PHILCONSA v.

Enriquez

Summary Cases:

● Philippine Constitution Association (PHILCONSA), et al. vs. Salvador Enriquez 235 SCRA 506

Subject:

Locus Standi of Legislative Members; Countrywide Development Fund; Augment Power; Item-Veto
Power of the President; Doctrine of “Inappropriate Provision”

Facts:

The General Appropriation Bill of 1994 was approved by both houses of Congress. As passed, it
imposed conditions and limitations on certain items of appropriations in the proposed budget previously
submitted by the President. It also authorized members of Congress to propose and identify projects in
the "pork barrels" allotted to them and to realign their respective operating budgets.

Congress presented the said bill to the President for consideration and approval. The President signed
the bill into law to become RA 7663 (GAA of 1994). However, he exercised his veto powers over specific
provisions of the bill and imposed conditions on other provisions. There was no move by Congress to
override any veto done by the President.

Suing as members of the Senate and taxpayers, petitioners question the constitutionality of: (1) the
Countrywide Development Fund (2) the conditions imposed by the President in the items of the GAA of
1994 and (2) the veto of the special provision in the appropriation for debt service.

Held:

Locus Standi

1. A member of the Senate, and of the House of Representatives has the legal standing to question the
validity of a presidential veto or a condition imposed on an item in an appropriation bill.

(a) Where the veto is claimed to have been made without or in excess of the authority vested on the
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President by the Constitution, the issue of an impermissible intrusion of the executive into the domain of
the legislature arises

(b) An act of the executive which injures the institution of Congress causes a derivative but nonetheless
substantial injury, which can be questioned by a member of Congress. In such a case, any member of
Congress can have a resort to the courts.

(c) It is true that the Constitution provides a mechanism for overriding a veto (Art. VI, Sec. 27 [1]). Said
remedy, however, is available only when the presidential veto is based on policy or political
considerations but not when the veto is claimed to be ultra vires.

Countrywide Development Fund

2. The Court rejected petitioners’ claim that the power given to the members of Congress to propose and
identify the projects and activities to be funded by the Countrywide Development Fund (CDF) is an
encroachment by the legislature on executive power for these do not involve the making or amendment
of laws-- the only function given to the Congress by the Constitution.

3. The power of appropriation given to Congress carries with it the power to specify the project or activity
to be funded under the appropriation law. Executive function under the CDF involves implementation of
the priority projects specified in the law.

4. While individual members of Congress are allowed to identify the specific projects which are to be
funded, it is still the President who shall examine the proposals submitted to see if they fall within the
specific items of expenditures for which the CDF was set up. It is still the President who shall implement
them. The proposals and identifications made by the members of Congress are merely recommendatory.

Augment Power (Realignment of Operation Expenses)

5. The Court rejected petitioners’ argument that the provision allowing the individual members of
Congress to ‘realign his allocation for operational expenses to any other expense category provided the
total of said allocation is not exceeded’ is against Section 25(A), Article VI of the Constitution. Such
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provisiongrants the (1) President, (2) Senate President, (3) Speaker of the House, (4) the Chief Justice,
and (5) the heads of the Constitutional Commissions the power to augment items in an appropriation act
for their respective offices from savings in other items of their appropriations, whenever there is a law
authorizing such augmentation.

6. In rejecting the petitioners’ contention, the Court held that, under the special provision in the GAA
authorizing such realignment of operational expenses, the individual members only determine the
necessity of the realignment. They is so because they are the ones who know whether there are
deficiencies in other items of their operating expenses that need augmentation. However,it is still the
Senate President or the Speaker of the House, as the case may be, who shall approve the realignment.

Highest Priority for Debt Service

7. Petitioners urged that Congress cannot give debt service the highest priority in the GAA of 1994
because under the Constitution it should be education that is entitled to the highest funding in
accordance withSection 5(5), Article XIV.

8. The Court has already ruled in Guingona, Jr. v. Carague that such provision is merely directory. It
does notdeprive Congress of the power to respond to the imperatives of the national interest and for the
attainment of other state policies or objectives.

Item-Veto Power of President

9. Under his general veto power, the President has to veto the entire bill, not merely parts thereof (1987
Constitution, Art. VI, Sec. 27[1]).

10. The exception to the general veto power is the power given to the President to veto any particular
item or items in a general appropriations bill (1987 Constitution, Art. VI, Sec. 27 [2]). In so doing, the
President must veto the entire item.

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Power of President to Veto “Provisions” in an Appropriation Bill (Veto of Provision on Debt
Ceiling)

11. The President vetoed a special provision in the GAA which effectively imposed a 'debt-ceiling' on the
debt service by providing that "any payment in excess of the amount herein appropriated shall be subject
to the approval of the President with the concurrence of the congress."

12. Petitioners claim that the President cannot veto the special "debt-ceiling" provision without vetoing
the entire appropriation amount of P86,323,438.00 for said purpose.

13. The issue here is the item-veto power of the President. Petitioners claim that the President's line-veto
power as regards appropriation bills is limited to item/s and does not cover provision/s.

14. The court upheld such veto because the provision is an “inappropriate provision” that should be
treated as an "item" for the purpose of the President's veto power..

It is an attempt to repeal Section 31 of PD No. 1177 (Foreign Borrowing Act) and EO 292 (Administrative
Code) which authorizes the automatic provision of debt servicing.

As held in Gonzales v. Macaraig, Jr., the repeal of these laws should be done in a separate law and not
in the appropriations law.

15. Note : The Court sustained the veto of the Special Provision of the item on debt service only with
respect to the proviso on the debt ceiling. The President vetoed the entire paragraph one of the Special
Provision of the item on debt service, including the provisos that the appropriation authorized in said item
"shall be used for payment of the principal and interest of foreign and domestic indebtedness" and that "
in no case shall this fund be used to pay for the liabilities of the Central Bank Board of Liquidators."
These provisos are germane to and have a direct connection with the item on debt service. The said
provisos, being appropriate provisions, cannot be vetoed separately. Hence the item veto of said
provisions is void.

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Doctrine of “Inappropriate Provision”

16. As the Constitution is explicit that the provision which Congress can include in an appropriations bill
must "relate specifically to some particular appropriation therein" and "be limited in its operation to the
appropriation to which it relates," it follows that any provision which does not relate to any particular
item, or which extends in its operation beyond an item of appropriation, is considered "an
inappropriate provision" which can be vetoed separately from an item. Also to be included in the
category of "inappropriate provisions" are unconstitutional provisions and provisions which are intended
to amend other laws, because clearly these kind of laws have no place in an appropriations bill. These
are matters of general legislation more appropriately dealt with in separate enactments.

Veto of provisions for revolving funds of State Universities and Colleges (SUC)

17. The President vetoed provisions allowing SUCs to create a separate revolving fund from income
from their own operations on the ground that all income earned by government offices and agencies
shall accrue to the General Fund of the government in line with the One Fund Policy.

18. The Court upheld such veto and ruled that there was no undue discrimination in allowing other
agencies to use revolving funds because such agencies have already been enjoying such privilege
under special laws authorizing exceptions to the One Fund Policy.

Veto of provision on 70% (administrative)/ 30% (contract) ratio for road maintenance

18. The President vetoed a special provision which specified the maximum percentage to be contracted
out on the ground that it is the policy of the government to maximize private sector participation. The
provision is not an inappropriate provision which can be the subject of a veto. It specifies how the said
item shall be expended. The veto is therefore unconstitutional.

Veto of provision on purchase of medicines by AFP

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19. The President vetoed the special provision on the purchase by the AFP of medicines in compliance
with the Generics Drugs Law on the ground that the President believed that it is more prudent to provide
for a transition period for the smooth implementation of the law. This belief cannot justify his veto
because the provision is an appropriate provision. The special provision cannot be vetoed by the
President without also vetoing the said item.

Veto of provision on prior approval of Congress for purchase of military equipment

20. The President vetoed the special provision which requires the prior approval of the Congress for the
release of the corresponding AFP modernization funds on the ground that such violated the
non-impairment of contracts clause. This provision is an example of a legislative veto. However, this
case is not the proper occasion to discuss the validity of a legislative veto because such issue can be
disposed of on other grounds. Such provision is an inappropriate provision because it should be
incorporated in a separate and substantive bill. Any provision blocking an administrative action in
implementing a law or requiring legislative approval of executive acts must be incorporated in a separate
and substantive bill. The proviso is also violative of the Constitutional prohibition on the passage of laws
that impair the obligations of contracts. The veto is therefore valid.

Veto of provision on use of savings to augment AFP pension funds

21. The President vetoed the new provision authorizing the AFP Chief of Staff to use savings in the AFP
to augment pension and gratuity funds. Such provision is violative of Section 25(5) and Section 29(1) of
Article VI. Such right can only be exercised by the President pursuant to a specific law. The veto is valid.

Condition on the deactivation of the CAFGUs

22. The President vetoed a provision which provided for the separation benefit of CAFGUs who will be
deactivated in 1994. The President reasoned that the implementation of the special provision and the
deactivation of the CAFGUs shall be subject to prior presidential approval. Petitioners claim that such
veto by the president was tantamount to an unconstitutional administrative embargo of the congressional
will to implement the Constitution’s command to dissolve the CAFGU. The Court held that such action by
the President is within his power to faithfully execute the laws. There is nothing in the challenged
provision which would imply that Congress intended to deny to the President the right to defer or reduce
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the spending, much less to deactivate the 11,000 CAFGUs all at one time in 1994.

Conditions on the appropriations of the Supreme Court, etc.

23. The GAA of 1994 specified the allowed realignments from savings of the Supreme Court and the
Constitutional Commissions. In his Veto Message, the President approved these conditions. For the
appropriations for the COA, the DPWH, and the NHA, the president imposed the condition that the
operationalization of such appropriations should be subject to the guidelines to be issued by the
Executive. These conditions are valid because they are just mere reminders that the implementation of
the items on which the said conditions were imposed should be done in accordance with existing laws,
regulations or policies. Further, it is premature to question the guidelines to be issued by the President
when the guidelines have not been issued yet.

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