1. MARIA CAROLINA P. ARAULLO v. BENIGNO SIMEON C.

AQUINO III, GR
No. 209287, 2014-07-01
Facts:
For resolution are the consolidated petitions assailing the constitutionality of the
Disbursement Acceleration Program (DAP), National Budget Circular (NBC) No. 541,
and related issuances of the Department of Budget and Management (DBM)
implementing the DAP.
At the core of the controversy is Section 29(1) of Article VI of the 1987 Constitution, a
provision of the fundamental law that firmly ordains that "[n]o money shall be paid out of
the Treasury except in pursuance of an appropriation made by law."
Used constitutional powers under Sec. 25(5) as a guise to use money out of the
treasury without an appropriation made by law... indicate that the DAP contravened this
provision by allowing the Executive to allocate public money pooled from programmed
and unprogrammed funds of its various agencies in the guise of the President
exercising his... constitutional authority under Section 25(5) of the 1987 Constitution to
transfer funds out of savings to augment the appropriations of offices within the
Executive Branch of the Government.
Sen. Jinggoy Ejercito Estrada... had been allotted an additional P50 Million each as
"incentive" for voting in favor of the impeachment of Chief Justice Renato C. Corona.
Abad: Releases to Senators Part of Spending Acceleration Program, explaining that the
funds released to the Senators had been part of... the DAP, a program designed by the
DBM to ramp up spending to accelerate economic expansion.
He clarified that the funds had been released to the Senators based on their letters of
request for funding
He explained that the funds under the DAP were usually taken from (1) unreleased
appropriations under Personnel Services; (2) unprogrammed funds; (3) carry-over
appropriations unreleased from the previous year; and (4) budgets for slow-moving
items or projects that had been realigned to support faster-disbursing projects.
The DBM soon came out to claim in its website that the DAP releases had been
sourced from savings generated by the Government, and from unprogrammed funds;
and that the savings had been derived from (1) the pooling of unreleased
appropriations, like... unreleased Personnel Services appropriations that would lapse at
the end of the year, unreleased appropriations of slow-moving projects and
discontinued projects per zero-based budgeting findings; and (2) the withdrawal of
unobligated allotments also for slow-moving programs and projects that had been
earlier released to the agencies of the National Government.
The DBM listed the following as the legal bases for the DAP's use of savings,
Why DAP is legal according to DBM
(1) Section 25(5), Article VI of the 1987 Constitution, which granted to the President the
authority to augment an item for his office in the general appropriations... law;
(2) Section 49 (Authority to Use Savings for Certain Purposes) and Section 38
(Suspension of Expenditure Appropriations), Chapter 5, Book VI of Executive Order
(EO) No. 292 (Administrative Code of 1987); and
(3) the General Appropriations Acts (GAAs) of 2011, 2012 and 2013, particularly their
provisions on the (a) use of savings; (b) meanings of savings and augmentation; and (c)
priority in the use of savings.
Issues:
a. Procedural Issue: whether there is a controversy ripe for judicial determination,
and the standing of petitioners.
Substantive Issues:
B. Whether or not the DAP violates Sec. 29, Art. VI of the 1987 Constitution, which
provides: "No money shall be paid out of the Treasury except in pursuance of an
appropriation made by law."
Issue pertinent to Sec. 25
C. Whether or not the DAP, NBC No. 541, and all other executive issuances allegedly
implementing the DAP violate Sec. 25(5), Art. VI of the 1987 Constitution insofar as:
(a) They treat the unreleased appropriations and unobligated allotments withdrawn from
government agencies as "savings" as the term is used in Sec. 25(5), in relation to the
provisions of the GAAs of 2011, 2012 and 2013;
(b) They authorize the disbursement of funds for projects or programs not provided in
the GAAs for the Executive Department; and
(c) They "augment" discretionary lump sum appropriations in the GAAs
D. Whether or not the DAP violates: (1) the Equal Protection Clause, (2) the system of
checks and balances, and (3) the principle of public accountability enshrined in the 1987
Constitution considering that it authorizes the release of funds upon the request of...
legislators.
E. Whether or not factual and legal justification exists to issue a temporary restraining
order to restrain the implementation of the DAP, NBC No. 541, and all other executive
issuances allegedly implementing the DAP.
F. Whether or not the release of unprogrammed funds under the DAP was in accord
with the GAAs.
Ruling:
Procedural Issue:... a) The petitions under Rule 65 are... proper remedies
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.
b) Requisites for the exercise of the power... of judicial review were complied with
(1) there must be an actual case or justiciable controversy before the Court; (2) the
question before the Court must be ripe for adjudication; (3) the person challenging the
act must be a... proper party; and (4) the issue of constitutionality must be raised at the
earliest opportunity and must be the very litis mota of the case
Under their respective circumstances, each of the petitioners has established sufficient
interest in the outcome of the controversy as to confer locus standi on each of them.
II.
Substantive Issues

1.

Overview of the Budget System

PAP... c. DAP was not an appropriation... measure; hence, no appropriation... law was
required to adopt or to... implement it... that no law was necessary for the adoption and
implementation of the DAP because of its being neither a fund nor an appropriation, but
a program or an administrative system of prioritizing spending; and that the adoption of
the DAP was by virtue of the... authority of the President as the Chief Executive to
ensure that laws were faithfully executed.
Main ratio under Sec. 25(5)

3.

Unreleased appropriations and withdrawn... unobligated allotments under the DAP...

were not savings, and the use of such... appropriations contravened Section 25(5),...
Article VI of the 1987 Constitution.
The management... and utilization of the public wealth inevitably demands a most
careful scrutiny of whether the Executive's implementation of the DAP was consistent
with the Constitution, the relevant GAAs and other existing laws.
a. Although executive discretion... and flexibility are necessary in... the execution of the
budget, any... transfer of appropriated funds... should conform to Section 25(5),... Article
VI of the Constitution
The heads of offices, particularly the President, require flexibility in their operations
under performance budgeting to enable them to make whatever adjustments are
needed to meet established work goals under changing conditions.
the power to transfer funds can give the President the flexibility to meet unforeseen
events that may otherwise impede the efficient implementation of the PAPs set by
Congress in the GAA.
Congress has traditionally allowed much flexibility to the President in allocating funds
pursuant to the GAAs,[129] particularly when the funds are grouped to form lump sum
accounts.
The DAP as a strategy to improve the country's economic... position was one policy that
the President decided to carry out in order to fulfill his mandate under the GAAs.
Denying to the Executive flexibility in the expenditure process would be
counterproductive
Were Congress to control expenditures by confining administrators to narrow statutory
details, it would perhaps protect its power of... the purse but it would not protect the
purse itself. The realities and complexities of public policy require executive discretion
for the sound management of public funds.
In contrast, by allowing to the heads of offices some power to transfer funds within their
respective offices, the Constitution itself ensures the fiscal autonomy of their offices,
and at the same time maintains the separation of powers among the three main
branches of the
Government.
In the case of the President, the power to transfer funds from one item to another within
the Executive has not been the mere offshoot of established usage, but has emanated
from law itself.
The 1973 Constitution explicitly and categorically prohibited the transfer of funds from
one item to another, unless Congress enacted a law authorizing the President, the
Prime Minister, the Speaker, the Chief Justice of the Supreme Court, and the heads of
the Constitutional
Commissions to transfer funds for the purpose of augmenting any item from savings in
another item in the GAA of their respective offices.
was further constricted by the condition that the funds to be transferred should come
from... savings from another item in the appropriation of the office
PD No. 1177, providing in its Section 44
Section 44. Authority to Approve Fund Transfers. The President shall have the authority
to transfer any fund appropriated for the different departments, bureaus, offices and
agencies of the Executive Department which are included in the General
Appropriations Act, to any program, project, or activity of any department, bureau or
office included in the General Appropriations Act or approved after its enactment.
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 Article VIII, Section 16 (5) of the Constitution.
In Demetria v. Alba, however, the Court struck down the first paragraph of Section 44
for contravening Section 16(5) of the 1973 Constitution
Paragraph 1 of Section 44 of P.D. No. 1177 unduly over-extends the privilege granted
under said Section 16. It empowers the President to indiscriminately transfer funds from
one department, bureau, office or agency of the Executive Department to any program,
project... or activity of any department, bureau or office included in the General
Appropriations Act or approved after its enactment, without regard as to whether or not
the funds to be transferred are actually savings in the item from which the same are to
be taken, or whether or not... the transfer is for the purpose of augmenting the item to
which said transfer is to be made. It does not only completely disregard the standards
set in the fundamental law, thereby amounting to an undue delegation of legislative
powers, but likewise goes beyond the tenor... thereof. Indeed, such constitutional
infirmities render the provision in question null and void
It is significant that Demetria was promulgated 25 days after the ratification by the
people of the 1987 Constitution, whose Section 25(5) of Article VI is identical to Section
16(5), Article VIII of the 1973 Constitution,... The foregoing history makes it evident that
the Constitutional Commission included Section 25(5), supra, to keep a tight rein on the
exercise of the power to transfer funds appropriated by Congress by the President and
the other high officials of the Government named therein.
The only exception is found in Section 25 (5), Article VI of the Constitution, by which 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
are authorized to... transfer appropriations to augment any item in the GAA for their
respective offices from the savings in other items of their respective appropriations. The
plain language of the constitutional restriction leaves no room for the petitioner's
posture, which we should now... dispose of as untenable.
It bears emphasizing that the exception in favor of the high officials named in Section
25(5), Article VI of the Constitution limiting the authority to transfer savings only to
augment another item in the GAA is strictly but reasonably construed as exclusive.
Accordingly, we should interpret Section 25(5), supra, in the context of a limitation on
the President's discretion over the appropriations during the Budget Execution Phase.
b. Requisites for the valid transfer... of appropriated funds under Section
25(5), Article VI of the 1987
Constitution... b.1. First Requisite GAAs of 2011... and 2012 lacked valid provisions to...
authorize transfers of funds under... the DAP; hence, transfers under the
DAP were unconstitutional
Section 25(5), supra, not being a self-executing provision of the Constitution, must have
an implementing law for it to be operative.
the GAAs should expressly authorize the... transfer of funds.
Did the GAAs expressly authorize the transfer of funds?
2011 GAA... hereby... authorized to augment any item in this Act from savings in other
items of their respective appropriations.
2012 GAA... hereby... authorized to augment any item in this Act from savings in other
items of their respective appropriations
Even had a valid law authorizing the transfer of funds pursuant to Section 25(5), supra,
existed, there still remained two other requisites to be met, namely: that the source of
funds to be transferred were savings from appropriations within the respective offices;
and... that the transfer must be for the purpose of augmenting an item of appropriation
within the respective offices.
b.2. Second Requisite There were... no savings from which funds could... be sourced
for the DAP
The petitioners claim that the funds used in the DAP the unreleased appropriations and
withdrawn unobligated allotments were not actual savings within the context of Section
25(5), supra, and the relevant provisions of the GAAs. Belgica argues that "savings"
should be... understood to refer to the excess money after the items that needed to be
funded have been funded, or those that needed to be paid have been paid pursuant to
the budget.[146] The petitioners posit that there could be savings only when the PAPs
for which the... funds had been appropriated were actually implemented and completed,
or finally discontinued or abandoned. They insist that savings could not be realized with
certainty in the middle of the fiscal year; and that the funds for "slow-moving" PAPs
could not be considered as savings... because such PAPs had not actually been
abandoned or discontinued yet.[147] They stress that NBC No. 541, by allowing the
withdrawn funds to be reissued to the "original program or project from which it was
withdrawn," conceded that the PAPs from which the... supposed savings were taken
had not been completed, abandoned or discontinu
We partially find for the petitioners.
The first principle is that Congress wields the power of the purse. Congress decides
how the budget will be spent; what PAPs to fund; and the amounts of money to be
spent for each PAP
The... second principle is that the Executive, as the department of the Government
tasked to enforce the laws, is expected to faithfully execute the GAA and to spend the
budget in accordance with the provisions of the GAA
The third principle is that in... making the President's power to augment operative under
the GAA, Congress recognizes the need for flexibility in budget execution. In so doing,
Congress diminishes its own power of the purse, for it delegates a fraction of its power
to the Executive.
But Congress does not... thereby allow the Executive to override its authority over the
purse as to let the Executive exceed its delegated authority... fourth principle is that
savings should be actual. "Actual" denotes something that is real or substantial, or
something that exists... presently in fact, as opposed to something that is merely
theoretical, possible, potential or hypothetical.[150]
The foregoing principles caution us to construe savings strictly against expanding the
scope of the power to augment.
The three instances listed in the GAAs' aforequoted definition were a sure indication
that savings could be generated only upon the purpose of the appropriation being
fulfilled, or upon the need for the appropriation being no longer existent.
The DBM declares that part of the savings brought under the DAP came from "pooling
of unreleased appropriations such as unreleased Personnel Services appropriations
which will lapse at the end of the year, unreleased appropriations of slow moving
projects and discontinued... projects per Zero-Based Budgeting findings."
The declaration of the DBM by itself does not state the clear legal basis for the
treatment of unreleased or unalloted appropriations as savings.
The fact alone that the appropriations are unreleased or unalloted is a mere description
of the status of the items as unalloted or... unreleased. They have not yet ripened into
categories of items from which savings can be generated.
Appropriations remain unreleased, for instance, because of noncompliance with
documentary requirements (like the Special
Budget Request), or simply because of the unavailability of funds. But the
appropriations do not actually reach the agencies to which they were allocated under
the GAAs, and have remained with the DBM technically speaking. Ergo, unreleased
appropriations refer to... appropriations with allotments but without disbursement
authority.
For us to consider unreleased appropriations as savings, unless these met the statutory
definition of savings, would seriously undercut the congressional power of the purse,
because such appropriations had not even reached and been used by the agency
concerned vis-à-vis the PAPs... for which Congress had allocated them.
Justice Carpio has validly observed in his Separate Concurring Opinion that MOOE
appropriations are deemed divided into twelve monthly allocations within the fiscal year;
hence, savings could be generated monthly from the excess or unused MOOE
appropriations other than the
Mandatory Expenditures and Expenditures for Business-type Activities because of the
physical impossibility to obligate and spend such funds as MOOE for a period that
already lapsed. Following this observation, MOOE for future months are not savings
and cannot be... transferred.
The petitioners accuse the respondents of forcing the generation of savings in order to
have a larger fund available for discretionary spending. They aver that the respondents,
by withdrawing unobligated allotments in the middle of the fiscal year, in effect deprived
funding for
PAPs with existing appropriations under the GAAs
We agree with the petitioners.
Contrary to the respondents' insistence, the withdrawals were upon the initiative of the
DBM itself. T
The petitioners assert that no law had authorized the withdrawal and transfer of
unobligated allotments and the pooling of unreleased appropriations; and that the
unbridled withdrawal of unobligated allotments and the retention of appropriated funds
were akin to the impoundment... of appropriations that could be allowed only in case of
"unmanageable national government budget deficit" under the GAAs,[157] thus violating
the provisions of the GAAs of 2011, 2012 and 2013 prohibiting the retention or
deduction of allotments.
The assertions of the petitioners are upheld
The Executive could not circumvent this provision by declaring unreleased
appropriations and unobligated allotments as savings prior to the end of the fiscal year.
b.3. Third Requisite No funds from... savings could be transferred under... the DAP to
augment deficient items... not provided in the GAA... an appropriation for any PAP must
first be determined to be deficient before it could be augmented from savings. Note is
taken of the fact that the 2013 GAA already made this quite clear, thus:... lthough the
OSG rightly contends that the Executive was authorized to spend in line with its
mandate to faithfully execute the laws (which included the GAAs), such authority did not
translate to unfettered discretion that allowed the President to substitute his own will
for... that of Congress.
He was still required to remain faithful to the provisions of the GAAs, given that his
power to spend pursuant to the GAAs was but a delegation to him from Congress.
Verily, the power to spend the public wealth resided in Congress, not in the
Executive.[174] Moreover, leaving the spending power of the Executive unrestricted
would threaten to undo the principle of separation of powers. [175]... b.4 Third Requisite
Cross-border... augmentations from savings were... prohibited by the Constitution
By providing that 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 the
Constitutional Commissions may be authorized to augment any item in the GAA "for
their respective offices,"
Section 25(5), supra, has delineated borders between their offices, such that funds
appropriated for one office are prohibited from crossing over to another office even in
the guise of augmentation of a deficient item or items. Thus, we call such transfers of
funds... cross-border transfers or cross-border augmentations.
To be sure, the phrase "respective offices" used in Section 25(5), supra, refers to the
entire Executive, with respect to the President; the Senate, with respect to the Senate
President; the House of Representatives, with respect to the Speaker; the Judiciary,
with... respect to the Chief Justice; the Constitutional Commissions, with respect to their
respective Chairpersons.
The respondents justified all the cross-border transfers thusly:
 99. The Constitution does not prevent the President from transferring savings of his
department to another department upon the latter's request, provided it is the
recipient department that uses such funds to augment its own appropriation. In
such a case, the

President merely gives the other department access to public funds but he cannot
dictate how they shall be applied by that department whose fiscal autonomy is
guaranteed by the Constitution.
Regardless of the variant characterizations of the cross-border transfers of funds, the
plain text of Section 25(5), supra, disallowing cross-border transfers was disobeyed.
Cross-border transfers, whether as augmentation, or as aid, were prohibited under
Section
25(5), supra.

4.

Sourcing the DAP from unprogrammed... funds despite the original revenue targets...
not having been exceeded was invalid
The petitioners point out that a condition for the release of the unprogrammed funds
was that the revenue collections must exceed revenue targets; and that the release of
the unprogrammed funds was illegal because such condition was not met.[191]
The respondents disagree, holding that the release and use of the unprogrammed funds
under the DAP were in accordance with the pertinent provisions of the GAAs. In
particular, the DBM avers that the unprogrammed funds could be availed of when any of
the following three instances... occur, to wit: (1) the revenue collections exceeded the
original revenue targets proposed in the BESFs submitted by the President to
Congress; (2) new revenues were collected or realized from sources not originally
considered in the BESFs; or (3) newly-approved loans for... foreign-assisted projects
were secured, or when conditions were triggered for other sources of funds, such as
perfected loan agreements for foreign-assisted projects.[192] This view of the DBM was
adopted by all the respondents in their Consolidated
Comment
We cannot, therefore, subscribe to the respondents' view.

5.

Equal protection, checks and balances,... and public accountability challenges

The denial of equal protection of any law should be an issue to be raised only by parties
who supposedly suffer it, and, in these cases, such parties would be the few legislators
claimed to have been discriminated against in the... releases of funds under the DAP.
The reason for the requirement is that only such affected legislators could properly and
fully bring to the fore when and how the denial of equal protection occurred, and explain
why there was a denial in their situation. The requirement was not... met here.
we have already held that the DAP and its implementing issuances were policies and...
acts that the Executive could properly adopt and do in the execution of the GAAs to the
extent that they sought to implement strategies to ramp up or accelerate the economy of
the country.

6.

Doctrine of operative fact was applicable

The doctrine of operative fact recognizes the existence of the law or executive act prior
to the determination of its unconstitutionality as an operative fact that produced
consequences that cannot always be erased, ignored or disregarded. In short, it nullifies
the void law or... executive act but sustains its effects. It provides an exception to the
general rule that a void or unconstitutional law produces no effect.
In that context, as Justice Brion has clarified, the doctrine of operative fact can apply
only to the PAPs that can no longer be undone, and whose beneficiaries relied in good
faith on the validity of the DAP, but cannot apply to the authors, proponents and
implementors of the
DAP, unless there are concrete findings of good faith in their favor by the proper
tribunals determining their criminal, civil, administrative and other liabilities.
Dispositive
WHEREFORE, the Court PARTIALLY GRANTS the petitions for certiorari and
prohibition; and DECLARES the following acts and practices under the Disbursement
Acceleration Program, National Budget Circular No. 541 and related executive
issuances
UNCONSTITUTIONAL for being in violation of Section 25(5), Article VI of the 1987
Constitution and the doctrine of separation of powers, namely:
(a) The withdrawal of unobligated allotments from the implementing agencies, and the
declaration of the withdrawn unobligated allotments and unreleased appropriations as
savings prior to the end of the fiscal year and without complying with the statutory
definition of savings... contained in the General Appropriations Acts;
(b) The cross-border transfers of the savings of the Executive to augment the
appropriations of other offices outside the Executive; and
(c) The funding of projects, activities and programs that were not covered by any
appropriation in the General Appropriations Act.
The Court further DECLARES VOID the use of unprogrammed funds despite the
absence of a certification by the National Treasurer that the revenue collections
exceeded the revenue targets for non-compliance with the conditions provided in the
relevant General Appropriations
Acts.
Principles:

1.

Overview of the Budget System

The Philippine Budget Cycle
(1) Budget Preparation; (2) Budget Legislation; (3) Budget Execution; and (4)
Accountability... c.1. Budget Preparation
The budget preparation phase is commenced through the issuance of a Budget Call by
the DBM
The Budget Call is of two kinds, namely: (1) a National Budget Call, which is addressed
to all agencies, including state universities and colleges; and (2) a Corporate Budget
Call, which... is addressed to all government-owned and -controlled corporations
(GOCCs) and government financial institutions (GFIs)... the various departments and
agencies submit their respective Agency Budget Proposals to the DBM.
DBM bureaus thereafter review the Agency Budget Proposals and come up with
recommendations for the Executive Review Board, comprised by the DBM Secretary
and the DBM's senior officials. The discussions of the Executive Review
Board cover the prioritization of programs and their corresponding support vis-à-vis the
priority agenda of the National Government, and their implementation.
The DBM next consolidates the recommended agency budgets into the National
Expenditure Program (NEP) and a Budget of Expenditures and Sources of Financing
(BESF).
NEP provides the details of spending for each department and agency by program,
activity... or project (PAP), and is submitted in the form of a proposed GAA
Once the NEP and the BESF are approved by the President and the Cabinet, the DBM
prepares the budget documents for... submission to Congress.
The budget documents consist of: (1) the President's Budget Message, through which
the President explains the policy framework and budget priorities; (2) the BESF,
mandated by Section 22, Article VII of the Constitution,[68] which contains the
macroeconomic assumptions, public sector context, breakdown of the expenditures and
funding sources for the fiscal year and the two previous years; and (3) the NEP.
Public or government expenditures are generally classified into two categories,... (1)
capital expenditures or outlays; and (2) current operating expenditures.
Capital expenditures are the expenses whose usefulness lasts for more than one
year,... and which add to the assets of the Government,... Current operating
expenditures are the purchases of goods and services in current... consumption the
benefit of which does not extend beyond the fiscal yea
The two components of current expenditures are those for personal services (PS), and
those for maintenance and other operating expense
Public expenditures
(1) economic development expenditures (i.e., expenditures on agriculture and natural
resources, transportation and communications, commerce and industry, and other...
economic development efforts);[71] (2) social services or social development
expenditures (i.e., government outlay on education, public health and medicare, labor
and welfare and others);[72] (3) general government or... general public services
expenditures (i.e., expenditures for the general government, legislative services, the
administration of justice, and for pensions and gratuities); [73] (4) national defense
expenditures (i.e., sub-divided... into national security expenditures and expenditures for
the maintenance of peace and order);[74] and (5) public debt.
Public expenditures may further be classified according to the nature of funds, i.e.,
general fund, special fund or bond fund... public revenues complement public
expenditures and cover all income or receipts of the government treasury used to
support government expenditures
In the Philippines, public revenues are generally derived from the following sources, to
wit: (1) tax revenues (i.e., compulsory contributions to finance government activities);
[80] (2) capital revenues (i.e., proceeds... from sales of fixed capital assets or scrap
thereof and public domain, and gains on such sales like sale of public lands, buildings
and other structures, equipment, and other properties recorded as fixed assets);[81] (3)
grants (i.e.,... voluntary contributions and aids given to the Government for its operation
on specific purposes in the form of money and/or materials, and do not require any
monetary commitment on the part of the recipient);[82] (4) extra-ordinary income
(i.e., repayment of loans and advances made by government corporations and local
governments and the receipts and shares in income of the Banko Sentral ng Pilipinas,
and other receipts);[83] and (5) public borrowings (i.e., proceeds of... repayable
obligations generally with interest from domestic and foreign creditors of the
Government in general, including the National Government and its political
subdivisions).[84]... c.2. Budget Legislation
The Budget Legislation Phase covers the period commencing from the time Congress
receives the President's Budget, which is inclusive of the NEP and the BESF, up to the
President's approval of the GAA
Budget
Authorization Phase, and involves the significant participation of the Legislative through
its deliberations.
Initially, the President's Budget is assigned to the House of Representatives'
Appropriations Committee on First Reading
Appropriations Committee and its various Sub-Committees schedule and conduct
budget hearings to examine the PAPs of the... departments and agencies.
House of Representatives drafts the General Appropriations Bill (GA
The GAB is sponsored, presented and defended by the House of Representatives'
Appropriations Committee and Sub-Committees in plenary session. As with other laws,
the GAB is approved on Third Reading before the House of Representatives' version is
transmitted... to the Senate
The Senate's Finance Committee and its
Sub-Committees may submit the proposed amendments to the GAB to the plenary of
the Senate only after the House of Representatives has formally transmitted its version
to the Senate. The Senate version of the GAB is likewise approved on Third Readi
The House of Representatives and the Senate then constitute a panel each to sit in the
Bicameral Conference Committee for the purpose of discussing and harmonizing the
conflicting provisions of their versions of the GAB. The "harmonized" version of the GAB
is next... presented to the President for approv... c.3. Budget Execution
The Budget Execution Phase is primarily the function of the DBM, which is tasked to
perform the following procedures, namely: (1) to issue the programs and guidelines for
the... release of funds; (2) to prepare an Allotment and Cash Release Program; (3) to
release allotments; and (4) to issue disbursement authorities.
Thereafter, the DBM prepares an Allotment Release Program (ARP) and a Cash
Release Program (CRP). The ARP sets a limit for allotments issued in general and to a
specific agency. The CRP fixes the monthly, quarterly and annual disbursement...
levels.
Actual disbursement or spending of government funds terminates the Budget Execution
Phase and is usually accomplished through the Modified Disbursement Scheme under
wehich disbursements chargeable against the National Treasury are coursed through
the government... servicing banks.
c.4. Accountability
An agency's accountability may be examined and evaluated through (1) performance
targets and outcomes; (2) budget accountability reports; (3) review of agency
performance; and (4) audit conducted by the Commission on Audit (COA).

2.

Nature of the DAP as a fiscal plan... a. DAP was a program designed to... promote
economic growth
Administration's "blueprint for public policy" and reflects the Government's goals and...
strategies
The Administration would thereby accelerate government spending by: (1) streamlining
the implementation process through the clustering of infrastructure projects... of the
Department of Public Works and Highways (DPWH) and the Department of Education
(DepEd), and (2) frontloading PPP-related projects[107] due for implementation in the
following year.[108]
The DAP was a government policy or strategy designed to stimulate the economy
through accelerated spending.
In the context of the DAP's adoption and implementation being a function pertaining to
the Executive as the main actor during the Budget Execution Stage under its...
constitutional mandate to faithfully execute the laws, including the GAAs, Congress did
not need to legislate to adopt or to implement the DAP.
Congress could appropriate but would have nothing more to do during the Budget
Execution Stage. Indeed, appropriation was the... act by which Congress "designates a
particular fund, or sets apart a specified portion of the public revenue or of the money in
the public treasury, to be applied to some general object of governmental expenditure,
or to some individual purchase or expense."
'"In a strict sense, appropriation has been defined 'as nothing more than the legislative
authorization prescribed by the Constitution that money may be paid out of the
Treasury,' while... appropriation made by law refers to 'the act of the legislature setting
apart or assigning to a particular use a certain sum to be used in the payment of debt or
dues from the State to its creditors.'"
On the other hand, the President, in keeping with his duty to faithfully execute the laws,
had sufficient discretion during the execution of the budget to adapt the budget to
changes in the country's economic situation.
He could adopt a plan like the
DAP for the purpose. He could pool the savings and identify the PAPs to be funded
under the DAP.
In such actions, the Executive did not usurp the power vested in Congress under
Section 29(1), Article VI of the Constitution.
It is significant that Demetria was promulgated 25 days after the ratification by the
people of the 1987 Constitution, whose Section 25(5) of Article VI is identical to Section
16(5), Article VIII of the 1973 Constitution, to wit:
Section 25. x x x... x x x x

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.

Requisites for the valid transfer... of appropriated funds under Section

25(5), Article VI of the 1987
Constitution
The transfer of appropriated funds, to be valid under Section 25(5), supra, must be
made upon a concurrence of the following requisites, namely:
(1) There is a law authorizing 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
the Constitutional Commissions to transfer funds within their respective offices;
(2) The funds to be transferred are savings generated from the appropriations for their
respective offices; and
(3) The purpose of the transfer is to augment an item in the general appropriations law
for their respective offices.
Appropriations have been considered "released" if there has already been an allotment
or authorization to incur obligations and disbursement authority.
According to Philippine Constitution Association v. Enriquez:[159] "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."
Impoundment under the GAA is understood to mean the retention or deduction of
appropriations. The 2011 GAA authorized impoundment only in case of unmanageable
National Government budget deficit, to wit:
Augmentation implies the existence in this Act of a program, activity, or project with an
appropriation, which upon implementation, or subsequent evaluation of needed
resources, is determined to be deficient. In no case shall a non-existent program,...
activity, or project, be funded by augmentation from savings or by the use of
appropriations otherwise authorized in this Act.
It is the President who proposes the budget but it is Congress that has the final say on
matters of appropriations.[180] For this purpose, appropriation involves two governing
principles, namely: (1) "a Principle of the Public Fisc, asserting that all... monies
received from whatever source by any part of the government are public funds;" and (2)
"a Principle of Appropriations Control, prohibiting expenditure of any public money
without legislative authorization.
REPUBLIC of the PHILIPPINES, represented by SOLICITOR GENERAL JOSE C.
CALIDA v. MARIA LOURDES P.A. SERENO, sa

G.R. No. 237428, May 11, 2018 [J. Tijam, En Banc]

DOCTRINE OF THE CASE:

Quo warranto as a remedy to oust an ineligible public official may be availed of when
the subject act or omission was committed prior to or at the time of appointment or
election relating to an official’s qualifications to hold office as to render such
appointment or election invalid. Acts or omissions, even if it relates to the qualification of
integrity being a continuing requirement but nonetheless committed during the
incumbency of a validly appointed and/or validly elected official cannot be the subject of
a quo warranto proceeding, but of impeachment if the public official concerned is
impeachable and the act or omission constitutes an impeachable offense, or to
disciplinary, administrative or criminal action, if otherwise.

FACTS:

From 1986 to 2006, Sereno served as a member of the faculty of the University of the
Philippines-College of Law. While being employed at the UP Law, or from October 2003
to 2006, Sereno was concurrently employed as legal counsel of the Republic in two
international arbitrations known as the PIATCO cases, and a Deputy Commissioner of
the Commissioner on Human Rights.

The Human Resources Development Office of UP (UP HRDO) certified that there was
no record on Sereno’s file of any permission to engage in limited practice of profession.
Moreover, out of her 20 years of employment, only nine (9) Statement of Assets,
Liabilities, and Net Worth (SALN) were on the records of UP HRDO. In a manifestation,
she attached a copy of a tenth SALN, which she supposedly sourced from the “filing
cabinets” or “drawers of UP”. The Ombudsman likewise had no record of any SALN
filed by Sereno. The JBC has certified to the existence of one SALN. In sum, for 20
years of service, 11 SALNs were recovered.

On August 2010, Sereno was appointed as Associate Justice. On 2012, the position of
Chief Justice was declared vacant, and the JBC directed the applicants to submit
documents, among which are “all previous SALNs up to December 31, 2011” for those
in the government and “SALN as of December 31, 2011” for those from the private
sector. The JBC announcement further provided that “applicants with incomplete or out-
of-date documentary requirements will not be interviewed or considered for nomination.”
Sereno expressed in a letter to JBC that since she resigned from UP Law on 2006 and
became a private practitioner, she was treated as coming from the private sector and
only submitted three (3) SALNs or her SALNs from the time she became an Associate
Justice. Sereno likewise added that “considering that most of her government records in
the academe are more than 15 years old, it is reasonable to consider it infeasible to
retrieve all of those files,” and that the clearance issued by UP HRDO and CSC should
be taken in her favor. There was no record that the letter was deliberated upon. Despite
this, on a report to the JBC, Sereno was said to have “complete requirements.” On
August 2012, Sereno was appointed Chief Justice.

On August 2017, an impeachment complaint was filed by Atty. Larry Gadon against
Sereno, alleging that Sereno failed to make truthful declarations in her SALNs. The
House of Representatives proceeded to hear the case for determination of probable
cause, and it was said that Justice Peralta, the chairman of the JBC then, was not made
aware of the incomplete SALNs of Sereno. Other findings were made: such as pieces of
jewelry amounting to P15,000, that were not declared on her 1990 SALN, but was
declared in prior years’ and subsequent years’ SALNs, failure of her husband to sign
one SALN, execution of the 1998 SALN only in 2003

On February 2018, Atty. Eligio Mallari wrote to the OSG, requesting that the latter, in
representation of the Republic, initiate a quo warranto proceeding against Sereno. The
OSG, invoking the Court’s original jurisdiction under Section 5(1), Article VIII of the
Constitution in relation to the special civil action under Rule 66, the Republic, through
the OSG filed the petition for the issuance of the extraordinary writ of quo warranto to
declare as void Sereno’s appointment as CJ of the SC and to oust and altogether
exclude Sereno therefrom. [yourlawyersays]

Capistrano, Sen. De Lima, Sen. Trillianes, et. al., intervened. Sereno then filed a Motion
for Inhibition against AJ Bersamin, Peralta, Jardeleza, Tijam, and Leonardo-De Castro,
imputing actual bias for having testified against her on the impeachment hearing before
the House of Representatives.

Contentions:

Office of the Solicitor General (petitioner):

OSG argues that the quo warranto is an available remedy because what is being sought
is to question the validity of her appointment, while the impeachment complaint accuses
her of committing culpable violation of the Constitution and betrayal of public trust while
in office, citing Funa v. Chairman Villar, Estrada v. Desierto and Nacionalista Party v.
De Vera. OSG maintains that the phrase “may be removed from office” in Section 2,
Article XI of the Constitution means that Members of the SC may be removed through
modes other than impeachment.

OSG contends that it is seasonably filed within the one-year reglementary period under
Section 11, Rule 66 since Sereno’s transgressions only came to light during the
impeachment proceedings. Moreover, OSG claims that it has an imprescriptible right to
bring a quo warranto petition under the maxim nullum tempus occurit regi (“no time runs
against the king”) or prescription does not operate against the government. The State
has a continuous interest in ensuring that those who partake of its sovereign powers are
qualified. Even assuming that the one-year period is applicable to the OSG, considering
that SALNs are not published, the OSG will have no other means by which to know the
disqualification.

Moreover, OSG maintains that the SC has jurisdiction, citing A.M. No. 10-4-20-SC
which created a permanent Committee on Ethics and Ethical Standards, tasked to
investigate complaints involving graft and corruption and ethical violations against
members of the SC and contending that this is not a political question because such
issue may be resolved through the interpretation of the provisions of the Constitution,
laws, JBC rules, and Canons of Judicial Ethics.
OSG seeks to oust Sereno from her position as CJ on the ground that Sereno failed to
show that she is a person of proven integrity which is an indispensable qualification for
membership in the Judiciary under Section 7(3), Article VIII of the Constitution.
According to the OSG, because OSG failed to fulfill the JBC requirement of filing the
complete SALNs, her integrity remains unproven. The failure to submit her SALN, which
is a legal obligation, should have disqualified Sereno from being a candidate; therefore,
she has no right to hold the office. Good faith cannot be considered as a defense since
the Anti-Graft and Corrupt Practices Act (RA No. 3019) and Code of Conduct and
Ethical Standards for Public Officials and Employees (RA No. 6713) are special laws
and are thus governed by the concept of malum prohibitum, wherein malice or criminal
intent is completely immaterial.

Sereno (respondent):

Sereno contends that an impeachable officer may only be ousted through

impeachment, citing Section 2 of Article XI of the Constitution, and Mayor Lecaroz v.
Sandiganbayan, Cuenca v. Hon. Fernan, In Re: First lndorsement from Hon. Gonzales,
and Re: Complaint-Affidavit for Disbarment Against SAJ Antonio T. Carpio. Sereno
contends that the clear intention of the framers of the Constitution was to create an
exclusive category of public officers who can be removed only by impeachment and not
otherwise. Impeachment was chosen as the method of removing certain high-ranking
government officers to shield them from harassment suits that will prevent them from
performing their functions which are vital to the continued operations of government.
Sereno further argues that the word “may” on Section 2 of Article XI only qualifies the
penalty imposable after the impeachment trial, i.e., removal from office. Sereno
contends that the since the mode is wrong, the SC has no jurisdiction.

Sereno likewise argues that the cases cited by OSG is not in all fours with the present
case because the President and the Vice President may, in fact, be removed by means
other than impeachment on the basis of Section 4, Article VII of the 1987 Constitution
vesting in the Court the power to be the “sole judge” of all contests relating to the
qualifications of the President and the Vice-President. There is no such provision for
other impeachable officers. Moreover, on the rest of the cases cited by the OSG, there
is no mention that quo warranto may be allowed.

Sereno also argues that since a petition for quo warranto may be filed before the RTC,
such would result to a conundrum because a judge of lower court would have effectively
exercised disciplinary power and administrative supervision over an official of the
Judiciary much higher in rank and is contrary to Sections 6 and 11, Article VIII of the
Constitution which vests upon the SC disciplinary and administrative power over all
courts and the personnel thereof.

Sereno likewise posits that if a Member of the SC can be ousted through quo

warranto initiated by the OSG, the Congress’ “check” on the SC through impeachment
would be rendered inutile.
Furthermore, Sereno argues that it is already time-barred. Section 11, Rule 66 provides
that a petition for quo warranto must be filed within one (1) year from the “cause of
ouster” and not from the “discovery” of the disqualification.

Moreover, Sereno contends that the Court cannot presume that she failed to file her
SALNs because as a public officer, she enjoys the presumption that her appointment to
office was regular. OSG failed to overcome the presumption created by the certifications
from UP HRDO that she had been cleared of all administrative responsibilities and
charges. Her integrity is a political question which can only be decided by the JBC and
the President.

Regarding her missing SALNs, Sereno contends that the fact that SALNs are missing
cannot give rise to the inference that they are not filed. The fact that 11 SALNs were
filed should give an inference to a pattern of filing, not of non-filing.

Intervenors’ arguments:

The intervenors argue that it is not incumbent upon Sereno to prove to the JBC that she
possessed the integrity required by the Constitution; rather, the onus of determining
whether or not she qualified for the post fell upon the JBC. Moreover, submission of
SALNs is not a constitutional requirement; what is only required is the imprimatur of the
JBC. The intervenors likewise contend that “qualifications” such as citizenship, age, and
experience are enforceable while “characteristics” such as competence, integrity,
probity, and independence are mere subjective considerations.

ISSUES:

Preliminary issues:

1. Whether the Court should entertain the motion for intervention

2. Whether the Court should grant the motion for the inhibition of Sereno against
five Justices

Main Issues:

3. Whether the Court can assume jurisdiction and give due course to the instant
petition for quo warranto.
4. Whether Sereno may be the respondent in a quo warranto proceeding
notwithstanding the fact that an impeachment complaint has already been filed
with the House of Representatives.
5. Whether Sereno, who is an impeachable officer, can be the respondent in a  quo
warranto proceeding, i.e., whether the only way to remove an impeachable
officer is impeachment.
 6. Whether to take cognizance of the quo warranto proceeding is violative of the
principle of separation of powers
7. Whether the petition is outrightly dismissible on the ground of prescription
8. Whether the determination of a candidate’s eligibility for nomination is the sole
and exclusive function of the JBC and whether such determination. partakes of
the character of a political question outside the Court’s supervisory and review
powers;
9. Whether the filing of SALN is a constitutional and statutory requirement for the
position of Chief Justice.
10. If answer to ninth issue is in the affirmative, whether Sereno failed to file her
SALNs as mandated by the Constitution and required by the law and its
implementing rules and regulations
11. If answer to ninth issue is in the affirmative, whether Sereno filed SALNs are not
filed properly and promptly.
12. Whether Sereno failed to comply with the submission of SALNs as required by
the JBC
13. If answer to the twelfth issue is in the affirmative, whether the failure to submit
SALNs to the JBC voids the nomination and appointment of Sereno as Chief
Justice;
14. In case of a finding that Sereno is ineligible to hold the position of Chief Justice,
whether the subsequent nomination by the JBC and the appointment by the
President cured such ineligibility.
15. Whether Sereno is a de jure or a de facto officer.

[READ: Justice Leonen’s dissenting opinion: Q&A Format]

HELD:

Anent the first issue: The intervention is improper.

Intervention is a remedy by which a third party, not originally impleaded in the

proceedings, becomes a litigant therein for a certain purpose: to enable the third party
to protect or preserve a right or interest that may be affected by those proceedings. The
remedy of intervention is not a matter of right but rests on the sound discretion of the
court upon compliance with the first requirement on legal interest and the second
requirement that no delay and prejudice should result. The justification of one’s
“sense of patriotism and their common desire to protect and uphold the Philippine
Constitution”, and that of the Senator De Lima’s and Trillanes’ intervention that their
would-be participation in the impeachment trial as Senators-judges if the articles of
impeachment will be filed before the Senate as the impeachment court will be taken
away is not sufficient. The interest contemplated by law must be actual, substantial,
material, direct and immediate, and not simply contingent or expectant. Moreover, the
petition of quo warranto is brought in the name of the Republic. It is vested in the
people, and not in any private individual or group, because disputes over title to public
office are viewed as a public question of governmental legitimacy and not merely a
private quarrel among rival claimants.

Anent the second issue: There is no basis for the Associate Justices of the Supreme
Court to inhibit in the case.

It is true that a judge has both the duty of rendering a just decision and the duty of doing
it in a manner completely free from suspicion as to its fairness and as to his integrity.
However, the right of a party to seek the inhibition or disqualification of a judge who
does not appear to be wholly free, disinterested, impartial and independent in handling
the case must be balanced with the latter’s sacred duty to decide cases without fear of
repression. Bias must be proven with clear and convincing evidence. Those justices
who were present at the impeachment proceedings were armed with the requisite
imprimatur of the Court En Banc, given that the Members are to testify only on matters
within their personal knowledge. The mere imputation of bias or partiality is not enough
ground for inhibition, especially when the charge is without basis. There must be acts or
conduct clearly indicative of arbitrariness or prejudice before it can brand them with the
stigma of bias or partiality. Sereno’s call for inhibition has been based on speculations,
or on distortions of the language, context and meaning of the answers the Justices may
have given as sworn witnesses in the proceedings before the House.

Moreover, insinuations that the Justices of the SC are towing the line of President
Duterte in entertaining the quo warranto petition must be struck for being unfounded
and for sowing seeds of mistrust and discordance between the Court and the public.
The Members of the Court are beholden to no one, except to the sovereign Filipino
people who ordained and promulgated the Constitution. It is thus inappropriate to
misrepresent that the SolGen who has supposedly met consistent litigation success
before the SG shall likewise automatically and positively be received in the present quo
warranto action. As a collegial body, the Supreme Court adjudicates without fear or
favor. The best person to determine the propriety of sitting in a case rests with the
magistrate sought to be disqualified. [yourlawyersays]

Anent the third issue: A quo warranto petition is allowed against impeachable officials
and SC has jurisdiction.

The SC have concurrent jurisdiction with the CA and RTC to issue the extraordinary
writs, including quo warranto. A direct invocation of the SC’s original jurisdiction to issue
such writs is allowed when there are special and important reasons therefor, and in this
case, direct resort to SC is justified considering that the action is directed against the
Chief Justice. Granting that the petition is likewise of transcendental importance and
has far-reaching implications, the Court is empowered to exercise its power of judicial
review. To exercise restraint in reviewing an impeachable officer’s appointment is a
clear renunciation of a judicial duty. an outright dismissal of the petition based on
speculation that Sereno will eventually be tried on impeachment is a clear abdication of
the Court’s duty to settle actual controversy squarely presented before it. Quo
warranto proceedings are essentially judicial in character – it calls for the exercise of the
Supreme Court’s constitutional duty and power to decide cases and settle actual
controversies. This constitutional duty cannot be abdicated or transferred in favor of, or
in deference to, any other branch of the government including the Congress, even as it
acts as an impeachment court through the Senate.

To differentiate from impeachment, quo warranto involves a judicial determination of the

eligibility or validity of the election or appointment of a public official based on
predetermined rules while impeachment is a political process to vindicate the violation
of the public’s trust. In quo warranto proceedings referring to offices filled by
appointment, what is determined is the legality of the appointment. The title to a public
office may not be contested collaterally but only directly, by quo warranto proceedings.
usurpation of a public office is treated as a public wrong and carries with it public
interest, and as such, it shall be commenced by a verified petition brought in the name
of the Republic of the Philippines through the Solicitor General or a public prosecutor.
The SolGen is given permissible latitude within his legal authority in actions for quo
warranto, circumscribed only by the national interest and the government policy on the
matter at hand.

Anent the fourth issue: Simultaneous quo warranto proceeding and impeachment

proceeding is not forum shopping and is allowed.

Quo warranto and impeachment may proceed independently of each other as these

remedies are distinct as to (1) jurisdiction (2) grounds, (3) applicable rules pertaining to
initiation, filing and dismissal, and (4) limitations. Forum shopping is the act of a litigant
who repetitively availed of several judicial remedies in different courts, simultaneously or
successively, all substantially founded on the same transactions and the same essential
facts and circumstances, and all raising substantially the same issues, either pending in
or already resolved adversely by some other court, to increase his chances of obtaining
a favorable decision if not in one court, then in another. The test for determining forum
shopping is whether in the two (or more) cases pending, there is identity of parties,
rights or causes of action, and reliefs sought. The crux of the controversy in this quo
warranto proceedings is the determination of whether or not Sereno legally holds the
Chief Justice position to be considered as an impeachable officer in the first place. On
the other hand, impeachment is for respondent’s prosecution for certain impeachable
offenses. Simply put, while Sereno’s title to hold a public office is the issue in quo
warranto proceedings, impeachment necessarily presupposes that Sereno legally holds
the public office and thus, is an impeachable officer, the only issue being whether or not
she committed impeachable offenses to warrant her removal from office.

Moreover, the reliefs sought are different. respondent in a quo warranto proceeding

shall be adjudged to cease from holding a public office, which he/she is ineligible to
hold. Moreover, impeachment, a conviction for the charges of impeachable offenses
shall result to the removal of the respondent from the public office that he/she is legally
holding. It is not legally possible to impeach or remove a person from an office that
he/she, in the first place, does not and cannot legally hold or occupy.

Lastly, there can be no forum shopping because the impeachment proceedings before
the House is not the impeachment case proper, since it is only a determination of
probable cause. The impeachment case is yet to be initiated by the filing of the Articles
of Impeachment before the Senate. Thus, at the moment, there is no pending
impeachment case against Sereno. The process before the House is merely inquisitorial
and is merely a means of discovering if a person may be reasonably charged with a
crime.

Anent the fifth issue: Impeachment is not an exclusive remedy by which an invalidly
appointed or invalidly elected impeachable official may be removed from office.

The language of Section 2, Article XI of the Constitution does not foreclose a quo
warranto action against impeachable officers: “Section 2. The President, the Vice-
President, the Members of the Supreme Court, the Members of the Constitutional
Commissions, and the Ombudsman may be removed from office on impeachment for,
and conviction of, culpable violation of the Constitution, treason, bribery, graft and
corruption, other high crimes, or betrayal of public trust.” The provision uses the
permissive term “may” which denote discretion and cannot be construed as having a
mandatory effect, indicative of a mere possibility, an opportunity, or an option. In
American jurisprudence, it has been held that “the express provision for removal by
impeachment ought not to be taken as a tacit prohibition of removal by other methods
when there are other adequate reasons to account for this express provision.”

The principle in case law is that during their incumbency, impeachable officers cannot
be criminally prosecuted for an offense that carries with it the penalty of removal, and if
they are required to be members of the Philippine Bar to qualify for their positions, they
cannot be charged with disbarment. The proscription does not extend to actions
assailing the public officer’s title or right to the office he or she occupies. Even the PET
Rules expressly provide for the remedy of either an election protest or a petition for quo
warranto to question the eligibility of the President and the Vice-President, both of
whom are impeachable officers.

Further, that the enumeration of “impeachable offenses” is made absolute, that is, only
those enumerated offenses are treated as grounds for impeachment, is not equivalent
to saying that the enumeration likewise purport to be a complete statement of the
causes of removal from office. If other causes of removal are available, then other
modes of ouster can likewise be availed. To subscribe to the view that appointments or
election of impeachable officers are outside judicial review is to cleanse their
appointments or election of any possible defect pertaining to the Constitutionally-
prescribed qualifications which cannot otherwise be raised in an impeachment
proceeding. To hold otherwise is to allow an absurd situation where the appointment of
an impeachable officer cannot be questioned even when, for instance, he or she has
been determined to be of foreign nationality or, in offices where Bar membership is a
qualification, when he or she fraudulently represented to be a member of the Bar.

Anent the sixth issue: The Supreme Court’s exercise of its jurisdiction over a quo
warranto petition is not violative of the doctrine of separation of powers.

The Court’s assumption of jurisdiction over an action for quo warranto involving a

person who would otherwise be an impeachable official had it not been for a
disqualification, is not violative of the core constitutional provision that impeachment
cases shall be exclusively tried and decided by the Senate. Again, the difference
between quo warranto and impeachment must be emphasized. An action for quo
warranto does not try a person’s culpability of an impeachment offense, neither does a
writ of quo warranto conclusively pronounce such culpability. The Court’s exercise of its
jurisdiction over quo warranto proceedings does not preclude Congress from enforcing
its own prerogative of determining probable cause for impeachment, to craft and
transmit the Articles of Impeachment, nor will it preclude Senate from exercising its
constitutionally committed power of impeachment.

However, logic, common sense, reason, practicality and even principles of plain
arithmetic bear out the conclusion that an unqualified public official should be removed
from the position immediately if indeed Constitutional and legal requirements were not
met or breached. To abdicate from resolving a legal controversy simply because of
perceived availability of another remedy, in this case impeachment, would be to
sanction the initiation of a process specifically intended to be long and arduous and
compel the entire membership of the Legislative branch to momentarily abandon their
legislative duties to focus on impeachment proceedings for the possible removal of a
public official, who at the outset, may clearly be unqualified under existing laws and
case law.

For guidance, the Court demarcates that an act or omission committed prior to or at the
time of appointment or election relating to an official’s qualifications to hold office as to
render such appointment or election invalid is properly the subject of a quo
warranto petition, provided that the requisites for the commencement thereof are
present. Contrariwise, acts or omissions, even if it relates to the qualification of integrity,
being a continuing requirement but nonetheless committed during the incumbency of a
validly appointed and/or validly elected official, cannot be the subject of a quo
warranto proceeding, but of something else, which may either be impeachment if the
public official concerned is impeachable and the act or omission constitutes an
impeachable offense, or disciplinary, administrative or criminal action, if otherwise.

Anent the seventh issue: Prescription does not lie against the State.

The rules on quo warranto provides that “nothing contained in this Rule shall be
construed to authorize an action against a public officer or employee for his ouster from
office unless the same be commenced within one (1) year after the cause of such
ouster, or the right of the petitioner to hold such office or position, arose”. Previously,
the one-year prescriptive period has been applied in cases where private individuals
asserting their right of office, unlike the instant case where no private individual claims
title to the Office of the Chief Justice. Instead, it is the government itself which
commenced the present petition for quo warranto and puts in issue the qualification of
the person holding the highest position in the Judiciary.

Section 2 of Rule 66 provides that “the Solicitor General or a public prosecutor, when
directed by the President of the Philippines, or when upon complaint or otherwise he
has good reason to believe that any case specified in the preceding section can be
established by proof must commence such action.” It may be stated that ordinary
statutes of limitation, civil or penal, have no application to quo warranto proceeding
brought to enforce a public right. There is no limitation or prescription of action in an
action for quo warranto, neither could there be, for the reason that it was an action by
the Government and prescription could not be plead as a defense to an action by the
Government.

That prescription does not lie in this case can also be deduced from the very purpose of
an action for quo warranto. Because quo warranto serves to end a continuous
usurpation, no statute of limitations applies to the action. Needless to say, no prudent
and just court would allow an unqualified person to hold public office, much more the
highest position in the Judiciary. Moreover, the Republic cannot be faulted for
questioning Sereno’s qualification· for office only upon discovery of the cause of ouster
because even up to the present, Sereno has not been candid on whether she filed the
required SALNs or not. The defect on Sereno’s appointment was therefore not
discernible, but was, on the contrary, deliberately rendered obscure.

Anent the eighth issue: The Court has supervisory authority over the JBC includes
ensuring that the JBC complies with its own rules.

Section 8(1), Article VIII of the Constitution provides that “A Judicial and Bar Council is
hereby created under the supervision of the Supreme Court.” The power of supervision
means “overseeing or the authority of an officer to see to it that the subordinate officers
perform their duties.” JBC’s absolute autonomy from the Court as to place its non-action
or improper· actions beyond the latter’s reach is therefore not what the Constitution
contemplates. What is more, the JBC’s duty to recommend or nominate, although
calling for the exercise of discretion, is neither absolute nor unlimited, and is not
automatically equivalent to an exercise of policy decision as to place, in wholesale, the
JBC process beyond the scope of the Court’s supervisory and corrective powers. While
a certain leeway must be given to the JBC in screening aspiring magistrates, the same
does not give it an unbridled discretion to ignore Constitutional and legal requirements.
Thus, the nomination by the JBC is not accurately an exercise of policy or wisdom as to
place the JBC’s actions in the same category as political questions that the Court is
barred from resolving. [yourlawyersays]
[READ: Justice Leonen’s dissenting opinion: Q&A Format]

With this, it must be emphasized that qualifications under the Constitution cannot be
waived or bargained by the JBC, and one of which is that “a Member of the Judiciary
must be a person of proven competence, integrity, probity, and independence.
“Integrity” is closely related to, or if not, approximately equated to an applicant’s good
reputation for honesty, incorruptibility, irreproachable conduct, and fidelity to sound
moral and ethical standards.” Integrity is likewise imposed by the New Code of Judicial
Conduct and the Code of Professional Responsibility. The Court has always viewed
integrity with a goal of preserving the confidence of the litigants in the Judiciary. Hence,
the JBC was created in order to ensure that a member of the Supreme Court must be a
person of proven competence, integrity, probity, and independence.

Anent the ninth issue: The filing of SALN is a constitutional and statutory requirement.

Section 17, Article XI of the Constitution states that “A public officer or employee shall,
upon assumption of office and as often thereafter as may be required by law, submit a
declaration under oath of his assets, liabilities, and net worth.” This has likewise been
required by RA 3019 and RA 6713. “Failure to comply” with the law is a violation of law,
a “prima facie evidence of unexplained wealth, which may result in the dismissal from
service of the public officer.” It is a clear breach of the ethical standards set for public
officials and employees. The filing of the SALN is so important for purposes of
transparency and accountability that failure to comply with such requirement may result
not only in dismissal from the public service but also in criminal liability. Section 11 of
R.A. No. 6713 even provides that  non-compliance with this requirement is not only
punishable by imprisonment and/or a fine, it may also result in disqualification to hold
public office.

Because the Chief Justice is a public officer, she is constitutionally and statutorily
mandated to perform a positive duty to disclose all of his assets and liabilities.
According to Sereno herself in her dissenting opinion in one case, those who accept a
public office do so cum onere, or with a burden, and are considered as accepting its
burdens and obligations, together with its benefits. They thereby subject themselves to
all constitutional and legislative provisions relating thereto, and undertake to perform all
the duties of their office. The public has the right to demand the performance of those
duties. More importantly, while every office in the government service is a public trust,
no position exacts a greater demand on moral righteousness and uprightness of an
individual than a seat in the Judiciary.

Noncompliance with the SALN requirement indubitably·reflects on a person’s integrity. It

is not merely a trivial or a formal requirement. The contention that the mere non-filing
does not affect Sereno’s integrity does not persuade considering that RA 6713 and RA
3019 are malum prohibitum and not malum in se. Thus, it is the omission or commission
of that act as defined by the law, and not the character or effect thereof, that determines
whether or not the provision has been violated. Malice or criminal intent is completely
immaterial.

Anent the tenth issue: Sereno chronically failed to file her SALNs and thus violated the
Constitution, the law, and the Code of Judicial Conduct.

In Sereno’s 20 years of government service in UP Law, only 11 SALNs have been filed.
Sereno could have easily dispelled doubts as to the filing or nonfiling of the
unaccounted SALNs by presenting them before the Court. Yet, Sereno opted to
withhold such information or such evidence, if at all, for no clear reason. The Doblada
case, invoked by Sereno, cannot be applied, because in the Doblada case, there was a
letter of the head of the personnel of the branch of the court that the missing SALN
exists and was duly transmitted and received by the OCA as the repository agency. In
Sereno’s case, the missing SALNs are neither proven to be in the records of nor was
proven to have been sent to and duly received by the Ombudsman as the repository
agency. The existence of these SALNs and the fact of filing thereof were neither
established by direct proof constituting substantial evidence nor by mere inference.
Moreover, the statement of the Ombudsman is categorical: “based on records on
file, there is no SALN filed by [Sereno] for calendar years 1999 to 2009 except SALN
ending December 1998.” This leads the Court to conclude that Sereno did not indeed
file her SALN.

For this reason, the Republic was able to discharge its burden of proof with the
certification from UP HRDO and Ombudsman, and thus it becomes incumbent upon
Sereno to discharge her burden of evidence. Further, the burden of proof in a quo
warranto proceeding is different when it is filed by the State in that the burden rests
upon the respondent.

In addition, contrary to what Sereno contends, being on leave does not exempt her from
filing her SALN because it is not tantamount to separation from government service.
The fact that Sereno did not receive any pay for the periods she was on leave does not
make her a government worker “serving in an honorary capacity” to be exempted from
the SALN laws on RA 6713. [yourlawyersays]

Neither can the clearance and certification of UP HRDO be taken in favor of Sereno.
During the period when Sereno was a professor in UP, concerned authorized official/s
of the Office of the President or the Ombudsman had not yet established compliance
procedures for the review of SALNs filed by officials and employees of State Colleges
and Universities, like U.P. The ministerial duty of the head of office to issue compliance
order came about only on 2006 from the CSC. As such, the U.P. HRDO could not have
been expected to perform its ministerial duty of issuing compliance orders to Sereno
when such rule was not yet in existence at that time. Moreover, the clearance are not
substitutes for SALNs. The import of said clearance is limited only to clearing Sereno of
her academic and administrative responsibilities, money and property accountabilities
and from administrative charges as of the date of her resignation.
Neither can Sereno’s inclusion in the matrix of candidates with complete requirements
and in the shortlist nominated by the JBC confirm or ratify her compliance with the
SALN requirement. Her inclusion in the shortlist of candidates for the position of Chief
Justice does not negate, nor supply her with the requisite proof of integrity. She should
have been disqualified at the outset. Moreover, the JBC En Banc cannot be deemed to
have considered Sereno eligible because it does not appear that Sereno’s failure to
submit her SALNs was squarely addressed by the body. Her inclusion in the shortlist of
nominees and subsequent appointment to the position do not estop the Republic or this
Court from looking into her qualifications. Verily, no estoppel arises where the
representation or conduct of the party sought to be estopped is due to ignorance
founded upon an innocent mistake

Anent the eleventh issue: Sereno failed to properly and promptly file her SALNs, again
in violation of the Constitutional and statutory requirements    .

Failure to file a truthful, complete and accurate SALN would likewise amount to
dishonesty if the same is attended by malicious intent to conceal the truth or to make
false statements. The suspicious circumstances include: 1996 SALN being
accomplished only in 1998; 1998 SALN only filed in 2003; 1997 SALN only notarized in
1993; 2004-2006 SALNs were not filed which were the years when she received the
bulk of her fees from PIATCO cases, 2006 SALN was later on intended to be for 2010,
gross amount from PIATCO cases were not reflected, suspicious increase of
P2,700,000 in personal properties were seen in her first five months as Associate
Justice. It is therefore clear as day that Sereno failed not only in complying with the
physical act of filing, but also committed dishonesty betraying her lack of integrity,
honesty and probity. The Court does not hesitate to impose the supreme penalty of
dismissal against public officials whose SALNs were found to have contained
discrepancies, inconsistencies and non-disclosures.

Anent the twelfth issue: Sereno failed to submit the required SALNs as to qualify for
nomination pursuant to the JBC rules.

The JBC required the submission of at least ten SALNs from those applicants who are
incumbent Associate Justices, absent which, the applicant ought not to have been
interviewed, much less been considered for nomination. From the minutes of the
meeting of the JBC, it appeared that Sereno was singled out from the rest of the
applicants for having failed to submit a single piece of SALN for her years of service in
UP Law. It is clear that JBC did not do away with the SALN requirement, but still
required substantial compliance. Subsequently, it appeared that it was only Sereno who
was not able to substantially comply with the SALN requirement, and instead of
complying, Sereno wrote a letter containing justifications why she should no longer be
required to file the SALNs: that she resigned from U.P. in 2006 and then resumed
government service only in 2009, thus her government service is not continuous; that
her government records are more than 15 years old and thus infeasible to retrieve; and
that U.P. cleared her of all academic and administrative responsibilities and charges.
These justifications, however, did not obliterate the simple fact that Sereno submitted
only 3 SALNs to the JBC in her 20-year service in U.P., and that there was nary an
attempt on Sereno’s part to comply. Moreover, Sereno curiously failed to mention that
she did not file several SALNs during the course of her employment in U.P. Such failure
to disclose a material fact and the concealment thereof from the JBC betrays any claim
of integrity especially from a Member of the Supreme Court. [yourlawyersays]

Indubitably, Sereno not only failed to substantially comply with the submission of the
SALNs but there was no compliance at all. Dishonesty is classified as a grave offense
the penalty of which is dismissal from the service at the first infraction. A person aspiring
to public office must observe honesty, candor and faithful compliance with the law.
Nothing less is expected. Dishonesty is a malevolent act that puts serious doubt upon
one’s ability to perform his duties with the integrity and uprightness demanded of a
public officer or employee. For these reasons, the JBC should no longer have
considered Sereno for interview.

Moreover, the fact that Sereno had no permit to engage in private practice while in UP,
her false representations that she was in private practice after resigning from UP when
in fact she was counsel for the government, her false claims that the clearance from UP
HRDO is proof of her compliance with SALNs requirement, her commission of tax fraud
for failure to truthfully declare her income in her ITRs for the years 2007-2009, procured
a brand new Toyota Land Cruiser worth at least P5,000,000, caused the hiring of Ms.
Macasaet without requisite public bidding, misused P3,000,000 of government funds for
hotel accommodation at Shangri-La Boracay as the venue of the 3 rd ASEAN Chief
Justices meeting, issued a TRO in Coalition of Associations of Senior Citizens in the
Philippines v. COMELEC contrary to the Supreme Court’s internal rules, manipulated
the disposition of the DOJ request to transfer the venue of the Maute cases outside of
Mindanao, ignored rulings of the Supreme Court with respect to the grant of
survivorship benefits which caused undue delay to the release of survivorship benefits
to spouses of deceased judges and Justices, manipulated the processes of the JBC to
exclude then SolGen, now AJ Francis Jardeleza, by using highly confidential document
involving national security against the latter among others, all belie the fact that Sereno
has integrity.

Anent the thirteenth issue: Sereno’s failure to submit to the JBC her SALNs for
several years means that her integrity was not established at the time of her application

The requirement to submit SALNs is made more emphatic when the applicant is eyeing
the position of Chief Justice. On the June 4, 2012, JBC En Banc meeting, Senator
Escudero proposed the addition of the requirement of SALN in order for the next Chief
Justice to avoid what CJ Corona had gone through. Further, the failure to submit the
required SALNs means that the JBC and the public are divested of the opportunity to
consider the applicant’s fitness or propensity to commit corruption or dishonesty. In
Sereno’s case, for example, the waiver of the confidentiality of bank deposits would be
practically useless for the years that she failed to submit her SALN since the JBC
cannot verify whether the same matches the entries indicated in the SALN.

Anent the fourteenth issue: Sereno’s ineligibility for lack of proven integrity cannot be
cured by her nomination and subsequent appointment as Chief Justice.

Well-settled is the rule that qualifications for public office must be possessed at the time
of appointment and assumption of office and also during the officer’s entire tenure as a
continuing requirement. The voidance of the JBC nomination as a necessary
consequence of the Court’s finding that Sereno is ineligible, in the first place, to be a
candidate for the position of Chief Justice and to be nominated for said position follows
as a matter of course. The Court has ample jurisdiction to do so without the necessity of
impleading the JBC as the Court can take judicial notice of the explanations from the
JBC members and the OEO. he Court, in a quo warranto proceeding, maintains the
power to issue such further judgment determining the respective rights in and to the
public office, position or franchise of all the parties to the action as justice requires.

Neither will the President’s act of appointment cause to qualify Sereno. Although the
JBC is an office constitutionally created, the participation of the President in the
selection and nomination process is evident from the composition of the JBC itself.

An appointment is essentially within the discretionary power of whomsoever it is vested,

subject to the only condition that the appointee should possess the qualifications
required by law. While the Court surrenders discretionary appointing power to the
President, the exercise of such discretion is subject to the non-negotiable requirements
that the appointee is qualified and all other legal requirements are satisfied, in the
absence of which, the appointment is susceptible to attack.

Anent the fifteenth issue: Sereno is a de facto officer removable through quo

warranto

The effect of a finding that a person appointed to an office is ineligible therefor is that his
presumably valid appointment will give him color of title that confers on him the status of
a de facto officer. For lack of a Constitutional qualification, Sereno is ineligible to hold
the position of Chief Justice and is merely holding a colorable right or title thereto. As
such, Sereno has never attained the status of an impeachable official and her removal
from the office, other than by impeachment, is justified. The remedy, therefore, of a quo
warranto at the instance of the State is proper to oust Sereno from the appointive
position of Chief Justice. [yourlawyersays]

DISPOSITIVE PORTION:

 
WHEREFORE, the Petition for Quo Warranto is GRANTED.

Sereno is found DISQUALIFIED from and is hereby adjudged GUILTY of

UNLAWFULLY HOLDING and EXERCISING the OFFICE OF THE CHIEF JUSTICE.
Accordingly, Sereno is OUSTED and EXCLUDED therefrom.

The position of the Chief Justice of the Supreme Court is declared vacant and the
Judicial and Bar Council is directed to commence the application and nomination
process.

This Decision is immediately executory without need of further action from the Court.

Sereno is ordered to SHOW CAUSE within ten (10) days from receipt hereof why she
should not be sanctioned for violating the Code of Professional Responsibility and the
Code of Judicial Conduct for transgressing the sub judice rule and for casting
aspersions and ill motives to the Members of the Supreme Court.