FISCAL AUTONOMY

Art VIII, Sec 3.

Presidential veto of provisions in the GAB relating to the use of savings for augmenting
items in the Judiciary’s appropriation impairs the power of the Chief Justice to augment
other items in its appropriation and is thus repugnant to Fiscal Autonomy.

Bengzon v. Drilon
GR 103524, 208 SCRA 133 [Apr 15, 1992]

The authority of the DBM to “review” SC issuances relative to court personnel and their
compensation extends only to “calling its attention” lest they violate the Judiciary’s fiscal
autonomy.
Re: Clarifying and Strengthening the Organizational

FACTS:
In 1957, RA 1797 was enacted and provided for the adjustment of pensions of
retired Justices. Such privilege was extended to retired members of Constitutional
Commissions by RA 3595 and later to retired members of the Armed Forces by PD 578.
In 1975, Pres. Marcos issued PD 644 which repealed the foregoing Acts. Shortly after,
Pres. Marcos restored automatic readjustment of pensions for retired Armed Forces officers
only. The apparent unfairness led Congress to pass HB 16297 in 1990 to restore the
repealed provisions by PD 644. Pres. Aquino vetoed the HB. Meanwhile in 1991, PD 644,
upon petition of retired justices, was declared to be null and void for lack of a valid
publication pursuant to Tañada v. Tuvera. Pursuant to the ruling, Congress included in the
GAB of 1992 appropriations for the payment of adjusted pension rates of the retired
justices. Pres. Aquino vetoed all that referred to the payment of said pension for the reason,
among others, that it nullified her veto of HB 16297 in 1990. It resulted into the veto of
portions of two sections in the appropriations for the judiciary and of an entire section in
the item on General Fund Adjustments.

ISSUE:
WON the presidential vetoes contravene the constitutional provision on the
Judiciary’s fiscal autonomy.

RULING:
Yes. Fiscal autonomy118 enjoyed by the Judiciary contemplates a guarantee of full
flexibility to allocate and utilize resources with the wisdom and dispatch that their needs
require. It recognizes the power and authority to levy, assess and collect fees, fix rates of
compensation not exceeding the highest rates authorized by law xxx and pay plans of the
govt and allocate such sums as may be provided by law and prescribed by them in the
discharge of their functions. It means freedom from outside control. In the case at bar, the
veto of the subject provisions (which relate to the use of savings for augmenting items for
the payment of the pension differentials) of the GAA is tantamount to dictating to the
Judiciary how its funds should be utilized. The veto impairs the power of the Chief Justice
to augment other items in the Judiciary’s appropriation, in contravention of the
constitutional provision on “fiscal autonomy”.

RE: PETITION FOR RECOGNITION OF THE EXEMPTION OF THE GSIS

FROM PAYMENT OF LEGAL FEES.
A.M. No. 08-2-01-0 February 11, 2010

FACTS:
The GSIS seeks exemption from the payment of legal fees imposed on GOCCs
under Sec 22, Rule 141 (Legal Fees) of the ROC. The said provision states:

SEC. 22. Government exempt. – The Republic of the Philippines, its agencies and
instrumentalities are exempt from paying the legal fees provided in this Rule. Local
government corporations and government-owned or controlled corporations with or
without independent charter are not exempt from paying such fees. xx

The GSIS anchors its petition on Sec 39 of its charter, RA 8291 (The GSIS Act of
1997):

SEC. 39. Exemption from Tax, Legal Process and Lien. – It is hereby declared to be the
policy of the State that the actuarial solvency of the funds of the GSIS shall be preserved
and maintained at all times and that contribution rates necessary to sustain the benefits
under this Act shall be kept as low as possible in order not to burden the members of the
GSIS and their employers. Taxes imposed on the GSIS tend to impair the actuarial
solvency of its funds and increase the contribution rate necessary to sustain the benefits
of this Act. Accordingly, notwithstanding any laws to the contrary, the GSIS, its assets,
revenues including accruals thereto, and benefits paid, shall be exempt from all taxes,
assessments, fees, charges or duties of all kinds. These exemptions shall continue unless
expressly and specifically revoked and any assessment against the GSIS as of the
approval of this Act are hereby considered paid. Consequently, all laws, ordinances,
regulations, issuances, opinions or jurisprudence contrary to or in derogation of this
provision are hereby deemed repealed, superseded and rendered ineffective and without
legal force and effect. xx

Required to comment on the GSIS’ petition, the OSG maintains that the petition
should be denied. On this Court’s order, the Office of the Chief Attorney (OCAT)
submitted a report and recommendation on the petition of the GSIS and the comment of
the OSG thereon. According to the OCAT, the claim of the GSIS for exemption from the
payment of legal fees has no legal basis.

ISSUE:
May the legislature exempt the GSIS from legal fees imposed by the Court on
GOCCs and local government units?

HELD:
WHEREFORE, the petition of the GSIS for recognition of its exemption from the
payment of legal fees imposed under Sec 22 of Rule 141 of the ROC on GOCCs and
LGUs is hereby DENIED.

NO, Rule 141 (on Legal Fees) of the ROC was promulgated by this Court in the
exercise of its rule-making powers under Sec 5(5), Art VIII of the Constitution:
Sec. 5. The Supreme Court shall have the following powers:
xxxxxxxxx
(5) Promulgate rules concerning the protection and enforcement of constitutional rights,
pleading, practice, and procedure in all courts, the admission to the practice of law, the
Integrated Bar, and legal assistance to the underprivileged.
xxxxxxxx

Clearly, therefore, the payment of legal fees under Rule 141 of the ROC is an integral
part of the rules promulgated by this Court pursuant to its rule-making power under
Section 5(5), Article VIII of the Constitution. In particular, it is part of the rules
concerning pleading, practice and procedure in courts. Indeed, payment of legal (or
docket) fees is a jurisdictional requirement.
Since the payment of legal fees is a vital component of the rules promulgated by this
Court concerning pleading, practice and procedure, it cannot be validly annulled, changed
or modified by Congress. As one of the safeguards of this Court’s institutional
independence, the power to promulgate rules of pleading, practice and procedure is now
the Court’s exclusive domain. That power is no longer shared by this Court with
Congress, much less with the Executive.

Odchigue-Bondoc vs Tan Tiong Bio, GR 186652, October 6, 2010

FACTS:
Respondent filed a complaint for estafa against Fil-Estate officials including its
Corporate Secretary, herein respondent. Petitioner denies the allegations. The DOJ, by
resolution signed by the Chief State Prosecutor for the Secretary of Justice, motu proprio
dismissed the petition on finding that there was no showing of any reversible error. The
CA set aside the DOJ Secretary’s resolution holding that it committed grave abuse of
discretion in issuing its Resolution dismissing respondent’s petition for review without
therein expressing clearly and distinctly the facts on which the dismissal was based, in
violation of Sec. 14, Art. VIII of the Constitution (No decision shall be rendered by any
court without expressing therein clearly and distinctly the facts and the law on which it is
based).

Petitioner asserts in this present petition for review on certiorari that the requirement
in Sec. 14, Art. VIII of the Constitution applies only to decisions of “courts of justice”, and
it does not extend to decisions or rulings of executive departments such as the DOJ.
Respondent counters that the constitutional requirement is not limited to courts as it extends
to quasi-judicial and administrative bodies, as well as to preliminary investigations
conducted by these tribunals.

ISSUE:
1. Whether or not a prosecutor exercises quasi-judicial power.
2. Whether or not the DOJ Secretary exercises quasi-judicial power.

RULING:
1. No. A prosecutor does not exercise adjudication or rule-making powers. A
preliminary investigation is not a quasi-judicial proceeding, but is merely
inquisitorial since the prosecutor does not determine the guilt of innocence of
the accused. While the prosecutor makes the determination whether a crime has
been committed and whether there is probable cause, he cannot be said to be
acting as a quasi-court, for it is the courts, ultimately, that pass judgment on the
accused.
2. No. The Secretary of Justice in reviewing a prosecutor’s order or resolution via
appeal or petition for review cannot be considered a quasi-judicial proceeding
since the DOJ is not a quasi-judicial body. Sec 14, Art. VIII of the Constitution
does not thus extend to resolutions issued by the DOJ Secretary.