TEOFISTO T. GUINGONA, JR. AND AQUILINO Q. PIMENTEL, JR., PETITIONERS, VS. HON. GUILLERMO CARAGUE, IN HIS CAPACITY AS SECRETARY, BUDGET & MANAGEMENT, HON. ROZALINA S. CAJUCOM, IN…

Guingona versus Carague

The Case

This is the case of Guingona versus Carague, a case of first impression in which two Senators of the Republic, Teofisto Guingona, Junior and Aquilino Pimentel, Junior, asked the Supreme Court to strike down as unconstitutional the automatic appropriation for debt service in the 1990 national budget. They sued the Secretary of Budget and Management and other public respondents to restrain the disbursement of the debt service funds. The case matters because it is the Court's first full reckoning with the tension between the constitutional command to give education the highest budgetary priority and the government's need to service its foreign debt, and because it settles the continuing force of presidential decrees on automatic appropriation after the 1987 Constitution took effect.

Procedural History

The petitioners went directly to the Supreme Court in an original action, raising a constitutional question and praying for a declaration of unconstitutionality and for restraint against disbursement. There were no proceedings in a trial court or in the Court of Appeals. The respondents raised the threshold objection that the petition involved a pure political question, a matter of the repeal or amendment of laws addressed to the judgment and wisdom of the legislative body. The Court rejected that objection, holding that a justiciable controversy was raised which it could properly take cognizance of, and it proceeded to resolve the constitutional issues on the merits.

Facts

The 1990 budget consisted of 98.4 billion pesos in automatic appropriation, of which 86.8 billion pesos was programmed for debt service, and 155.3 billion pesos appropriated under the General Appropriations Act, for a total of 233.5 billion pesos. The appropriation for the Department of Education, Culture and Sports amounted to 27,017,813,000 pesos. The automatic appropriation for debt service was authorized by Presidential Decree Number 81, Presidential Decree Number 1177, and Presidential Decree Number 1967.

The petitioners argued that the appropriation of 86.8 billion pesos for debt service, as against the much smaller amount for education, violated the constitutional mandate to assign the highest budgetary priority to education. They also argued that the presidential decrees had become functus officio, meaning their office was spent, when President Marcos was ousted in February 1986, and that the legislative power was restored to Congress when the Constitution was ratified in 1987, so that a new law was needed for automatic appropriation and none had been passed.

Alternatively, the petitioners contended that even if the decrees survived, they were inoperative under the transitory provision of the Constitution because they were inconsistent with the provisions on appropriation bills and on payment out of the Treasury, and that they amounted to an undue delegation of legislative power to the President, who determined in advance the amount appropriated for debt service.

Issues

• Whether or not the appropriation of 86.8 billion pesos for debt service in the 1990 budget violated the constitutional mandate to assign the highest budgetary priority to education.
• Whether or not Presidential Decree Number 81, Presidential Decree Number 1177, and Presidential Decree Number 1967 remained operative under the 1987 Constitution.
• Whether or not those decrees violated the constitutional requirement that no money shall be paid out of the Treasury except in pursuance of an appropriation made by law, on the ground of undue delegation of legislative power.

Applicable Provisions

Section 5 of Article Fourteen of the Constitution provides:

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 is the provision the petitioners invoke against the size of the debt service appropriation.

Section 3 of Article Eighteen of the Constitution provides:

All existing laws, decrees, executive orders, proclamations, letters of instructions, and other executive issuances not inconsistent with this Constitution shall remain operative until amended, repealed, or revoked.

This transitory provision governs whether the presidential decrees survived the change of government and the ratification of the Constitution.

Section 24 of Article Six of the Constitution provides:

All appropriation, revenue or tariff bills, bills authorizing increase of the public debt, bills of local application, and private bills shall originate exclusively in the House of Representatives, but the Senate may propose or concur with amendments.

The petitioners use this provision to argue that a new act of Congress was needed to authorize the automatic appropriation.

Section 29, paragraph 1 of Article Six of the Constitution provides:

No money shall be paid out of the Treasury except in pursuance of an appropriation made by law.

This is the provision against which the petitioners measure the definiteness and certainty of the automatic appropriation.

Section 31 of Presidential Decree Number 1177 provides:

Automatic appropriations. All expenditures for (a) personnel retirement premiums, government service insurance, and other similar fixed expenditures, (b) principal and interest on public debt, (c) national government guarantees of obligations which are drawn upon, are automatically appropriated: Provided, that no obligations shall be incurred or payments made from funds thus automatically appropriated except as issued in the form of regular budgetary allotments.

This is the very mechanism the petitioners assail as an invalid standing appropriation.

Ruling

On the first issue, the Court held that the constitutional mandate to assign the highest budgetary priority to education does not hamstring the hands of Congress so as to deprive it of the power to respond to the imperatives of the national interest and other state policies. The Court noted that the budget for education had tripled since 1985, that teacher compensation had been doubled, and that the amount set aside for the Department of Education, Culture and Sports was the highest budgetary allocation among all department budgets, a clear compliance with the constitutional mandate. Having faithfully complied, Congress was not without power, guided by its good judgment, to provide an appropriation that can reasonably service the enormous debt, the greater portion of which was inherited from the previous administration. The very survival of the economy was at stake, and so the appropriation for debt service bigger than the share allocated to education could not be assailed as unconstitutional.

On the second issue, the Court held that the presidential decrees remained operative. The transitory provision was adopted precisely to preserve the social order so that legislation by the then President may be recognized, and such laws remain in force unless inconsistent with the Constitution or amended, repealed, or revoked. The clear intent of the decrees was that the amounts needed to cover principal and interest should be made available when due without the necessity of periodic enactments of separate laws, since both the periods and the necessities are incapable of determination in advance. The Court rejected the argument that the decrees failed to meet the requirements for appropriation bills, reasoning that the framers did not contemplate that existing laws appropriating public money are reduced to mere bills that must again go through the legislative mill. The only reasonable interpretation of the provisions referring to bills is that they mean appropriation measures still to be passed by Congress.

On the third issue, the Court held that there was no undue delegation of legislative power. The test is the completeness of the statute in all its terms and provisions when it leaves the hands of the legislature, and to avoid the taint of unlawful delegation there must be a standard, which implies at the very least that the legislature itself determines matters of principle and lays down fundamental policy. The Court found the questioned laws complete in all their essential terms and conditions, with sufficient standards indicated. Although the decrees do not state specific amounts, the amounts are made certain by the legislative parameters provided, and the Executive is not of unlimited discretion, since the mandate is to pay only the principal, interest, taxes, and other normal banking charges as and when they shall become due.

Doctrine

The constitutional mandate to assign the highest budgetary priority to education is a directive to Congress, not a straitjacket; compliance is measured by whether education in fact receives the highest allocation among department budgets, and once that is shown, Congress may still appropriate for debt service an amount larger than the education budget without violating the Constitution.

Under the transitory provision, existing presidential decrees on automatic appropriation remain operative until amended, repealed, or revoked, and the constitutional provisions on appropriation bills refer only to measures still to be passed by Congress, not to laws already in the statute books.

Automatic appropriation laws are not an undue delegation of legislative power where they are complete in all essential terms and lay down sufficient standards, the amounts being made certain by legislative parameters even without a fixed sum.

Disposition

The petition was dismissed, and the Court upheld the constitutionality of the automatic appropriation for debt service in the 1990 budget and of the presidential decrees authorizing it.

Remember This

Memorize the line that the highest budgetary priority for education does not hamstring the hands of Congress, which may still respond to the imperatives of the national interest. Examiners use this case to test the transitory effect of presidential decrees under the 1987 Constitution and the validity of automatic appropriations against the rule that no money shall be paid out of the Treasury except in pursuance of an appropriation made by law.