NEPTALI A. GONZALES, ERNESTO M. MACEDA, ALBERTO G. ROMULO, HEHERSON T. ALVAREZ, EDGARDO J. ANGARA, AGAPITO A. AQUINO, TEOFISTO T. GUINGONA, JR., ERNESTO F. HERRERA, JOSE D. LINA…

This constitutional controversy between the legislative and
executive departments of government stemmed from Senate Resolution No. 381,
adopted on 2 February 1989.

“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.”

Petitioners are thus before us as members and ex-officio members
of the Committee on Finance of the Senate and as “substantial taxpayers
whose vital interests may be affected by this case.”

Respondents are members of the Cabinet tasked with the
implementation of the General
Appropriations Act of 1989 and 1990, some of them incumbents, while others have
already been replaced, and include
the National Treasurer and the Commission on Audit Chairman, all of whom are
being sued in their official capacities.

The Background
Facts

On 16 December 1988,
Congress passed House Bill No. 19186, or the General Appropriations Bill for
the Fiscal Year 1989.  As passed, it
eliminated or decreased certain items included in the proposed budget submitted
by the President.

Pursuant to the constitutional provision on the passage of bills, Congress presented the said
Bill to the President for consideration and approval.

On 29 December 1988,
the President signed the Bill into
law, and declared the same to have
become Rep. Act No. 6688.  In the
process, seven (7) Special Provisions and Section 55, a “General Provision,” were vetoed.

On 2 February 1989,
the Senate, in the same Resolution No. 381 mentioned at the outset, further
expressed:

“WHEREAS, Be
it Resolved, as it is hereby Resolved. 
That the Senate express its sense that the veto by the President of
Section 55 of the GENERAL PROVISIONS of the General Appropriation Bill of 1989
(H.B. No. 19186) is unconstitutional and, therefore, void and without any force
and effect; hence, the aforesaid Section 55 remains;

” x x x                        x x x                 x x x“

Thus it is that, on 11
April 1989, this Petition for Prohibition/Mandamus was
filed, with a prayer for the issuance of a Writ of Preliminary Injunction and
Restraining Order, assailing mainly the constitutionality or legality of the
Presidential veto of Section 55, and seeking to enjoin respondents from
implementing Rep. Act No. 6688.  No
Restraining Order was issued by the Court.

The Comment, submitted by the Solicitor General on 25 August 1989 (after several
extensions granted), was considered as the Answer to the Petition and, on 7 September 1989, the Court Resolved
to give due course to the Petition and to require the parties to submit their
respective Memoranda.  Petitioners filed
their Memorandum on 12 December 1989.  But, on 19 January 1990, they filed a Motion
for Leave to File and to Admit Supplemental Petition, which was granted,
basically raising the same issue as in the original Petition, this time
questioning the President’s veto of certain provisions, particularly Section
16, of House Bill 26934, or the General Appropriations Bill for Fiscal Year
1990, which the President declared to have become Rep. Act No. 6831.

The Solicitor General’s Comment on the Supplemental Petition, on
behalf of respondent public officials, was submitted on 24 April 1990. 
On 15 May 1990, the
Court required the parties to file simultaneously their consolidated memoranda,
to include the Supplemental Petition, within an inextendible
period of thirty (30) days from notice. 
However, because the original Resolution of 15 May 1990 merely required the filing of a
memorandum on the Supplemental Petition, a revised Resolution requiring
consolidated memoranda, within thirty (30) days from notice, was released on 28 June 1990.

The Consolidated Memoranda were respectively filed on 26 June 1990 by petitioners, and on 1 August 1990 by respondents.  On 14
August 1990, both Memoranda were Noted and the case was deemed
submitted for deliberation.

On 11 September 1990,
the Court heard the case on oral argument and required the submittal of
supplemental Memoranda, the last of which was filed on 26 September 1990.

The Vetoed
Provisions and Reasons Therefor

Section 55 of the Appropriations Act of 1989 (Section 55 [FY ‘89]
hereinafter), which was vetoed by the President, reads:

“SEC. 55. Prohibition
Against the Restoration or Increase of Recommended Appropriations Disapproved
and/or Reduced by Congress:  No item
of appropriation recommended by the
President in the Budget submitted to Congress pursuant to Article VII, Section 22 of the Constitution which has been disapproved or reduced in
this Act shall be restored or increased by the use of appropriations authorized
for other purposes by augmentation. 
An item of appropriation for any
purpose recommended by the President in the Budget shall be deemed to
have been disapproved by Congress if no corresponding appropriation for the specific purpose is provided in this Act.”

We quote below the reason for the Presidential veto:

“The provision violates Section 25(5) of Article VI of the
Constitution.  If allowed, this Section
would nullify not only the constitutional and statutory authority of the
President, but also that of the President of the Senate, the Speaker of the
House of Representatives, the Chief Justice of the Supreme Court, and Heads of
Constitutional Commissions, to augment any item in the general appropriations
law for their respective offices from savings in other items of their
respective appropriations.  A careful
review of the legislative action on the budget as submitted shows that in
almost all cases, the budgets of agencies as recommended by the President, as
well as those of the Senate, the House of Representatives, and the
Constitutional Commissions, have been reduced. 
An unwanted consequence of this provision is the inability of the
President, the President of the Senate, Speaker of the House of
Representatives, the Chief Justice of the Supreme Court, and the heads of
Constitutional Commissions to augment any item of appropriation of their
respective offices from savings in other items of their respective appropriations
even in cases of calamity or in the event of urgent need to accelerate the
implementation of essential public services and infrastructure projects.

“Furthermore, this provision is inconsistent with Section 12
and other similar provisions of this General Appropriations Act.”

A substantially similar provision as the vetoed Section 55
appears in the Appropriations Act of 1990, this time crafted as follows:

“B. GENERAL PROVISIONS

“Sec. 16.  Use of
Savings. – The President of the Philippines, the President of the Senate,
the Speaker of the House of Representatives, the Chief Justice of the Supreme
Court, the Heads of Constitutional Commissions under Article IX of the
Constitution and the Ombudsman are hereby authorized to augment any item in
this Act for their respective offices from savings in other items of their
appropriations:  PROVIDED, THAT NO ITEM
OF APPROPRIATION RECOMMENDED BY THE PRESIDENT IN THE BUDGET SUBMITTED TO
CONGRESS PURSUANT TO ARTICLE VII, SECTION 22 OF THE CONSTITUTION WHICH HAS BEEN
DISAPPROVED OR REDUCED BY CONGRESS SHALL BE RESTORED OR INCREASED BY THE USE OF
APPROPRIATIONS AUTHORIZED FOR OTHER PURPOSES IN THIS ACT BY AUGMENTATION.  AN ITEM OF APPROPRIATION FOR ANY PURPOSE
RECOMMENDED BY THE PRESIDENT IN THE BUDGET SHALL BE DEEMED TO HAVE BEEN
DISAPPROVED BY CONGRESS IF NO CORRESPONDING APPROPRIATION FOR THE SPECIFIC
PURPOSE IS PROVIDED IN THIS ACT.”

It should be noted that in the 1989 Appropriations Act, the
“Use of Savings” appears in Section 12, separate and apart from
Section 55; whereas in the 1990 Appropriations Act, the “Use of
Savings” and the vetoed provision have been commingled in Section 16 only,
with the vetoed provision made to appear as a condition or restriction.

Essentially the same reason was given for the veto of Section 16
(FY ‘90), thus:

“I am vetoing this provision for the reason that it violates Section 25(5) of Article VI
of the Constitution in relation to Sections 44 and 45 of P.D. No. 1177 as
amended by R.A. No. 6670 which authorizes the President to use savings to
augment any item of appropriations in the Executive Branch of the Government.

“Parenthetically,
there is a case pending in the Supreme Court relative to the validity of the
President’s veto on Section 55 of the General Provisions of Republic Act No.
6688 upon which the amendment on this Section was based.  Inclusion, therefore, of the proviso in the
last sentence of this section might prejudice the Executive Branch’s position
in the case.

“Moreover, if allowed,
this Section would nullify not only the constitutional and statutory authority
of the President, but also that of the officials enumerated under Section 25(5)
of Article VI of the Constitution, to augment any item in the general
appropriations law for their respective appropriations.

“An unwanted
consequence of this provision would be the inability of the President, the
President of the Senate, Speaker of the House of Representatives, the Chief
Justice of the Supreme Court, and heads of Constitutional Commissions to
augment any item of appropriation of their respective offices from savings in
other items of their respective appropriations even in cases of national
emergency or in the event of urgent need to accelerate the implementation of
essential public services and infrastructure projects.”

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 Contending
Views

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
Section 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 Solicitor General, as counsel for public respondents, counters that the issue at bar is a
political question beyond the power of this Court to determine; that
petitioners had a political remedy, which was
to override the veto; that Section 55 is a “rider” because it
is extraneous to the Appropriations Act and, therefore, merits the President’s
veto; that the power of the President to augment items in the appropriations for the executive branches had already
been provided for in the Budget Law, specifically Sections 44 and 45 of Pres. Decree No. 1177, as amended by Rep. Act No. 6670 (4 August 1988);
and that the President is empowered by the Constitution to veto provisions or
other “distinct and severable parts” of an Appropriations Bill.

Judicial
Determination

With the Senate maintaining that the President’s veto is
unconstitutional, and that charge being controverted,
there is an actual case or justiciable controversy
between the Upper House of Congress and the executive department that may be
taken cognizance of by this Court.

“Indeed, where the legislature or the executive branch is
acting within the limits of its authority, the judiciary cannot and ought not
to interfere with the former.  But where
the legislature or the executive acts beyond the scope of its constitutional
powers, it becomes the duty of the judiciary, to declare what the other
branches of the government had assumed to do as void.  This is the essence of judicial power
conferred by the Constitution ‘in one Supreme Court and in such lower courts as
may be established by law’ [Art. VIII, Section 1 of the 1935 Constitution; Art.
X, Section 1 of the 1973 Constitution and which was adopted as part of the
Freedom Constitution, and Art. VIII, Section 1 of the 1987 Constitution] and
which power this Court has exercised in many instances” (Demetria vs. Alba, G. R. No. 71977, 27 February 1987, 148
SCRA 209).

We take note as well of what petitioners stress as the
“imperative need for a definitive ruling by this Court as to the exact
parameters of the exercise of the item-veto power of the President as regards
appropriation bills x x x
in order to obviate the recurrence of a similar problem whenever a general appropriations bill is passed
by Congress.” Indeed, the contextual reiteration of Section 55 (FY 89) in
Section 16 (FY ‘90) and again, its veto by the President, underscore the need
for judicial arbitrament.  The Court does not thereby assert its
superiority over or exhibit lack of respect due the other co-ordinate
departments but discharges a solemn and sacred duty to determine essentially
the scope of intersecting powers in regard which the Executive and the Senate
are in dispute.

Petitioners have also brought this suit as taxpayers.  As ruled in Sanidad v. COMELEC (No. L-44640, 12 October 1976, 73 SCRA 333), this
Court enjoys the open discretion to entertain
taxpayers suits or not.  In Tolentino v. COMELEC (No. L-34150,
16 October 1961, 41 SCRA
702), it was also held that a
member of the Senate has the requisite personality to bring a suit where a constitutional issue is
raised.

The political question doctrine neither interposed an obstacle to
judicial determination of the rival claims. 
The jurisdiction to delimit constitutional boundaries has been given to
this Court.  It cannot abdicate that
obligation mandated by the 1987 Constitution, although said provision by no
means does away with the applicability of the principle in appropriate cases.

“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.”

Nor is this the first time that the constitutionality of a
Presidential veto is raised to the Court. 
The two oft-cited cases are Bengson
v. Secretary of Justice (62 Phil. 912 [1936]), penned by Justice George A.
Malcolm, which upheld the veto questioned before it, but which decision was
reversed by the U.S. Supreme Court in the same entitled case in 292, U.S. 410, infra,
essentially on the ground that an Appropriations Bill was not involved.  The second case is Bolinao
Electronics v. Valencia (G. R. No. L-20740, 30 June 1964, 11 SCRA 486), infra, which rejected
the President’s veto of a condition or restriction in an Appropriations Bill.

The Extent of
the President’s Item-veto Power

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?

Petitioners contend that Section 55 (FY ’89) and Section 16 (FY
’90) are provisions and not items and are, therefore, outside the
scope of the item-veto power of the President.

The veto power of the President is expressed in Article VI,
Section 27 of the 1987 Constitution reading, in full, as follows:

“Sec. 27. (1) Every bill passed by the Congress shall, before
it becomes a law, be presented to the President.  If he approves the same, he shall sign it;
otherwise, he shall veto it and return the same with his objections to the
House where it originated, which shall enter the objections at large in its
Journal and proceed to reconsider it. 
If, after such reconsideration, two-thirds of all the Members of such
House shall agree to pass the bill, it shall be sent, together with the
objections, to the other House by which it shall likewise be reconsidered, and
if approved by two-thirds of all the Members of that House, it shall become a
law.  In all such cases, the votes of
each House shall be determined by yeas or nays, and the names of
the Members voting for or against shall be entered in its Journal.  The President shall communicate his veto of
any bill to the House where it originated within thirty days after the date of
receipt thereof; otherwise, it shall become a law as if he had signed it.

“(2) The President shall have the power to veto any particular
item or items in an appropriation, revenue, or tariff bill, but the veto shall
not affect the item or items to which he does not object.”

Paragraph (1) refers to the general veto power of the President and
if exercised would result in the veto of the entire bill, as a general
rule.  Paragraph (2) is what is referred to as the item-veto power
or the line-veto power.  It allows the
exercise of the veto over a particular item or items in an appropriation, revenue,
or tariff bill.  As specified, the
President may not veto less than all of an item of an Appropriations Bill.  In other words, the power given the executive
to disapprove any item or items in an Appropriations Bill does not grant the
authority to veto a part of an item and to approve the remaining portion of the
same item.

Originally, item veto exclusively referred to veto of items
of appropriation bills and first came into being in the former Organic Act, the
Act of Congress of 29 August 1916.  This was followed by the 1935 Constitution,
which contained a similar provision in its Section 11(2), Article VI, except
that the veto power was made more expansive by the inclusion of this sentence:

“x x x When a
provision of an appropriation bill affects one or more items of the same, the
President can not veto the provision without at the same time vetoing the
particular item or items to which it relates x x x.”

The 1935 Constitution further broadened the President’s veto
power to include the veto of item of items of revenue and tariff bills.

With the advent of the 1973 Constitution, the section took a more
simple and compact form, thus:

“Section 20 (2).  The Prime
Minister shall have the power to veto any particular item or items in an
appropriation, revenue, or tariff bill, but the veto not affect the item or
items to which he does not object.”

It is to be noted that the counterpart provision in the
1987 Constitution (Article VI, Section 27[2], supra), is a verbatim
reproduction except for the public official concerned.  In other words, also eliminated has been any
reference to the veto of a provision. 
The vital question is:  should
this exclusion be interpreted to mean as a disallowance of the power to veto a provision,
as petitioners urge?

The terms item and provision in budgetary
legislation and practice are concededly different.  An item in a bill refers to the
particulars, the details, the distinct and severable parts x x x of the
bill (Bengzon, supra, at 916).  It is an indivisible sum of money dedicated
to a stated purpose (Commonwealth v. Dodson, 11 S.E.. 2d 120, 124, 125, etc.,
176 Va. 281).  The United States Supreme Court, in the case of Bengzon v. Secretary of Justice
(299 U.S. 410, 414, 57 S.Ct 252, 81 L. Ed., 312)
declared “that an ‘item’ of an appropriation bill obviously means an item
which in itself is a specific appropriation
of money, not some general provision of law, which happens to be put
into an appropriation bill.”

It is our considered
opinion that, notwithstanding the elimination in Article VI, Section 27(2) of the 1987
Constitution of any reference to the veto of a provision, the extent of the President’s veto power as
previously defined by the 1935 Constitution has not changed.  This is because the eliminated proviso merely
pronounces the basic principle that a distinct and severable part of a bill may
be the subject of a separate
veto (Bengzon v. Secretary of Justice,
62 Phil., 912, 916 (1926); 2 BERNAS, Joaquin, S.J., The Constitution of the Republic of the Philippines, 1st ed.,
154-155, [1988]).

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.

Petitioners’ further submission that, since the exercise of the
veto power by the President partakes of the nature of legislative powers it
should be strictly construed, is negatived by the
following dictum in Bengzon, supra,
reading:

“The Constitution is a limitation upon the power of the
legislative department of the government, but in this respect it is a grant of
power to the executive department.  The
Legislature has the affirmative power to enact laws; the Chief Executive has
the negative power by the constitutional exercise of which he may defeat the
will of the Legislature.  It follows that
the Chief Executive must find his authority in the Constitution.  But in exercising that authority he may not
be confined to rules of strict construction or hampered by the unwise
interference of the judiciary.  The
courts will indulge every intendment in favor of the constitutionality of a
veto the same as they will presume the constitutionality of an act as
originally passed by the Legislature” (Commonwealth v. Barnett [1901], 199
Pa., 161; 55 L.R.A., 882; People v. Board of Councilmen [1892], 20 N.Y.S., 52; Fulmore v. Lane [1911], 104 Tex., 499; Texas Co v. State
[1927], 53 A.L.R., 258 [at 917]).

Inappropriateness
of the so-called
“Provisions”

But even assuming arguendo that provisions
are beyond the executive power to veto, we are of the opinion that Section 55
(FY ’89) and Section 16 (FY ’90) are not provisions in the budgetary
sense of the term.  Article VI, Section 25(2)
of the 1987 Constitution provides:

“Sec.  25(2) 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.”

Explicit is the requirement that a provision in the
Appropriations Bill should relate specifically to some “particular appropriation”
therein.  The challenged
“provisions” fall short of this requirement.  Firstly, the vetoed “provisions” do
not relate to any particular or distinctive appropriation.  They apply
generally to all items disapproved or reduced by Congress in the Appropriations
Bill.  Secondly, the disapproved or
reduced items are nowhere to be found on the face of the Bill.  To discover them, resort will have to be made
to the original recommendations made by the President and to the source
indicated by petitioners themselves, i.e., the “Legislative Budget
Research and Monitoring Office” (Annex B-1 and B-2, Petition).  Thirdly, the vetoed Sections are more of an expression of Congressional policy
in respect of augmentation from savings rather than a budgetary
appropriation.  Consequently, Section 55
(FY ’89) and Section 16 (FY ‘90) although labelled as
“provisions,” are actually inappropriate provisions
that should be treated as items for the
purpose of the President’s veto power (Henry v. Edwards [1977] 346 S Rep. 2d,
157-158).

“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 expenditure
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

“x x x Legislative control cannot be exercised in such a manner
as to encumber the general appropriation bill with veto-proof ‘logrolling
measure,’ 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.  x x x ” (Underscoring
supplied)

Inappropriateness
of the so-called “Conditions/Restrictions“

Petitioners maintain, however, that Congress is free to impose conditions in an
Appropriations Bill and where
conditions are attached, the veto power does not carry with it the power to strike them out, citing Commonwealth
v. Dodson (11 SE, 2d 130, supra) and Bolinao Electronics Corporation v.
Valencia (No. L-20740, June 30, 1964, 11 SCRA 486).  In other words, their theory is that Section
55 (FY ’89) and Section 16 (FY ’90) are such conditions/restrictions and thus
beyond the veto power.

There can be no denying that inherent in the power of
appropriation is the power to specify how money shall be spent; and that in
addition to distinct “items” of appropriation, the Legislature may
include in Appropriation Bills
qualifications, conditions, limitations or restrictions on expenditure of
funds.  Settled also is the rule that the
Executive is not allowed to veto a condition or proviso of an appropriation,
while allowing the appropriation itself to stand (Fairfield v. Foster, supra, at
320).  That was also the ruling in Bolinao supra, which held that the veto of a condition in
an Appropriations Bill which did not include a veto of the items to which the
condition related was deemed invalid and without effect whatsoever.

However, for the rule to apply, restrictions should be such in
the real sense of the term, not some matters which are more properly dealt with
in a separate legislation (Henry v. Edwards, La, 346, So 2d 153).  Restrictions or conditions in an
Appropriations Bill must exhibit a connection with money items in
a budgetary sense in the schedule of expenditures.  Again, the test is appropriateness.

“It is not enough that a provision be
related to the institution or agency to which funds are appropriated.  Conditions and limitations properly included
in an appropriation bill must exhibit such a connexity
with money items of appropriation that they logically belong in a schedule of
expenditures. . .  the ultimate test is
one of appropriateness” (Henry v. Edwards, supra, at 158).

Tested by these criteria.  Section 55 (FY ’89) and Section 16 (FY ’90) must also be held to be inappropriate
“conditions.” While   they,
particularly, Section 16 (FY ’90), have been “artfully drafted” to
appear as true conditions or limitations, they are actually general law
measures more appropriate for substantive and, therefore, separate legislation.

Further, neither of them shows the necessary connection with a
schedule of expenditures.  The reason, as explained earlier, is that items reduced or disapproved
by Congress would not appear on
the face of the enrolled bill or Appropriations Act itself.  They can only be detected when compared with
the original budgetary submittals of the President.  In fact, Sections 55 (FY ’89) and 16 (FY ‘90)
themselves provide that an item “shall be deemed to have been disapproved
by Congress if no corresponding appropriation for the specific purpose is provided
in this Act.”

Considering that the vetoed provisions are not, in the budgetary sense
of the term, conditions or restrictions, the case of Bolinao
Electronics Corporation v. Valencia (supra), invoked by petitioners,
becomes inapplicable.  In that case, a public works bill
contained an item appropriating a certain sum
for assistance to
television stations, subject to the condition that the amount would not be available to places where there were
commercial television stations.  Then
President Macapagal approved the appropriation but
vetoed the condition.  When challenged
before this Court, it was held that the veto was ineffectual and that the
approval of the item carried with it the approval of the condition attached to
it.  In contrast with the case at bar,
there is no condition, in the budgetary sense of the term, attached to an appropriation
or item in the appropriation bill which was struck out.  For obviously, Sections 55 (FY ’89) and 16
(FY ’90) partake more of a curtailment on the power to augment from savings; in
other words, “a general provision of law, which happens to be put in an
appropriation bill” (Bengzon v. Secretary
of Justice, supra).

The Power of
Augmentation and The Validity of the Veto

The President promptly vetoed Section 55 (FY ’89) and Section 16
(FY ‘90) because they nullify
the authority of the Chief Executive and heads of different branches of
government to augment any item in the General Appropriations Law for their
respective offices from savings in other items of their respective
appropriations, as guaranteed by
Article VI, Section 25(5) of the Constitution. 
Said provision reads:

“Sec. 25.  (5) 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”
(Underscoring ours).

Noteworthy is the fact that the power to augment from savings
lies dormant until authorized by law.

This Court upheld the validity of the power of augmentation from
savings in Demetria v. Alba, which
ruled:

“x x x to
afford the heads of the different branches of the government and those of the
constitutional commissions considerable flexibility in the use of public funds
and resources, the constitution allowed the enactment of a law authorizing the
transfer of funds for the purpose of augmenting an item from savings in another item in the appropriation of the
government branch or constitutional body concerned.  The leeway granted was thus limited.  The purpose and conditions for which funds
may be transferred were specified, i.e., transfer may be allowed for the
purpose of augmenting an item and such transfer may be made only if there are savings from another item in the
appropriation of the government branch or constitutional body” (G. R. No.
71977, 27 February 1987, 148 SCRA 214).

The 1973 Constitution contained an identical authority to augment
from savings in its Article VIII, Section 16(5), except for mention of the
Prime Minister among the officials vested with that power.^[1]

In 1977, the statutory authority of the President to augment any
appropriation of the executive department in the General Appropriations Act
from savings was specifically provided for in Section 44 of Presidential Decree
No. 1177, as amended (RA 6670, 4 August 1988), otherwise known as the
“Budget Reform Decree of 1977.” It reads:

“Sec. 44.  x x x

“The  President shall,
likewise, have the authority to augment any appropriation
of the Executive Department in the General Appropriations Act, from savings in
the appropriations of another department, bureau, office or agency within the
Executive Branch, pursuant to the provisions of Art. VIII, Sec. 16(5) of the
Constitution (now Sec. 25(5), Art. VI)”
(Emphasis ours). (N.B.:  The first
paragraph declared void in Demetria v.
Alba, supra, has been deleted).

Similarly, the use by the President of savings to cover deficits
is specifically authorized in the same Decree. 
Thus:

“Sec. 45.  Authority
to Use Savings in Appropriations to Cover Deficits.  Except as otherwise provided in the General
Appropriations Act, any savings in the regular appropriations authorized in the
General Appropriations Act for programs and projects of any department, office
or agency, may, with the approval of the President be used to cover a deficit
in any other item of the regular appropriations:” x x
x

A more recent grant is found in Section 12 of the General
Appropriations Act of 1989, the text of which is repeated in the first
paragraph of Section 16 (FY ‘90), Section
12 reads:

“Sec. 12.  Use of Savings. – The President, the
President of the Senate, the Speaker of the House of Representatives, the Chief
Justice of the Supreme Court, the heads of the Constitutional Commissions, and
the Ombudsman are hereby authorized to augment any item in this Act for their
respective offices from savings in other items of their respective
appropriations.”

There should be no question, therefore, that statutory authority
has, in fact, been granted.  And once
given, the heads of the different branches of the Government and those of the
Constitutional Commissions are afforded considerable flexibility in the use of
public funds and resources (Demetria v.
Alba, supra).  The doctrine of
separation of powers is in no way endangered because the transfer is made
within a department (or branch of government) and not from one department
(branch) to another (CRUZ, lsagani A., Philippine
Political Law [1989] p. 155).

When Sections 55 (FY ‘89) and 16 (FY ‘90), therefore, prohibit
the restoration or increase by augmentation of appropriations disapproved or
reduced by Congress, they impair the constitutional and statutory authority of
the President and other key officials to augment any item or any
appropriation from savings in the interest of expediency and
efficiency.  The exercise of such
authority in respect of disapproved or reduced items by no means vests in the
Executive the power to rewrite the entire budget, as petitioners contend, the
leeway granted being delimited to transfers within the department or branch
concerned, the sourcing to come only from savings.

More importantly, it strikes us, too, that for such a special
power as that of augmentation from savings, the same is merely incorporated in the General Appropriations
Bill.  An Appropriations Bill is
“one the primary and specific aim of which is to make appropriation of money from the public
treasury” (Bengzon v. Secretary of Justice, 292 U.S.,
410, 57 S.Ct. 252). 
It is a legislative authorization of receipts and expenditures.  The power of augmentation from savings, on
the other hand, can by no means be considered a specific appropriation of
money.  It is a non-appropriation item
inserted in an appropriation measure.

The same thing must be said of Section 55 (FY ’89), taken in
conjunction with Section 12, and Section 16 (FY ’90), which prohibit the
restoration or increase by augmentation of appropriations disapproved and or
reduced by Congress.  They are
non-appropriation items, an appropriation being a setting apart by law of a
certain sum from the public revenue for a specified purpose (Bengzon v. Secretary of Justice, 62 Phil. 912, 916
[1936]).  It bears repeating that they
are more of a substantive expression of a legislative objective to restrict the
power of augmentation granted to the President and other key officials.  They are actually matters of general law and
more properly the subject of a separate legislation
that will embody, define and delimit the scope of the special power of
augmentation from savings instead of being inappropriately incorporated
annually in the Appropriation Act.  To
sanction this practice would be to give the Legislature the freedom to grant or
withhold the power from the Executive and other officials, and thus put in
yearly jeopardy the exercise of that power.

If, indeed, by the later enactments of Section 55 (FY ‘89) and
Section 16 (FY ’90), Congress, as petitioners argue, intended to amend or
repeal Pres. Decree No. 1177, with all the more reason should it have so
provided in a separate enactment, it being basic that implied repeals are not
favored.  For the same reason, we cannot
subscribe to petitioners’ allegation that Pres. Decree No. 1177 has been
revoked by the 1987 Constitution.  The
1987 Constitution itself provides for the continuance of laws, decrees,
executive orders, proclamations, letters of instructions, and other executive
issuances not inconsistent with the Constitution until amended, repealed or
revoked (1987 Constitution, Article XVIII, Section 3).

If, indeed, the legislature believed that the exercise of the
veto powers by the executive were unconstitutional, the remedy laid down by the
Constitution is crystal clear.  A
Presidential veto may be overridden by the votes of two?thirds of members
of Congress (1987 Constitution, Article VI, Section 27[1], supra).  But Congress made no
attempt to override the Presidential veto. 
Petitioners’ argument that the veto is ineffectual so that there is
“nothing to override” (citing Bolinao)
has lost force and effect with the executive veto having been herein upheld.

As we see it, there need be no future conflict if the legislative
and executive branches of government adhere to the spirit of the Constitution,
each exercising its respective powers with due deference to the constitutional
responsibilities and functions of the other. 
Thereby, the delicate equilibrium of governmental powers remains on even
keel.

WHEREFORE. the
constitutionality of the assailed Presidential veto is UPHELD and this Petition
is hereby DISMISSED.  No costs.

SO ORDERED.

Narvasa, Gancayco,
Bidin, Sarmiento, Griño-Aquino, Medialdea, and Regalado, JJ., concur.

Gutierrez, Jr., Cruz, Paras, and Padilla, JJ.,
see dissenting opinion.

Feliciano, J., on leave.

Fernan, C.J., no part. Formerly counsel for one petitioner and one respondent.

---

^[1]
Sec. 16 (5) – No law shall be passed authorizing any transfer of
appropriations; however, the President, the Prime Minister, the Speaker, the
Chief Justice of the Supreme Court, and the heads of Constitutional Commissions
may by law be authorized to augment any item in the general appropriations law
for their respective offices from savings in other items of their respective
appropriations.

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