ARTICLE VI SECTION 29 FISCAL POWER OF CONGRESS AND ITS LIMITATION

Pascual v. Sec. of Public Works

https://lawphil.net/judjuris/juri1960/dec1960/gr_l-10405_1960.html

G.R. No. L-10405 December 29, 1960

WENCESLAO PASCUAL, in his official capacity as Provincial Governor of Rizal, petitioner-appellant,

vs.
THE SECRETARY OF PUBLIC WORKS AND COMMUNICATIONS, ET AL., respondents-appellees.

Asst. Fiscal Noli M. Cortes and Jose P. Santos for appellant.

Office of the Asst. Solicitor General Jose G. Bautista and Solicitor A. A. Torres for appellee.

Facts

 Respondent Zulueta, a member of the Senate, was the owner of several parcels of residential
land situated in Pasig, Rizal, known as the Antonio Subdivision. Certain portions of the Antonio
Subdivision had been reserved for the projected feeder roads.
 Congress passed RA 920, appropriating P85,000 for the “construction, reconstruction, repair,
extension and improvement” of said feeder roads,
 After over 5 months subsequent to the approval and effectivity of the Act, the projected feeder
roads were donated by Zulueta to the Government.
 Petitioner Pascual, as Governor of Rizal, filed an action questioning the constitutionality of the
appropriation for the feeder road.
 The lower court held that the appropriation was clearly for a private, not a public purpose.
 CFI dismissed the case and dissolved the writ of preliminary injunction

Issue :

Is the provision in RA 920 appropriating the said amount unconstitutional?

Held :

Yes. RA 920 is unconstitutional

Rationale :

Under the express and implied provisions of the Constitution, the legislature is without power to
appropriate public revenue for anything but a public purpose.

It is the essential character of the direct object of the expenditure which must determine its validity as
justifying a tax, and not the magnitude of the interest to be affected nor the degree to which the general
advantage of the community, and thus the public welfare, may be ultimately benefited by their
promotion. Incidental to the public or to the state, which results from the promotion of private interest
and the prosperity of private enterprises or business, does not justify their aid by the use public money

Inasmuch as the land on which the projected feeder roads were to be constructed, belong to Zulueta,
the result is that said appropriation sought a private purpose, and hence, was null and void.
Aglipay v Ruiz

https://lawphil.net/judjuris/juri1937/mar1937/gr_l-45459_1937.html

G.R. No. L-45459 March 13, 1937

GREGORIO AGLIPAY, petitioner,

vs.
JUAN RUIZ, respondent.

Vicente Sotto for petitioner.

Office of the Solicitor-General Tuason for respondent.

Facts.

 Respondent Director of Posts Ruiz issued and sold postage stamps commemorative of the 33rd
International Eucharistic Congress.
 Act No. 4052 authorized the Dir. of Posts to dispose of the amount appropriated for the cost of
plates and printing of postage stamps with new designs as may be deemed advantageous to the
Govt.
 Petitioner Mons. Aglipay, Supreme Head of the Philippine Independent Church, prays for a writ
of inhibition to prevent Dir. Ruiz from issuing and selling the commemorative postage stamp,
averring that it violates Art VI, Sec 29(2) of the Constitution.
 Notably, the stamps as actually designed and printed, instead of showing a Catholic Church
chalice as originally planned, contains a map of the Philippines and the location of the City of
Manila, and an inscription as follows: “Seat XXXIII International Eucharistic Congress, Feb. 3-7,
1937.”

Issues.

(1) Does Act No. 4025 contemplate a religious purpose?

(2) Is the issuance and selling of the commemorative postage stamps contrary to Art VI, Sec 29(2)?

Held.

(1) No. Art VI, Sec 29(2) is a direct corollary of the principle of separation of church and state. The stamps
were not issued and sold for the benefit of the Roman Catholic Church. Nor were money derived from the sale of
the stamps given to that church. The only purpose in issuing and selling the stamps was “to advertise the
Philippines and attract more tourist to this country.” The officials concerned merely took advantage of an event
considered of international importance “to give publicity to the Philippines and its people.” [Considering the
original design and the actual design of the stamps, it can be gleaned that] [w]hat is emphasized is not the
Eucharistic Congress itself but Manila as the seat of that congress. It is thus obvious that while the issuance and
sale of the stamps may be said to be inseparably linked with an event of religious character, the resulting
propaganda, if any, received by the Roman Catholic Church, was not the aim and purpose of the Govt.

(2) No. As Act No. 4052 contemplates no religious purpose in view, it does not authorize the appropriation
xxx of public money xxx for the use, benefit xxx of a particular sect or Church. The main purpose, which could
legitimately be undertaken by appropriate legislation, should not be frustrated by xxx mere incidental
Guingona v. Carague

https://www.lawphil.net/judjuris/juri1991/apr1991/gr_94571_1991.html

G.R. No. 94571 April 22, 1991

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 her capacity as National Treasurer and COMMISSION ON AUDIT, respondents.

Ramon A. Gonzales for petitioners.

Facts

 Petitioners assail the constitutionality of the automatic appropriation for foreign debt service in
the 1990 budget.
 Petitioners contend that the 3 presidential decrees authorizing such automatic appropriation
violate Sec 29 (1), Art VI of the Constitution.
 It is asserted, among others, that it did not meet the alleged required definiteness, certainty,
and exactness in appropriation, and so it is an undue delegation of legislative power as the
President, by virtue of which, determines in advance the amount appropriated for the debt
service.

Issue

Is the automatic appropriation for debt service in the 1990 budget violative of Art VI, Sec 29 (1) of the
Constitution?

Held

No. Our Constitution does not require a definite, certain, exact or “specific appropriation made by law”
unlike the Nebraska Constitution invoked by petitioners.

Ratio

Our Constitution simply states that moneys paid out of the treasury must be made pursuant to an
appropriation made by law. More significantly, our Constitution does not prescribe any particular form
of words or religious recitals in which an authorization or appropriation by Congress shall be made,
except that it be “made by law” such as precisely the authorization under the questioned presidential
decrees. In other words xxx an appropriation may be made impliedly (as by past but subsisting
legislations) as well as expressly for the current fiscal year (as by enactment of laws by the present
Congress). The Congressional authorization may be embodied in annual laws, such as a general
appropriations act or in special provisions of laws of general or special application which appropriate
public funds for specific public purposes, such as the questioned decrees.
Osmeña v. Orbos

https://lawphil.net/judjuris/juri1993/mar1993/gr_99886_1993.html

G.R. No. 99886 March 31, 1993

JOHN H. OSMEÑA, petitioner,

vs.
OSCAR ORBOS, in his capacity as Executive Secretary; JESUS ESTANISLAO, in his capacity as Secretary
of Finance; WENCESLAO DELA PAZ, in his capacity as Head of the Office of Energy Affairs; REX V.
TANTIONGCO, and the ENERGY REGULATORY BOARD, respondents.

Nachura & Sarmiento for petitioner.

The Solicitor General for public respondents.

Facts.

 By PD 1956, a special account in the general fund designated as the Oil Price Stabilization Fund
(OPSF) was created. The OPSF was designed to minimize frequent price changes by reimbursing
oil companies for the cost increases brought about by exchange rate adjustments and increases
in the world market price of oil.
 Subsequently, by EO 1024, the OPSF was reclassified into a “trust liability account” and was
ordered released from the National Treasury to the Ministry of Energy. The same EO also
authorized the investment of the fund in govt securities, with the earnings from such accruing to
the fund. As the OPSF is now in a balance deficit, the Energy Regulatory Board issued an order
approving the increase in pump prices of petroleum products.
 Petitioner avers that the reclassification is a violation of Sec 29(3), Art VI of the Constitution as it
authorized the monies collected for the OPSF to be channeled to another govt objective and not
maintained in a special account in the general fund. He maintains the monies collected for the
OPSF must be treated as a “special fund” and not a “trust account”

ISSUE

Is the “trust liability account” violative of Sec 29(3), Art VI of the Constitution?

HELD

No. Petitioner’s averment is premised on the view that the powers granted to the ERB partake
of the nature of the taxation power of the State.

RATIO
It assumes that the OPSF is a form of revenue measure drawing from a special tax to be expended for a special purpose. This is
not quite correct. It is right to say that the stabilization fees collected are in the nature of a tax. The fact that the State has taken
possession of moneys pursuant to law is sufficient to constitute them State funds. However, the tax collected is not in a pure
exercise of the taxing power. It is levied with a regulatory purpose, to provide a means for the stabilization of [oil prices]. The
levy is primarily in the exercise of the police power of the State. Moreover, that the OPSF is a special fund is plain from the fact
that it is segregated from the general fund; and while it is placed in what the law refers to as a “trust liability account,” the fund
nonetheless remains subject to the scrutiny and review of the Commission on Audit. The Court is satisfied that these measures
comply with the constitutional description of a “special fund.”