Services
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(GAA of 1994, pp. 3-4)
The 1994 operating expenditures for the House of Representatives
are as follows:
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(GAA of 1994, pp. 11-12)
The Special Provision Applicable to the Congress of the
Philippines provides:
“4. Realignment of Allocation for Operational Expenses. A member of Congress may realign his
allocation for operational expenses to any other expense category provided the
total of said allocation is not exceeded” (GAA of 1994, p. 14).
The appropriation for operating expenditures for each House is further
divided into expenditures for salaries, personal services, other compensation
benefits, maintenance expenses and other operating expenses. In turn, each member of Congress is allotted
for his own operating expenditure a proportionate share of the appropriation
for the House to which he belongs. If
he does not spend for one item of expense, the provision in question allows him
to transfer his allocation in said item to another item of expense.
Petitioners assail the special provision allowing a member of
Congress to realign his allocation for operational expenses to any other
expense category (Rollo, pp. 82-92), claiming that this practice is prohibited
by Section 25(5), Article VI of the Constitution. Said section 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 heads of Constitutional Commissions
may, by law, be authorized to augment any item in the general appropriations
law for their respective offices from savings in other items of their
respective appropriations.”
The proviso of said Article of the Constitution grants the
President of the Senate and the Speaker of the House of Representatives the
power to augment items in an appropriation act for their respective offices
from savings in other items of their appropriations, whenever there is a law
authorizing such augmentation.
The special provision on realignment of the operating expenses of
members of Congress is authorized by Section 16 of the General Provisions of
the GAA of 1994, which provides:
“Expenditure Components. Except by act of the Congress of the Philippines, no change or
modification shall be made in the expenditure items authorized in this Act and
other appropriation laws unless in cases of augmentations from savings in
appropriations as authorized under Section 25(5) of Article VI of the
Constitution” (GAA of 1994, p. 1273).
Petitioners argue that the Senate President and the Speaker of
the House of Representatives, but not the individual members of Congress are
the ones authorized to realign the savings as appropriated.
Under the Special Provisions applicable to the Congress of the
Philippines, the members of Congress only determine the necessity of the
realignment of the savings in the allotments for their operating expenses. They are in the best position to do so
because they are the ones who know whether there are savings available in some
items and whether there are deficiencies in other items of their operating
expenses that need augmentation. However, it is the Senate President and the Speaker of the House of
Representatives, as the case may be, who shall approve the realignment. Before giving their stamp of approval, these
two officials will have to see to it that:
(1) The funds to be realigned or transferred are actually savings
in the items of expenditures from which the same are to be taken; and
(2) The transfer or realignment is for the purpose of augmenting
the items of expenditure to which said transfer or realignment is to be made.
3. Highest Priority for Debt Service
While Congress appropriated P86,323,438,000.00 for debt service
(Article XLVII of the GAA of 1994), it appropriated only P37,780,450,000.00 for
the Department of Education, Culture and Sports. Petitioners urged that Congress cannot give debt service the
highest priority in the GAA of 1994 (Rollo, pp. 93-94) because under the
Constitution it should be education that is entitled to the highest
funding. They invoke Section 5(5),
Article XIV thereof, which provides:
“(5) The State
shall assign the highest budgetary priority to education and ensure that
teaching will attract and retain its rightful share of the best available
talents through adequate remuneration and other means of job satisfaction and
fulfillment.”
This issue was raised in Guingona, Jr. v. Carague,
196 SCRA 221 (1991), where this Court held that Section 5(5), Article XIV of
the Constitution, is merely directory, thus:
“While it is true that under Section 5(5), Article XIV of the
Constitution, Congress is mandated to ‘assign the highest budgetary priority to
education’ in order to ‘insure that teaching will attract and retain its
rightful share of the best available talents through adequate remuneration and
other means of job satisfaction and fulfillment,’ it does not thereby follow
that the hands of Congress are so hamstrung as to deprive it the power to
respond to the imperatives of the national interest and for the attainment of
other state policies or objectives.
As aptly observed by respondents, since 1985, the budget for
education has tripled to upgrade and improve the facility of the public school
system. The compensation of teachers
has been doubled. The amount of
P29,740,611,000.00 set aside for the Department of Education, Culture and
Sports under the General Appropriations Act (R.A. No. 6831), is the highest
budgetary allocation among all department budgets. This is a clear compliance with the aforesaid constitutional
mandate according highest priority to education.
Having
faithfully complied therewith, Congress is certainly not without any power,
guided only by its good judgment, to provide an appropriation, that can
reasonably service our enormous debt, the greater portion of which was
inherited from the previous administration. It is not only a matter of honor and to protect the credit standing of
the country. More especially, the very
survival of our economy is at stake. Thus, if in the process Congress appropriated an amount for debt service
bigger than the share allocated to education, the Court finds and so holds that
said appropriation cannot be thereby assailed as unconstitutional.”
G.R. NO. 113105
G.R. NO. 113174
Veto of Provision
on Debt Ceiling
The Congress added a Special Provision to Article XLVIII
(Appropriations for Debt Service) of the GAA of 1994 which provides:
“Special Provisions
1. Use of the Fund. The appropriation authorized herein shall be
used for payment of principal and interest of foreign and domestic
indebtedness; PROVIDED, That any payment in excess of the amount herein
appropriated shall be subject to the approval of the President of the
Philippines with the concurrence of the Congress of the Philippines; PROVIDED,
FURTHER, That in no case shall this fund be used to pay for the liabilities of
the Central Bank Board of Liquidators.
2. Reporting
Requirement. The Bangko Sentral ng
Pilipinas and the Department of Finance shall submit a quarterly report of actual
foreign and domestic debt service payments to the House Committee on
Appropriations and Senate Finance Committee within one (1) month after each
quarter” (GAA of 1944, pp. 1266).
The President vetoed the first Special Provision, without vetoing
the P86,323,438,000.00 appropriation for debt service in said Article. According to the President’s Veto Message:
“IV. APPROPRIATIONS FOR DEBT SERVICE
I would like to emphasize that I concur fully with the desire of
Congress to reduce the debt burden by decreasing the appropriation for debt
service as well as the inclusion of the Special Provision quoted below. Nevertheless, I believe that this debt
reduction scheme cannot be validly done through the 1994 GAA. This must be addressed by revising our debt
policy by way of innovative and comprehensive debt reduction programs
conceptualized within the ambit of the Medium-Term Philippine Development Plan.
Appropriations for payment of public debt, whether foreign or
domestic, are automatically appropriated pursuant to the Foreign Borrowing Act
and Section 31 of P.D. No. 1177 as reiterated under Section 26, Chapter 4, Book
VI of E.O. No. 292, the Administrative Code of 1987. I wish to emphasize that the constitutionality of such automatic
provisions on debt servicing has been upheld by the Supreme Court in the case
of ‘Teofisto T. Guingona, Jr. and Aquilino Q. Pimentel, Jr. v. Hon. Guillermo
N. Carague, in his capacity as Secretary of Budget and Management, et al.,’
G.R. No. 94571, dated April 22, 1991.
I am, therefore vetoing the following special provision for the
reason that the GAA is not the appropriate legislative measure to amend the
provisions of the Foreign Borrowing Act, P.D. No. 1177 and E.O. No. 292:
‘Use of the Fund. The
appropriation authorized herein shall be used for payment of principal and
interest of foreign and domestic indebtedness: PROVIDED, That any payment in excess of the amount herein appropriated
shall be subject to the approval of the President of the Philippines with the
concurrence of the Congress of the Philippines: PROVIDED, FURTHER, That in no case shall this fund be used to pay
for the liabilities of the Central Bank Board of Liquidators'” (GAA of
1994, p. 1290).
Petitioners claim that the President cannot veto the Special
Provision on the appropriation for debt service without vetoing the entire
amount of P86,323,438.00 for said purpose (Rollo, G.R. No. 113105, pp. 93-98;
Rollo, G.R. No. 113174, pp. 16-18). The
Solicitor General counterposed that the Special Provision did not relate to the
item of appropriation for debt service and could therefore be the subject of an
item veto (Rollo, G.R. No. 113105, pp. 54-60; Rollo, G.R. No. 113174, pp.
72-82).
This issue is a mere rehash of the one put to rest in Gonzales
v. Macaraig, Jr., 191 SCRA 452 (1990). In that case, the issue was stated by the
Court, thus:
“The fundamental issue raised is whether or not the veto by
the President of Section 55 of the 1989 Appropriations Bill (Section 55 FY
‘89), and subsequently of its counterpart Section 16 of the 1990 Appropriations
Bill (Section 16 FY ’90), is unconstitutional and without effect.”
The Court re-stated the issue, just so there would not be any
misunderstanding about it, thus:
“The focal issue for resolution is whether or not the President
exceeded the item-veto power accorded by the Constitution. Or differently put, has the President the
power to veto ‘provisions’ of an Appropriations Bill?”
The bases of the petition in Gonzales, which are similar
to those invoked in the present case, are stated as follows:
“In essence, petitioners’ cause is anchored on the following
grounds: (1) the President’s line-veto
power as regards appropriation bills is limited to item/s and does not cover
provision/s; therefore, she exceeded her authority when she vetoed Section 55
(FY ’89) and Secton 16 (FY ’90) which are provisions; (2) when the President
objects to a provision of an appropriation bill, she cannot exercise the
item-veto power but should veto the entire bill; (3) the item-veto power does
not carry with it the power to strike out conditions or restrictions for that
would be legislation, in violation of the doctrine of separation of powers; and
(4) the power of augmentation in Article VI, Section 25 [5] of the 1987
Constitution, has to be provided for by law and, therefore, Congress is also
vested with the prerogative to impose restrictions on the exercise of that
power.
The restrictive interpretation urged by petitioners that the
President may not veto a provision without vetoing the entire bill not only
disregards the basic principle that a distinct and severable part of a bill may
be the subject of a separate veto but also overlooks the Constitutional mandate
that any provision in the general appropriations bill shall relate specifically
to some particular appropriation therein and that any such provision shall be
limited in its operation to the appropriation to which it relates (1987
Constitution, Article VI, Section 25 [2]). In other words, in the true sense of the term, a provision in an Appropriations
Bill is limited in its operation to some particular appropriation to which it
relates, and does not relate to the entire bill.”
The Court went one step further and ruled that even assuming arguendo
that “provisions” are beyond the executive power to veto, and Section
55 (FY ’89) and Section 16 (FY ’90) were not “provisions” in the
budgetary sense of the term, they are “inappropriate provisions” that
should be treated as “items” for the purpose of the President’s veto
power.
The Court, citing Henry v. Edwards, La., 346
So. 2d 153 (1977), said that Congress cannot include in a general
appropriations bill matters that should be more properly enacted in separate
legislation, and if it does that, the inappropriate provisions inserted by it
must be treated as “item,” which can be vetoed by the President in
the exercise of his item-veto power.
It is readily apparent that the Special Provision applicable to
the appropriation for debt service insofar as it refers to funds in excess of
the amount appropriated in the bill, is an “inappropriate” provision
referring to funds other than the P86,323,438,000.00 appropriated in the
General Appropriations Act of 1991.
Likewise the vetoed provision is clearly an attempt to repeal
Section 31 of P.D. No. 1177 (Foreign Borrowing Act) and E.O. No. 292, and to
reverse the debt payment policy. As
held by the Court in Gonzales, the repeal of these laws should be done
in a separate law, not in the appropriations law.
The Court will indulge every intendment in favor of the constitutionality
of a veto, the same as it will presume the constitutionality of an act of
Congress (Texas Co. v. State, 254 P. 1060; 31 Ariz, 485, 53 A.L.R. 258 [1927]).
The veto power, while exercisable by the President, is actually a
part of the legislative process (Memorandum of Justice Irene Cortes as Amicus
Curiae, pp. 3-7). That is why it
is found in Article VI on the Legislative Department rather than in Article VII
on the Executive Department in the Constitution. There is, therefore, sound basis to indulge in the presumption of
validity of a veto. The burden shifts
on those questioning the validity thereof to show that its use is a violation
of the Constitution.
Under his general veto power, the President has to veto the
entire bill, not merely parts thereof (1987 Constitution, Art. VI, Sec.
27[1]). The exception to the general
veto power is the power given to the President to veto any particular item or
items in a general appropriations bill (1987 Constitution, Art. VI, Sec.
27[2]). In so doing, the President must
veto the entire item.
A general appropriations bill is a special type of legislation,
whose content is limited to specified sums of money dedicated to a specific
purpose or a separate fiscal unit (Beckman, The Item Veto Power of the Executive,
31 Temple Law Quarterly 27 [1957]).
The item veto was first introduced by the Organic Act of the
Philippines passed by the U.S. Congress on August 29, 1916. The concept was adopted from some State
Constitutions.
Cognizant of the legislative practice of inserting provisions,
including conditions, restrictions and limitations, to items in appropriations
bills, the Constitutional Convention added the following sentence to Section
20(2), Article VI of the 1935 Constitution:
“xxx When a provision of an appropriation bill affects one or
more items of the same, the President cannot veto the provision without at the
same time vetoing the particular item or items to which it relates xxx.”
In short, under the 1935 Constitution, the President was
empowered to veto separately not only items in an appropriations bill but also
“provisions.”
While the 1987 Constitution did not retain the aforementioned
sentence added to Section 11(2) of Article VI of the 1935 Constitution, it
included the following provision:
“No provision or enactment shall be embraced in the general
appropriations bill unless it relates specifically to some particular
appropriation therein. Any such
provision or enactment shall be limited in its operation to the appropriation
to which it relates” (Art. VI, Sec. 25[2]).
In Gonzales, we made it clear that the omission of that
sentence of Section 16(2) of the 1935 Constitution in the 1987 Constitution
should not be interpreted to mean the disallowance of the power of the
President to veto a “provision.”
As the Constitution is explicit that the provision which Congress
can include in an appropriations bill must “relate specifically to some
particular appropriation therein” and “be limited in its operation to
the appropriation to which it relates,” it follows that any provision
which does not relate to any particular item, or which extends in its operation
beyond an item of appropriation, is considered “an inappropriate
provision” which can be vetoed separately from an item. Also to be included in the category of
“inappropriate provisions” are unconstitutional provisions and
provisions which are intended to amend other laws, because clearly these kind
of laws have no place in an appropriations bill. These are matters of general legislation more appropriately dealt
with in separate enactments. Former
Justice Irene Cortes, as Amicus Curiae, commented that Congress
cannot by law establish conditions for and regulate the exercise of powers of the
President given by the Constitution for that would be an unconstitutional
intrusion into executive prerogative.
The doctrine of “inappropriate provision” was well
elucidated in Henry v. Edwards, supra., thus:
“Just as the President may not use his item-veto to usurp
constitutional powers conferred on the legislature, neither can the legislature
deprive the Governor of the constitutional powers conferred on him as chief
executive officer of the state by including in a general appropriation bill
matters more properly enacted in separate legislation. The Governor’s constitutional power to veto
bills of general legislation … cannot be abridged by the careful placement of
such measures in a general appropriation bill, thereby forcing the Governor to
choose between approving unacceptable substantive legislation or vetoing
‘items’ of expenditures essential to the operation of government. The legislature cannot by location of a
bill give it immunity from executive veto. Nor can it circumvent the Governor’s veto power over substantive
legislation by artfully drafting general law measures so that they appear to be
true conditions or limitations on an item of appropriation. Otherwise, the legislature would be
permitted to impair the constitutional responsibilities and functions of a
co-equal branch of government in contravention of the separation of powers
doctrine … We are no more willing to allow the legislature to use its
appropriation power to infringe on the Governor’s constitutional right to veto
matters of substantive legislation than we are to allow the Governor to
encroach on the constitutional powers of the legislature. In order to avoid this result, we hold that,
when the legislature inserts inappropriate provisions in a general
appropriation bill, such provisions must be treated as ‘items’ for purposes of
the Governor’s item veto power over general appropriation bills.
x x x x
x x x x x
“xxx Legislative control cannot be exercised in such a manner
as to encumber the general appropriation bill with veto-proof ‘logrolling
measures,’ special interest provisions which could not succeed if separately
enacted, or ‘riders,’ substantive pieces of legislation incorporated in a bill
to insure passage without veto. xxx” (Underlining supplied).
Petitioners contend that granting arguendo that the veto
of the Special Provision on the ceiling for debt payment is valid, the
President cannot automatically appropriate funds for debt payment without
complying with the conditions for automatic appropriation under the provisions
of R.A. No. 4860 as amended by P.D. No. 81 and the provisions of P.D. No. 1177
as amended by the Administrative Code of 1987 and P.D. No. 1967 (Rollo, G.R.
No. 113766, pp. 9-15).
Petitioners cannot anticipate that the President will not
faithfully execute the laws. The writ
of prohibition will not issue on the fear that official actions will be done in
contravention of the laws.
The President vetoed the entire paragraph one of the Special
Provision of the item on debt service, including the provisos that the
appropriation authorized in said item “shall be used for payment of the
principal and interest of foreign and domestic indebtedness” and that
“in no case shall this fund be used to pay for the liabilities of the Central
Bank Board of Liquidators.” These provisos are germane to and have a
direct connection with the item on debt service. Inherent in the power of appropriation is the power to specify
how the money shall be spent (Henry v. Edwards, LA, 346 So., 2d., 153). The said provisos, being appropriate
provisions, cannot be vetoed separately. Hence the item veto of said provisions is void.
We reiterate,
in order to obviate any misunderstanding, that we are sustaining the veto of
the Special Provision of the item on debt service only with respect to the
proviso therein requiring that “any payment in excess of the amount
herein, appropriated shall be subject to the approval of the President of the
Philippines with the concurrence of the Congress of the Philippines xxx”.
G.R. NO. 113174
G.R. NO. 113766
G.R. NO. 113888
1. Veto of provisions for revolving
funds of SUCs.
In the appropriation for State Universities and Colleges (SUC’s),
the President vetoed special provisions which authorize the use of income and
the creation, operation and maintenance of revolving funds. The Special Provisions vetoed are the
following:
“(H.7) West Visayas
State University
‘Equal Sharing of Income. Income earned by the University subject to Section 13 of the special
provisions applicable to all State Universities and Colleges shall be equally
shared by the University and the University hospital’ (GAA of 1994, p. 395).
x x x
(J.3) Leyte State College
‘Revolving Fund for the Operation of LSC House and Human Resources
Development Center (HRDC). The income
of Leyte State College derived from the operation of its LSC House and HRDC
shall be constituted into a Revolving Fund to be deposited in an authorized
government depository bank for the operational expenses of these
projects/services. The net income of
the Revolving Fund at the end of the year shall be remitted to the National
Treasury and shall accrue to the General Fund. The implementing guidelines shall be issued by the Department of Budget
and Management” (GAA of 1994, p. 415).
The vetoed Special Provisions applicable to all SUC’s are the
following:
“12. Use of
Income from Extension Services. State
Universities and Colleges are authorized to use their income from their
extension services. Subject to the
approval of the Board of Regents and the approval of a special budget pursuant
to Sec. 35, Chapter 5, Book VI of E.O. No. 292, such income shall be utilized
solely for faculty development, instructional materials and work study
program” (GAA of 1994, p. 490).
x x x
“13. ‘Income of
State Universities and Colleges. The
income of State Universities and Colleges derived from tuition fees and other
sources as may be imposed by governing boards other than those accruing to
revolving funds created under LOI Nos. 872 and 1026 and those authorized to be
recorded as trust receipts pursuant to Section 40, Chapter 5, Book VI of E.O.
No. 292 shall be deposited with the National Treasury and recorded as a Special
Account in the General Fund pursuant to P.D. No. 1234 and P.D. No. 1437 for the
use of the institution, subject to Section 35, Chapter 5, Book VI of E.O. No.
292: PROVIDED, That disbursements from
the Special Account shall not exceed the amount actually earned and deposited: PROVIDED, FURTHER, That a cash advance on
such income may be allowed State Universities and Colleges representing up to
one-half of income actually realized during the preceding year and this cash
advance shall be charged against income actually earned during the budget
year: AND PROVIDED, FINALLY, That in no
case shall such funds be used to create positions, nor for payment of salaries,
wages or allowances, except as may be specifically approved by the Department
of Budget and Management for income-producing activities, or to purchase
equipment or books, without the prior approval of the President of the
Philippines pursuant to Letter of Implementation No. 29.
All collections of the State Universities and Colleges for fees,
charges and receipts intended for private recipient units, including private
foundations affiliated with these institutions shall be duly acknowledged with
official receipts and deposited as a trust receipt before said income shall be
subject to Section 35, Chapter 5, Book VI of E.O. No. 292″ (GAA of 1994,
p. 490).
The President gave his reasons for the veto thus:
“Pursuant to Section 65 of the Government Auditing Code of the
Philippines, Section 44, Chapter 5, Book VI of E.O. No. 292, s. 1987 and
Section 22, Article VII of the Constitution, all income earned by all
Government offices and agencies shall accrue to the General Fund of the
Government in line with the One Fund Policy enunciated by Section 29 (1),
Article VI and Section 22, Article VII of the Constitution. Likewise, the creation and establishment of
revolving funds shall be authorized by substantive law pursuant to Section 66
of the Government Auditing Code of the Philippines and Section 45, Chapter 5,
Book VI of E.O. No. 292.
Notwithstanding the aforementioned provisions of the Constitution
and existing law, I have noted the proliferation of special provisions
authorizing the use of agency income as well as the creation, operation and
maintenance of revolving funds.
I would like to underscore the fact that such income were already
considered as integral part of the revenue and financing sources of the
National Expenditure Program which I previously submitted to Congress. Hence, the grant of new special provisions
authorizing the use of agency income and the establishment of revolving funds
over and above the agency appropriations authorized in this Act shall
effectively reduce the financing sources of the 1994 GAA and, at the same time,
increase the level of expenditures of some agencies beyond the
well-coordinated, rationalized levels for such agencies. This corresponding increases the overall
deficit of the National Government” (Veto Message, p. 3).
Petitioners claim that the President acted with grave abuse of
discretion when he disallowed by his veto the “use of income” and the
creation of “revolving fund” by the Western Visayas State University
and Leyte State Colleges when he allowed other government offices, like the
National Stud Farm, to use their income for their operating expenses (Rollo,
G.R. No. 113174, pp. 15-16).
There was no undue discrimination when the President vetoed said
special provisions while allowing similar provisions in other government
agencies. If some government agencies
were allowed to use their income and maintain a revolving fund for that
purpose, it is because these agencies have been enjoying such privilege before
by virtue of the special laws authorizing such practices as exceptions to the
“one-fund policy” (e.g., R.A. No. 4618 for the National Stud Farm,
P.D. No. 902-A for the Securities and Exchange Commission; E.O. No. 359 for the
Department of Budget and Management’s Procurement Service).
2. Veto of provision on 70% (administrative)/30%
(contract) ratio for road maintenance.
In the appropriation for the Department of Public Works and
Highways, the President vetoed the second paragraph of Special Provision No. 2,
specifying the 30% maximum ratio of works to be contracted for the maintenance
of national roads and bridges. The said
paragraph reads as follows:
“2. Release and Use of Road Maintenance
Funds. Funds allotted for the
maintenance and repair of roads which are provided in this Act for the
Department of public Works and Highways shall be released to the respective
Engineering District, subject to such rules and regulations as may be
prescribed by the Department of Budget and Management. Maintenance funds for roads and bridges
shall be exempt from budgetary reserve.
Of the amount herein appropriated for the maintenance of
national roads and bridges, a maximum of thirty percent (30%) shall be
contracted out in accordance with guidelines to be issued by the Department of
Public Works and Highways. The balance
shall be used for maintenance by force account.
Five percent (5%) of the total road maintenance fund appropriated
herein to be applied across the board to the allocation of each region shall be
set aside for the maintenance of roads which may be converted to or taken over
as national roads during the current year and the same shall be released to the
central office of the said department for eventual sub-allotment to the
concerned region and district: PROVIDED, That any balance of the said five percent (5%) shall be
restored to the regions on a pro-rata basis for the maintenance of existing
national roads.
No retention or deduction as reserves or overhead expenses shall be
made, except as authorized by law or upon direction of the President” (GAA
of 1994, pp. 785-786; Underlining supplied).
The President gave the following reason for the veto:
“While I am cognizant of the well-intended desire of Congress
to impose certain restrictions contained in some special provisions, I am
equally aware that many programs, projects and activities of agencies would
require some degree of flexibility to ensure their successful implementation
and therefore risk their completion. Furthermore, not only could these restrictions and limitations derail
and impede program implementation but they may also result in a breach of
contractual obligations.
D.1.a. A study conducted by
the Infrastructure Agencies show that for practical intent and purposes,
maintenance by contract could be undertaken to an optimum of seventy percent
(70%) and the remaining thirty percent (30%) by force account. Moreover, the policy of maximizing
implementation through contract maintenance is a covenant of the Road and Road
Transport Program Loan from the Asian Development Bank (ADB Loan No.
1047-PHI-1990) and Overseas Economic Cooperation Fund (OECF Loan No.
PH-C17-199). The same is a covenant
under the World Bank (IBRD) Loan for the Highway Management Project (IBRD Loan
No. PH-3430) obtained in 1992.
In the light of the foregoing and considering the policy of the
government to encourage and maximize private sector participation in the
regular repair and maintenance of infrastructure facilities, I am directly
vetoing the underlined second paragraph of Special Provision No. 2 of the
Department of Public Works and Highways” (Veto Message, p. 11).
The second paragraph of Special Provision No. 2 brings to fore
the divergence in policy of Congress and the President. While Congress expressly laid down the
condition that only 30% of the total appropriation for road maintenance should
be contracted out, the President, on the basis of a comprehensive study,
believed that contracting out road maintenance projects at an option of 70%
would be more efficient, economical and practical.
The Special Provision in question is not an inappropriate
provision which can be the subject of a veto. It is not alien to the appropriation for road maintenance, and on the
other hand, it specifies how the said item shall be expended — 70% by
administrative and 30% by contract.
The 1987 Constitution allows the addition by Congress of special
provisions, conditions to items in an expenditure bill, which cannot be vetoed
separately from the items to which they relate so long as they are
“appropriate” in the budgetary sense (Art. VII, Sec. 25[2]).
The Solicitor General was hard put in justifying the veto of this
special provision. He merely argued
that the provision is a complete turnabout from an entrenched practice of the government
to maximize contract maintenance (Rollo, G.R. No. 113888, pp. 85-86). That is not a ground to veto a provision
separate from the item to which it refers.
The veto of the second paragraph of Special Provision No. 2 of
the item for the DPWH is therefore unconstitutional.
3. Veto of provision on purchase of
medicines by AFP.
In the appropriation for the Armed Forces of the Philippines
(AFP), the President vetoed the special provision on the purchase by the AFP of
medicines in compliance with the Generics Drugs Law (R.A. No. 6675). The vetoed provision reads:
“12. Purchase
of Medicines. The purchase of medicines
by all Armed Forces of the Philippines units, hospitals and clinics shall
strictly comply with the formulary embodied in the National Drug Policy of the
Department of Health” (GAA of 1994, p. 748).
According to the President, while it is desirable to subject the
purchase of medicines to a standard formulary, “it is believed more
prudent to provide for a transition period for its adoption and smooth
implementation in the Armed Forces of the Philippines” (Veto Message, p.
12).
The Special Provision which requires that all purchases of
medicines by the AFP should strictly comply with the formulary embodied in the
National Drug Policy of the Department of Health is an “appropriate”
provision. It is a mere advertence by
Congress to the fact that there is an existing law, the Generics Act of 1988,
that requires “the extensive use of drugs with generic names through a
rational system of procurement and distribution.” The President believes
that it is more prudent to provide for a transition period for the smooth
implementation of the law in the case of purchases by the Armed Forces of the
Philippines, as implied by Section 11 (Education Drive) of the law itself. This belief, however, cannot justify his
veto of the provision on the purchase of medicines by the AFP.
Being directly related to and inseparable from the appropriation
item on purchases of medicines by the AFP, the special provision cannot be
vetoed by the President without also vetoing the said item (Bolinao Electronics
Corporation v. Valencia, 11 SCRA 486 [1964]).
4. Veto of provision on prior approval of
Congress for purchase of military equipment.
In the appropriation for the modernization of the AFP, the
President vetoed the underlined proviso of Special Provision No. 2 on the
“Use of Fund,” which requires the prior approval of Congress for the
release of the corresponding modernization funds, as well as the entire Special
Provision No. 3 on the “Specific Prohibition”:
“2. Use of the Fund. Of the amount herein appropriated, priority shall be given for
the acquisition of AFP assets necessary for protecting marine, mineral, forest
and other resources within Philippine territorial borders and its economic
zone, detection, prevention or deterrence of air or surface intrusions and to
support diplomatic moves aimed at preserving national dignity, sovereignty and
patrimony: PROVIDED, That the said
modernization fund shall not be released until a Table of Organization and
Equipment for FY 1994-2000 is submitted to and approved by Congress.
3. Specific Prohibition. The said Modernization Fund shall not be
used for payment of six (6) additional S-211 Trainer planes, 18 SF-260 Trainer
planes and 150 armored personnel carriers” (GAA of 1994, p. 747).
As reason for the veto, the President stated that the said
condition and prohibition violate the Constitutional mandate of non-impairment
of contractual obligations, and if allowed, “shall effectively alter the
original intent of the AFP Modernization Fund to cover all military equipment
deemed necessary to modernize the Armed Forces of the Philippines” (Veto
Message, p. 12).
Petitioners claim that Special Provision No. 2 on the “Use
of Fund” and Special Provision No. 3 are conditions or limitations related
to the item on the AFP modernization plan.
The requirement in Special Provision No. 2 on the “Use of
Fund” for the AFP modernization program that the President must submit all
purchases of military equipment to Congress for its approval, is an exercise of
the “congressional or legislative veto.” By way of definition, a
congressional veto is a means whereby the legislature can block or modify
administrative action taken under a statute. It is a form of legislative control in the implementation of particular
executive actions. The form may be
either negative, that is requiring disapproval of the executive action, or
affirmative, requiring approval of the executive action. This device represents a significant attempt
by Congress to move from oversight of the executive to shared administration
(Dixon, The Congressional Veto and Separation of Powers: The Executive on a Leash, 56 North
Carolina Law Review, 423 [1978]).
A congressional veto is subject to serious questions involving
the principle of separation of powers.
However the case at bench is not the proper occasion to resolve
the issues of the validity of the legislative veto as provided in Special
Provisions Nos. 2 and 3 because the issues at hand can be disposed of on other
grounds. Any provision blocking an
administrative action in implementing a law or requiring legislative approval
of executive acts must be incorporated in a separate and substantive bill. Therefore, being “inappropriate”
provisions, Special Provisions Nos. 2 and 3 were properly vetoed.
As commented by Justice Irene Cortes in her memorandum as Amicus
Curiae: “What Congress
cannot do directly by law it cannot do indirectly by attaching conditions to
the exercise of that power (of the President as Commander-in-Chief) through
provisions in the appropriation law.”
Furthermore, Special Provision No. 3, prohibiting the use of the
Modernization Fund for payment of the trainer planes and armored personnel
carriers, which have been contracted for by the AFP, is violative of the
Constitutional prohibition on the passage of laws that impair the obligation of
contracts (Art. III, Sec. 10), more so, contracts entered into by the
Government itself.
The veto of said special provision is therefore valid.
5. Veto of provision on use of
savings to augment AFP pension funds.
In the appropriation for the AFP Pension and Gratuity Fund, the
President vetoed the new provision authorizing the Chief of Staff to use
savings in the AFP to augment pension and gratuity funds. The vetoed provision reads:
“2. Use of Savings. The Chief of Staff, AFP, is authorized, subject to the approval
of the Secretary of National Defense, to use savings in the appropriations
provided herein to augment the pension fund being managed by the AFP Retirement
and Separation Benefits System as provided under Sections 2(a) and 3 of P.D.
No. 361” (GAA of 1994, p. 746).
According to the President, the grant of retirement and
separation benefits should be covered by direct appropriations specifically
approved for the purpose pursuant to Section 29(1) of Article VI of the
Constitution. Moreover, he stated that
the authority to use savings is lodged in the officials enumerated in Section
25(5) of Article VI of the Constitution (Veto Message, pp. 7-8).
Petitioners claim that the Special Provision on AFP Pension and
Gratuity Fund is a condition or limitation which is so intertwined with the
item of appropriation that it could not be separated therefrom.
The Special Provision, which allows the Chief of Staff to use
savings to augment the pension fund for the AFP being managed by the AFP
Retirement and Separation Benefits System is violative of Sections 25(5) and
29(1) of the Article VI of the Constitution.
Under Section 25(5), no law shall be passed authorizing any
transfer of appropriations, and under Section 29(1), no money shall be paid out
of the Treasury except in pursuance of an appropriation made by law. While Section 25(5) allows as an exception
the realignment of savings to augment items in the general appropriations law
for the executive branch, such right must and can be exercised only by the
President pursuant to a specific law.
6. Condition on the deactivation of
the CAFGU’s
Congress appropriated compensation for the CAFGU’s, including the
payment of separation benefits but it added the following Special Provision:
“1. CAFGU Compensation and Separation
Benefit. The appropriation authorized
herein shall be used for the compensation of CAFGU’s including the payment of
their separation benefit not exceeding one (1) year subsistence allowance for
the 11,000 members who will be deactivated in 1994. The Chief of Staff, AFP, shall, subject to the approval of the
Secretary of National Defense, promulgate policies and procedures for the
payment of separation benefit” (GAA of 1994, p. 740).
The President declared in his Veto Message that the
implementation of this Special Provision to the item on the CAFGU’s shall be
subject to prior Presidential approval pursuant to P.D. No. 1597 and R.A. No.
6758. He gave the following reasons for
imposing the condition:
“I am well cognizant of the laudable intention of Congress in
proposing the amendment of Special Provision No. 1 of the CAFGU. However, it is premature at this point in
time of our peace process to earmark and declare through special provision the
actual number of CAFGU members to be deactivated in CY 1994. I understand that the number to be deactivated
would largely depend on the result or degree of success of the on-going peace
initiatives which are not yet precisely determinable today. I have desisted, therefore, to directly veto
said provisions because this would mean the loss of the entire special
provision to the prejudice of its beneficient provisions. I therefore declare that the actual
implementation of this special provision shall be subject to prior Presidential
approval pursuant to the provisions of P.D. No. 1597 and R.A. No. 6758”
(Veto Message, p. 13).
Petitioners claim that the Congress has required the deactivation
of the CAFGU’s when it appropriated the money for payment of the separation pay
of the members of thereof. The
President, however, directed that the deactivation should be done in accordance
to his timetable, taking into consideration the peace and order situation in
the affected localities.
Petitioners complain that the directive of the President was
tantamount to an administrative embargo of the congressional will to implement
the Constitution’s command to dissolve the CAFGU’s (Rollo, G.R. No. 113174, p.
14; G.R. No. 113888, pp. 9, 14-16). They argue that the President cannot impair or withhold expenditures
authorized and appropriated by Congress when neither the Appropriations Act nor
other legislation authorize such impounding (Rollo, G.R. No. 113888, pp.
15-16).
The Solicitor General contends that it is the President, as
Commander-in-Chief of the Armed Forces of the Philippines, who should determine
when the services of the CAFGU’s are no longer needed (Rollo, G.R. No. 113888,
pp. 92-95).
This is the first case before this Court where the power of the
President to impound is put in issue. Impoundment refers to a refusal by the President, for whatever reason,
to spend funds made available by Congress. It is the failure to spend or obligate budget authority of any type
(Notes: Impoundment of Funds, 86
Harvard Law Review 1505 [1973]).
Those who deny to the President the power to impound argue that
once Congress has set aside the fund for a specific purpose in an
appropriations act, it becomes mandatory on the part of the President to
implement the project and to spend the money appropriated therefor. The President has no discretion on the
matter, for the Constitution imposes on him the duty to faithfully execute the
laws.
In refusing or deferring the implementation of an appropriation
item, the President in effect exercises a veto power that is not expressly
granted by the Constitution. As a
matter of fact, the Constitution does not say anything about impounding. The source of the Executive authority must
be found elsewhere.
Proponents of impoundment have invoked at least three principal
sources of the authority of the President. Foremost is the authority to impound given to him either expressly or
impliedly by Congress. Second is the
executive power drawn from the President’s role as Commander-in-Chief. Third is the Faithful Execution Clause which
ironically is the same provision invoked by petitioners herein.
The proponents insist that a faithful execution of the laws
requires that the President desist from implementing the law if doing so would
prejudice public interest. An example
given is when through efficient and prudent management of a project, substantial
savings are made. In such a case, it is
sheer folly to expect the President to spend the entire amount budgeted in the
law (Notes: Presidential Impoundment: Constitutional Theories and
Political Realities, 61 Georgetown Law Journal 1295 [1973];
Notes: Protecting the Fisc: Executive Impoundment and
Congressional Power, 82 Yale Law Journal 1686 [1973]).
We do not find anything in the language used in the challenged
Special Provision that would imply that Congress intended to deny to the
President the right to defer or reduce the spending, much less to deactivate
11,000 CAFGU members all at once in 1994. But even if such is the intention, the appropriation law is not the
proper vehicle for such purpose. Such
intention must be embodied and manifested in another law considering that it
abrades the powers of the Commander-in-Chief and there are existing laws on the
creation of the CAFGU’s to be amended. Again we state: a provision in
an appropriations act cannot be used to repeal or amend other laws, in this
case, P.D. No. 1597 and R.A. No. 6758.
7. Conditions on the appropriation for the
Supreme Court, etc.
(a) In the appropriations for the Supreme
Court, Ombudsman, COA, and CHR, the Congress added the following provisions:
The Judiciary
x x x x
x x x x x
Special Provisions
“1. Augmentation of any Item in the Court’s
Appropriations. Any savings in the
appropriations for the Supreme Court and the Lower Courts may be utilized by
the Chief Justice of the Supreme Court to augment any item of the Court’s
appropriations for (a) printing of decisions and publication of ‘Philippine
Reports’; (b) commutable terminal leaves of Justices and other personnel of the
Supreme Court and payment of adjusted pension rates to retired Justices
entitled thereto pursuant to Administrative Matter No. 91-8-225?C.A.; (c)
repair, maintenance, improvement and other operating expenses of the courts’
libraries, including purchase of books and periodicals; (d) purchase,
maintenance and improvement of printing equipment; (e) necessary expenses for
the employment of temporary employees, contractual and casual employees, for
judicial administration; (f) maintenance and improvement of the Court’s
Electronic Data Processing System; (g) extraordinary expenses of the Chief
Justice, attendance in international conferences and conduct of training
programs; (h) commutable transportation and representation allowances and
fringe benefits for Justices, Clerks of Court, Court Administrator, Chiefs of
Offices and other Court personnel in accordance with the rates prescribed by
law; and (i) compensation of attorney-de-officio: PROVIDED, That as mandated by LOI No. 489 any increase in salary
and allowances shall be subject to the usual procedures and policies as
provided for under P.D. No. 985 and other pertinent laws” (GAA of 1994, p.
1128; Underscoring supplied).
x x x x x x x
x x
Commission on Audit
x x x x x x x
x x
“5. Use of Savings. The Chairman of the Commission on Audit is hereby authorized, subject
to appropriate accounting and auditing rules and regulations, to use savings
for the payment of fringe benefits as may be authorized by law for
officials and personnel of the Commission” (GAA of 1994, p. 1161;
Underscoring supplied).
x x x x x x x x x
Office of the Ombudsman
x x x x x x x
x x
“6. Augmentation of Items in the Appropriation
of the Office of the Ombudsman. The
Ombudsman is hereby authorized, subject to appropriate accounting and auditing
rules and regulations to augment items of appropriation in the Office of the
Ombudsman from savings in other items of appropriation actually released,
for: (a) printing and/or publication of
decisions, resolutions, training and information materials; (b) repair,
maintenance and improvement of OMB Central and Area/Sectoral facilities; (c)
purchase of books, journals, periodicals and equipment; (d) payment of
commutable representation and transportation allowances of officials and
employees who by reason of their positions are entitled thereto and fringe
benefits as may be authorized specifically by law for officials and
personnel of OMB pursuant to Section 8 of Article IX-B of the Constitution; and
(e) for other official purposes subject to accounting and auditing rules and
regulations” (GAA of 1994, p. 1174; Underscoring supplied).
x x x x x x x
x x
Commission on Human Rights
x x x x x x x
x x
“1. Use of
Savings. The Chairman of the Commission
on Human Rights (CHR) is hereby authorized, subject to appropriate accounting
and auditing rules and regulations, to augment any item of appropriation in the
office of the CHR from savings in other items of appropriations actually
released, for: (a) printing and/or
publication of decisions, resolutions, training materials and educational
publications; (b) repair, maintenance and improvement of Commission’s central
and regional facilities; (c) purchase of books, journals, periodicals and
equipment, (d) payment of commutable representation and transportation
allowances of officials and employees who by reason of their positions are
entitled thereto and fringe benefits, as may be authorized by law for
officials and personnel of CHR, subject to accounting and auditing rules and
regulations” (GAA of 1994, p. 1178; Underscoring supplied).
In his Veto Message, the President expressed his approval of the
conditions included in the GAA of 1994. He noted that:
“The said condition is consistent with the Constitutional
injunction prescribed under Section 8, Article IX-B of the Constitution which
states that ‘no elective or appointive public officer or employee shall receive
additional, double, or indirect compensation unless specifically authorized by
law.’ I am, therefore, confident that the heads of the said offices shall
maintain fidelity to the law and faithfully adhere to the well-established
principle on compensation standardization (Veto Message, p. 10).
Petitioners claim that the conditions imposed by the President
violated the independence and fiscal autonomy of the Supreme Court, the
Ombudsman, the COA and the CHR.
In the first place, the conditions questioned by petitioners were
placed in the GAB by Congress itself, not by the President. The Veto Message merely highlighted the
Constitutional mandate that additional or indirect compensation can only be given
pursuant to law.
In the second place, such statements are mere reminders that the
disbursements of appropriations must be made in accordance with law. Such statements may, at worse, be treated as
superfluities.
(b) In the appropriation for the COA, the
President imposed the condition that the implementation of the budget of the
COA be subject to “the guidelines to be issued by the President.”
The provisions subject to said condition reads:
x x x x x x x
x x
“3. Revolving Fund. The income of the Commission on Audit derived from sources
authorized by the Government Auditing Code of the Philippines (P.D. No. 1445)
not exceeding Ten Million Pesos (P10,000,000) shall be constituted into a
revolving fund which shall be used for maintenance, operating and other
incidental expenses to enhance audit services and audit-related
activities. The fund shall be deposited
in an authorized government depository ban, and withdrawals therefrom shall be
made in accordance with the procedure prescribed by law and implementing rules
and regulations: PROVIDED, That any
interests earned on such deposit shall be remitted at the end of each quarter
to the National Treasury and shall accrue to the General Fund: PROVIDED FURTHER, That the Commission on
Audit shall submit to the Department of Budget and Management a quarterly
report of income and expenditures of said revolving fund” (GAA of 1994,
pp. 1160-1161).
The President cited the “imperative need to
rationalize” the implementation, applicability and operation of use of
income and revolving funds. The Veto
Message stated:
“xxx I have observed that there are old and long existing
special provisions authorizing the use of income and the creation of revolving
funds. As a rule, such authorizations
should be discouraged. However, I take
it that these authorizations have legal/statutory basis aside from being
already a vested right to the agencies concerned which should not be
jeopardized through the Veto Message. There is, however, imperative need to rationalize their implementation,
applicability and operation. Thus, in
order to substantiate the purpose and intention of said provisions, I hereby
declare that the operationalization of the following provisions during budget
implementation shall be subject to the guidelines to be issued by the
President pursuant to Section 35, Chapter 5, Book VI of E.O. No. 292 and
Sections 65 and 66 of P.D. No. 1445 in relation to Sections 2 and 3 of the
General Provisions of this Act” (Veto Message, p. 6; Underscoring
supplied).
(c) In the appropriation for the DPWH, the
President imposed the condition that in the implementation of DPWH projects,
the administrative and engineering overhead of 5% and 3% “shall be subject
to the necessary administrative guidelines to be formulated by the Executive
pursuant to existing laws.” The condition was imposed because the
provision “needs further study” according to the President.
The following provision was made subject to said condition:
“9. Engineering and Administrative
Overhead. Not more than five percent
(5%) of the amount for infrastructure project released by the Department of
Budget and Management shall be deducted by DPWH for administrative overhead,
detailed engineering and construction supervision, testing and quality control,
and the like, thus insuring that at least ninety-five percent (95%) of the
released fund is available for direct implementation of the project. PROVIDED, HOWEVER, That for school
buildings, health centers, daycare centers and barangay halls, the deductible
amount shall not exceed three percent (3%).
Violation of, or non-compliance with, this provision shall subject
the government official or employee concerned to administrative, civil and/or
criminal sanction under Sections 43 and 80, Book VI of E.O. No. 292″ (GAA
of 1994, p. 786).
(d) In the appropriation for the National
Housing Authority (NHA), the President imposed the condition that allocations
for specific projects shall be released and disbursed “in accordance with
the housing program of the government, subject to prior Executive
approval.”
The provision subject to the said condition reads:
“3. Allocations for Specified Projects. The following allocations for the specified
projects shall be set aside for corollary works and used exclusively for the
repair, rehabilitation and construction of buildings, roads, pathwalks,
drainage, waterworks systems, facilities and amenities in the area: PROVIDED, That any road to be constructed or
rehabilitated shall conform with the specifications and standards set by the
Department of Public Works and Highways for such kind of road: PROVIDED, FURTHER, That savings that may be
available in the future shall be used for road repair, rehabilitation and
construction:
(1) Maharlika Village
Road – Not less than P5,000,000
(2) Tenement Housing
Project (Taguig) – Not less than P3,000,000
(3) Bagong Lipunan
Condominium Project (Taguig) – Not less than P2,000,000
4. Allocation of Funds. Out of the amount appropriated for the
implementation of various projects in resettlement areas, Seven Million Five
Hundred Thousand Pesos (P7,500,000) shall be allocated to the Dasmarinas Bagong
Bayan resettlement area, Eighteen Million Pesos (P18,000,000) to the Carmona
Relocation Center Area (Gen. Mariano Alvarez) and Three Million Pesos
(P3,000,000) to the Bulihan Sites and Services, all of which will be for the
cementing of roads in accordance with DPWH standards.
5. Allocation for Sapang Palay. An allocation of Eight Million Pesos
(P8,000,000) shall be set aside for the asphalting of seven (7) kilometer main
road of Sapang Palay, San Jose Del Monte, Bulacan” (GAA of 1994, p. 1216).
The President imposed the conditions: (a) that the “operationalization” of the special
provision on revolving fund of the COA “shall be subject to guidelines to
be issued by the President pursuant to Section 35, Chapter 5, Book VI of E.O.
292 and Sections 65 and 66 of P.D. No. 1445 in relation to Sections 2 and 3 of
the General Provisions of this Act” (Rollo, G.R. No. 113174, pp. 5, 7-8);
(b) that the implementation of Special Provision No. 9 of the DPWH on the
mandatory retention of 5% and 3% of the amounts released by said Department
“be subject to the necessary administrative guidelines to be formulated by
the Executive pursuant to existing law” (Rollo, G.R. No. 113888; pp. 10,
14-16); and (c) that the appropriations authorized for the NHA can be released
only “in accordance with the housing program of the government subject to
prior Executive approval” (Rollo, G.R. No. 113888, pp. 10-11; 14-16).
The conditions objected to by petitioners are mere reminders that
the implementation of the items on which the said conditions were imposed,
should be done in accordance with existing laws, regulations or policies. They did not add anything to what was already
in place at the time of the approval of the GAA of 1994.
There is less basis to complain when the President said that the
expenditures shall be subject to guidelines he will issue. Until the guidelines are issued, it cannot
be determined whether they are proper or inappropriate. The issuance of administrative guidelines on
the use of public funds authorized by Congress is simply an exercise by the
President of his constitutional duty to see that the laws are faithfully
executed (1987 Constitution, Art. VII, Sec. 17; Planas v. Gil 67 Phil. 62
[1939]). Under the Faithful Execution
Clause, the President has the power to take “necessary and proper
steps” to carry into execution the law (Schwartz, On Constitutional Law,
p. 147 [1977]). These steps are the ones
to be embodied in the guidelines.
IV
Petitioners chose to avail of the special civil actions but those
remedies can be used only when respondents have acted “without or in
excess” of jurisdiction, or “with grave abuse of discretion,”
(Revised Rules of Court, Rule 65, Section 2). How can we begrudge the President for vetoing the Special Provision on
the appropriation for debt payment when he merely followed our decision in Gonzales? How can we say that Congress has abused its
discretion when it appropriated a bigger sum for debt payment than the amount
appropriated for education, when it merely followed our dictum in Guingona?
Article 8 of the Civil Code of Philippines, provides:
“Judicial decisions applying or interpreting the laws or the
constitution shall form a part of the legal system of the Philippines.”
The Court’s interpretation of the law is part of that law as of
the date of its enactment since the court’s interpretation merely establishes
the contemporary legislative intent that the construed law purports to carry
into effect (People v. Licera, 65 SCRA 270 [1975]). Decisions of the Supreme Court assume the same authority as
statutes (Floresca v. Philex Mining Corporation, 136 SCRA 141 [1985]).
Even if Guingona and Gonzales are considered hard cases
that make bad laws and should be reversed, such reversal cannot nullify prior
acts done in reliance thereof.
WHEREFORE, the petitions are DISMISSED, except with
respect to (1) G.R. Nos. 113105 and 113766 only insofar as they pray for the
annulment of the veto of the special provision on debt service specifying that
the fund therein appropriated “shall be used for payment of the principal
and interest of foreign and domestic indebtedness” prohibiting the use of
the said funds “to pay for the liabilities of the Central Bank Board of
Liquidators”, and (2) G.R. No. 113888 only insofar as it prays for the
annulment of the veto of: (a) the
second paragraph of Special Provision No. 2 of the item of appropriation for
the Department of Public Works and Highways (GAA of 1994, pp. 785-786);
and (b) Special Provision No. 12 on the
purchase of medicines by the Armed Forces of the Philippines (GAA of 1994, p.
748), which is GRANTED.
SO ORDERED.
Narvasa, C.J., Feliciano, Bidin, Regalado, Davide, Jr., Romero,
Bellosillo, Melo, Puno, Kapunan, and
Mendoza, JJ., concur.
Cruz, J., concurs with
J. Quiason’s opinion, certify by J.
Narvasa.
Padilla, J., see concurring and
dissenting opinion.
Vitug, J., see concurring
opinion.
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OPINION
PADILLA, J.:
I concur with the ponencia of Mr. Justice Camilo
D. Quiason except in so far as it re-affirms the Court’s decision in Gonzalez v. Macaraig (191
SCRA 452).
Sec. 27(2), Art. VI of
the Constitution states:
“The President shall have the power to veto any particular
item or items in an appropriation, revenue, or tariff bill, but the veto shall
not affect the item or items to which he does not object.”
In my dissenting opinion
in Gonzalez, I stated that:
“The majority opinion positions the veto questioned in this
case within the scope of Section 27(2) [Article VI of the Constitution]. I do not see how this can be done without
doing violence to the constitutional design. The distinction between an item-veto and a provision-veto
has been traditionally recognized in constitutional litigation and budgetary
practice. As stated by Mr. Justice
Sutherland, speaking for the U.S. Supreme Court in Bengzon v. Secretary of Justice, 299 U.S. 410-416:
‘x x x. An item of an appropriation
bill obviously means an item which in itself is a specific appropriation of money, not some general provisions
of law which happens to be put into an appropriation bill. x x x’
When the Constitution in Section 27(2) empowers the President to veto
any particular item or items in the appropriation act, it does not confer — in
fact, it excludes — the power to veto any particular provision or provisions
in said act.
In an earlier case, Sarmiento
v. Mison, et al. 156
SCRA 549, this court referred to its duty to construe the Constitution, not in
accordance with how the executive or the legislative would want it construed,
but in accordance with what it says and
provides. When the Constitution states
that the President has the power to veto any particular item or items in the
appropriation act, this must be taken as
a component of that delicate balance of power between the executive and legislative, so that, for this Court
to construe Sec. 27(2) of the
Constitution as also
empowering the President to veto any particular provision or provisions in the
appropriations act, is to load the scale in favor of the executive, at the
expense of that delicate balance of power.”
I therefore disagree with the majority’s pronouncements which
would validate the veto by the President of specific provisions in the
appropriations act based on the contention that such are “inappropriate
provisions.” Even assuming, for the sake of argument, that a provision in the appropriations act
“inappropriate” from the Presidential standpoint, it is still a provision, not
an item, in an appropriations act and,
therefore, outside the veto power of the Executive.
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OPINION
VITUG, J.:
I concur on the points so well expounded by a most respected
colleague, Mr. Justice Camilo D. Quiason. I should like to highlight a bit, however, that part of the ponencia
dealing on the Countrywide Development Fund or, so commonly referred to as, the
infamous “pork barrel.”
I agree that it lies with Congress to determine in an
appropriation act the activities and the projects that are desirable and may
thus be funded. Once, however, such
identification and the corresponding appropriation therefor is done, the
legislative act is completed and it ends there. Thereafter, the Executive is behooved, with exclusive
responsibility and authority, to see to it that the legislative will is
properly carried out. I cannot
subscribe to another theory invoked by some quarters that, in so implementing
the law, the Executive does so only by way of delegation. Congress neither may delegate what it does
not have nor may encroach on the powers of a coequal, independent and
coordinate branch.
Within its own sphere, Congress acts as a body, not as the
individuals that comprise it, in any action or decision that can bind it, or be
said to have been done by it, under its constitutional authority. Even assuming that overseeing the laws it
enacts continues to be a legislative process, one that I find difficult to
accept, it is Congress itself, not any of its members, that must exercise that
function.
I cannot debate the fact that the members of Congress, more than
the President and his colleagues, would have the best feel on the needs of
their own respective constituents. I
see no legal obstacle, however, in their making, just like anyone else, the
proper recommendations to, albeit not necessarily conclusive on, the
President for the purpose. Neither
would it be objectionable for Congress, by law, to appropriate funds for such
specific projects as it may be minded; to give that authority, however, to the
individual members of Congress in whatever guise, I am afraid, would be
constitutionally impermissible.