I. What is legislative power?

Blas F. Ople vs. Torres – G.R. No. 127685 dated 23 July 1998
https://lawphil.net/judjuris/juri1998/jul1998/gr_127685_1998.html

Facts:

On December 12, 1996, then President Ramos enacted Administrative order no. 308,
which laid down the ground work for the implementation of a National ID system. The A.O.
mandated major government agencies to pool their resources together to implement a
centralized data bank of all citizens which shall be used to streamline day to day government
transactions and minimize rampant red taping and corruption among government employees.

Herein petitioner Senator Blas Ople, filed the case at bar questioning the said A.O. on 3
grounds 1) implementation of a national ID system requires a legislative act, as such A.O. no.
308 is usurpation of legislative functions. 2) that said A.O. tends to infringe the right to privacy of
citizens 3) the appropriation of funds for the implementation of said A.O. is also an exclusive
legislative function.

On the other hand, herein respondent as Executive Secretary refutes all said arguments.

Issue:

1. Whether or not A.O. no. 308 is a valid exercise of the Executive power.

2. Whether or not the issuance of A.O. 308 by the President in establishing a national
computerized identification reference system is an unconstitutional usurpation of the
legislative powers of the Congress.

Ruling:

1. The Supreme Court ruled in the negative.

In holding the A.O. no. 308 as an invalid exercise of the Presidents Executive power, the
Court provided the following:

1. As raised by petitioner, A.O. no. 308 does indeed infringe upon the legislature’s
exclusive function as it laid down a system whereby compliance therewith is a
condition to transact with the government.
 2. A.O. no. 308 is a potential threat to the Constitutional right to Privacy as it allows the
government to pool various data regarding an individual without any clear concise
direction as to the manner to keeping, safeguards against improper use, and any
definite answer as to what type of information may or may not be used.
 But what is not arguable is the broadness, the vagueness, the overbreadth of
A.O. No. 308 which if implemented will put our people's right to privacy in
clear and present danger.
3. A.O. no. 308 failed to substantiate any justifiable reason to allow the would be
infringement. To streamline government transactions and to remove red taping was
not sufficiently shown to be valid reasons to counter act the strict protection of the
individual’s right to privacy.

2. While Congress is vested with the power to enact laws, the President executes the
laws. As head of the Executive Department, the President is the Chief Executive.
Corollary to the power of control, the President has the duty of supervising the
enforcement of laws for the maintenance of general peace and public order. Thus, he is
granted administrative power over bureaus and offices under his control to enable him to
discharge his duties effectively. Administrative power is concerned with the work of
applying policies and enforcing orders as determined by proper governmental organs.

As said administrative order redefines the parameters of some basic rights of our
citizenry vis-a-vis the State as well as the line that separates the administrative power of the
President to make rules and the legislative power of Congress, it ought to be evident that it
deals with a subject that should be covered by law. From these precepts, the Supreme
Court holds that A.O. No. 308 involves a subject that is not appropriate to be covered by an
administrative order. The dissenting opinions of the Justices unduly expand the limits of
administrative legislation and consequently erode the plenary power of Congress to make
laws. This is contrary to the established approach defining the traditional limits of
administrative legislation. As well stated by Fisher: ". . . Many regulations however, bear
directly on the public. It is here that administrative legislation must he restricted in its scope
and application. Regulations are not supposed to be a substitute for the general policy-
making that Congress enacts in the form of a public law. Although administrative regulations
are entitled to respect, the authority to prescribe rules and regulations is not an independent
source of power to make laws."
 Thus, Adminisrative Order No. 308 entitled "Adoption of a National Computerized
Identification Reference System" was declared null and void for being unconstitutional by
the Supreme Court.

II. Limitation on the power of Congress: Doctrine of Constitutional Supremacy

A. Substantive
Social Justice Society vs. Dangerous Drugs Board and PDEA – G.R. No. 157870 dated 03
November 2008
https://elibrary.judiciary.gov.ph/thebookshelf/showdocs/1/47712

Facts:
Petitioners question the constitutionality of Section 36 of RA 9165, a.k.a. the Comprehensive
Drugs Act of 2002. Section 36 requires mandatory drug testing of candidates for public office,
students of secondary and tertiary schools, officers and employees of public and private offices,
and persons charged before the prosecutor’s office with certain offenses, particularly those who
are charged with offenses punishable by a penalty of not less than 6 years and 1 day of
imprisonment.
On December 23, 2003, COMELEC issued Resolution 6486, which provides the rules on the
mandatory drugs testing of candidates for public office. It requires the COMELEC offices and
employees concerned to submit two separate lists of candidates: one for those who complied
with the mandatory drug testing and the other of those who failed to comply.
It was Aquilino Pimentel, Jr. who opposed such resolution, contending that it was
unconstitutional as it imposes an additional qualification for senators.

Issues:
1. Do Section 36(g) of RA 9165 and COMELEC Resolution 6468 impose an additional
qualification for candidates for senator?
2. Is RA 9165 unconstitutional?

Ruling:
1. Yes. The COMELEC cannot, in the guise of enforcing and administering election laws or
promulgating rules and regulations to implement Section 36, validly impose qualifications on
candidates for senator in addition to what the Constitution provides. The COMELEC resolution
effectively enlarges that qualification requirements for senator, enumerated under Section 3,
Article VI of the Constitution.
2. The provision of RA 9165 requiring mandatory drug testing for students (Section 36[b]) are
constitutional as long as they are random and suspicionless. This is because schools and their
administrators stand in loco parentis with respect to their students, and schools have the right to
impose conditions on applicants for admission that are fair and non-discriminatory.
The provision requiring mandatory drug testing for officers and employees of public and private
offices (Section 36[d]) are also justifiable. The privacy expectation in a regulated office
environment is reduced. A degree of impingement upon such privacy has been upheld. To the
Court, the need for drug testing to at least minimize illegal drug use is substantial enough to
override the individual’s privacy interest under the premises.
On the other hand, the Court finds no justification in the mandatory drug testing of those
prosecuted for crimes punishable by imprisonment of more than 6 years and 1 day (Section
36[f]). The operative concepts in the mandatory drug testing are randomness and suspicionless.
In this case, it cannot be said that the drug testing is random. To impose mandatory drug testing
on the accused is a blatant attempt to harness a medical test as a tool for criminal prosecution,
contrary to the stated objectives of RA 9165.
In sum, Section 36(c) and (d) are constitutional, but 36(f) is not.

FACTS:
In its Petition for Prohibition under Rule 65, petitioner Social Justice Society (SJS), a registered
political party, seeks to prohibit the Dangerous Drugs Board (DDB) and the Philippine Drug
Enforcement Agency (PDEA) from enforcing paragraphs (c), (d), (f), and (g) of Sec. 36 of RA
9165 on the ground that they are constitutionally infirm. For one, the provisions constitute undue
delegation of legislative power when they give unbridled discretion to schools and employers to
determine the manner of drug testing. For another, the provisions trench in the equal protection
clause inasmuch as they can be used to harass a student or an employee deemed undesirable.
And for a third, a persons constitutional right against unreasonable searches is also breached
by said provisions.

ISSUES:
Are paragraphs (c), (d), (f), and (g) of Sec. 36, RA 9165 unconstitutional? Specifically, do these
paragraphs violate the right to privacy, the right against unreasonable searches and seizure,
and the equal protection clause? Or do they constitute undue delegation of legislative power?

RULING:
The essence of privacy is the right to be left alone. In context, the right to privacy means the
right to be free from unwarranted exploitation of one’s person or from intrusion into one’s private
activities in such a way as to cause humiliation to a person’s ordinary sensibilities. And while
there has been general agreement as to the basic function of the guarantee against
unwarranted search, “translation of the abstract prohibition against ‘unreasonable searches and
seizures’ into workable broad guidelines for the decision of particular cases is a difficult task,” to
borrow from C. Camara v. Municipal Court. Authorities are agreed though that the right to
privacy yields to certain paramount rights of the public and defers to the state’s exercise of
police power.
As the warrantless clause of Sec. 2, Art III of the Constitution is couched and as has been held,
“reasonableness” is the touchstone of the validity of a government search or intrusion. And
whether a search at issue hews to the reasonableness standard is judged by the balancing of
the government – mandated intrusion on the individual’s privacy interest against the promotion
of some compelling state interest.
In the criminal context, reasonableness requires showing of probable cause to be personally
determined by a judge. Given that the drug – testing policy for employees–and students for that
matter–under RA 9165 is in the nature of administrative search needing what was referred to in
Vernonia as “swift and informal disciplinary procedures,” the probable – cause standard is not
required or even practicable. Be that as it may, the review should focus on the reasonableness
of the challenged administrative search in question.
The first factor to consider in the matter of reasonableness is the nature of the privacy interest
upon which the drug testing, which effects a search within the meaning of Sec. 2, Art. III of the
Constitution, intrudes. In this case, the office or workplace serves as the backdrop for the
analysis of the privacy expectation of the employees and the reasonableness of drug testing
requirement. The employees’ privacy interest in an office is to a large extent circumscribed by
the company’s work policies, the collective bargaining agreement, if any, entered into by
management and the bargaining unit, and the inherent right of the employer to maintain
discipline and efficiency in the workplace. Their privacy expectation in a regulated office
environment is, in fine, reduced; and a degree of impingement upon such privacy has been
upheld.
To reiterate, RA 9165 was enacted as a measure to stamp out illegal drug in the country and
thus protect the well – being of the citizens, especially the youth, from the deleterious effects of
dangerous drugs. The law intends to achieve this through the medium, among others, of
promoting and resolutely pursuing a national drug abuse policy in the workplace via a
mandatory random drug test.36 To the Court, the need for drug testing to at least minimize
illegal drug use is substantial enough to override the individual’s privacy interest under the
premises. The Court can consider that the illegal drug menace cuts across gender, age group,
and social – economic lines. And it may not be amiss to state that the sale, manufacture, or
trafficking of illegal drugs, with their ready market, would be an investor’s dream were it not for
the illegal and immoral components of any of such activities. The drug problem has hardly
abated since the martial law public execution of a notorious drug trafficker. The state can no
longer assume a laid back stance with respect to this modern – day scourge. Drug enforcement
agencies perceive a mandatory random drug test to be an effective way of preventing and
deterring drug use among employees in private offices, the threat of detection by random testing
being higher than other modes. The Court holds that the chosen method is a reasonable and
enough means to lick the problem.

Taking into account the foregoing factors, i.e., the reduced expectation of privacy on the part of
the employees, the compelling state concern likely to be met by the search, and the well –
defined limits set forth in the law to properly guide authorities in the conduct of the random
testing, we hold that the challenged drug test requirement is, under the limited context of the
case, reasonable and, ergo, constitutional.

Like their counterparts in the private sector, government officials and employees also labor
under reasonable supervision and restrictions imposed by the Civil Service law and other laws
on public officers, all enacted to promote a high standard of ethics in the public service. And if
RA 9165 passes the norm of reasonableness for private employees, the more reason that it
should pass the test for civil servants, who, by constitutional command, are required to be
accountable at all times to the people and to serve them with utmost responsibility and
efficiency.
Petitioner SJS’ next posture that Sec. 36 of RA 9165 is objectionable on the ground of undue
delegation of power hardly commends itself for concurrence. Contrary to its position, the
provision in question is not so extensively drawn as to give unbridled options to schools and
employers to determine the manner of drug testing. Sec. 36 expressly provides how drug testing
for students of secondary and tertiary schools and officers/employees of public/private offices
should be conducted. It enumerates the persons who shall undergo drug testing. In the case of
students, the testing shall be in accordance with the school rules as contained in the student
handbook and with notice to parents. On the part of officers/employees, the testing shall take
into account the company’s work rules. In either case, the random procedure shall be observed,
meaning that the persons to be subjected to drug test shall be picked by chance or in an
unplanned way. And in all cases, safeguards against misusing and compromising the
confidentiality of the test results are established.
Lest it be overlooked, Sec. 94 of RA 9165 charges the DDB to issue, in consultation with the
DOH, Department of the Interior and Local Government, Department of Education, and
Department of Labor and Employment, among other agencies, the IRR necessary to enforce
the law. In net effect then, the participation of schools and offices in the drug testing scheme
shall always be subject to the IRR of RA 9165. It is, therefore, incorrect to say that schools and
employers have unchecked discretion to determine how often, under what conditions, and
where the drug tests shall be conducted.
The validity of delegating legislative power is now a quiet area in the constitutional landscape.39
In the face of the increasing complexity of the task of the government and the increasing
inability of the legislature to cope directly with the many problems demanding its attention, resort
to delegation of power, or entrusting to administrative agencies the power of subordinate
legislation, has become imperative, as here.
The Court declares Sec. 36(g) of RA 9165 and COMELEC Resolution No. 6486 as
UNCONSTITUTIONAL; and resolves to PARTIALLY GRANT the petition in G.R. Nos. 157870
by declaring Sec. 36(c) and (d) of RA 9165 CONSTITUTIONAL, but declaring its Sec. 36(f)
UNCONSTITUTIONAL. All concerned agencies are, accordingly, permanently enjoined from
implementing Sec. 36(f) and (g) of RA 9165.

B. Procedural
B.1 – only one subject – Section 26, Article VI
Benjamin Cawaling, Jr., vs. COMELEC – G.R. No. 146319
https://lawphil.net/judjuris/juri2001/oct2001/gr_146319_2001.html

SUMMARY: Congress passed RA 8806 creating the city of Sorsogon by merging municipalities
of Sorsogon and Bacon. Petitioner Cawaling assailed this, stating that the LGC recognizes only
two modes of creating a city: 1) by converting a municipality into a city; or 2) by converting a
cluster of barangays.

HELD: The provision cited by the Petitioner points only to some of the modes of creating a city.
The LGC and the Constitution recognizes DIVISION and MERGER as modes as well, provided
only that the legal requirements as provided in the LGC are met.

FACTS: On August 16, 2000, President Estrada signed into law RA 8806, an "Act Creating The
City Of Sorsogon By Merging The Municipalities Of Bacon And Sorsogon In The Province Of
Sorsogon, And Appropriating Funds Therefor." One of the provisions in said law include:
SECTION 54. Plebiscite. — The City of Sorsogon shall acquire corporate existence upon the
ratification of its creation by a majority of the votes cast by the qualified voters in a plebiscite to
be conducted in the present municipalities of Bacon and Sorsogon within one hundred twenty
(120) days from the approval of this Act.
The passage of the law was published in newspapers from August to SEPTEMBER 1, 2000.
A plesbiscite was conducted in the component municipalities by the COMELEC on DECEMBER
16, 2000. On December 17, 2000, the Plebiscite City Board of Canvassers (PCBC) proclaimed
the creation of the City of Sorsogon as having been ratified and approved by the majority of the
votes cast in the plebiscite. Subsequently, Petitioner Cawaling assailed the plebiscite as a nullity
AND RA 8806 as unconstitutional.

His argument: NULL AND VOID PLEBISCITE

A. The December 16, 2000 plebiscite was conducted beyond the required 120-day period from
the approval of R.A. 8806, in violation of Section 54 thereof; and
B. Respondent COMELEC failed to observe the legal requirement of twenty (20) day extensive
information campaign in the Municipalities of Bacon and Sorsogon before conducting the
plebiscite.
UNCONSTITUTIONAL RA 8806
A. The creation of Sorsogon City by merging two municipalities violates Section 450(a) of the
Local Government Code of 1991 (in relation to Section 10, Article X of the Constitution) which
requires that only "a municipality or a cluster of barangays may be converted into a component
city";
B. There is no compelling reason to create Sorsogon City
C. R.A. No. 8806 contains two (2) subjects, namely, the (a) creation of the City of Sorsogon and
the (b) abolition of the Municipalities of Bacon and Sorsogon, thereby violating the "one subject-
one bill" rule prescribed by Section 26(1), Article VI of the Constitution.

ISSUES:
1. WON RA 8806 is unconstitutional – NO
2. WON the Plebiscite was a NULLITY – NO
THE LGC AND THE CONSTITUTION RECOGNIZES MERGER AND DIVISION AS A MODE
OF CREATION OF A CITY
Petitioner's constricted reading of Section 450(a) of the Code is erroneous. The phrase "A
municipality or a cluster of barangays may be converted into a component city" is not a criterion
but simply one of the modes by which a city may be created. Section 10, Article X of the
Constitution, quoted earlier and which petitioner cited in support of his posture, allows the
merger of local government units to create a province city, municipality or barangay in
accordance with the criteria established by the Code. Thus, Section 8 of the Code distinctly
provides:
"SECTION 8. Division and Merger. — Division and merger of existing local government units
shall comply with the same requirements herein prescribed for their creation… (may
requirements pa re. contiguous area, land area, population etc. pero di ko na sinama kasi di
importante sa issue)
Verily, the creation of an entirely new local government unit through a division or a merger of
existing local government units is recognized under the Constitution, provided that such merger
or division shall comply with the requirements prescribed by the Code.
AS TO THE COMPELLING REASON TO CREATE SORSOGON CITY FROM BACON AND
SORSOGON This goes into the wisdom of the law which is something that we do not litigate.
AS TO THE ONE BILL, ON TITLE RULE Contrary to petitioner's assertion, there is only one
subject embraced in the title of the law, that is, the creation of the City of Sorsogon. The
abolition/cessation of the corporate existence of the Municipalities of Bacon and Sorsogon due
to their merger is not a subject separate and distinct from the creation of Sorsogon City. Such
abolition/cessation was but the logical, natural and inevitable consequence of the merger.
Otherwise put, it is the necessary means by which the City of Sorsogon was created. Hence,
the title of the law, "An Act Creating the City of Sorsogon by Merging the Municipalities of Bacon
and Sorsogon in the Province of Sorsogon, and Appropriating Funds Therefor," cannot be said
to exclude the incidental effect of abolishing the two municipalities, nor can it be considered to
have deprived the public of fair information on this consequence.
AS TO THE PLEBSICITE COMELEC pegged the period NOT FROM THE DATE OF
APPROVAL of the law (Aug 16, 2000), but from the date of COMPLETION OF THE
PUBLICATION PERIOD (September 1, 2000). This is because the same Act, RA 8806, states:
SECTION 65. Effectivity. — This Act shall take effect upon its publication in at least two (2)
newspapers of general and local circulation. From said date, the conduct of the plebiscite was
well within the 120 day period. SC agreed with the COMELEC, and added the ratio by citing
Section 10 of the LGC which provides:
"SECTION 10. Plebiscite Requirement. — No creation, division, merger, abolition, or substantial
alteration of boundaries of local government units shall take effect unless approved by a
majority of the votes cast in a plebiscite called for the purpose in the political unit or units directly
affected.
Such plebiscite shall be conducted by the Commission on Elections within one hundred twenty
(120) days from the date of the effectivity of the law or ordinance affecting such action, unless
said law or ordinance fixes another date…”
The court cited the Ruling in TANADA v ANGARA re. importance of publication for laws to take
effect. The SC said that to give Section 54 a literal and strict interpretation would in effect make
the Act effective even before its publication, which scenario is precisely abhorred in Tañada.
AS TO THE LACK OF INFORMATION CAMPAIGN
No sufficient proof was provided on this issue. Hence, the SC used the presumption of regularity
in favor of COMELEC.
FALLO: WHEREFORE, the instant petitions are DISMISSED for lack of merit. Costs against
petitioner.

III. Three readings on separate days / Appropriation, Tariff, Revenue Bills, Etc.
Tolentino vs. Secretary of Finance – G.R. No. 115455 dated 25 August 1994
https://lawphil.net/judjuris/juri1994/aug1994/gr_115455_1994.html

ACTS: Petitioner Tolentino filed a certiorari to reconsider the dismissal of the decision
of the 10 suits filed against the declaration of R.A. 7716 or known as the Expanded Value
Added Tax Law (E-Vat) unconstitutionality. H. No. 1197 was filed in the House of
Representatives and passed three readings. It was sent to the Senate and was approved as S.
No. 1630 on May 24, 1994, voting on the bill on second and third readings on the same day.

ISSUE: a. Is the E-Vat Law unconstitutional because it did not originate exclusively in the House
of Representatives? b. Is the E-Vat Law unconstitutional because it did not pass the required 3
required readings on 3 separate days and the final form to be distributed to its members 3
days before the passage of law? c. Did the Conference Committee usurped the legislative
power of Congress and violated the Constitution?

HELD: a. Without H. No. 11197, the Senate could not have enacted S No. 1630. Because the
Senate bill was a mere amendment of the House bill, H. No. 11197.It is not the law, but the
revenue bill, which is required by the Constitution to originate exclusively in the House of
Representatives. It is important to emphasize this, because a bill originating in the House
may undergo such extensive changes in the Senate that the result may be a rewriting of the
whole. Art. 6. Section 24 of our Constitution reads: All appropriation, revenue or tariff bills, bills
authorizing increase of the public debt, bills of local application, and private bills shall originate
exclusively in the House of Representatives, but the Senate may propose or concur with
amendments.
At this point, what is important to note is that, as a result of the Senate action, a distinct bill
may be produced. To insist that a revenue statute and not only the bill which initiated the
legislative process culminating in the enactment of the law must substantially be the same as
the House bill would be to deny the Senate’s power not only to concur with amendments but
also to propose amendments b. It is enough that the President certified the bill which, at the
time he makes the certification, is under consideration. Since on March 22, 1994 the Senate
was considering S. No. 1630, it was that bill which had to be certified. For that matter on June 1,
1993 the President had earlier certified H. No. 9210 for immediate enactment because it was
the one which at that time was being considered by the House. This bill was later substituted,
together with other bills, by H. No. 11197.Art. 6 Sec 26 (2) of the present Constitution, thus:(2)
No bill passed by either House shall become a law unless it has passed three readings on
separate days, and printed copies thereof in its final form have been distributed
to its Members three days before its passage, except when the President certifies to
the necessity of its immediate enactment to meet a public calamity or emergency. Upon the last
reading of a bill, no amendment thereto shall be allowed, and the vote thereon shall be
taken immediately thereafter, and the yeas and nays entered in the Journal. Apparently, the
members of the Senate (including some of the petitioners in these cases) believed that there
was an urgent need for consideration of S. No. 1630, because they responded to the call of the
President by voting on the bill on second and third readings on the same day. While the
judicial department is not bound by the Senate's acceptance of the President's certification,
the respect due coequal departments of the government in matters committed to them by the
Constitution and the absence of a clear showing of grave abuse of discretion caution
a stay of the judicial hand. At any rate, we are satisfied that S. No. 1630 received
thorough consideration in the Senate where it was discussed for six days. Only its distribution
in advance in its final printed form was actually dispensed with by holding the voting on second
and third readings on the same day (March 24, 1994). Otherwise, sufficient time between the
submission of the bill on February 8, 1994 on second reading and its approval on March
24, 1994 elapsed before it was finally voted on by the Senate on third reading c. The allegation
that the Conference Committee usurped the legislative power of Congress is, in our view,
without warrant in fact and in law.

FACTS
RA 7716, otherwise known as the Expanded Value-Added Tax Law, is an act that seeks to
widen the tax base of the existing VAT system and enhance its administration by amending the
National Internal Revenue Code. There are various suits questioning and challenging the
constitutionality of RA 7716 on various grounds.
Tolentino contends that RA 7716 did not originate exclusively from the House of
Representatives but is a mere consolidation of HB. No. 11197 and SB. No. 1630 and it did not
pass three readings on separate days on the Senate thus violating Article VI, Sections 24 and
26(2) of the Constitution, respectively.

Art. VI, Section 24: All appropriation, revenue or tariff bills, bills authorizing increase of the
public debt, bills of local application, and private bills shall originate exclusively in the House of
Representatives, but the Senate may propose or concur with amendments.
Art. VI, Section 26(2): No bill passed by either House shall become a law unless it has passed
three readings on separate days, and printed copies thereof in its final form have been
distributed to its Members three days before its passage, except when the President certifies to
the necessity of its immediate enactment to meet a public calamity or emergency. Upon the last
reading of a bill, no amendment thereto shall be allowed, and the vote thereon shall be taken
immediately thereafter, and the yeas and nays entered in the Journal.

ISSUE
Whether or not RA 7716 violated Art. VI, Section 24 and Art. VI, Section 26(2) of the
Constitution.

HELD
No. The phrase “originate exclusively” refers to the revenue bill and not to the revenue law. It is
sufficient that the House of Representatives initiated the passage of the bill which may undergo
extensive changes in the Senate.
SB. No. 1630, having been certified as urgent by the President need not meet the requirement
not only of printing but also of reading the bill on separate days.

FACTS:
PPI contends that by removing the exemption of the press from the VAT while maintaining those
granted to others, the law discriminates against the press. CREBA asserts that R.A. No. 7716
impairs the obligations of contracts, and violates the rule that taxes should be uniform and
equitable and that Congress shall “evolve a progressive system of taxation”.
CUP argues that legislature was to adopt a definite policy of granting tax exemption to
cooperatives that the present Constitution embodies provisions on cooperatives. To subject
cooperatives to the VAT would, therefore, be to infringe a constitutional policy.

ISSUE:
Whether or not RA 7716 is unconstitutional.
RULING:
No. In withdrawing the exemption, the law merely subjects the press to the same tax burden to
which other businesses have long ago been subject. The VAT is not a license tax. It is imposed
purely for revenue purposes.
Equality and uniformity of taxation mean that all taxable articles or kinds of property of the same
class be taxed at the same rate. It is enough that the statute or ordinance applies equally to all
persons, firms, and corporations placed in similar situation.

FACTS:
These are motions seeking reconsideration of our decision dismissing the petitions filed in these
cases for the declaration of unconstitutionality of R.A. No. 7716, otherwise known as the
Expanded Value-Added Tax Law. Now it is contended by the Philippine Press Institute (PPI)
that by removing the exemption of the press from the VAT while maintaining those granted to
others, the law discriminates against the press. At any rate, it is averred, “even
nondiscriminatory taxation of constitutionally guaranteed freedom is unconstitutional.”

ISSUE:
Does sales tax on bible sales violative of religious and press freedom?

RULING:
No. The Court was speaking in that case of a license tax, which, unlike an ordinary tax, is
mainly for regulation. Its imposition on the press is unconstitutional because it lays a prior
restraint on the exercise of its right. Hence, although its application to others, such those selling
goods, is valid, its application to the press or to religious groups, such as the Jehovah’s
Witnesses, in connection with the latter’s sale of religious books and pamphlets, is
unconstitutional. As the U.S. Supreme Court put it, “it is one thing to impose a tax on income or
property of a preacher. It is quite another thing to exact a tax on him for delivering a sermon.”
The VAT is, however, different. It is not a license tax. It is not a tax on the exercise of a
privilege, much less a constitutional right. It is imposed on the sale, barter, lease or exchange of
goods or properties or the sale or exchange of services and the lease of properties purely for
revenue purposes. To subject the press to its payment is not to burden the exercise of its right
any more than to make the press pay income tax or subject it to general regulation is not to
violate its freedom under the Constitution.

Facts: The constitutionality of RA 7716 which expanded the scope of the value added tax was
questioned on the ground that the second and third readings were read on the same date. It
was also claimed that the certification by the President the urgency of its enactment was invalid
as there was no emergency and the certification only dispensed with the requirement that the
bill be presented in its final form before its approval on the third reading.
Issue: Whether or not three readings on different dates is mandatory?

Decision: There is no merit in the contention that presidential certification dispenses only with
the requirement of these readings on separate readings. It is nonetheless urged that the
certification of the bill in this case was invalid because there was no emergency, the condition
stated in the certification of a growing budget deficit” not being an unusual condition in this
country.

C.1. Presumption of Constitutionality

- Benjamin Cawaling Jr., vs. COMLEC – G.R. No. 146319
https://lawphil.net/judjuris/juri2001/oct2001/gr_146319_2001.html

Before us are two (2) separate petitions challenging the constitutionality of Republic Act No.
8806 which created the City of Sorsogon and the validity of the plebiscite conducted pursuant
thereto.
On August 16, 2000, former President Joseph E. Estrada signed into law R.A. No. 8806, an
"Act Creating The City Of Sorsogon By Merging The Municipalities Of Bacon And Sorsogon In
The Province Of Sorsogon, And Appropriating Funds Therefor."[1]
Pursuant to Section 10, Article X of the Constitution,[2] the Commission on Elections
(COMELEC), on December 16, 2000, conducted a plebiscite in the Municipalities of Bacon and
Sorsogon and submitted the matter for ratification.
On December 17, 2000, the Plebiscite City Board of Canvassers (PCBC) proclaimed[3] the
creation of the City of Sorsogon as having been ratified and approved by the majority of the
votes cast in the plebiscite.[4]
Invoking his right as a resident and taxpayer of the former Municipality of Sorsorgon, Benjamin
E. Cawaling, Jr. filed on January 2, 2001 the present petition for certiorari (G.R. No. 146319)
seeking the annulment of the plebiscite on the following grounds:
The December 16, 2000 plebiscite was conducted beyond the required 120-day period from the
approval of R.A. 8806, in violation of Section 54 thereof; and
Respondent COMELEC failed to observe the legal requirement of twenty (20) day extensive
information campaign in the Municipalities of Bacon and Sorsogon before conducting the
plebiscite.
Two days after filing the said action, or on January 4, 2001, petitioner instituted another petition
(G.R. No. 146342), this time for prohibition, seeking to enjoin the further implementation of R.A.
No. 8806 for being unconstitutional, contending, in essence, that:
The creation of Sorsogon City by merging two municipalities violates Section 450(a) of the Local
Government Code of 1991 (in relation to Section 10, Article X of the Constitution) which requires
that only "a municipality or a cluster of barangays may be converted into a component city"; and
R.A. No. 8806 contains two (2) subjects, namely, the (a) creation of the City of Sorsogon and
the (b) abolition of the Municipalities of Bacon and Sorsogon, thereby violating the "one subject-
one bill" rule prescribed by Section 26(1), Article VI of the Constitution.

Hence, the present petitions which were later consolidated.[5]

Significantly, during the pendency of these cases, specifically during the May 14, 2001
elections, the newly-created Sorsogon City had the first election of its officials. Since then, the
City Government of Sorsogon has been regularly discharging its corporate and political powers
pursuant to its charter, R.A. No. 8806.
We shall first delve on petitioner's constitutional challenge against R.A. No. 8806 in G.R. No.
146342.
Every statute has in its favor the presumption of constitutionality.[6] This presumption is rooted
in the doctrine of separation of powers which enjoins upon the three coordinate departments of
the Government a becoming courtesy for each other's acts.[7] The theory is that every law,
being the joint act of the Legislature and the Executive, has passed careful scrutiny to ensure
that it is in accord with the fundamental law.[8] This Court, however, may declare a law, or
portions thereof, unconstitutional, where a petitioner has shown a clear and unequivocal breach
of the Constitution, not merely a doubtful or argumentative one.[9] In other words, the grounds
for nullity must be beyond reasonable doubt,[10] for to doubt is to sustain.[11]
Petitioner initially rejects R.A. No. 8806 because it violates Section 10, Article X of the
Constitution which provides, inter alia:
"Section 10. No province, city, municipality, or barangay may be created, divided, merged,
abolished, or its boundary substantially altered, except in accordance with the criteria
established in the local government code and subject to approval by a majority of the votes cast
in a plebiscite in the political units directly affected." (Emphasis ours)
The criteria for the creation of a city is prescribed in Section 450 of the Local Government Code
of 1991 (the Code), thus:
"Section 450. Requisites for Creation. - (a) A municipality or a cluster of barangays may be
converted into a component city if it has an average annual income, as certified by the
Department of Finance, of at least Twenty million (P20,000,000.00) for the last two (2)
consecutive years based on 1991 constant prices, and if it has either of the following requisites:
(i) a contiguous territory of at least one hundred (100) square kilometers, as certified by the
Lands Management Bureau; or
(ii) a population of not less than one hundred fifty thousand (150,000) inhabitants, as certified by
the National Statistics Office:
Provided, That, the creation thereof shall not reduce the land area, population, and income of
the original unit or units at the time of said creation to less than the minimum requirements
prescribed herein.
(b) The territorial jurisdiction of a newly-created city shall be properly identified by metes and
bounds. The requirement on land area shall not apply where the city proposed to be created is
composed of one (1) or more islands. The territory need not be contiguous if it comprises two
(2) or more islands.

(c) The average annual income shall include the income accruing to the general fund, exclusive
of specific funds, transfers, and non-recurring income." (Emphasis ours)
Petitioner is not concerned whether the creation of Sorsogon City through R.A. No. 8806
complied with the criteria set by the Code as to income, population and land area. What he is
assailing is its mode of creation. He contends that under Section 450(a) of the Code, a
component city may be created only by converting "a municipality or a cluster of barangays," not
by merging two municipalities, as what R.A. No. 8806 has done.
This contention is devoid of merit.
Petitioner's constricted reading of Section 450(a) of the Code is erroneous. The phrase "A
municipality or a cluster of barangays may be converted into a component city" is not a criterion
but simply one of the modes by which a city may be created. Section 10, Article X of the
Constitution, quoted earlier and which petitioner cited in support of his posture, allows the
merger of local government units to create a province, city, municipality or barangay in
accordance with the criteria established by the Code. Thus, Section 8 of the Code distinctly
provides:
"Section 8. Division and Merger. - Division and merger of existing local government units shall
comply with the same requirements herein prescribed for their creation: Provided, however,
That such division shall not reduce the income, population, or land area of the local government
unit or units concerned to less than the minimum requirements prescribed in this Code:
Provided, further, That the income classification of the original local government unit or units
shall not fall below its current income classification prior to such division. x x x." (Emphasis ours)
Verily, the creation of an entirely new local government unit through a division or a merger of
existing local government units is recognized under the Constitution, provided that such merger
or division shall comply with the requirements prescribed by the Code.
Petitioner further submits that, in any case, there is no "compelling" reason for merging the
Municipalities of Bacon and Sorsogon in order to create the City of Sorsogon considering that
the Municipality of Sorsogon alone already qualifies to be upgraded to a component city. This
argument goes into the wisdom of R.A. No. 8806, a matter which we are not competent to rule.
In Angara v. Electoral Commission,[12] this Court, through Justice Jose P. Laurel, made it clear
that "the judiciary does not pass upon questions of wisdom, justice or expediency of legislation."
In the exercise of judicial power, we are allowed only "to settle actual controversies involving
rights which are legally demandable and enforceable,"[13] and "may not annul an act of the
political departments simply because we feel it is unwise or impractical."[14]
Next, petitioner assails R.A. No. 8806 since it contravenes the "one subject-one bill" rule
enunciated in Section 26 (1), Article VI of the Constitution, to wit:
"Section 26 (1). Every bill passed by the Congress shall embrace only one subject which shall
be expressed in the title thereof." (emphasis ours)
Petitioner contends that R.A. No. 8806 actually embraces two principal subjects which are: (1)
the creation of the City of Sorsogon, and (2) the abolition of the Municipalities of Bacon and
Sorsogon. While the title of the Act sufficiently informs the public about the creation of
Sorsogon City, petitioner claims that no such information has been provided on the abolition of
the Municipalities of Bacon and Sorsogon. The argument is far from persuasive. Contrary to
petitioner's assertion, there is only one subject embraced in the title of the law, that is, the
creation of the City of Sorsogon. The abolition/cessation of the corporate existence of the
Municipalities of Bacon and Sorsogon due to their merger is not a subject separate and distinct
from the creation of Sorsogon City. Such abolition/cessation was but the logical, natural and
inevitable consequence of the merger. Otherwise put, it is the necessary means by which the
City of Sorsogon was created. Hence, the title of the law, "An Act Creating the City of Sorsogon
by Merging the Municipalities of Bacon and Sorsogon in the Province of Sorsogon, and
Appropriating Funds Therefor," cannot be said to exclude the incidental effect of abolishing the
two municipalities, nor can it be considered to have deprived the public of fair information on this
consequence.
It is well-settled that the "one title-one subject" rule does not require the Congress to employ in
the title of the enactment language of such precision as to mirror, fully index or catalogue all the
contents and the minute details therein.[15] The rule is sufficiently complied with if the title is
comprehensive enough as to include the general object which the statute seeks to effect,[16]
and where, as here, the persons interested are informed of the nature, scope and
consequences of the proposed law and its operation.[17] Moreover, this Court has invariably
adopted a liberal rather than technical construction of the rule "so as not to cripple or impede
legislation."[18]
Consequently, we hold that petitioner has failed to present clear and convincing proof to defeat
the presumption of constitutionality of R.A. No. 8806.
We now turn to G.R. No. 146319 wherein petitioner assails the validity of the plebiscite
conducted by the COMELEC for the ratification of the creation of Sorsogon City.
Petitioner asserts that the plebiscite required by R.A. No. 8806 should be conducted within 120
days from the "approval" of said Act per express provision of its Section 54, viz:
"Sec. 54. Plebiscite. - The City of Sorsogon shall acquire corporate existence upon the
ratification of its creation by a majority of the votes cast by the qualified voters in a plebiscite to
be conducted in the present municipalities of Bacon and Sorsogon within one hundred twenty
(120) days from the approval of this Act. x x x." (Emphasis ours)
The Act was approved on August 16, 2000 by former President Joseph E. Estrada. Thus,
petitioner claims, the December 16, 2000 plebiscite was conducted one (1) day late from the
expiration of the 120-day period after the approval of the Act. This 120-day period having
expired without a plebiscite being conducted, the Act itself expired and could no longer be
ratified and approved in the plebiscite held on December 16, 2000.
In its comment, the COMELEC asserts that it scheduled the plebiscite on December 16, 2000
based on the date of the effectivity of the Act. Section 65 of the Act states:
"Sec. 65. Effectivity. - This Act shall take effect upon its publication in at least two (2)
newspapers of general and local circulation."
The law was first published in the August 25, 2000 issue of TODAY, a newspaper of general
circulation. Then on September 01, 2000, it was published in a newspaper of local circulation in
the Province of Sorsogon. Thus, the publication of the law was completed on September 1,
2000, which date, according to the COMELEC, should be the reckoning point in determining the
120-day period within which to conduct the plebiscite, not from the date of its approval (August
16, 2000) when the law had not yet been published. The COMELEC argues that since
publication is indispensable for the effectivity of a law, citing the landmark case of Tañada vs.
Tuvera,[19] it could only schedule the plebiscite after the Act took effect. Thus, the COMELEC
concludes, the December 16, 2000 plebiscite was well within the 120-day period from the
effectivity of the law on September 1, 2000.
The COMELEC is correct.
In addition, Section 10 of the Code provides:
"Section 10. Plebiscite Requirement. - No creation, division, merger, abolition, or substantial
alteration of boundaries of local government units shall take effect unless approved by a
majority of the votes cast in a plebiscite called for the purpose in the political unit or units directly
affected. Such plebiscite shall be conducted by the Commission on Elections within one
hundred twenty (120) days from the date of the effectivity of the law or ordinance affecting such
action, unless said law or ordinance fixes another date." (Emphasis ours)
Quite plainly, the last sentence of Section 10 mandates that the plebiscite shall be conducted
within 120 days from the date of the effectivity of the law, not from its approval. While the same
provision allows a law or ordinance to fix "another date" for conducting a plebiscite, still such
date must be reckoned from the date of the effectivity of the law.
Consequently, the word "approval" in Section 54 of R.A. No. 8806, which should be read
together with Section 65 (effectivity of the Act) thereof, could only mean "effectivity" as used and
contemplated in Section 10 of the Code. This construction is in accord with the fundamental rule
that all provisions of the laws relating to the same subject should be read together and
reconciled to avoid inconsistency or repugnancy to established jurisprudence. As we stated in
Tañada:
"Art. 2. Laws shall take effect after fifteen days following the completion of their publication in
the Official Gazette, unless it is otherwise provided. This Code shall take effect one year after
such publication.
After a careful study of this provision and of the arguments of the parties, both on the original
petition and on the instant motion, we have come to the conclusion, and so hold, that the clause
`unless it is otherwise provided' refers to the date of effectivity and not to the requirement of
publication itself, which cannot in any event be omitted. This clause does not mean that the
legislature may make the law effective immediately upon approval, or on any other date, without
its previous publication." (Emphasis supplied)
To give section 54 a literal and strict interpretation would in effect make the Act effective even
before its publication, which scenario is precisely abhorred in Tañada.
Lastly, petitioner alleges that the COMELEC failed to conduct an extensive information
campaign on the proposed Sorsogon cityhood 20 days prior to the scheduled plebiscite as
required by Article 11 (b.4.ii), Rule II of the Rules and Regulations Implementing the Code.
However, no proof whatsoever was presented by petitioner to substantiate his allegation.
Consequently, we sustain the presumption[20] that the COMELEC regularly performed or
complied with its duty under the law in conducting the plebiscite.
WHEREFORE, the instant petitions are DISMISSED for lack of merit. Costs against petitioner.

C.2. G.R.: A void statute confers no rights, imposes no duties and affords no protection
whatsoever.
Exception: Operative Fact Doctrine / Without force and effect as to a particular subject
-Araullo vs. Aquino III – G.R. No. 209287 dated 01 July2 2014
https://elibrary.judiciary.gov.ph/thebookshelf/showdocs/1/57044

When President Benigno Aquino III took office, his administration noticed the sluggish growth of
the economy. The World Bank advised that the economy needed a stimulus plan. Budget
Secretary Florencio “Butch” Abad then came up with a program called the Disbursement
Acceleration Program (DAP).
The DAP was seen as a remedy to speed up the funding of government projects. DAP enables
the Executive to realign funds from slow moving projects to priority projects instead of waiting
for next year’s appropriation. So, what happens under the DAP was that if a certain government
project is being undertaken slowly by a certain executive agency, the funds allotted therefor will
be withdrawn by the Executive. Once withdrawn, these funds are declared as “savings” by the
Executive and said funds will then be reallotted to other priority projects. The DAP program did
work to stimulate the economy as economic growth was in fact reported and portion of such
growth was attributed to the DAP (as noted by the Supreme Court).
Other sources of the DAP include the unprogrammed funds from the General Appropriations Act
(GAA). Unprogrammed funds are standby appropriations made by Congress in the GAA.
Meanwhile, in September 2013, Senator Jinggoy Estrada made an exposé claiming that he, and
other Senators, received Php50M from the President as an incentive for voting in favor of the
impeachment of then Chief Justice Renato Corona. Secretary Abad claimed that the money was
taken from the DAP but was disbursed upon the request of the Senators.
This apparently opened a can of worms as it turns out that the DAP does not only realign funds
within the Executive. It turns out that some non-Executive projects were also funded; to name a
few: for the CPLA (Cordillera People’s Liberation Army), for the MNLF (Moro National Liberation
Front), P700M for the Quezon Province, P50-P100M for certain Senators each, P10B for
Relocation Projects, etc.
This prompted Maria Carolina Araullo, Chairperson of the Bagong Alyansang Makabayan, and
several other concerned citizens to file various petitions with the Supreme Court questioning the
validity of the DAP. Among their contentions was:
DAP is unconstitutional because it violates the constitutional rule which provides that “no money
shall be paid out of the Treasury except in pursuance of an appropriation made by law“.

Secretary Abad argued that the DAP is based on certain laws particularly the GAA (savings and
augmentation provisions thereof), Sec. 25(5), Art. VI of the Constitution (power of the President
to augment), Secs. 38 and 49 of Executive Order 292 (power of the President to suspend
expenditures and authority to use savings, respectively).

Issues:
I. Whether or not the DAP violates the principle “no money shall be paid out of the Treasury
except in pursuance of an appropriation made by law” (Sec. 29(1), Art. VI, Constitution).
II. Whether or not the DAP realignments can be considered as impoundments by the executive.
III. Whether or not the DAP realignments/transfers are constitutional.
IV. Whether or not the sourcing of unprogrammed funds to the DAP is constitutional.
V. Whether or not the Doctrine of Operative Fact is applicable.

HELD:
I. No, the DAP did not violate Section 29(1), Art. VI of the Constitution. DAP was merely a
program by the Executive and is not a fund nor is it an appropriation. It is a program for
prioritizing government spending. As such, it did not violate the Constitutional provision cited in
Section 29(1), Art. VI of the Constitution. In DAP no additional funds were withdrawn from the
Treasury otherwise, an appropriation made by law would have been required. Funds, which
were already appropriated for by the GAA, were merely being realigned via the DAP.
II. No, there is no executive impoundment in the DAP. Impoundment of funds refers to the
President’s power to refuse to spend appropriations or to retain or deduct appropriations for
whatever reason. Impoundment is actually prohibited by the GAA unless there will be an
unmanageable national government budget deficit (which did not happen). Nevertheless, there’s
no impoundment in the case at bar because what’s involved in the DAP was the transfer of
funds.
III. No, the transfers made through the DAP were unconstitutional. It is true that the President
(and even the heads of the other branches of the government) are allowed by the Constitution
to make realignment of funds, however, such transfer or realignment should only be made
“within their respective offices”. Thus, no cross-border transfers/augmentations may be allowed.
But under the DAP, this was violated because funds appropriated by the GAA for the Executive
were being transferred to the Legislative and other non-Executive agencies.
Further, transfers “within their respective offices” also contemplate realignment of funds to an
existing project in the GAA. Under the DAP, even though some projects were within the
Executive, these projects are non-existent insofar as the GAA is concerned because no funds
were appropriated to them in the GAA. Although some of these projects may be legitimate, they
are still non-existent under the GAA because they were not provided for by the GAA. As such,
transfer to such projects is unconstitutional and is without legal basis.

On the issue of what are “savings”

These DAP transfers are not “savings” contrary to what was being declared by the Executive.
Under the definition of “savings” in the GAA, savings only occur, among other instances, when
there is an excess in the funding of a certain project once it is completed, finally discontinued, or
finally abandoned. The GAA does not refer to “savings” as funds withdrawn from a slow moving
project. Thus, since the statutory definition of savings was not complied with under the DAP,
there is no basis at all for the transfers. Further, savings should only be declared at the end of
the fiscal year. But under the DAP, funds are already being withdrawn from certain projects in
the middle of the year and then being declared as “savings” by the Executive particularly by the
DBM.
IV. No. Unprogrammed funds from the GAA cannot be used as money source for the DAP
because under the law, such funds may only be used if there is a certification from the National
Treasurer to the effect that the revenue collections have exceeded the revenue targets. In this
case, no such certification was secured before unprogrammed funds were used.
V. Yes. The Doctrine of Operative Fact, which recognizes the legal effects of an act prior to it
being declared as unconstitutional by the Supreme Court, is applicable. The DAP has definitely
helped stimulate the economy. It has funded numerous projects. If the Executive is ordered to
reverse all actions under the DAP, then it may cause more harm than good. The DAP effects
can no longer be undone. The beneficiaries of the DAP cannot be asked to return what they
received especially so that they relied on the validity of the DAP. However, the Doctrine of
Operative Fact may not be applicable to the authors, implementers, and proponents of the DAP
if it is so found in the appropriate tribunals (civil, criminal, or administrative) that they have not
acted in good faith.

Topics/subject matter: 1.Moot and Academic/ Exceptions

2.Legal Standing or Locus Standi (Exceptions)
3.Operative Fact Doctrine
We find the doctrine of operative fact applicable to the adoption and implementation of the DAP.
Its application to the DAP proceeds from equity and fair play. The consequences resulting from
the DAP and its related issuances could not be ignored or could no longer be undone.
Nonetheless, as Justice Brion has pointed out during the deliberations, the doctrine of operative
fact does not always apply, and is not always the consequence of every declaration of
constitutional invalidity. It can be invoked only in situations where the nullification of the effects
of what used to be a valid law would result in inequity and injustice;212 but where no such result
would ensue, the general rule that an unconstitutional law is totally ineffective should apply.
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.
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.

-Commissioner of Internal Revenue vs. De La Salle University – G.R. No. 196596

https://lawphil.net/judjuris/juri2016/nov2016/gr_196596_2016.html

FACTS:
In 2004, the Bureau of Internal Revenue (BIR) issued to DLSU Letter of Authority (LOA) No.
2794 authorizing its revenue officers to examine the latter's books of accounts and other
accounting records for all internal revenue taxes for the period Fiscal Year Ending 2003 and
Unverified Prior Years.
BIR through a Formal Letter of Demand assessed DLSU the following deficiency taxes: (1)
income tax on rental earnings from restaurants/canteens and bookstores operating within the
campus; (2) VAT business income; and (3) documentary stamp tax (DST) on loans and lease
contracts. The BIR demanded the payment of P17,303,001.12, inclusive of surcharge, interest
and penalty for taxable years 2001, 2002 and 2003.
DLSU protested the assessment. The Commissioner failed to act on the protest; thus, DLSU
filed on August 3, 2005 a petition for review with the CTA Division.
DLSU, a non-stock, non-profit educational institutions, principally anchored its petition on Article
XIV, Section 4 (3) of the Constitution, which reads:
(3) All revenues and assets of non-stock, non-profit educational institutions used actually,
directly, and exclusively for educational purposes shall be exempt from taxes and duties. Xxx
In 2010, the CTA Division partially granted DLSU's petition for review. The DST assessment on
the loan transactions of DLSU in the amount of P11,681,774.00 is hereby CANCELLED.
However, DLSU is ordered to pay the deficiency income tax, VAT and DST on its lease
contracts, plus 25% surcharge for the fiscal years 2001, 2002 and 2003 in the total amount of
P18,421,363.53.

Both the Commissioner and DLSU moved for the reconsideration. The CTA Division denied the
Commissioner's motion for reconsideration while it held in abeyance the resolution on DLSU's
motion for reconsideration.
The Commissioner appealed to the CTA En Banc arguing that DLSU's use of its revenues and
assets for non-educational or commercial purposes removed these items from the exemption
coverage under the Constitution.
DLSU formally offered to the CTA Division supplemental pieces of documentary evidence to
prove that its rental income was used actually, directly and exclusively for educational purposes.
The CTA Division, in view of the supplemental evidence submitted, reduced the amount of
DLSU's tax deficiencies.
The CTA En Banc dismissed the Commissioner's petition for review and sustained the findings
of the CTA Division. The CTA En Banc was satisfied with DLSU's supporting evidence
confirming that part of its rental income had indeed been used to pay the loan it obtained to
build the university's Physical Education – Sports Complex.
The CTA En Banc partially granted DLSU's petition for review and further reduced its tax
liabilities to P2,554,825.47 inclusive of surcharge.

CIR ARGUMENTS:
DLSU's rental income is taxable regardless of how such income is derived, used or disposed of.
DLSU's operations of canteens and bookstores within its campus even though exclusively
serving the university community do not negate income tax liability.
The Commissioner contends that Article XIV , Section 4 (3) of the Constitution must be
harmonized with Section 30 (H) of the Tax Code, which states among others, that the income of
whatever kind and character of [a non-stock and non-profit educational institution] from any of
[its] properties, real or personal, or from any of [its] activities conducted for profit regardless of
the disposition made of such income, shall be subject to tax imposed by this Code.
The Commissioner posits that a tax-exempt organization like DLSU is exempt only from
property tax but not from income tax on the rentals earned from property. Thus, DLSU's income
from the leases of its real properties is not exempt from taxation even if the income would be
used for educational purposes.

DLSU ARGUMENTS:
DLSU stresses that Article XIV, Section 4 (3) of the Constitution is clear that all revenues and
assets of non-stock, non-profit educational institutions used actually, directly and exclusively for
educational purposes are exempt from taxes and duties.

On this point, DLSU explains that: (1) the tax exemption of non-stock, non-profit educational
institutions is novel to the 1987 Constitution and that Section 30 (H) of the 1997 Tax Code
cannot amend the 1987 Constitution; (2) Section 30 of the 1997 Tax Code is almost an exact
replica of Section 26 of the 1977 Tax Code — with the addition of non-stock, non-profit
educational institutions to the list of tax-exempt entities; and (3) that the 1977 Tax Code was
promulgated when the 1973 Constitution was still in place.
DLSU thus invokes the doctrine of constitutional supremacy, which renders any subsequent law
that is contrary to the Constitution void and without any force and effect. Section 30 (H) of the
1997 Tax Code insofar as it subjects to tax the income of whatever kind and character of a non-
stock and non-profit educational institution from any of its properties, real or personal, or from
any of its activities conducted for profit regardless of the disposition made of such income,
should be declared without force and effect in view of the constitutionally granted tax exemption
on "all revenues and assets of non-stock, non-profit educational institutions used actually,
directly, and exclusively for educational purposes."
DLSU further submits that it complies with the requirements enunciated in the YMCA case, that
for an exemption to be granted under Article XIV , Section 4 (3) of the Constitution, the taxpayer
must prove that: (1) it falls under the classification non-stock, non-profit educational institution;
and (2) the income it seeks to be exempted from taxation is used actually, directly and
exclusively for educational purposes.

ISSUE:
W/N it is required that the revenues and income of a non-stock, non-profit educational institution
must have also been sourced from educational activities or activities related to the purposes of
an educational institution for it to be tax-exempt.

RULING:
No, it is not required that the revenues and income of a non-stock, non-profit educational
institution must have also been sourced from educational activities or activities related to the
purposes of an educational institution for it to be tax-exempt
Before fully discussing the merits of the case, we observe that:
1. The constitutional provision refers to two kinds of educational institutions: (1) non-stock, non-
prot educational institutions and (2) proprietary educational institutions.
2. DLSU falls under the frst category. Even the Commissioner admits the status of DLSU as a
nonstock, non-profit educational institution.
3. While DLSU's claim for tax exemption arises from and is based on the Constitution, the
Constitution, in the same provision, also imposes certain conditions to avail of the exemption.
We discuss below the import of the constitutional text vis - à- vis the Commissioner's
counterarguments.
4. There is a marked distinction between the treatment of non-stock, non-profit educational
institutions and proprietary educational institutions. The tax exemption granted to non-stock,
non-prot educational institutions is conditioned only on the actual, direct and exclusive use of
their revenues and assets for educational purposes. While tax exemptions may also be granted
to proprietary educational institutions, these exemptions may be subject to limitations imposed
by Congress.
The Commissioner opposes DLSU's claim for tax exemption on the basis of Section 30 (H) of
the Tax Code. The relevant text reads: The following organizations shall not be taxed under this
Title [Tax Income] in respect to income received by them as such:
(H) A non-stock and non-profit educational institution xxx xxx xxx
Notwithstanding the provisions in the preceding paragraphs, the income of whatever kind and
character of the foregoing organizations from any of their properties, real or personal, or from
any of their activities conducted for profit regardless of the disposition made of such income
shall be subject to tax imposed under this Code.
The Commissioner posits that the 1997 Tax Code qualified the tax exemption granted to non-
stock, nonprofit educational institutions such that the revenues and income they derived from
their assets, or from any of their activities conducted for profit, are taxable even if these
revenues and income are used for educational purposes.

We now adopt YMCA as precedent and hold that:

1. The last paragraph of Section 30 of the Tax Code is without force and effect with respect to
nonstock, non-profit educational institutions, provided, that the non-stock, non-profit educational
institutions prove that its assets and revenues are used actually, directly and exclusively for
educational purposes.
2. The tax-exemption constitutionally-granted to non-stock, non-profit educational institutions, is
not subject to limitations imposed by law.
The tax exemption granted by the Constitution to non-stock, non-profit educational institutions is
conditioned only on the actual, direct and exclusive use of their assets, revenues and income for
educational purposes.
A plain reading of the Constitution would show that Article XIV, Section 4 (3) does not require
that the revenues and income must have also been sourced from educational activities or
activities related to the purposes of an educational institution. The phrase all revenues is
unqualified by any reference to the source of revenues. Thus, so long as the revenues and
income are used actually, directly and exclusively for educational purposes, then said revenues
and income shall be exempt from taxes and duties.
We find it helpful to discuss at this point the taxation of revenues versus the taxation of assets.

REVENUES consist of the amounts earned by a person or entity from the conduct of business
operations. It may refer to the sale of goods, rendition of services, or the return of an
investment. Revenue is a component of the tax base in income tax, VAT, and local business tax
(LBT).
ASSETS, on the other hand, are the tangible and intangible properties owned by a person or
entity. It may refer to real estate, cash deposit in a bank, investment in the stocks of a
corporation, inventory of goods, or any property from which the person or entity may derive
income or use to generate the same. In Philippine taxation, the fair market value of real property
is a component of the tax base in real property tax. Also, the landed cost of imported goods is a
component of the tax base in VAT on importation 88 88 and tariff duties.
Thus, when a non-stock, non-profit educational institution proves that it uses its revenues
actually, directly, and exclusively for educational purposes, it shall be exempted from income
tax, VAT, and LBT. On the other hand, when it also shows that it uses its assets in the form of
real property for educational purposes, it shall be exempted from RPT.
WHEREFORE, premises considered, we DENY the petition of the Commissioner of Internal
Revenue in G.R. No. 196596 and AFFIRM the December 10, 2010 decision and March 29,
2011 resolution of the Court of Tax Appeals En Banc in CTA En Banc Case No. 622, except for
the total amount of deficiency tax liabilities of De La Salle University, Inc., which had been
reduced.

- Belgica
Separation of powers, checks and balances, item veto.
https://elibrary.judiciary.gov.ph/thebookshelf/showdocs/1/56517

"Experience is the oracle of truth.”[1]

- James Madison

[2]
Before the Court are consolidated petitions taken under Rule 65 of the Rules of Court, all of
which assail the constitutionality of the Pork Barrel System. Due to the complexity of the
subject matter, the Court shall heretofore discuss the system‘s conceptual underpinnings
before detailing the particulars of the constitutional challenge.

The Facts

I. Pork Barrel: General Concept.

[3]
"Pork Barrel” is political parlance of American-English origin. Historically, its usage may be
traced to the degrading ritual of rolling out a barrel stuffed with pork to a multitude of black
slaves who would cast their famished bodies into the porcine feast to assuage their hunger
[4]
with morsels coming from the generosity of their well-fed master. This practice was later
compared to the actions of American legislators in trying to direct federal budgets in favor of
[5]
their districts. While the advent of refrigeration has made the actual pork barrel obsolete, it
persists in reference to political bills that "bring home the bacon” to a legislator‘s district and
[6]
constituents. In a more technical sense, "Pork Barrel” refers to an appropriation of
government spending meant for localized projects and secured solely or primarily to bring
[7]
money to a representative's district. Some scholars on the subject further use it to refer
[8]
to legislative control of local appropriations.

In the Philippines, "Pork Barrel” has been commonly referred to as lump-sum, discretionary
[9]
funds of Members of the Legislature, although, as will be later discussed, its usage would
evolve in reference to certain funds of the Executive.

II. History of Congressional Pork Barrel in the Philippines.

A. Pre-Martial Law Era (1922-1972).

[10] [11]
Act 3044, or the Public Works Act of 1922, is considered as the earliest form of
"Congressional Pork Barrel” in the Philippines since the utilization of the funds appropriated
therein were subjected to post- enactment legislator approval. Particularly, in the area of fund
[12]
release, Section 3 provides that the sums appropriated for certain public works
[13]
projects "shall be distributed x x x subject to the approval of a joint committee elected
by the Senate and the House of Representatives.” "[T]he committee from each House may
[also] authorize one of its members to approve the distribution made by the Secretary of
[14]
Commerce and Communications.” Also, in the area of fund realignment, the same section
provides that the said secretary, "with the approval of said joint committee, or of the
authorized members thereof, may, for the purposes of said distribution, transfer unexpended
portions of any item of appropriation under this Act to any other item hereunder.”

[15]
In 1950, it has been documented that post-enactment legislator participation broadened
from the areas of fund release and realignment to the area of project identification. During
that year, the mechanics of the public works act was modified to the extent that the
discretion of choosing projects was transferred from the Secretary of Commerce and
Communications to legislators. "For the first time, the law carried a list of projects selected by
Members of Congress, they 'being the representatives of the people, either on their own
[16]
account or by consultation with local officials or civil leaders.‘“ During this period, the pork
barrel process commenced with local government councils, civil groups, and individuals
appealing to Congressmen or Senators for projects. Petitions that were accommodated formed
part of a legislator‘s allocation, and the amount each legislator would eventually get is
determined in a caucus convened by the majority. The amount was then integrated into the
administration bill prepared by the Department of Public Works and Communications.
Thereafter, the Senate and the House of Representatives added their own provisions to the bill
[17]
until it was signed into law by the President – the Public Works Act. In the 1960‘s,
however, pork barrel legislation reportedly ceased in view of the stalemate between the
[18]
House of Representatives and the Senate.

B. Martial Law Era (1972-1986).

While the previous "Congressional Pork Barrel” was apparently discontinued in 1972 after
[19]
Martial Law was declared, an era when "one man controlled the legislature,” the reprieve
was only temporary. By 1982, the Batasang Pambansa had already introduced a new item in
the General Appropriations Act (GAA) called the "Support for Local Development Projects”
[20]
(SLDP) under the article on "National Aid to Local Government Units”. Based on reports, it
was under the SLDP that the practice of giving lump-sum allocations to individual legislators
began, with each assemblyman receiving P500,000.00. Thereafter, assemblymen
would communicate their project preferences to the Ministry of Budget and Management for
approval. Then, the said ministry would release the allocation papers to the Ministry of Local
Governments, which would, in turn, issue the checks to the city or municipal treasurers in the
assemblyman‘s locality. It has been further reported that "Congressional Pork Barrel” projects
under the SLDP also began to cover not only public works projects, or so-called "hard
[21]
projects”, but also "soft projects”, or non-public works projects such as those which would
[22]
fall under the categories of, among others, education, health and livelihood.

C. Post-Martial Law Era:

Corazon Cojuangco Aquino Administration (1986-1992).

After the EDSA People Power Revolution in 1986 and the restoration of Philippine democracy,
"Congressional Pork Barrel” was revived in the form of the "Mindanao Development
Fund” and the "Visayas Development Fund” which were created with lump-sum
appropriations of P480 Million and P240 Million, respectively, for the funding of development
[23]
projects in the Mindanao and Visayas areas in 1989. It has been documented that the
clamor raised by the Senators and the Luzon legislators for a similar funding, prompted the
creation of the "Countrywide Development Fund” (CDF) which was integrated into
[24]
the 1990 GAA with an initial funding of P2.3 Billion to cover "small local infrastructure
and other priority community projects.”

[25]
Under the GAAs for the years 1991 and 1992, CDF funds were, with the approval of the
President, to be released directly to the implementing agencies but "subject to the submission
of the required list of projects and activities.” Although the GAAs from 1990 to 1992 were
silent as to the amounts of allocations of the individual legislators, as well as their
[26]
participation in the identification of projects, it has been reported that by 1992,
Representatives were receiving P12.5 Million each in CDF funds, while Senators were
receiving P18 Million each, without any limitation or qualification, and that they could identify
any kind of project, from hard or infrastructure projects such as roads, bridges, and buildings
[27]
to "soft projects” such as textbooks, medicines, and scholarships.

D. Fidel Valdez Ramos (Ramos) Administration (1992-1998).

[28]
The following year, or in 1993, the GAA explicitly stated that the release of CDF funds was
to be made upon the submission of the list of projects and activities identified by, among
others, individual legislators. For the first time, the 1993 CDF Article included an allocation
[29]
for the Vice-President. As such, Representatives were allocated P12.5 Million each in CDF
funds, Senators, P18 Million each, and the Vice- President, P20 Million.

[30] [31] [32]

In 1994, 1995, and 1996, the GAAs contained the same provisions on project
identification and fund release as found in the 1993 CDF Article. In addition, however, the
Department of Budget and Management (DBM) was directed to submit reports to the Senate
Committee on Finance and the House Committee on Appropriations on the releases made
[33]
from the funds.

[34]
Under the 1997 CDF Article, Members of Congress and the Vice- President, in
consultation with the implementing agency concerned, were directed to submit to the DBM
the list of 50% of projects to be funded from their respective CDF allocations which shall be
duly endorsed by (a) the Senate President and the Chairman of the Committee on Finance, in
the case of the Senate, and (b) the Speaker of the House of Representatives and the Chairman
of the Committee on Appropriations, in the case of the House of Representatives; while the list
for the remaining 50% was to be submitted within six (6) months thereafter. The same article
also stated that the project list, which would be published by the DBM, [35] "shall be the basis
for the release of funds” and that "[n]o funds appropriated herein shall be disbursed for
projects not included in the list herein required.”

[36]
The following year, or in 1998, the foregoing provisions regarding the required lists and
endorsements were reproduced, except that the publication of the project list was no longer
required as the list itself sufficed for the release of CDF Funds.

The CDF was not, however, the lone form of "Congressional Pork Barrel” at that time. Other
forms of "Congressional Pork Barrel” were reportedly fashioned and inserted into the GAA
(called "Congressional Insertions” or "CIs”) in order to perpetuate the administration‘s political
[37]
agenda. It has been articulated that since CIs "formed part and parcel of the budgets of
executive departments, they were not easily identifiable and were thus harder to monitor.”
Nonetheless, the lawmakers themselves as well as the finance and budget officials of the
implementing agencies, as well as the DBM, purportedly knew about the insertions.
[38]
Examples of these CIs are the Department of Education (DepEd) School Building Fund, the
Congressional Initiative Allocations, the Public Works Fund, the El Niño Fund, and the Poverty
[39]
Alleviation Fund. The allocations for the School Building Fund, particularly, "shall be made
upon prior consultation with the representative of the legislative
[40]
district concerned.” Similarly, the legislators had the power to direct how, where and
[41]
when these appropriations were to be spent.

E. Joseph Ejercito Estrada (Estrada) Administration (1998-2001).

[42]
In 1999, the CDF was removed in the GAA and replaced by three (3) separate forms of CIs,
[43]
namely, the "Food Security Program Fund,” the "Lingap Para Sa Mahihirap Program
[44] [45]
Fund,” and the "Rural/Urban Development Infrastructure Program Fund,” all of which
contained a special provision requiring “prior consultation” with the Members of Congress for
the release of the funds.

[46]
It was in the year 2000 that the "Priority Development Assistance Fund” (PDAF) appeared
in the GAA. The requirement of "prior consultation with the respective Representative of the
District” before PDAF funds were directly released to the implementing agency concerned was
explicitly stated in the 2000 PDAF Article. Moreover, realignment of funds to any expense
category was expressly allowed, with the sole condition that no amount shall be used to fund
[47]
personal services and other personnel benefits. The succeeding PDAF provisions remained
[48]
the same in view of the re-enactment of the 2000 GAA for the year 2001.

F. Gloria Macapagal-Arroyo (Arroyo) Administration (2001-2010).

[49]
The 2002 PDAF Article was brief and straightforward as it merely contained a single
special provision ordering the release of the funds directly to the implementing agency or
local government unit concerned, without further qualifications. The following year, 2003,
[50]
the same single provision was present, with simply an expansion of purpose and express
authority to realign. Nevertheless, the provisions in the 2003 budgets of the Department of
[51] [52]
Public Works and Highways (DPWH) and the DepEd required prior consultation with
Members of Congress on the aspects of implementation delegation and project list
[53]
submission, respectively. In 2004, the 2003 GAA was re-enacted.

[54]
In 2005, the PDAF Article provided that the PDAF shall be used "to fund priority programs
and projects under the ten point agenda of the national government and shall be released
directly to the implementing agencies.” It also introduced the program menu concept,
[55]
which is essentially a list of general programs and implementing agencies from which a
particular PDAF project may be subsequently chosen by the identifying authority. The 2005
[56]
GAA was re-enacted in 2006 and hence, operated on the same bases. In similar regard, the
[57] [58] [59]
program menu concept was consistently integrated into the 2007, 2008, 2009, and
[60]
2010 GAAs.

Textually, the PDAF Articles from 2002 to 2010 were silent with respect to the specific
amounts allocated for the individual legislators, as well as their participation in the proposal
and identification of PDAF projects to be funded. In contrast to the PDAF Articles, however,
the provisions under the DepEd School Building Program and the DPWH budget, similar to its
predecessors, explicitly required prior consultation with the concerned Member of
[61]
Congress anent certain aspects of project implementation.

Significantly, it was during this era that provisions which allowed formal participation of non-
governmental organizations (NGO) in the implementation of government projects were
introduced. In the Supplemental Budget for 2006, with respect to the appropriation for school
buildings, NGOs were, by law, encouraged to participate. For such purpose, the law stated
that "the amount of at least P250 Million of the P500 Million allotted for the construction and
completion of school buildings shall be made available to NGOs including the Federation of
Filipino-Chinese Chambers of Commerce and Industry, Inc. for its "Operation Barrio School”
program[,] with capability and proven track records in the construction of public school
[62]
buildings x x x.” The same allocation was made available to NGOs in the 2007 and 2009
[63]
GAAs under the DepEd Budget. Also, it was in 2007 that the Government Procurement
[64]
Policy Board (GPPB) issued Resolution No. 12-2007 dated June 29, 2007 (GPPB Resolution
[65] [66]
12-2007), amending the implementing rules and regulations of RA 9184, the
[67]
Government Procurement Reform Act, to include, as a form of negotiated procurement, the
[68]
procedure whereby the Procuring Entity (the implementing agency) may enter into
a memorandum of agreement with an NGO, provided that "an appropriation law or ordinance
[69]
earmarks an amount to be specifically contracted out to NGOs.”

G. Present Administration (2010-Present).

[70]
Differing from previous PDAF Articles but similar to the CDF Articles, the 2011 PDAF
Article included an express statement on lump- sum amounts allocated for individual
legislators and the Vice-President: Representatives were given P70 Million each, broken down
into P40 Million for "hard projects” and P30 Million for "soft projects”; while P200 Million was
given to each Senator as well as the Vice-President, with a P100 Million allocation each for
"hard” and "soft projects.” Likewise, a provision on realignment of funds was included, but
with the qualification that it may be allowed only once. The same provision also allowed the
Secretaries of Education, Health, Social Welfare and Development, Interior and Local
Government, Environment and Natural Resources, Energy, and Public Works and Highways to
realign PDAF Funds, with the further conditions that: (a) realignment is within the same
implementing unit and same project category as the original project, for infrastructure
projects; (b) allotment released has not yet been obligated for the original scope of work, and
[71]
(c) the request for realignment is with the concurrence of the legislator concerned.

[72] [73]
In the 2012 and 2013 PDAF Articles, it is stated that the "[i]dentification of projects
and/or designation of beneficiaries shall conform to the priority list, standard or design
prepared by each implementing agency [(priority list requirement)] x x x.” However, as
practiced, it would still be the individual legislator who would choose and identify the project
[74]
from the said priority list.

[75] [76]
Provisions on legislator allocations as well as fund realignment were included in the
2012 and 2013 PDAF Articles; but the allocation for the Vice-President, which was pegged at
P200 Million in the 2011 GAA, had been deleted. In addition, the 2013 PDAF Article
now allowed LGUs to be identified as implementing agencies if they have the technical
[77]
capability to implement the projects. Legislators were also allowed to identify
programs/projects, except for assistance to indigent patients and scholarships, outside of his
legislative district provided that he secures the written concurrence of the legislator of the
[78]
intended outside-district, endorsed by the Speaker of the House. Finally, any realignment
of PDAF funds, modification and revision of project identification, as well as requests for
release of funds, were all required to be favorably endorsed by the House Committee on
[79]
Appropriations and the Senate Committee on Finance, as the case may be.

III. History of Presidential Pork Barrel in the Philippines.

While the term "Pork Barrel” has been typically associated with lump- sum, discretionary funds
of Members of Congress, the present cases and the recent controversies on the matter have,
however, shown that the term‘s usage has expanded to include certain funds of the President
such as the Malampaya Funds and the Presidential Social Fund.

[80]
On the one hand, the Malampaya Funds was created as a special fund under Section 8 of
[81]
Presidential Decree No. (PD) 910, issued by then President Ferdinand E. Marcos (Marcos)
on March 22, 1976. In enacting the said law, Marcos recognized the need to set up a special
fund to help intensify, strengthen, and consolidate government efforts relating to the
exploration, exploitation, and development of indigenous energy resources vital to economic
[82]
growth. Due to the energy-related activities of the government in the Malampaya natural
 [83]
gas field in Palawan, or the "Malampaya Deep Water Gas-to-Power Project”, the special
fund created under PD 910 has been currently labeled as Malampaya Funds.

[84]
On the other hand the Presidential Social Fund was created under Section 12, Title IV of
[85]
PD 1869, or the Charter of the Philippine Amusement and Gaming Corporation (PAGCOR).
PD 1869 was similarly issued by Marcos on July 11, 1983. More than two (2) years after, he
amended PD 1869 and accordingly issued PD 1993 on October 31, 1985, [86] amending Section
1287 of the former law. As it stands, the Presidential Social Fund has been described as a
special funding facility managed and administered by the Presidential Management Staff
through which the President provides direct assistance to priority programs and projects not
funded under the regular budget. It is sourced from the share of the government in the
aggregate gross earnings of PAGCOR.88

IV. Controversies in the Philippines.

[89]
Over the decades, "pork” funds in the Philippines have increased tremendously, owing in
no small part to previous Presidents who reportedly used the "Pork Barrel” in order to gain
[90]
congressional support. It was in 1996 when the first controversy surrounding the "Pork
Barrel” erupted. Former Marikina City Representative Romeo Candazo (Candazo), then an
anonymous source, "blew the lid on the huge sums of government money that regularly went
[91]
into the pockets of legislators in the form of kickbacks.” He said that ?the kickbacks were
'SOP‘ (standard operating procedure) among legislators and ranged from a low 19 percent to a
high 52 percent of the cost of each project, which could be anything from dredging, rip
[92]
rapping, asphalting, concreting, and construction of school buildings.” "Other sources of
kickbacks that Candazo identified were public funds intended for medicines and textbooks. A
few days later, the tale of the money trail became the banner story of the [Philippine Daily]
[93]
Inquirer issue of [August] 13, 1996, accompanied by an illustration of a roasted pig.” "The
publication of the stories, including those about congressional initiative allocations of certain
[94]
lawmakers, including P3.6 [B]illion for a [C]ongressman, sparked public outrage.”

Thereafter, or in 2004, several concerned citizens sought the nullification of the PDAF as
enacted in the 2004 GAA for being unconstitutional. Unfortunately, for lack of "any pertinent
evidentiary support that illegal misuse of PDAF in the form of kickbacks has become a
[95]
common exercise of unscrupulous Members of Congress,” the petition was dismissed.

Recently, or in July of the present year, the National Bureau of Investigation (NBI) began its
probe into allegations that "the government has been defrauded of some P10 Billion over the
past 10 years by a syndicate using funds from the pork barrel of lawmakers and various
[96]
government agencies for scores of ghost projects.” The investigation was spawned by
sworn affidavits of six (6) whistle-blowers who declared that JLN Corporation – "JLN” standing
for Janet Lim Napoles (Napoles) – had swindled billions of pesos from the public coffers for
"ghost projects” using no fewer than 20 dummy NGOs for an entire decade. While the NGOs
were supposedly the ultimate recipients of PDAF funds, the whistle-blowers declared that the
[97]
money was diverted into Napoles‘ private accounts. Thus, after its investigation on the
Napoles controversy, criminal complaints were filed before the Office of the Ombudsman,
charging five (5) lawmakers for Plunder, and three (3) other lawmakers for Malversation, Direct
Bribery, and Violation of the Anti-Graft and Corrupt Practices Act. Also recommended to be
charged in the complaints are some of the lawmakers‘ chiefs-of-staff or representatives, the
heads and other officials of three (3) implementing agencies, and the several presidents of the
[98]
NGOs set up by Napoles.
On August 16, 2013, the Commission on Audit (CoA) released the results of a three-year audit
[99]
investigation covering the use of legislators' PDAF from 2007 to 2009, or during the last
three (3) years of the Arroyo administration. The purpose of the audit was to determine the
propriety of releases of funds under PDAF and the Various Infrastructures including Local
[100]
Projects (VILP) by the DBM, the application of these funds and the implementation of
projects by the appropriate implementing agencies and several government-owned-and-
[101]
controlled corporations (GOCCs). The total releases covered by the audit amounted to
P8.374 Billion in PDAF and P32.664 Billion in VILP, representing 58% and 32%, respectively, of
the total PDAF and VILP releases that were found to have been made nationwide during the
[102]
audit period. Accordingly, the CoA‘s findings contained in its Report No. 2012-03 (CoA
Report), entitled "Priority Development Assistance Fund (PDAF) and Various Infrastructures
[103]
including Local Projects (VILP),” were made public, the highlights of which are as follows:

 Amounts released for projects identified by a considerable number of legislators

significantly exceeded their respective allocations.
 Amounts were released for projects outside of legislative districts of sponsoring members
of the Lower House.
 Total VILP releases for the period exceeded the total amount appropriated under the 2007
to 2009 GAAs.
 Infrastructure projects were constructed on private lots without these having been turned
over to the government.
 Significant amounts were released to [implementing agencies] without the latter‘s
endorsement and without considering their mandated functions, administrative and
technical capabilities to implement projects.
 Implementation of most livelihood projects was not undertaken by the [implementing
agencies] themselves but by [NGOs] endorsed by the proponent legislators to which the
Funds were transferred. • The funds were transferred to the NGOs in spite of the absence
of any appropriation law or ordinance.
 Selection of the NGOs were not compliant with law and regulations.
 Eighty-Two (82) NGOs entrusted with implementation of seven hundred seventy two (772)
projects amount to [P]6.156 Billion were either found questionable, or submitted
questionable/spurious documents, or failed to liquidate in whole or in part their utilization
of the Funds.
 Procurement by the NGOs, as well as some implementing agencies, of goods and services
reportedly used in the projects were not compliant with law.

As for the "Presidential Pork Barrel”, whistle-blowers alleged that "[a]t least P900 Million from
royalties in the operation of the Malampaya gas project off Palawan province intended for
[104]
agrarian reform beneficiaries has gone into a dummy [NGO].” According to incumbent CoA
Chairperson Maria Gracia Pulido Tan (CoA Chairperson), the CoA is, as of this writing, in the
[105]
process of preparing "one consolidated report” on the Malampaya Funds.

V. The Procedural Antecedents.

Spurred in large part by the findings contained in the CoA Report and the Napoles controversy,
several petitions were lodged before the Court similarly seeking that the "Pork Barrel System”
be declared unconstitutional. To recount, the relevant procedural antecedents in these cases
are as follows:
On August 28, 2013, petitioner Samson S. Alcantara (Alcantara), President of the Social
Justice Society, filed a Petition for Prohibition of even date under Rule 65 of the Rules of Court
(Alcantara Petition), seeking that the "Pork Barrel System” be declared unconstitutional, and a
writ of prohibition be issued permanently restraining respondents Franklin M. Drilon and
Feliciano S. Belmonte, Jr., in their respective capacities as the incumbent Senate President
and Speaker of the House of Representatives, from further taking any steps to enact
legislation appropriating funds for the "Pork Barrel System,” in whatever form and by whatever
[106]
name it may be called, and from approving further releases pursuant thereto. The
Alcantara Petition was docketed as G.R. No. 208493.

On September 3, 2013, petitioners Greco Antonious Beda B. Belgica, Jose L. Gonzalez, Reuben
M. Abante, Quintin Paredes San Diego (Belgica, et al.), and Jose M. Villegas, Jr. (Villegas) filed
an Urgent Petition For Certiorari and Prohibition With Prayer For The Immediate Issuance of
Temporary Restraining Order (TRO) and/or Writ of Preliminary Injunction dated August 27, 2013
under Rule 65 of the Rules of Court (Belgica Petition), seeking that the annual "Pork Barrel
System,” presently embodied in the provisions of the GAA of 2013 which provided for the 2013
PDAF, and the Executive‘s lump-sum, discretionary funds, such as the Malampaya Funds and
[107]
the Presidential Social Fund, be declared unconstitutional and null and void for being acts
constituting grave abuse of discretion. Also, they pray that the Court issue a TRO against
respondents Paquito N. Ochoa, Jr., Florencio B. Abad (Secretary Abad) and Rosalia V. De Leon,
in their respective capacities as the incumbent Executive Secretary, Secretary of the
Department of Budget and Management (DBM), and National Treasurer, or their agents, for
them to immediately cease any expenditure under the aforesaid funds. Further, they pray that
the Court order the foregoing respondents to release to the CoA and to the public: (a) "the
complete schedule/list of legislators who have availed of their PDAF and VILP from the years
2003 to 2013, specifying the use of the funds, the project or activity and the recipient entities
or individuals, and all pertinent data thereto”; and (b) "the use of the Executive‘s [lump-sum,
discretionary] funds, including the proceeds from the x x x Malampaya Fund[s] [and]
remittances from the [PAGCOR] x x x from 2003 to 2013, specifying the x x x project or
[108]
activity and the recipient entities or individuals, and all pertinent data thereto.” Also, they
pray for the "inclusion in budgetary deliberations with the Congress of all presently off-budget,
[lump-sum], discretionary funds including, but not limited to, proceeds from the Malampaya
[109]
Fund[s] [and] remittances from the [PAGCOR].” The Belgica Petition was docketed as G.R.
[110]
No. 208566.

Lastly, on September 5, 2013, petitioner Pedrito M. Nepomuceno (Nepomuceno), filed a

Petition dated August 23, 2012 (Nepomuceno Petition), seeking that the PDAF be declared
unconstitutional, and a cease and desist order be issued restraining President Benigno Simeon
S. Aquino III (President Aquino) and Secretary Abad from releasing such funds to Members of
Congress and, instead, allow their release to fund priority projects identified and approved by
the Local Development Councils in consultation with the executive departments, such as the
DPWH, the Department of Tourism, the Department of Health, the Department of
Transportation, and Communication and the National Economic Development Authority.
[111] [112]
The Nepomuceno Petition was docketed as UDK-14951.

On September 10, 2013, the Court issued a Resolution of even date ( a) consolidating all cases;
(b) requiring public respondents to comment on the consolidated petitions; ( c) issuing a TRO
(September 10, 2013 TRO) enjoining the DBM, National Treasurer, the Executive Secretary, or
any of the persons acting under their authority from releasing (1) the remaining PDAF
allocated to Members of Congress under the GAA of 2013, and (2) Malampaya Funds under the
phrase "for such other purposes as may be hereafter directed by the President” pursuant to
Section 8 of PD 910 but not for the purpose of "financ[ing] energy resource development and
exploitation programs and projects of the government” under the same provision; and ( d)
setting the consolidated cases for Oral Arguments on October 8, 2013.

On September 23, 2013, the Office of the Solicitor General (OSG) filed a Consolidated
Comment (Comment) of even date before the Court, seeking the lifting, or in the alternative,
the partial lifting with respect to educational and medical assistance purposes, of the Court‘s
September 10, 2013 TRO, and that the consolidated petitions be dismissed for lack of merit.
[113]

On September 24, 2013, the Court issued a Resolution of even date directing petitioners to
reply to the Comment.

Petitioners, with the exception of Nepomuceno, filed their respective replies to the Comment:
(a) on September 30, 2013, Villegas filed a separate Reply dated September 27, 2013 (Villegas
Reply); (b) on October 1, 2013, Belgica, et al. filed a Reply dated September 30, 2013 (Belgica
Reply); and (c) on October 2, 2013, Alcantara filed a Reply dated October 1, 2013.

On October 1, 2013, the Court issued an Advisory providing for the guidelines to be observed
by the parties for the Oral Arguments scheduled on October 8, 2013. In view of the technicality
of the issues material to the present cases, incumbent Solicitor General Francis H. Jardeleza
(Solicitor General) was directed to bring with him during the Oral Arguments representative/s
from the DBM and Congress who would be able to competently and completely answer
questions related to, among others, the budgeting process and its implementation. Further,
the CoA Chairperson was appointed as amicus curiae and thereby requested to appear before
the Court during the Oral Arguments.

On October 8 and 10, 2013, the Oral Arguments were conducted. Thereafter, the Court
directed the parties to submit their respective memoranda within a period of seven (7) days, or
until October 17, 2013, which the parties subsequently did.

The Issues Before the Court

Based on the pleadings, and as refined during the Oral Arguments, the following are the main
issues for the Court‘s resolution:

I. Procedural Issues.

Whether or not (a) the issues raised in the consolidated petitions involve an actual and
justiciable controversy; (b) the issues raised in the consolidated petitions are matters of
policy not subject to judicial review; (c) petitioners have legal standing to sue; and (d) the
Court‘s Decision dated August 19, 1994 in G.R. Nos. 113105, 113174, 113766, and 113888,
entitled "Philippine Constitution Association v. Enriquez ”[114] (Philconsa) and Decision dated
April 24, 2012 in G.R. No. 164987, entitled " Lawyers Against Monopoly and Poverty v.
Secretary of Budget and Management”[115] (LAMP) bar the re- litigation of the issue of
constitutionality of the "Pork Barrel System” under the principles of res judicata and stare
decisis.

II. Substantive Issues on the “Congressional Pork Barrel.”

Whether or not the 2013 PDAF Article and all other Congressional Pork Barrel Laws similar
thereto are unconstitutional considering that they violate the principles of/constitutional
provisions on (a) separation of powers; (b) non-delegability of legislative power; (c) checks and
balances; (d) accountability; (e) political dynasties; and (f) local autonomy.

III. Substantive Issues on the “Presidential Pork Barrel.”

Whether or not the phrases ( a) "and for such other purposes as may be hereafter directed by
the President” under Section 8 of PD 910, [116] relating to the Malampaya Funds, and (b) "to
finance the priority infrastructure development projects and to finance the restoration of
damaged or destroyed facilities due to calamities, as may be directed and authorized by the
Office of the President of the Philippines” under Section 12 of PD 1869, as amended by PD
1993, relating to the Presidential Social Fund, are unconstitutional insofar as they constitute
undue delegations of legislative power.

These main issues shall be resolved in the order that they have been stated. In addition, the
Court shall also tackle certain ancillary issues as prompted by the present cases.

The Court’s Ruling

The petitions are partly granted.

I. Procedural Issues.

The prevailing rule in constitutional litigation is that no question involving the constitutionality
or validity of a law or governmental act may be heard and decided by the Court unless there is
[117]
compliance with the legal requisites for judicial inquiry, namely: (a) there must be
an actual case or controversy calling for the exercise of judicial power; (b) the person
challenging the act must have the standing to question the validity of the subject act or
issuance; (c) the question of constitutionality must be raised at the earliest opportunity; and
[118]
(d) the issue of constitutionality must be the very lis mota of the case. Of these
[119]
requisites, case law states that the first two are the most important and, therefore, shall
be discussed forthwith.

A. Existence of an Actual Case or Controversy.

By constitutional fiat, judicial power operates only when there is an actual case or
[120]
controversy. This is embodied in Section 1, Article VIII of the 1987 Constitution which
pertinently states that "[j]udicial power includes the duty of the courts of justice to settle
actual controversies involving rights which are legally demandable and enforceable x x x.”
Jurisprudence provides that an actual case or controversy is one which "involves a conflict of
legal rights, an assertion of opposite legal claims, susceptible of judicial resolution as
[121]
distinguished from a hypothetical or abstract difference or dispute.” In other words,
"[t]here must be a contrariety of legal rights that can be interpreted and enforced on the basis
[122]
of existing law and jurisprudence.” Related to the requirement of an actual case or
controversy is the requirement of "ripeness,” meaning that the questions raised for
constitutional scrutiny are already ripe for adjudication. "A question is ripe for adjudication
when the act being challenged has had a direct adverse effect on the individual challenging it.
It is a prerequisite that something had then been accomplished or performed by either branch
before a court may come into the picture, and the petitioner must allege the existence of an
[123]
immediate or threatened injury to itself as a result of the challenged action.” "Withal,
courts will decline to pass upon constitutional issues through advisory opinions, bereft as they
[124]
are of authority to resolve hypothetical or moot questions.”

Based on these principles, the Court finds that there exists an actual and justiciable
controversy in these cases.

The requirement of contrariety of legal rights is clearly satisfied by the antagonistic positions
of the parties on the constitutionality of the "Pork Barrel System.” Also, the questions in these
consolidated cases are ripe for adjudication since the challenged funds and the provisions
allowing for their utilization – such as the 2013 GAA for the PDAF, PD 910 for the Malampaya
Funds and PD 1869, as amended by PD 1993, for the Presidential Social Fund – are currently
existing and operational; hence, there exists an immediate or threatened injury to petitioners
as a result of the unconstitutional use of these public funds.

As for the PDAF, the Court must dispel the notion that the issues related thereto had been
rendered moot and academic by the reforms undertaken by respondents. A case becomes
moot when there is no more actual controversy between the parties or no useful purpose can
[125]
be served in passing upon the merits. Differing from this description, the Court observes
that respondents‘ proposed line-item budgeting scheme would not terminate the controversy
nor diminish the useful purpose for its resolution since said reform is geared towards the 2014
budget, and not the 2013 PDAF Article which, being a distinct subject matter, remains legally
effective and existing. Neither will the President‘s declaration that he had already "abolished
the PDAF” render the issues on PDAF moot precisely because the Executive branch of
government has no constitutional authority to nullify or annul its legal existence. By
constitutional design, the annulment or nullification of a law may be done either by Congress,
through the passage of a repealing law, or by the Court, through a declaration of
unconstitutionality. Instructive on this point is the following exchange between Associate
Justice Antonio T. Carpio (Justice Carpio) and the Solicitor General during the Oral
[126]
Arguments:

Justice Carpio: [T]he President has taken an oath to faithfully execute the law, [127] correct?

Solicitor General Jardeleza: Yes, Your Honor.

Justice Carpio: And so the President cannot refuse to implement the General Appropriations
Act, correct?

Solicitor General Jardeleza: Well, that is our answer, Your Honor. In the case, for example of
the PDAF, the President has a duty to execute the laws but in the face of the outrage over
PDAF, the President was saying, "I am not sure that I will continue the release of the soft
projects,” and that started, Your Honor. Now, whether or not that … (interrupted)

Justice Carpio: Yeah. I will grant the President if there are anomalies in the project, he has the
power to stop the releases in the meantime, to investigate, and that is Section [38] of Chapter
5 of Book 6 of the Revised Administrative Code [128] x x x. So at most the President can
suspend, now if the President believes that the PDAF is unconstitutional, can he just refuse to
implement it?

Solicitor General Jardeleza: No, Your Honor, as we were trying to say in the specific case of
the PDAF because of the CoA Report, because of the reported irregularities and this Court can
take judicial notice, even outside, outside of the COA Report, you have the report of the
whistle-blowers, the President was just exercising precisely the duty ….
x x x x

Justice Carpio: Yes, and that is correct. You‘ve seen the CoA Report, there are anomalies, you
stop and investigate, and prosecute, he has done that. But, does that mean that PDAF has
been repealed?

Solicitor General Jardeleza: No, Your Honor x x x.

x x x x

Justice Carpio: So that PDAF can be legally abolished only in two (2) cases. Congress passes
a law to repeal it, or this Court declares it unconstitutional, correct?

Solictor General Jardeleza: Yes, Your Honor.

Justice Carpio: The President has no power to legally abolish PDAF. (Emphases supplied)

Even on the assumption of mootness, jurisprudence, nevertheless, dictates that "the 'moot
and academic‘ principle is not a magical formula that can automatically dissuade the Court in
resolving a case.” The Court will decide cases, otherwise moot, if: first, there is a grave
violation of the Constitution; second, the exceptional character of the situation and the
paramount public interest is involved; third, when the constitutional issue raised requires
formulation of controlling principles to guide the bench, the bar, and the public; and fourth,
[129]
the case is capable of repetition yet evading review.

The applicability of the first exception is clear from the fundamental posture of petitioners –
they essentially allege grave violations of the Constitution with respect to, inter alia, the
principles of separation of powers, non-delegability of legislative power, checks and balances,
accountability and local autonomy.

The applicability of the second exception is also apparent from the nature of the interests
involved – the constitutionality of the very system within which significant amounts of public
funds have been and continue to be utilized and expended undoubtedly presents a situation of
exceptional character as well as a matter of paramount public interest. The present petitions,
in fact, have been lodged at a time when the system‘s flaws have never before been
magnified. To the Court‘s mind, the coalescence of the CoA Report, the accounts of numerous
whistle-blowers, and the government‘s own recognition that reforms are needed "to address
[130]
the reported abuses of the PDAF” demonstrates a prima facie pattern of abuse which
only underscores the importance of the matter. It is also by this finding that the Court finds
petitioners‘ claims as not merely theorized, speculative or hypothetical. Of note is the weight
accorded by the Court to the findings made by the CoA which is the constitutionally-mandated
[131]
audit arm of the government. In Delos Santos v. CoA, a recent case wherein the Court
upheld the CoA‘s disallowance of irregularly disbursed PDAF funds, it was emphasized that:

[T]he CoA is endowed with enough latitude to determine, prevent, and disallow irregular,
unnecessary, excessive, extravagant or unconscionable expenditures of government funds. It
is tasked to be vigilant and conscientious in safeguarding the proper use of the government's,
and ultimately the people's, property. The exercise of its general audit power is among the
constitutional mechanisms that gives life to the check and balance system inherent in our
form of government.
[I]t is the general policy of the Court to sustain the decisions of administrative authorities,
especially one which is constitutionally-created, such as the CoA, not only on the basis of the
doctrine of separation of powers but also for their presumed expertise in the laws they are
entrusted to enforce. Findings of administrative agencies are accorded not only respect but
also finality when the decision and order are not tainted with unfairness or arbitrariness that
would amount to grave abuse of discretion. It is only when the CoA has acted without or in
excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of
jurisdiction, that this Court entertains a petition questioning its rulings. x x x. (Emphases
supplied)

Thus, if only for the purpose of validating the existence of an actual and justiciable
controversy in these cases, the Court deems the findings under the CoA Report to be
sufficient.

The Court also finds the third exception to be applicable largely due to the practical need for
a definitive ruling on the system‘s constitutionality. As disclosed during the Oral Arguments,
the CoA Chairperson estimates that thousands of notices of disallowances will be issued by
her office in connection with the findings made in the CoA Report. In this relation, Associate
Justice Marvic Mario Victor F. Leonen (Justice Leonen) pointed out that all of these would
eventually find their way to the courts.[132] Accordingly, there is a compelling need to
formulate controlling principles relative to the issues raised herein in order to guide the
bench, the bar, and the public, not just for the expeditious resolution of the anticipated
disallowance cases, but more importantly, so that the government may be guided on how
public funds should be utilized in accordance with constitutional principles.

Finally, the application of the fourth exception is called for by the recognition that the
preparation and passage of the national budget is, by constitutional imprimatur, an affair of
[133]
annual occurrence. The relevance of the issues before the Court does not cease with the
[134]
passage of a "PDAF- free budget for 2014.” The evolution of the "Pork Barrel System,” by
its multifarious iterations throughout the course of history, lends a semblance of truth to
petitioners‘ claim that "the same dog will just resurface wearing a different
[135] [136]
collar.” In Sanlakas v. Executive Secretary, the government had already backtracked
on a previous course of action yet the Court used the "capable of repetition but evading
[137]
review” exception in order "[t]o prevent similar questions from re-emerging.” The
situation similarly holds true to these cases. Indeed, the myriad of issues underlying the
manner in which certain public funds are spent, if not resolved at this most opportune time,
are capable of repetition and hence, must not evade judicial review.

B. Matters of Policy: the Political Question Doctrine.

The "limitation on the power of judicial review to actual cases and controversies” carries the
assurance that "the courts will not intrude into areas committed to the other branches of
[138]
government.” Essentially, the foregoing limitation is a restatement of the political
[139]
question doctrine which, under the classic formulation of Baker v. Carr, applies when
there is found, among others, "a textually demonstrable constitutional commitment of the
issue to a coordinate political department,” "a lack of judicially discoverable and manageable
standards for resolving it” or "the impossibility of deciding without an initial policy
determination of a kind clearly for non-judicial discretion.” Cast against this light, respondents
submit that the "[t]he political branches are in the best position not only to perform budget-
related reforms but also to do them in response to the specific demands of their constituents”
[140]
and, as such, "urge [the Court] not to impose a solution at this stage.”
The Court must deny respondents‘ submission.

Suffice it to state that the issues raised before the Court do not present political but legal
questions which are within its province to resolve. A political question refers to "those
questions which, under the Constitution, are to be decided by the people in their sovereign
capacity, or in regard to which full discretionary authority has been delegated to the
Legislature or executive branch of the Government. It is concerned with issues dependent
[141]
upon the wisdom, not legality, of a particular measure.” The intrinsic constitutionality of
the “Pork Barrel System” is not an issue dependent upon the wisdom of the political branches
of government but rather a legal one which the Constitution itself has commanded the Court
to act upon. Scrutinizing the contours of the system along constitutional lines is a task that
the political branches of government are incapable of rendering precisely because it is an
exercise of judicial power. More importantly, the present Constitution has not only vested the
Judiciary the right to exercise judicial power but essentially makes it a duty to proceed
therewith. Section 1, Article VIII of the 1987 Constitution cannot be any clearer: "The judicial
power shall be vested in one Supreme Court and in such lower courts as may be established
by law. [It] 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
[142]
any branch or instrumentality of the Government.” In Estrada v. Desierto, the expanded
concept of judicial power under the 1987 Constitution and its effect on the political question
[143]
doctrine was explained as follows:

To a great degree, the 1987 Constitution has narrowed the reach of the political question
doctrine when it expanded the power of judicial review of this court not only to settle actual
controversies involving rights which are legally demandable and enforceable but also 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 government. Heretofore,
the judiciary has focused on the "thou shalt not's" of the Constitution directed against the
exercise of its jurisdiction. With the new provision, however, courts are given a greater
prerogative to determine what it can do to prevent grave abuse of discretion amounting to
lack or excess of jurisdiction on the part of any branch or instrumentality of
government. Clearly, the new provision did not just grant the Court power of doing nothing. x
x x (Emphases supplied)

It must also be borne in mind that "when the judiciary mediates to allocate constitutional
boundaries, it does not assert any superiority over the other departments; does not in reality
nullify or invalidate an act of the legislature [or the executive], but only asserts the solemn
[144]
and sacred obligation assigned to it by the Constitution.” To a great extent, the Court is
laudably cognizant of the reforms undertaken by its co-equal branches of government. But it is
by constitutional force that the Court must faithfully perform its duty. Ultimately, it is the
Court‘s avowed intention that a resolution of these cases would not arrest or in any manner
impede the endeavors of the two other branches but, in fact, help ensure that the pillars of
change are erected on firm constitutional grounds. After all, it is in the best interest of the
people that each great branch of government, within its own sphere, contributes its share
towards achieving a holistic and genuine solution to the problems of society. For all these
reasons, the Court cannot heed respondents‘ plea for judicial restraint.

C. Locus Standi.

"The gist of the question of standing is whether a party alleges such personal stake in the
outcome of the controversy as to assure that concrete adverseness which sharpens the
presentation of issues upon which the court depends for illumination of difficult constitutional
questions. Unless a person is injuriously affected in any of his constitutional rights by the
[145]
operation of statute or ordinance, he has no standing.”

Petitioners have come before the Court in their respective capacities as citizen-taxpayers and
accordingly, assert that they "dutifully contribute to the coffers of the National
[146]
Treasury.” Clearly, as taxpayers, they possess the requisite standing to question the
validity of the existing "Pork Barrel System” under which the taxes they pay have been and
continue to be utilized. It is undeniable that petitioners, as taxpayers, are bound to suffer from
the unconstitutional usage of public funds, if the Court so rules. Invariably, taxpayers have
been allowed to sue where there is a claim that public funds are illegally disbursed or that
public money is being deflected to any improper purpose, or that public funds are wasted
[147]
through the enforcement of an invalid or unconstitutional law, as in these cases.

Moreover, as citizens, petitioners have equally fulfilled the standing requirement given that
the issues they have raised may be classified as matters "of transcendental importance, of
[148]
overreaching significance to society, or of paramount public interest.” The CoA
Chairperson‘s statement during the Oral Arguments that the present controversy involves "not
[149]
[merely] a systems failure” but a "complete breakdown of controls” amplifies, in addition
to the matters above-discussed, the seriousness of the issues involved herein. Indeed, of
greater import than the damage caused by the illegal expenditure of public funds is the mortal
[150]
wound inflicted upon the fundamental law by the enforcement of an invalid statute. All
told, petitioners have sufficient locus standi to file the instant cases.

D. Res Judicata and Stare Decisis.

Res judicata (which means a "matter adjudged”) and stare decisisnon quieta et movere ([or
simply, stare decisis] which means "follow past precedents and do not disturb what has been
settled”) are general procedural law principles which both deal with the effects of previous
but factually similar dispositions to subsequent cases. For the cases at bar, the Court
examines the applicability of these principles in relation to its prior rulings
in Philconsa and LAMP.

The focal point of res judicata is the judgment. The principle states that a judgment on the
merits in a previous case rendered by a court of competent jurisdiction would bind a
subsequent case if, between the first and second actions, there exists an identity of parties,
[151]
of subject matter, and of causes of action. This required identity is not, however,
attendant hereto since Philconsa and LAMP, respectively involved constitutional challenges
against the 1994 CDF Article and 2004 PDAF Article, whereas the cases at bar call for a
broader constitutional scrutiny of the entire “Pork Barrel System.” Also, the ruling
in LAMP is essentially a dismissal based on a procedural technicality – and, thus, hardly a
judgment on the merits – in that petitioners therein failed to present any "convincing proof x x
x showing that, indeed, there were direct releases of funds to the Members of Congress, who
actually spend them according to their sole discretion” or "pertinent evidentiary support [to
demonstrate the] illegal misuse of PDAF in the form of kickbacks [and] has become a
common exercise of unscrupulous Members of Congress.” As such, the Court upheld, in view
of the presumption of constitutionality accorded to every law, the 2004 PDAF Article, and saw
"no need to review or reverse the standing pronouncements in the said case.” Hence, for the
foregoing reasons, the res judicata principle, insofar as the Philconsa and LAMP cases are
concerned, cannot apply.
On the other hand, the focal point of stare decisis is the doctrine created. The principle,
[152]
entrenched under Article 8 of the Civil Code, evokes the general rule that, for the sake of
certainty, a conclusion reached in one case should be doctrinally applied to those that follow
if the facts are substantially the same, even though the parties may be different. It proceeds
from the first principle of justice that, absent any powerful countervailing considerations, like
cases ought to be decided alike. Thus, where the same questions relating to the same event
have been put forward by the parties similarly situated as in a previous case litigated and
decided by a competent court, the rule of stare decisis is a bar to any attempt to re-litigate
[153]
the same issue.

Philconsa was the first case where a constitutional challenge against a Pork Barrel provision,
i.e., the 1994 CDF Article, was resolved by the Court. To properly understand its context,
petitioners‘ posturing was that "the power given to the [M]embers of Congress to propose and
identify projects and activities to be funded by the [CDF] is an encroachment by the legislature
on executive power, since said power in an appropriation act is in implementation of the law”
and that "the proposal and identification of the projects do not involve the making of laws or
the repeal and amendment thereof, the only function given to the Congress by the
[154]
Constitution.” In deference to the foregoing submissions, the Court reached the following
main conclusions: one, under the Constitution, the power of appropriation, or the "power of
the purse,” belongs to Congress; two, the power of appropriation carries with it the power to
specify the project or activity to be funded under the appropriation law and it can be detailed
and as broad as Congress wants it to be; and, three, the proposals and identifications made
by Members of Congress are merely recommendatory. At once, it is apparent that
the Philconsa resolution was a limited response to a separation of powers problem,
specifically on the propriety of conferring post-enactment identification authority to Members
of Congress. On the contrary, the present cases call for a more holistic examination of (a)
the inter-relation between the CDF and PDAF Articles with each other, formative as they are
of the entire "Pork Barrel System” as well as (b) the intra-relation of post-enactment
measures contained within a particular CDF or PDAF Article, including not only those related
to the area of project identification but also to the areas of fund release and realignment. The
complexity of the issues and the broader legal analyses herein warranted may be, therefore,
considered as a powerful countervailing reason against a wholesale application of the stare
decisis principle.

In addition, the Court observes that the Philconsa ruling was actually riddled with inherent
constitutional inconsistencies which similarly countervail against a full resort to stare decisis.
As may be deduced from the main conclusions of the case, Philconsa‘s fundamental premise
in allowing Members of Congress to propose and identify of projects would be that the said
identification authority is but an aspect of the power of appropriation which has been
constitutionally lodged in Congress. From this premise, the contradictions may be easily seen.
If the authority to identify projects is an aspect of appropriation and the power of
appropriation is a form of legislative power thereby lodged in Congress, then it follows
that: (a) it is Congress which should exercise such authority, and not its individual
Members; (b) such authority must be exercised within the prescribed procedure of law
passage and, hence, should not be exercised after the GAA has already been passed;
and (c) such authority, as embodied in the GAA, has the force of law and, hence, cannot be
merely recommendatory. Justice Vitug‘s Concurring Opinion in the same case sums up
the Philconsa quandary in this wise: ?Neither would it be objectionable for Congress, by law,
to appropriate funds for such specific projects as it may be minded; to give that authority,
however, to the individual members of Congress in whatever guise, I am afraid, would be
constitutionally impermissible.” As the Court now largely benefits from hindsight and current
findings on the matter, among others, the CoA Report, the Court must partially abandon its
previous ruling in Philconsa insofar as it validated the post-enactment identification authority
of Members of Congress on the guise that the same was merely recommendatory. This
postulate raises serious constitutional inconsistencies which cannot be simply excused on
the ground that such mechanism is "imaginative as it is innovative.” Moreover, it must be
[155]
pointed out that the recent case of Abakada Guro Party List v. Purisima (Abakada) has
effectively overturned Philconsa‘s allowance of post-enactment legislator participation in
view of the separation of powers principle. These constitutional inconsistencies and
the Abakada rule will be discussed in greater detail in the ensuing section of this Decision.

As for LAMP, suffice it to restate that the said case was dismissed on a procedural
technicality and, hence, has not set any controlling doctrine susceptible of current application
to the substantive issues in these cases. In fine, stare decisis would not apply.

II. Substantive Issues.

A. Definition of Terms.
Before the Court proceeds to resolve the substantive issues of these cases, it must first define
the terms "Pork Barrel System,” "Congressional Pork Barrel,” and "Presidential Pork Barrel” as
they are essential to the ensuing discourse.

Petitioners define the term "Pork Barrel System” as the "collusion between the Legislative and
Executive branches of government to accumulate lump-sum public funds in their offices with
[156]
unchecked discretionary powers to determine its distribution as political largesse.” They
assert that the following elements make up the Pork Barrel System: ( a) lump-sum funds are
allocated through the appropriations process to an individual officer; ( b) the officer is given
sole and broad discretion in determining how the funds will be used or expended; ( c) the
guidelines on how to spend or use the funds in the appropriation are either vague, overbroad
or inexistent; and (d) projects funded are intended to benefit a definite constituency in a
particular part of the country and to help the political careers of the disbursing official by
[157]
yielding rich patronage benefits. They further state that the Pork Barrel System is
comprised of two (2) kinds of discretionary public funds: first, the Congressional (or
[158]
Legislative) Pork Barrel, currently known as the PDAF; and, second, the Presidential (or
Executive) Pork Barrel, specifically, the Malampaya Funds under PD 910 and the Presidential
[159]
Social Fund under PD 1869, as amended by PD 1993.

Considering petitioners‘ submission and in reference to its local concept and legal history, the
Court defines the Pork Barrel System as the collective body of rules and practices that
govern the manner by which lump-sum, discretionary funds, primarily intended for local
projects, are utilized through the respective participations of the Legislative and Executive
branches of government, including its members. The Pork Barrel System involves two (2)
kinds of lump-sum discretionary funds:

First, there is the Congressional Pork Barrel which is herein defined as a kind of lump-sum,
discretionary fund wherein legislators, either individually or collectively organized into
committees, are able to effectively control certain aspects of the fund’s utilization through
various post-enactment measures and/or practices. In particular, petitioners consider the
PDAF, as it appears under the 2013 GAA, as Congressional Pork Barrel since it is, inter alia, a
post-enactment measure that allows individual legislators to wield a collective power;
[160]
and

Second, there is the Presidential Pork Barrel which is herein defined as a kind of lump-sum,
discretionary fund which allows the President to determine the manner of its utilization. For
 [161]
reasons earlier stated, the Court shall delimit the use of such term to refer only to the
Malampaya Funds and the Presidential Social Fund.

With these definitions in mind, the Court shall now proceed to discuss the substantive issues
of these cases.

B. Substantive Issues on the Congressional Pork Barrel.

1. Separation of Powers.
a. Statement of Principle.
The principle of separation of powers refers to the constitutional demarcation of the three
fundamental powers of government. In the celebrated words of Justice Laurel in Angara v.
[162]
Electoral Commission, it means that the "Constitution has blocked out with deft strokes
and in bold lines, allotment of power to the executive, the legislative and the judicial
[163]
departments of the government.” To the legislative branch of government, through
[164]
Congress, belongs the power to make laws; to the executive branch of government,
[165]
through the President, belongs the power to enforce laws; and to the judicial branch of
[166]
government, through the Court, belongs the power to interpret laws. Because the three
great powers have been, by constitutional design, ordained in this respect, "[e]ach department
of the government has exclusive cognizance of matters within its jurisdiction, and is supreme
[167]
within its own sphere.” Thus, "the legislature has no authority to execute or construe the
law, the executive has no authority to make or construe the law, and the judiciary has no
[168]
power to make or execute the law.” The principle of separation of powers and its
concepts of autonomy and independence stem from the notion that the powers of government
must be divided to avoid concentration of these powers in any one branch; the division, it is
hoped, would avoid any single branch from lording its power over the other branches or the
[169]
citizenry. To achieve this purpose, the divided power must be wielded by co-equal
branches of government that are equally capable of independent action in exercising their
respective mandates. Lack of independence would result in the inability of one branch of
[170]
government to check the arbitrary or self- interest assertions of another or others.

Broadly speaking, there is a violation of the separation of powers principle when one branch of
government unduly encroaches on the domain of another. US Supreme Court decisions
instruct that the principle of separation of powers may be violated in two (2) ways: firstly,
"[o]ne branch may interfere impermissibly with the other’s performance of its constitutionally
[171]
assigned function”; and "[a]lternatively, the doctrine may be violated when one
[172]
branch assumes a function that more properly is entrusted to another.” In other words,
there is a violation of the principle when there is impermissible ( a) interference with and/or
(b) assumption of another department‘s functions.

The enforcement of the national budget, as primarily contained in the GAA, is indisputably a
function both constitutionally assigned and properly entrusted to the Executive branch of
[173]
government. In Guingona, Jr. v. Hon. Carague (Guingona, Jr.), the Court explained that
the phase of budget execution "covers the various operational aspects of budgeting” and
accordingly includes "the evaluation of work and financial plans for individual
activities,” the "regulation and release of funds” as well as all "other related activities” that
[174]
comprise the budget execution cycle. This is rooted in the principle that the allocation of
power in the three principal branches of government is a grant of all powers inherent in them.
[175]
Thus, unless the Constitution provides otherwise, the Executive department should
exclusively exercise all roles and prerogatives which go into the implementation of the
national budget as provided under the GAA as well as any other appropriation law.

In view of the foregoing, the Legislative branch of government, much more any of its members,
should not cross over the field of implementing the national budget since, as earlier stated,
the same is properly the domain of the Executive. Again, in Guingona, Jr., the Court stated
that "Congress enters the picture [when it] deliberates or acts on the budget proposals of the
President. Thereafter, Congress, "in the exercise of its own judgment and
wisdom, formulates an appropriation act precisely following the process established by the
Constitution, which specifies that no money may be paid from the Treasury except in
accordance with an appropriation made by law.” Upon approval and passage of the GAA,
Congress‘ law-making role necessarily comes to an end and from there the Executive‘s role of
implementing the national budget begins. So as not to blur the constitutional boundaries
between them, Congress must "not concern itself with details for implementation by the
[176]
Executive.”

The foregoing cardinal postulates were definitively enunciated in Abakada where the Court
held that "[f]rom the moment the law becomes effective, any provision of law that empowers
Congress or any of its members to play any role in the implementation or enforcement of the
[177]
law violates the principle of separation of powers and is thus unconstitutional.” It must
be clarified, however, that since the restriction only pertains to "any role in the
implementation or enforcement of the law,” Congress may still exercise its oversight function
which is a mechanism of checks and balances that the Constitution itself allows. But it must
be made clear that Congress‘ role must be confined to mere oversight. Any post- enactment-
measure allowing legislator participation beyond oversight is bereft of any constitutional basis
and hence, tantamount to impermissible interference and/or assumption of executive
[178]
functions. As the Court ruled in Abakada:

[A]ny post-enactment congressional measure x x x should be limited to scrutiny and

investigation. In particular, congressional oversight must be confined to the following:
(1) scrutiny based primarily on Congress‘ power of appropriation and the budget hearings
conducted in connection with it, its power to ask heads of departments to appear before and
be heard by either of its Houses on any matter pertaining to their departments and its power
of confirmation; and

(2) investigation and monitoring of the implementation of laws pursuant to the power of
Congress to conduct inquiries in aid of legislation.
Any action or step beyond that will undermine the separation of powers guaranteed by the
Constitution. (Emphases supplied)
b. Application.
In these cases, petitioners submit that the Congressional Pork Barrel – among others, the
2013 PDAF Article – "wrecks the assignment of responsibilities between the political
branches” as it is designed to allow individual legislators to interfere "way past the time it
[179]
should have ceased” or, particularly, "after the GAA is passed.” They state that the
findings and recommendations in the CoA Report provide ?an illustration of how absolute and
definitive the power of legislators wield over project implementation in complete violation of
[180]
the constitutional [principle of separation of powers.]” Further, they point out that the
Court in the Philconsa case only allowed the CDF to exist on the condition that individual
legislators limited their role to recommending projects and not if they actually dictate their
[181]
implementation.
For their part, respondents counter that the separations of powers principle has not been
violated since the President maintains "ultimate authority to control the execution of the GAA”
[182]
and that he "retains the final discretion to reject” the legislators‘ proposals. They
maintain that the Court, in Philconsa, "upheld the constitutionality of the power of members
of Congress to propose and identify projects so long as such proposal and identification are
[183]
recommendatory.” As such, they claim that "[e]verything in the Special Provisions [of the
[184]
2013 PDAF Article] follows the Philconsa framework, and hence, remains constitutional.”

The Court rules in favor of petitioners.

As may be observed from its legal history, the defining feature of all forms of Congressional
Pork Barrel would be the authority of legislators to participate in the post-enactment phases
of project implementation.

[185] [186]
At its core, legislators – may it be through project lists, prior consultations or
[187]
program menus – have been consistently accorded post-enactment authority to identify
the projects they desire to be funded through various Congressional Pork Barrel allocations.
Under the 2013 PDAF Article, the statutory authority of legislators to identify projects post-
GAA may be construed from the import of Special Provisions 1 to 3 as well as the second
paragraph of Special Provision 4. To elucidate, Special Provision 1 embodies the program
menu feature which, as evinced from past PDAF Articles, allows individual legislators to
identify PDAF projects for as long as the identified project falls under a general program listed
in the said menu. Relatedly, Special Provision 2 provides that the implementing agencies shall,
within 90 days from the GAA is passed, submit to Congress a more detailed priority list,
standard or design prepared and submitted by implementing agencies from which the
legislator may make his choice. The same provision further authorizes legislators to identify
PDAF projects outside his district for as long as the representative of the district concerned
concurs in writing. Meanwhile, Special Provision 3 clarifies that PDAF projects refer to
[188]
"projects to be identified by legislators” and thereunder provides the allocation limit for
the total amount of projects identified by each legislator. Finally, paragraph 2 of Special
Provision 4 requires that any modification and revision of the project identification "shall be
submitted to the House Committee on Appropriations and the Senate Committee on Finance
for favorable endorsement to the DBM or the implementing agency, as the case may be.” From
the foregoing special provisions, it cannot be seriously doubted that legislators have been
accorded post-enactment authority to identify PDAF projects.

Aside from the area of project identification, legislators have also been accorded post-
enactment authority in the areas of fund release and realignment. Under the 2013 PDAF
Article, the statutory authority of legislators to participate in the area of fund release through
congressional committees is contained in Special Provision 5 which explicitly states that "[a]ll
request for release of funds shall be supported by the documents prescribed under Special
Provision No. 1 and favorably endorsed by House Committee on Appropriations and the Senate
Committee on Finance, as the case may be”; while their statutory authority to participate in
the area of fund realignment is contained in: first, paragraph 2, Special Provision
[189]
4 which explicitly states, among others, that "[a]ny realignment [of funds] shall be
submitted to the House Committee on Appropriations and the Senate Committee on Finance
for favorable endorsement to the DBM or the implementing agency, as the case may be”;
and, second, paragraph 1, also of Special Provision 4 which authorizes the "Secretaries of
Agriculture, Education, Energy, Interior and Local Government, Labor and Employment, Public
[190]
Works and Highways, Social Welfare and Development and Trade and Industry x x x to
approve realignment from one project/scope to another within the allotment received from this
Fund, subject to [among others] (iii) the request is with the concurrence of the legislator
concerned.”

Clearly, these post-enactment measures which govern the areas of project identification, fund
release and fund realignment are not related to functions of congressional oversight and,
hence, allow legislators to intervene and/or assume duties that properly belong to the sphere
of budget execution. Indeed, by virtue of the foregoing, legislators have been, in one form or
another, authorized to participate in – as Guingona, Jr. puts it –
"the various operational aspects of budgeting,” including "the evaluation of work and
financial plans for individual activities” and the "regulation and release of funds” in violation of
the separation of powers principle. The fundamental rule, as categorically articulated
in Abakada, cannot be overstated – from the moment the law becomes effective, any
provision of law that empowers Congress or any of its members to play any role in the
implementation or enforcement of the law violates the principle of separation of powers and is
[191]
thus unconstitutional. That the said authority is treated as merely recommendatory in
nature does not alter its unconstitutional tenor since the prohibition, to repeat, covers any
role in the implementation or enforcement of the law. Towards this end, the Court must
therefore abandon its ruling in Philconsa which sanctioned the conduct of legislator
identification on the guise that the same is merely recommendatory and, as such,
respondents‘ reliance on the same falters altogether.

Besides, it must be pointed out that respondents have nonetheless failed to substantiate their
position that the identification authority of legislators is only of recommendatory import. Quite
the contrary, respondents – through the statements of the Solicitor General during the Oral
Arguments – have admitted that the identification of the legislator constitutes a mandatory
requirement before his PDAF can be tapped as a funding source, thereby highlighting the
[192]
indispensability of the said act to the entire budget execution process:

Justice Bernabe: Now, without the individual legislator’s identification of the project, can the
PDAF of the legislator be utilized?

Solicitor General Jardeleza: No, Your Honor.

Justice Bernabe: It cannot?

Solicitor General Jardeleza: It cannot… (interrupted)

Justice Bernabe: So meaning you should have the identification of the project by the
individual legislator?

Solicitor General Jardeleza: Yes, Your Honor.

x x x x

Justice Bernabe: In short, the act of identification is mandatory?

Solictor General Jardeleza: Yes, Your Honor. In the sense that if it is not done and then there
is no identification.

x x x x

Justice Bernabe: Now, would you know of specific instances when a project was implemented
without the identification by the individual legislator?

Solicitor General Jardeleza: I do not know, Your Honor; I do not think so but I have no specific
examples. I would doubt very much, Your Honor, because to implement, there is a need [for] a
SARO and the NCA. And the SARO and the NCA are triggered by an identification from the
legislator.

x x x x

Solictor General Jardeleza: What we mean by mandatory, Your Honor, is we were replying to a
question, "How can a legislator make sure that he is able to get PDAF Funds?” It is mandatory
in the sense that he must identify, in that sense, Your Honor. Otherwise, if he does not
identify, he cannot avail of the PDAF Funds and his district would not be able to have PDAF
Funds, only in that sense, Your Honor. (Emphases supplied)

Thus, for all the foregoing reasons, the Court hereby declares the 2013 PDAF Article as well as
all other provisions of law which similarly allow legislators to wield any form of post-
enactment authority in the implementation or enforcement of the budget, unrelated to
congressional oversight, as violative of the separation of powers principle and thus
unconstitutional. Corollary thereto, informal practices, through which legislators have
effectively intruded into the proper phases of budget execution, must be deemed as acts of
grave abuse of discretion amounting to lack or excess of jurisdiction and, hence, accorded
the same unconstitutional treatment. That such informal practices do exist and have, in fact,
been constantly observed throughout the years has not been substantially disputed here. As
pointed out by Chief Justice Maria Lourdes P.A. Sereno (Chief Justice Sereno) during the Oral
[193]
Arguments of these cases:

Chief Justice Sereno:

Now, from the responses of the representative of both, the DBM and two (2) Houses of
Congress, if we enforces the initial thought that I have, after I had seen the extent of this
research made by my staff, that neither the Executive nor Congress frontally faced the
question of constitutional compatibility of how they were engineering the budget process. In
fact, the words you have been using, as the three lawyers [of the DBM, and both Houses of
Congress] has also been using is surprise; surprised that all of these things are now surfacing.
In fact, I thought that what the 2013 PDAF provisions did was to codify in one section all the
past practice that [had] been done since 1991. In a certain sense, we should be thankful that
they are all now in the PDAF Special Provisions. x x x (Emphasis and underscoring supplied)

Ultimately, legislators cannot exercise powers which they do not have, whether through
formal measures written into the law or informal practices institutionalized in government
agencies, else the Executive department be deprived of what the Constitution has vested as
its own.

2. Non-delegability of Legislative Power.

a. Statement of Principle.
[194]
As an adjunct to the separation of powers principle, legislative power shall be exclusively
exercised by the body to which the Constitution has conferred the same. In particular, Section
1, Article VI of the 1987 Constitution states that such power shall be vested in the Congress of
the Philippines which shall consist of a Senate and a House of Representatives, except to the
[195]
extent reserved to the people by the provision on initiative and referendum. Based on this
provision, it is clear that only Congress, acting as a bicameral body, and the people, through
the process of initiative and referendum, may constitutionally wield legislative power and no
other. This premise embodies the principle of non-delegability of legislative power, and the
only recognized exceptions thereto would be: (a) delegated legislative power to local
governments which, by immemorial practice, are allowed to legislate on purely local matters;
[196]
and (b) constitutionally-grafted exceptions such as the authority of the President to, by
law, exercise powers necessary and proper to carry out a declared national policy in times of
[197]
war or other national emergency, or fix within specified limits, and subject to such
limitations and restrictions as Congress may impose, tariff rates, import and export quotas,
tonnage and wharfage dues, and other duties or imposts within the framework of the national
[198]
development program of the Government.

Notably, the principle of non-delegability should not be confused as a restriction to delegate

rule-making authority to implementing agencies for the limited purpose of either filling up
the details of the law for its enforcement (supplementary rule-making) or ascertaining facts to
[199]
bring the law into actual operation (contingent rule-making). The conceptual treatment
and limitations of delegated rule-making were explained in the case of People v.
[200]
Maceren as follows:

The grant of the rule-making power to administrative agencies is a relaxation of the principle
of separation of powers and is an exception to the nondelegation of legislative powers.
Administrative regulations or "subordinate legislation” calculated to promote the public
interest are necessary because of "the growing complexity of modern life, the multiplication of
the subjects of governmental regulations, and the increased difficulty of administering the
law.”

x x x x

[Nevertheless, it must be emphasized that] [t]he rule-making power must be confined to

details for regulating the mode or proceeding to carry into effect the law as it has been
enacted. The power cannot be extended to amending or expanding the statutory
requirements or to embrace matters not covered by the statute. Rules that subvert the statute
cannot be sanctioned. (Emphases supplied)
b. Application.
In the cases at bar, the Court observes that the 2013 PDAF Article, insofar as it confers post-
enactment identification authority to individual legislators, violates the principle of non-
delegability since said legislators are effectively allowed to individually exercise the power
[201]
of appropriation, which – as settled in Philconsa – is lodged in Congress. That the power
to appropriate must be exercised only through legislation is clear from Section 29(1), Article
VI of the 1987 Constitution which states that: "No money shall be paid out of the Treasury
except in pursuance of an appropriation made by law.” To understand what constitutes an act
of appropriation, the Court, in Bengzon v. Secretary of Justice and Insular
[202]
Auditor (Bengzon), held that the power of appropriation involves (a) the setting apart by
law of a certain sum from the public revenue for (b) a specified purpose. Essentially, under
the 2013 PDAF Article, individual legislators are given a personal lump-sum fund from which
they are able to dictate (a) how much from such fund would go to (b) a specific project or
beneficiary that they themselves also determine. As these two (2) acts comprise the exercise
of the power of appropriation as described in Bengzon, and given that the 2013 PDAF Article
authorizes individual legislators to perform the same, undoubtedly, said legislators have been
conferred the power to legislate which the Constitution does not, however, allow. Thus,
keeping with the principle of non-delegability of legislative power, the Court hereby declares
the 2013 PDAF Article, as well as all other forms of Congressional Pork Barrel which contain
the similar legislative identification feature as herein discussed, as unconstitutional.

3. Checks and Balances.

a. Statement of Principle; Item-Veto Power.
The fact that the three great powers of government are intended to be kept separate and
distinct does not mean that they are absolutely unrestrained and independent of each other.
The Constitution has also provided for an elaborate system of checks and balances to secure
[203]
coordination in the workings of the various departments of the government.

A prime example of a constitutional check and balance would be the President’s power to
veto an item written into an appropriation, revenue or tariff bill submitted to him by Congress
for approval through a process known as "bill presentment.” The President‘s item-veto power
is found in Section 27(2), Article VI of the 1987 Constitution which reads as follows:

Sec. 27. x x x.

x x x x

(2) The President shall have the power to veto any particular item or items in an appropriation,
revenue, or tariff bill, but the veto shall not affect the item or items to which he does not
object.

The presentment of appropriation, revenue or tariff bills to the President, wherein he may
exercise his power of item-veto, forms part of the "single, finely wrought and exhaustively
[204]
considered, procedures” for law-passage as specified under the Constitution. As stated
in Abakada, the final step in the law-making process is the "submission [of the bill] to the
President for approval. Once approved, it takes effect as law after the required
[205]
publication.” Elaborating on the President‘s item-veto power and its relevance as a check
[206]
on the legislature, the Court, in Bengzon, explained that:

The former Organic Act and the present Constitution of the Philippines make the Chief
Executive an integral part of the law-making power. His disapproval of a bill, commonly
known as a veto, is essentially a legislative act. The questions presented to the mind of the
Chief Executive are precisely the same as those the legislature must determine in passing a
bill, except that his will be a broader point of view.

The Constitution is a limitation upon the power of the legislative department of the
government, but in this respect it is a grant of power to the executive department. The
Legislature has the affirmative power to enact laws; the Chief Executive has the negative
power by the constitutional exercise of which he may defeat the will of the Legislature. It
follows that the Chief Executive must find his authority in the Constitution. But in exercising
that authority he may not be confined to rules of strict construction or hampered by the
unwise interference of the judiciary. The courts will indulge every intendment in favor of the
constitutionality of a veto [in the same manner] as they will presume the constitutionality of
an act as originally passed by the Legislature. (Emphases supplied)

The justification for the President‘s item-veto power rests on a variety of policy goals such as
[207]
to prevent log-rolling legislation, impose fiscal restrictions on the legislature, as well as
[208]
to fortify the executive branch‘s role in the budgetary process. In Immigration and
Naturalization Service v. Chadha, the US Supreme Court characterized the President‘s item-
power as "a salutary check upon the legislative body, calculated to guard the community
against the effects of factions, precipitancy, or of any impulse unfriendly to the public good,
which may happen to influence a majority of that body”; phrased differently, it is meant to
"increase the chances in favor of the community against the passing of bad laws, through
[209]
haste, inadvertence, or design.”

For the President to exercise his item-veto power, it necessarily follows that there exists a
proper “item” which may be the object of the veto. An item, as defined in the field of
appropriations, pertains to "the particulars, the details, the distinct and severable parts of the
appropriation or of the bill.” In the case of Bengzon v. Secretary of Justice of the Philippine
[210]
Islands, the US Supreme Court characterized an item of appropriation as follows:

An item of an appropriation bill obviously means an item which, in itself, is a specific

appropriation of money, not some general provision of law which happens to be put into an
appropriation bill. (Emphases supplied)

On this premise, it may be concluded that an appropriation bill, to ensure that the President
may be able to exercise his power of item veto, must contain "specific appropriations of
money” and not only "general provisions” which provide for parameters of appropriation.

Further, it is significant to point out that an item of appropriation must be an item

characterized by singular correspondence – meaning an allocation of a specified singular
[211]
amount for a specified singular purpose, otherwise known as a "line-item.” This treatment
not only allows the item to be consistent with its definition as a "specific appropriation of
money” but also ensures that the President may discernibly veto the same. Based on the
foregoing formulation, the existing Calamity Fund, Contingent Fund and the Intelligence Fund,
being appropriations which state a specified amount for a specific purpose, would then be
considered as "line-item” appropriations which are rightfully subject to item veto. Likewise, it
must be observed that an appropriation may be validly apportioned into component
percentages or values; however, it is crucial that each percentage or value must be allocated
for its own corresponding purpose for such component to be considered as a proper line-item.
Moreover, as Justice Carpio correctly pointed out, a valid appropriation may even have several
related purposes that are by accounting and budgeting practice considered as one
purpose, e.g., MOOE (maintenance and other operating expenses), in which case the related
purposes shall be deemed sufficiently specific for the exercise of the President‘s item veto
power. Finally, special purpose funds and discretionary funds would equally square with the
constitutional mechanism of item-veto for as long as they follow the rule on singular
correspondence as herein discussed. Anent special purpose funds, it must be added that
Section 25(4), Article VI of the 1987 Constitution requires that the "'special appropriations
bill shall specify the purpose for which it is intended, and shall be supported by funds
actually available as certified by the National Treasurer, or to be raised by a corresponding
revenue proposal therein.” Meanwhile, with respect to discretionary funds, Section 25(6),
Article VI of the 1987 Constitution requires that said funds "shall be disbursed only for public
purposes to be supported by appropriate vouchers and subject to such guidelines as may be
prescribed by law.”

In contrast, what beckons constitutional infirmity are appropriations which merely provide for
a singular lump-sum amount to be tapped as a source of funding for multiple purposes. Since
such appropriation type necessitates the further determination of both the actual amount to
be expended and the actual purpose of the appropriation which must still be chosen from
the multiple purposes stated in the law, it cannot be said that the appropriation law already
indicates a "specific appropriation of money” and hence, without a proper line-item which the
President may veto. As a practical result, the President would then be faced with the
predicament of either vetoing the entire appropriation if he finds some of its purposes
wasteful or undesirable, or approving the entire appropriation so as not to hinder some of its
legitimate purposes. Finally, it may not be amiss to state that such arrangement also raises
non-delegability issues considering that the implementing authority would still have to
determine, again, both the actual amount to be expended and the actual purpose of the
appropriation. Since the foregoing determinations constitute the integral aspects of the power
to appropriate, the implementing authority would, in effect, be exercising legislative
prerogatives in violation of the principle of non-delegability.

b. Application.
In these cases, petitioners claim that "[i]n the current x x x system where the PDAF is a lump-
sum appropriation, the legislator‘s identification of the projects after the passage of the GAA
[212]
denies the President the chance to veto that item later on.” Accordingly, they submit that
the "item veto power of the President mandates that appropriations bills adopt line-item
budgeting” and that "Congress cannot choose a mode of budgeting [which] effectively renders
[213]
the constitutionally-given power of the President useless.”

On the other hand, respondents maintain that the text of the Constitution envisions a process
which is intended to meet the demands of a modernizing economy and, as such, lump-sum
appropriations are essential to financially address situations which are barely foreseen when
a GAA is enacted. They argue that the decision of the Congress to create some lump- sum
[214]
appropriations is constitutionally allowed and textually-grounded.

The Court agrees with petitioners.

Under the 2013 PDAF Article, the amount of P24.79 Billion only appears as a collective
allocation limit since the said amount would be further divided among individual legislators
who would then receive personal lump-sum allocations and could, after the GAA is passed,
effectively appropriate PDAF funds based on their own discretion. As these intermediate
appropriations are made by legislators only after the GAA is passed and hence, outside of the
law, it necessarily means that the actual items of PDAF appropriation would not have been
written into the General Appropriations Bill and thus effectuated without veto consideration.
This kind of lump-sum/post-enactment legislative identification budgeting system fosters the
creation of a "budget within a budget” which subverts the prescribed procedure of
presentment and consequently impairs the President‘s power of item veto. As petitioners aptly
point out, the above- described system forces the President to decide between ( a) accepting
the entire P24.79 Billion PDAF allocation without knowing the specific projects of the
legislators, which may or may not be consistent with his national agenda and ( b) rejecting the
[215]
whole PDAF to the detriment of all other legislators with legitimate projects.

Moreover, even without its post-enactment legislative identification feature, the 2013 PDAF
Article would remain constitutionally flawed since it would then operate as a prohibited form
of lump-sum appropriation as above-characterized. In particular, the lump-sum amount of
P24.79 Billion would be treated as a mere funding source allotted for multiple purposes of
spending, i.e., scholarships, medical missions, assistance to indigents, preservation of
historical materials, construction of roads, flood control, etc. This setup connotes that the
appropriation law leaves the actual amounts and purposes of the appropriation for further
determination and, therefore, does not readily indicate a discernible item which may be
subject to the President‘s power of item veto.
In fact, on the accountability side, the same lump-sum budgeting scheme has, as the CoA
Chairperson relays, "limit[ed] state auditors from obtaining relevant data and information that
[216]
would aid in more stringently auditing the utilization of said Funds.” Accordingly, she
recommends the adoption of a "line by line budget or amount per proposed program, activity
[217]
or project, and per implementing agency.”

Hence, in view of the reasons above-stated, the Court finds the 2013 PDAF Article, as well as
all Congressional Pork Barrel Laws of similar operation, to be unconstitutional. That such
budgeting system provides for a greater degree of flexibility to account for future
contingencies cannot be an excuse to defeat what the Constitution requires. Clearly, the first
and essential truth of the matter is that unconstitutional means do not justify even
[218]
commendable ends.

c. Accountability.
Petitioners further relate that the system under which various forms of Congressional Pork
Barrel operate defies public accountability as it renders Congress incapable of checking itself
or its Members. In particular, they point out that the Congressional Pork Barrel "gives each
legislator a direct, financial interest in the smooth, speedy passing of the yearly budget”
[219]
which turns them "from fiscalizers” into "financially-interested partners.” They also claim
that the system has an effect on re-election as "the PDAF excels in self-perpetuation of
elective officials.” Finally, they add that the "PDAF impairs the power of impeachment” as
[220]
such "funds are indeed quite useful, 'to well, accelerate the decisions of senators.‘“

The Court agrees in part.

The aphorism forged under Section 1, Article XI of the 1987 Constitution, which states that
"public office is a public trust,” is an overarching reminder that every instrumentality of
government should exercise their official functions only in accordance with the principles of
the Constitution which embodies the parameters of the people‘s trust. The notion of a public
[221]
trust connotes accountability, hence, the various mechanisms in the Constitution which
are designed to exact accountability from public officers.

Among others, an accountability mechanism with which the proper expenditure of public funds
may be checked is the power of congressional oversight. As mentioned in Abakada,
[222]
congressional oversight may be performed either through: (a) scrutiny based primarily
on Congress‘ power of appropriation and the budget hearings conducted in connection with it,
its power to ask heads of departments to appear before and be heard by either of its Houses
[223]
on any matter pertaining to their departments and its power of confirmation; or
(b) investigation and monitoring of the implementation of laws pursuant to the power of
[224]
Congress to conduct inquiries in aid of legislation.

The Court agrees with petitioners that certain features embedded in some forms of
Congressional Pork Barrel, among others the 2013 PDAF Article, has an effect on
congressional oversight. The fact that individual legislators are given post-enactment roles in
the implementation of the budget makes it difficult for them to become disinterested
"observers” when scrutinizing, investigating or monitoring the implementation of the
appropriation law. To a certain extent, the conduct of oversight would be tainted as said
legislators, who are vested with post-enactment authority, would, in effect, be checking on
activities in which they themselves participate. Also, it must be pointed out that this very
same concept of post- enactment authorization runs afoul of Section 14, Article VI of the 1987
Constitution which provides that:
Sec. 14. No Senator or Member of the House of Representatives may personally appear as
counsel before any court of justice or before the Electoral Tribunals, or quasi-judicial and
other administrative bodies. Neither shall he, directly or indirectly, be interested financially in
any contract with, or in any franchise or special privilege granted by the Government, or any
subdivision, agency, or instrumentality thereof, including any government-owned or controlled
corporation, or its subsidiary, during his term of office. He shall not intervene in any matter
before any office of the Government for his pecuniary benefit or where he may be called upon
to act on account of his office. (Emphasis supplied)

Clearly, allowing legislators to intervene in the various phases of project implementation – a

matter before another office of government – renders them susceptible to taking undue
advantage of their own office.

The Court, however, cannot completely agree that the same post- enactment authority and/or
the individual legislator‘s control of his PDAF per se would allow him to perpetuate himself in
office. Indeed, while the Congressional Pork Barrel and a legislator‘s use thereof may be
linked to this area of interest, the use of his PDAF for re-election purposes is a matter which
must be analyzed based on particular facts and on a case-to-case basis.

Finally, while the Court accounts for the possibility that the close operational proximity
between legislators and the Executive department, through the former‘s post-enactment
participation, may affect the process of impeachment, this matter largely borders on the
domain of politics and does not strictly concern the Pork Barrel System‘s intrinsic
constitutionality. As such, it is an improper subject of judicial assessment.

In sum, insofar as its post-enactment features dilute congressional oversight and violate
Section 14, Article VI of the 1987 Constitution, thus impairing public accountability, the 2013
PDAF Article and other forms of Congressional Pork Barrel of similar nature are deemed as
unconstitutional.

4. Political Dynasties.
One of the petitioners submits that the Pork Barrel System enables politicians who are
members of political dynasties to accumulate funds to perpetuate themselves in power, in
[225]
contravention of Section 26, Article II of the 1987 Constitution which states that:

Sec. 26. The State shall guarantee equal access to opportunities for public service,
and prohibit political dynasties as may be defined by law. (Emphasis and underscoring
supplied)

At the outset, suffice it to state that the foregoing provision is considered as not self-
executing due to the qualifying phrase “as may be defined by law.” In this respect, said
provision does not, by and of itself, provide a judicially enforceable constitutional right but
[226]
merely specifies a guideline for legislative or executive action. Therefore, since there
appears to be no standing law which crystallizes the policy on political dynasties for
enforcement, the Court must defer from ruling on this issue.

In any event, the Court finds the above-stated argument on this score to be largely speculative
since it has not been properly demonstrated how the Pork Barrel System would be able to
propagate political dynasties.
5. Local Autonomy.
The State‘s policy on local autonomy is principally stated in Section 25, Article II and Sections
2 and 3, Article X of the 1987 Constitution which read as follows:

ARTICLE II

Sec. 25. The State shall ensure the autonomy of local governments.

ARTICLE X

Sec. 2. The territorial and political subdivisions shall enjoy local autonomy.

Sec. 3. The Congress shall enact a local government code which shall provide for a more
responsive and accountable local government structure instituted through a system of
decentralization with effective mechanisms of recall, initiative, and referendum, allocate
among the different local government units their powers, responsibilities, and resources, and
provide for the qualifications, election, appointment and removal, term, salaries, powers and
functions and duties of local officials, and all other matters relating to the organization and
operation of the local units.

[227]
Pursuant thereto, Congress enacted RA 7160, otherwise known as the "Local Government
Code of 1991” (LGC), wherein the policy on local autonomy had been more specifically
explicated as follows:

Sec. 2. Declaration of Policy. – (a) It is hereby declared the policy of the State that the
territorial and political subdivisions of the State shall enjoy genuine and meaningful local
autonomy to enable them to attain their fullest development as self-reliant communities and
make them more effective partners in the attainment of national goals. Toward this end, the
State shall provide for a more responsive and accountable local government structure
instituted through a system of decentralization whereby local government units shall be given
more powers, authority, responsibilities, and resources. The process of decentralization shall
proceed from the National Government to the local government units.

x x x x

(c) It is likewise the policy of the State to require all national agencies and offices to conduct
periodic consultations with appropriate local government units, nongovernmental and people‘s
organizations, and other concerned sectors of the community before any project or program is
implemented in their respective jurisdictions. (Emphases and underscoring supplied)

The above-quoted provisions of the Constitution and the LGC reveal the policy of the State to
empower local government units (LGUs) to develop and ultimately, become self-sustaining and
effective contributors to the national economy. As explained by the Court in Philippine
Gamefowl Commission v. Intermediate Appellate Court:[228]

This is as good an occasion as any to stress the commitment of the Constitution to the policy
of local autonomy which is intended to provide the needed impetus and encouragement to the
development of our local political subdivisions as “self-reliant communities.” In the words of
Jefferson, ?Municipal corporations are the small republics from which the great one derives
its strength.” The vitalization of local governments will enable their inhabitants to fully exploit
their resources and more important, imbue them with a deepened sense of involvement in
public affairs as members of the body politic. This objective could be blunted by undue
interference by the national government in purely local affairs which are best resolved by the
officials and inhabitants of such political units. The decision we reach today conforms not only
to the letter of the pertinent laws but also to the spirit of the Constitution. [229] (Emphases and
underscoring supplied)

In the cases at bar, petitioners contend that the Congressional Pork Barrel goes against the
constitutional principles on local autonomy since it allows district representatives, who are
national officers, to substitute their judgments in utilizing public funds for local development.
[230]

The Court agrees with petitioners.

Philconsa described the 1994 CDF as an attempt "to make equal the unequal” and that ?[i]t is
also a recognition that individual members of Congress, far more than the President and their
congressional colleagues, are likely to be knowledgeable about the needs of their respective
[231]
constituents and the priority to be given each project.” Drawing strength from this
pronouncement, previous legislators justified its existence by stating that ?the relatively small
projects implemented under [the Congressional Pork Barrel] complement and link the national
development goals to the countryside and grassroots as well as to depressed areas which are
[232]
overlooked by central agencies which are preoccupied with mega-projects. Similarly, in
his August 23, 2013 speech on the "abolition” of PDAF and budgetary reforms, President
Aquino mentioned that the Congressional Pork Barrel was originally established for a worthy
goal, which is to enable the representatives to identify projects for communities that the LGU
[233]
concerned cannot afford.

Notwithstanding these declarations, the Court, however, finds an inherent defect in the
system which actually belies the avowed intention of "making equal the unequal.” In
particular, the Court observes that the gauge of PDAF and CDF allocation/division is based
solely on the fact of office, without taking into account the specific interests and peculiarities
of the district the legislator represents. In this regard, the allocation/division limits are clearly
not based on genuine parameters of equality, wherein economic or geographic indicators have
been taken into consideration. As a result, a district representative of a highly-urbanized
metropolis gets the same amount of funding as a district representative of a far-flung rural
province which would be relatively "underdeveloped” compared to the former. To add, what
rouses graver scrutiny is that even Senators and Party-List Representatives – and in some
years, even the Vice- President – who do not represent any locality, receive funding from the
Congressional Pork Barrel as well. These certainly are anathema to the Congressional Pork
Barrel‘s original intent which is "to make equal the unequal.” Ultimately, the PDAF and CDF
had become personal funds under the effective control of each legislator and given unto them
on the sole account of their office.

The Court also observes that this concept of legislator control underlying the CDF and PDAF
conflicts with the functions of the various Local Development Councils (LDCs) which are
already legally mandated to "assist the corresponding sanggunian in setting the direction of
economic and social development, and coordinating development efforts within its territorial
[234]
jurisdiction.” Considering that LDCs are instrumentalities whose functions are essentially
[235]
geared towards managing local affairs, their programs, policies and resolutions should
not be overridden nor duplicated by individual legislators, who are national officers that have
no law-making authority except only when acting as a body. The undermining effect on local
autonomy caused by the post-enactment authority conferred to the latter was succinctly put
 [236]
by petitioners in the following wise:

With PDAF, a Congressman can simply bypass the local development council and initiate
projects on his own, and even take sole credit for its execution. Indeed, this type of
personality-driven project identification has not only contributed little to the overall
development of the district, but has even contributed to ?further weakening infrastructure
planning and coordination efforts of the government.”

Thus, insofar as individual legislators are authorized to intervene in purely local matters and
thereby subvert genuine local autonomy, the 2013 PDAF Article as well as all other similar
forms of Congressional Pork Barrel is deemed unconstitutional.

With this final issue on the Congressional Pork Barrel resolved, the Court now turns to the
substantive issues involving the Presidential Pork Barrel.

C. Substantive Issues on the Presidential Pork Barrel.

1. Validity of Appropriation.
Petitioners preliminarily assail Section 8 of PD 910 and Section 12 of PD1869 (now, amended
by PD 1993), which respectively provide for the Malampaya Funds and the Presidential Social
Fund, as invalid appropriations laws since they do not have the "primary and specific” purpose
of authorizing the release of public funds from the National Treasury. Petitioners submit that
Section 8 of PD 910 is not an appropriation law since the "primary and specific” purpose of PD
910 is the creation of an Energy Development Board and Section 8 thereof only created a
[237]
Special Fund incidental thereto. In similar regard, petitioners argue that Section 12 of PD
1869 is neither a valid appropriations law since the allocation of the Presidential Social Fund
is merely incidental to the "primary and specific” purpose of PD 1869 which is the amendment
[238]
of the Franchise and Powers of PAGCOR. In view of the foregoing, petitioners suppose
that such funds are being used without any valid law allowing for their proper appropriation in
violation of Section 29(1), Article VI of the 1987 Constitution which states that: "No money
[239]
shall be paid out of the Treasury except in pursuance of an appropriation made by law.”

The Court disagrees.

"An appropriation made by law” under the contemplation of Section 29(1), Article VI of the
1987 Constitution exists when a provision of law (a) sets apart a determinate or
[240]
determinable amount of money and (b) allocates the same for a particular public
purpose. These two minimum designations of amount and purpose stem from the very
definition of the word "appropriation,” which means "to allot, assign, set apart or apply to a
particular use or purpose,” and hence, if written into the law, demonstrate that the
legislative intent to appropriate exists. As the Constitution "does not provide or prescribe
any particular form of words or religious recitals in which an authorization or appropriation by
Congress shall be made, except that it be 'made by law,‘“ an appropriation law may –
according to Philconsa – be "detailed and as broad as Congress wants it to be” for as long as
the intent to appropriate may be gleaned from the same. As held in the case of Guingona,
[241]
Jr.:

[T]here is no provision in our Constitution that provides or prescribes any particular form of
words or religious recitals in which an authorization or appropriation by Congress shall be
made, except that it be “made by law,” such as precisely the authorization or appropriation
under the questioned presidential decrees. In other words, in terms of time horizons, an
appropriation may be made impliedly (as by past but subsisting legislations) as well as
expressly for the current fiscal year (as by enactment of laws by the present Congress), just
as said appropriation may be made in general as well as in specific terms. The Congressional
authorization may be embodied in annual laws, such as a general appropriations act or in
special provisions of laws of general or special application which appropriate public funds for
specific public purposes, such as the questioned decrees. An appropriation measure is
sufficient if the legislative intention clearly and certainly appears from the language
employed (In re Continuing Appropriations, 32 P. 272), whether in the past or in the
present. (Emphases and underscoring supplied)

[242]
Likewise, as ruled by the US Supreme Court in State of Nevada v. La Grave:

To constitute an appropriation there must be money placed in a fund applicable to the

designated purpose. The word appropriate means to allot, assign, set apart or apply to a
particular use or purpose. An appropriation in the sense of the constitution means the setting
apart a portion of the public funds for a public purpose. No particular form of words is
necessary for the purpose, if the intention to appropriate is plainly manifested. (Emphases
supplied)

Thus, based on the foregoing, the Court cannot sustain the argument that the appropriation
must be the "primary and specific” purpose of the law in order for a valid appropriation law to
exist. To reiterate, if a legal provision designates a determinate or determinable amount of
money and allocates the same for a particular public purpose, then the legislative intent to
appropriate becomes apparent and, hence, already sufficient to satisfy the requirement of an
"appropriation made by law” under contemplation of the Constitution.

Section 8 of PD 910 pertinently provides:

Section 8. Appropriations. x x x

All fees, revenues and receipts of the Board from any and all sources including receipts from
service contracts and agreements such as application and processing fees, signature bonus,
discovery bonus, production bonus; all money collected from concessionaires, representing
unspent work obligations, fines and penalties under the Petroleum Act of 1949; as well as the
government share representing royalties, rentals, production share on service contracts and
similar payments on the exploration, development and exploitation of energy resources, shall
form part of a Special Fund to be used to finance energy resource development and
exploitation programs and projects of the government and for such other purposes as may be
hereafter directed by the President. (Emphases supplied)

Whereas Section 12 of PD 1869, as amended by PD 1993, reads:

Sec. 12. Special Condition of Franchise. — After deducting five (5%) percent as Franchise Tax,
the Fifty (50%) percent share of the Government in the aggregate gross earnings of the
Corporation from this Franchise, or 60% if the aggregate gross earnings be less than
P150,000,000.00 shall be set aside and shall accrue to the General Fund to finance the
priority infrastructure development projects and to finance the restoration of damaged or
destroyed facilities due to calamities, as may be directed and authorized by the Office of the
President of the Philippines. (Emphases supplied)

Analyzing the legal text vis-à-vis the above-mentioned principles, it may then be concluded
that (a) Section 8 of PD 910, which creates a Special Fund comprised of "all fees, revenues,
and receipts of the [Energy Development] Board from any and all sources” (a determinable
amount) "to be used to finance energy resource development and exploitation programs and
projects of the government and for such other purposes as may be hereafter directed by the
President” (a specified public purpose), and (b) Section 12 of PD 1869, as amended by PD
1993, which similarly sets aside, "[a]fter deducting five (5%) percent as Franchise Tax, the
Fifty (50%) percent share of the Government in the aggregate gross earnings of [PAGCOR], or
60%[,] if the aggregate gross earnings be less than P150,000,000.00” (also a determinable
amount) "to finance the priority infrastructure development projects and x x x the restoration
of damaged or destroyed facilities due to calamities, as may be directed and authorized by the
Office of the President of the Philippines” (also a specified public purpose), are legal
appropriations under Section 29(1), Article VI of the 1987 Constitution.

In this relation, it is apropos to note that the 2013 PDAF Article cannot be properly deemed as
a legal appropriation under the said constitutional provision precisely because, as earlier
stated, it contains post- enactment measures which effectively create a system of
intermediate appropriations. These intermediate appropriations are the actual appropriations
meant for enforcement and since they are made by individual legislators after the GAA is
passed, they occur outside the law. As such, the Court observes that the real appropriation
made under the 2013 PDAF Article is not the P24.79 Billion allocated for the entire PDAF, but
rather the post-enactment determinations made by the individual legislators which are, to
repeat, occurrences outside of the law. Irrefragably, the 2013 PDAF Article does not constitute
an "appropriation made by law” since it, in its truest sense, only authorizes individual
legislators to appropriate in violation of the non-delegability principle as afore-discussed.

2. Undue Delegation.
On a related matter, petitioners contend that Section 8 of PD 910 constitutes an undue
delegation of legislative power since the phrase "and for such other purposes as may be
hereafter directed by the President” gives the President "unbridled discretion to determine for
[243]
what purpose the funds will be used.” Respondents, on the other hand, urged the Court to
apply the principle of ejusdem generis to the same section and thus, construe the phrase
"and for such other purposes as may be hereafter directed by the President” to refer only to
other purposes related "to energy resource development and exploitation programs and
[244]
projects of the government.”

The Court agrees with petitioners‘ submissions.

While the designation of a determinate or determinable amount for a particular public purpose
is sufficient for a legal appropriation to exist, the appropriation law must contain adequate
legislative guidelines if the same law delegates rule-making authority to the
[245]
Executive either for the purpose of (a) filling up the details of the law for its
enforcement, known as supplementary rule-making, or (b) ascertaining facts to bring the law
[246]
into actual operation, referred to as contingent rule-making. There are two (2)
fundamental tests to ensure that the legislative guidelines for delegated rule- making are
indeed adequate. The first test is called the "completeness test.” Case law states that a law is
complete when it sets forth therein the policy to be executed, carried out, or implemented by
the delegate. On the other hand, the second test is called the "sufficient standard test.”
Jurisprudence holds that a law lays down a sufficient standard when it provides adequate
guidelines or limitations in the law to map out the boundaries of the delegate‘s authority and
[247]
prevent the delegation from running riot. To be sufficient, the standard must specify the
limits of the delegate‘s authority, announce the legislative policy, and identify the conditions
[248]
under which it is to be implemented.
In view of the foregoing, the Court agrees with petitioners that the phrase "and for such other
purposes as may be hereafter directed by the President” under Section 8 of PD
910 constitutes an undue delegation of legislative power insofar as it does not lay down a
sufficient standard to adequately determine the limits of the President‘s authority with respect
to the purpose for which the Malampaya Funds may be used. As it reads, the said phrase
gives the President wide latitude to use the Malampaya Funds for any other purpose he may
direct and, in effect, allows him to unilaterally appropriate public funds beyond the purview of
the law. That the subject phrase may be confined only to "energy resource development and
exploitation programs and projects of the government” under the principle of ejusdem
generis, meaning that the general word or phrase is to be construed to include – or be
restricted to – things akin to, resembling, or of the same kind or class as those specifically
[249]
mentioned, is belied by three (3) reasons: first, the phrase "energy resource development
and exploitation programs and projects of the government” states a singular and
general class and hence, cannot be treated as a statutory reference of specific things from
which the general phrase "for such other purposes” may be limited; second, the said phrase
also exhausts the class it represents, namely energy development programs of the
[250]
government; and, third, the Executive department has, in fact, used the Malampaya
Funds for non-energy related purposes under the subject phrase, thereby contradicting
respondents‘ own position that it is limited only to "energy resource development and
[251]
exploitation programs and projects of the government.” Thus, while Section 8 of PD 910
may have passed the completeness test since the policy of energy development is clearly
deducible from its text, the phrase "and for such other purposes as may be hereafter directed
by the President” under the same provision of law should nonetheless be stricken down as
unconstitutional as it lies independently unfettered by any sufficient standard of the
delegating law. This notwithstanding, it must be underscored that the rest of Section 8,
insofar as it allows for the use of the Malampaya Funds "to finance energy resource
development and exploitation programs and projects of the government,” remains legally
effective and subsisting. Truth be told, the declared unconstitutionality of the aforementioned
phrase is but an assurance that the Malampaya Funds would be used – as it should be used –
only in accordance with the avowed purpose and intention of PD 910.

As for the Presidential Social Fund, the Court takes judicial notice of the fact that Section 12
of PD 1869 has already been amended by PD 1993 which thus moots the parties‘ submissions
[252]
on the same. Nevertheless, since the amendatory provision may be readily examined
under the current parameters of discussion, the Court proceeds to resolve its
constitutionality.

Primarily, Section 12 of PD 1869, as amended by PD 1993, indicates that the Presidential

Social Fund may be used "to [first,] finance the priority infrastructure development projects
and [second,] to finance the restoration of damaged or destroyed facilities due to calamities,
as may be directed and authorized by the Office of the President of the Philippines.” The Court
finds that while the second indicated purpose adequately curtails the authority of the
President to spend the Presidential Social Fund only for restoration purposes which arise from
calamities, the first indicated purpose, however, gives him carte blanche authority to use the
same fund for any infrastructure project he may so determine as a "priority”. Verily, the law
does not supply a definition of "priority infrastructure development projects” and hence,
leaves the President without any guideline to construe the same. To note, the delimitation of a
project as one of "infrastructure” is too broad of a classification since the said term could
pertain to any kind of facility. This may be deduced from its lexicographic definition as
follows: "[t]he underlying framework of a system, [especially] public services and facilities
(such as highways, schools, bridges, sewers, and water-systems) needed to support
 [253]
commerce as well as economic and residential development.” In fine, the phrase "to
finance the priority infrastructure development projects” must be stricken down as
unconstitutional since – similar to the above- assailed provision under Section 8 of PD 910 – it
lies independently unfettered by any sufficient standard of the delegating law. As they are
severable, all other provisions of Section 12 of PD 1869, as amended by PD 1993, remains
legally effective and subsisting.

D. Ancillary Prayers.

1. Petitioners’ Prayer to be Furnished Lists and Detailed Reports.

Aside from seeking the Court to declare the Pork Barrel System unconstitutional – as the Court
did so in the context of its pronouncements made in this Decision – petitioners equally pray
that the Executive Secretary and/or the DBM be ordered to release to the CoA and to the
public: (a) "the complete schedule/list of legislators who have availed of their PDAF and VILP
from the years 2003 to 2013, specifying the use of the funds, the project or activity and the
recipient entities or individuals, and all pertinent data thereto” (PDAF Use Schedule/List);
[254]
and (b) "the use of the Executive‘s [lump-sum, discretionary] funds, including the
proceeds from the x x x Malampaya Fund[s] [and] remittances from the [PAGCOR] x x x from
2003 to 2013, specifying the x x x project or activity and the recipient entities or individuals,
[255]
and all pertinent data thereto” (Presidential Pork Use Report). Petitioners‘ prayer is
grounded on Section 28, Article II and Section 7, Article III of the 1987 Constitution which read
as follows:

ARTICLE II

Sec. 28. Subject to reasonable conditions prescribed by law, the State adopts and implements
a policy of full public disclosure of all its transactions involving public interest.

ARTICLE III

Sec. 7. The right of the people to information on matters of public concern shall be recognized.
Access to official records, and to documents and papers pertaining to official acts,
transactions, or decisions, as well as to government research data used as basis for policy
development, shall be afforded the citizen, subject to such limitations as may be provided by
law.

The Court denies petitioners‘ submission.

Case law instructs that the proper remedy to invoke the right to information is to file a petition
[256]
for mandamus. As explained in the case of Legaspi v. Civil Service Commission:

[W]hile the manner of examining public records may be subject to reasonable regulation by the
government agency in custody thereof, the duty to disclose the information of public concern,
and to afford access to public records cannot be discretionary on the part of said agencies.
Certainly, its performance cannot be made contingent upon the discretion of such agencies.
Otherwise, the enjoyment of the constitutional right may be rendered nugatory by any
whimsical exercise of agency discretion. The constitutional duty, not being discretionary, its
performance may be compelled by a writ of mandamus in a proper case.
But what is a proper case for Mandamus to issue? In the case before Us, the public right to be
enforced and the concomitant duty of the State are unequivocably set forth in the
Constitution. The decisive question on the propriety of the issuance of the writ of mandamus
in this case is, whether the information sought by the petitioner is within the ambit of the
constitutional guarantee. (Emphases supplied)

[257]
Corollarily, in the case of Valmonte v. Belmonte Jr. (Valmonte), it has been clarified that
the right to information does not include the right to compel the preparation of "lists,
abstracts, summaries and the like.” In the same case, it was stressed that it is essential that
the "applicant has a well- defined, clear and certain legal right to the thing demanded and that
it is the imperative duty of defendant to perform the act required.” Hence, without the
foregoing substantiations, the Court cannot grant a particular request for information. The
[258]
pertinent portions of Valmonte are hereunder quoted:

Although citizens are afforded the right to information and, pursuant thereto, are entitled to
"access to official records," the Constitution does not accord them a right to compel
custodians of official records to prepare lists, abstracts, summaries and the like in their desire
to acquire information on matters of public concern.

It must be stressed that it is essential for a writ of mandamus to issue that the applicant has
a well-defined, clear and certain legal right to the thing demanded and that it is the imperative
duty of defendant to perform the act required. The corresponding duty of the respondent to
perform the required act must be clear and specific [ Lemi v. Valencia, G.R. No. L-20768,
November 29,1968,126 SCRA 203; Ocampo v. Subido, G.R. No. L-28344, August 27, 1976, 72
SCRA 443.] The request of the petitioners fails to meet this standard, there being no duty on
the part of respondent to prepare the list requested. (Emphases supplied)

In these cases, aside from the fact that none of the petitions are in the nature of mandamus
actions, the Court finds that petitioners have failed to establish a "a well-defined, clear and
certain legal right” to be furnished by the Executive Secretary and/or the DBM of their
requested PDAF Use Schedule/List and Presidential Pork Use Report. Neither did petitioners
assert any law or administrative issuance which would form the bases of the latter‘s duty to
furnish them with the documents requested. While petitioners pray that said information be
equally released to the CoA, it must be pointed out that the CoA has not been impleaded as a
party to these cases nor has it filed any petition before the Court to be allowed access to or to
compel the release of any official document relevant to the conduct of its audit investigations.
While the Court recognizes that the information requested is a matter of significant public
concern, however, if only to ensure that the parameters of disclosure are properly foisted and
so as not to unduly hamper the equally important interests of the government, it is constrained
to deny petitioners‘ prayer on this score, without prejudice to a proper mandamus case which
they, or even the CoA, may choose to pursue through a separate petition.

It bears clarification that the Court‘s denial herein should only cover petitioners‘ plea to be
furnished with such schedule/list and report and not in any way deny them, or the general
public, access to official documents which are already existing and of public record. Subject
to reasonable regulation and absent any valid statutory prohibition, access to these
documents should not be proscribed. Thus, in Valmonte, while the Court denied the
application for mandamus towards the preparation of the list requested by petitioners therein,
it nonetheless allowed access to the documents sought for by the latter, subject, however, to
[259]
the custodian‘s reasonable regulations, viz.:
In fine, petitioners are entitled to access to the documents evidencing loans granted by the
GSIS, subject to reasonable regulations that the latter may promulgate relating to the manner
and hours of examination, to the end that damage to or loss of the records may be avoided,
that undue interference with the duties of the custodian of the records may be prevented and
that the right of other persons entitled to inspect the records may be insured [ Legaspi v. Civil
Service Commission, supra at p. 538, quoting Subido v. Ozaeta, 80 Phil. 383, 387.] The
petition, as to the second and third alternative acts sought to be done by petitioners, is
meritorious.

However, the same cannot be said with regard to the first act sought by petitioners, i.e., "to
furnish petitioners the list of the names of the Batasang Pambansa members belonging to the
UNIDO and PDP- Laban who were able to secure clean loans immediately before the February
7 election thru the intercession/marginal note of the then First Lady Imelda Marcos.”

The Court, therefore, applies the same treatment here.

2. Petitioners’ Prayer to Include Matters in Congressional Deliberations.

Petitioners further seek that the Court "[order] the inclusion in budgetary deliberations with
the Congress of all presently, off-budget, lump sum, discretionary funds including but not
limited to, proceeds from the x x x Malampaya Fund, remittances from the [PAGCOR] and the
[260]
[PCSO] or the Executive‘s Social Funds[.]”

Suffice it to state that the above-stated relief sought by petitioners covers a matter which is
generally left to the prerogative of the political branches of government. Hence, lest the Court
itself overreach, it must equally deny their prayer on this score.

3. Respondents’ Prayer to Lift TRO; Consequential Effects of Decision.

The final issue to be resolved stems from the interpretation accorded by the DBM to the
concept of released funds. In response to the Court‘s September 10, 2013 TRO that enjoined
the release of the remaining PDAF allocated for the year 2013, the DBM issued Circular Letter
No. 2013-8 dated September 27, 2013 (DBM Circular 2013-8) which pertinently reads as
follows:

3.0 Nonetheless, PDAF projects funded under the FY 2013 GAA, where a Special Allotment
Release Order (SARO) has been issued by the DBM and such SARO has been obligated by the
implementing agencies prior to the issuance of the TRO, may continually be implemented and
disbursements thereto effected by the agencies concerned.

Based on the text of the foregoing, the DBM authorized the continued implementation and
disbursement of PDAF funds as long as they are: first, covered by a SARO; and, second, that
said SARO had been obligated by the implementing agency concerned prior to the issuance of
the Court‘s September 10, 2013 TRO.

Petitioners take issue with the foregoing circular, arguing that ?the issuance of the SARO
does not yet involve the release of funds under the PDAF, as release is only triggered by the
issuance of a Notice of Cash Allocation [(NCA)].”[261] As such, PDAF disbursements, even if
covered by an obligated SARO, should remain enjoined.

For their part, respondents espouse that the subject TRO only covers "unreleased and
unobligated allotments.” They explain that once a SARO has been issued and obligated by the
implementing agency concerned, the PDAF funds covered by the same are already "beyond the
reach of the TRO because they cannot be considered as 'remaining PDAF.‘“ They conclude
that this is a reasonable interpretation of the TRO by the DBM. [262]

The Court agrees with petitioners in part.

At the outset, it must be observed that the issue of whether or not the Court‘s September 10,
2013 TRO should be lifted is a matter rendered moot by the present Decision. The
unconstitutionality of the 2013 PDAF Article as declared herein has the consequential effect of
converting the temporary injunction into a permanent one. Hence, from the promulgation of
this Decision, the release of the remaining PDAF funds for 2013, among others, is now
permanently enjoined.

The propriety of the DBM‘s interpretation of the concept of "release” must, nevertheless, be
resolved as it has a practical impact on the execution of the current Decision. In particular,
the Court must resolve the issue of whether or not PDAF funds covered by obligated SAROs, at
the time this Decision is promulgated, may still be disbursed following the DBM‘s
interpretation in DBM Circular 2013-8.

On this score, the Court agrees with petitioners‘ posturing for the fundamental reason that
funds covered by an obligated SARO are yet to be "released” under legal contemplation. A
SARO, as defined by the DBM itself in its website, is "[a]specific authority issued to
identified agencies to incur obligations not exceeding a given amount during a specified
period for the purpose indicated. It shall cover expenditures the release of which is subject to
compliance with specific laws or regulations, or is subject to separate approval or clearance
[263]
by competent authority.” Based on this definition, it may be gleaned that a SARO only
evinces the existence of an obligation and not the directive to pay. Practically speaking, the
SARO does not have the direct and immediate effect of placing public funds beyond the
control of the disbursing authority. In fact, a SARO may even be withdrawn under certain
circumstances which will prevent the actual release of funds. On the other hand, the actual
[264]
release of funds is brought about by the issuance of the NCA, which is subsequent to the
issuance of a SARO. As may be determined from the statements of the DBM representative
[265]
during the Oral Arguments:

Justice Bernabe: Is the notice of allocation issued simultaneously with the SARO?

x x x x

Atty. Ruiz: It comes after. The SARO, Your Honor, is only the go signal for the agencies to
obligate or to enter into commitments. The NCA, Your Honor, is already the go signal to the
treasury for us to be able to pay or to liquidate the amounts obligated in the SARO; so it comes
after. x x x The NCA, Your Honor, is the go signal for the MDS for the authorized government-
disbursing banks to, therefore, pay the payees depending on the projects or projects covered
by the SARO and the NCA.

Justice Bernabe: Are there instances that SAROs are cancelled or revoked?

Atty. Ruiz: Your Honor, I would like to instead submit that there are instances that the SAROs
issued are withdrawn by the DBM.

Justice Bernabe: They are withdrawn?

Atty. Ruiz: Yes, Your Honor x x x. (Emphases and underscoring supplied)

Thus, unless an NCA has been issued, public funds should not be treated as funds which have
been "released.” In this respect, therefore, the disbursement of 2013 PDAF funds which are
only covered by obligated SAROs, and without any corresponding NCAs issued, must, at the
time of this Decision’s promulgation, be enjoined and consequently reverted to the
unappropriated surplus of the general fund. Verily, in view of the declared unconstitutionality
of the 2013 PDAF Article, the funds appropriated pursuant thereto cannot be disbursed even
though already obligated, else the Court sanctions the dealing of funds coming from an
unconstitutional source.

This same pronouncement must be equally applied to (a) the Malampaya Funds which have
been obligated but not released – meaning, those merely covered by a SARO – under the
phrase "and for such other purposes as may be hereafter directed by the President” pursuant
to Section 8 of PD 910; and (b) funds sourced from the Presidential Social Fund under the
phrase "to finance the priority infrastructure development projects” pursuant to Section 12 of
PD 1869, as amended by PD 1993, which were altogether declared by the Court as
unconstitutional. However, these funds should not be reverted to the general fund as afore-
stated but instead, respectively remain under the Malampaya Funds and the Presidential
Social Fund to be utilized for their corresponding special purposes not otherwise declared as
unconstitutional.

E. Consequential Effects of Decision.

As a final point, it must be stressed that the Court‘s pronouncement anent

the unconstitutionality of (a) the 2013 PDAF Article and its Special Provisions, (b) all other
Congressional Pork Barrel provisions similar thereto, and (c) the phrases (1) ?and for such
other purposes as may be hereafter directed by the President” under Section 8 of PD 910, and
(2) "to finance the priority infrastructure development projects” under Section 12 of PD 1869,
as amended by PD 1993, must only be treated as prospective in effect in view of
the operative fact doctrine.

To explain, the operative fact doctrine exhorts the recognition that until the judiciary, in an
appropriate case, declares the invalidity of a certain legislative or executive act, such act is
presumed constitutional and thus, entitled to obedience and respect and should be properly
enforced and complied with. As explained in the recent case of Commissioner of Internal
[266]
Revenue v. San Roque Power Corporation, the doctrine merely "reflect[s] awareness that
precisely because the judiciary is the governmental organ which has the final say on whether
or not a legislative or executive measure is valid, a period of time may have elapsed before it
can exercise the power of judicial review that may lead to a declaration of nullity. It would be
to deprive the law of its quality of fairness and justice then, if there be no recognition of what
had transpired prior to such adjudication.”[267] "In the language of an American Supreme Court
decision: 'The actual existence of a statute, prior to such a determination [of
unconstitutionality], is an operative fact and may have consequences which cannot justly be
[268]
ignored.‘“

For these reasons, this Decision should be heretofore applied prospectively.

Conclusion

The Court renders this Decision to rectify an error which has persisted in the chronicles of our
history. In the final analysis, the Court must strike down the Pork Barrel System
as unconstitutional in view of the inherent defects in the rules within which it operates. To
recount, insofar as it has allowed legislators to wield, in varying gradations, non-oversight,
post- enactment authority in vital areas of budget execution, the system has violated
the principle of separation of powers; insofar as it has conferred unto legislators the power of
appropriation by giving them personal, discretionary funds from which they are able to fund
specific projects which they themselves determine, it has similarly violated the principle of
non- delegability of legislative power; insofar as it has created a system of budgeting wherein
items are not textualized into the appropriations bill, it has flouted the prescribed procedure
of presentment and, in the process, denied the President the power to veto items; insofar as
it has diluted the effectiveness of congressional oversight by giving legislators a stake in the
affairs of budget execution, an aspect of governance which they may be called to monitor and
scrutinize, the system has equally impaired public accountability; insofar as it has authorized
legislators, who are national officers, to intervene in affairs of purely local nature, despite the
existence of capable local institutions, it has likewise subverted genuine local autonomy; and
again, insofar as it has conferred to the President the power to appropriate funds intended by
law for energy-related purposes only to other purposes he may deem fit as well as other public
funds under the broad classification of "priority infrastructure development projects,” it has
once more transgressed the principle of non-delegability.

For as long as this nation adheres to the rule of law, any of the multifarious unconstitutional
methods and mechanisms the Court has herein pointed out should never again be adopted in
any system of governance, by any name or form, by any semblance or similarity, by any
influence or effect. Disconcerting as it is to think that a system so constitutionally unsound
has monumentally endured, the Court urges the people and its co- stewards in government to
look forward with the optimism of change and the awareness of the past. At a time of great
civic unrest and vociferous public debate, the Court fervently hopes that its Decision today,
while it may not purge all the wrongs of society nor bring back what has been lost, guides this
nation to the path forged by the Constitution so that no one may heretofore detract from its
cause nor stray from its course. After all, this is the Court‘s bounden duty and no other‘s.

WHEREFORE, the petitions are PARTLY GRANTED. In view of the constitutional violations
discussed in this Decision, the Court hereby declares as UNCONSTITUTIONAL: (a) the entire
2013 PDAF Article; (b) all legal provisions of past and present Congressional Pork Barrel Laws,
such as the previous PDAF and CDF Articles and the various Congressional Insertions, which
authorize/d legislators – whether individually or collectively organized into committees – to
intervene, assume or participate in any of the various post-enactment stages of the budget
execution, such as but not limited to the areas of project identification, modification and
revision of project identification, fund release and/or fund realignment, unrelated to the power
of congressional oversight; (c) all legal provisions of past and present Congressional Pork
Barrel Laws, such as the previous PDAF and CDF Articles and the various Congressional
Insertions, which confer/red personal, lump-sum allocations to legislators from which they are
able to fund specific projects which they themselves determine; (d) all informal practices of
similar import and effect, which the Court similarly deems to be acts of grave abuse of
discretion amounting to lack or excess of jurisdiction; and (e) the phrases (1) ?and for such
other purposes as may be hereafter directed by the President” under Section 8 of Presidential
Decree No. 910 and (2) "to finance the priority infrastructure development projects” under
Section 12 of Presidential Decree No. 1869, as amended by Presidential Decree No. 1993, for
both failing the sufficient standard test in violation of the principle of non-delegability of
legislative power.
Accordingly, the Court‘s temporary injunction dated September 10, 2013 is hereby declared to
be PERMANENT. Thus, the disbursement/release of the remaining PDAF funds allocated for
the year 2013, as well as for all previous years, and the funds sourced from (1) the Malampaya
Funds under the phrase "and for such other purposes as may be hereafter directed by the
President” pursuant to Section 8 of Presidential Decree No. 910, and (2) the Presidential Social
Fund under the phrase ?to finance the priority infrastructure development projects” pursuant
to Section 12 of Presidential Decree No. 1869, as amended by Presidential Decree No. 1993,
which are, at the time this Decision is promulgated, not covered by Notice of Cash Allocations
(NCAs) but only by Special Allotment Release Orders (SAROs), whether obligated or not, are
hereby ENJOINED. The remaining PDAF funds covered by this permanent injunction shall not
be disbursed/released but instead reverted to the unappropriated surplus of the general fund,
while the funds under the Malampaya Funds and the Presidential Social Fund shall remain
therein to be utilized for their respective special purposes not otherwise declared as
unconstitutional.

On the other hand, due to improper recourse and lack of proper substantiation, the Court
hereby DENIES petitioners‘ prayer seeking that the Executive Secretary and/or the
Department of Budget and Management be ordered to provide the public and the Commission
on Audit complete lists/schedules or detailed reports related to the availments and utilization
of the funds subject of these cases. Petitioners‘ access to official documents already available
and of public record which are related to these funds must, however, not be prohibited but
merely subjected to the custodian‘s reasonable regulations or any valid statutory prohibition
on the same. This denial is without prejudice to a proper mandamus case which they or the
Commission on Audit may choose to pursue through a separate petition.

The Court also DENIES petitioners‘ prayer to order the inclusion of the funds subject of these
cases in the budgetary deliberations of Congress as the same is a matter left to the
prerogative of the political branches of government.

Finally, the Court hereby DIRECTS all prosecutorial organs of the government to, within the
bounds of reasonable dispatch, investigate and accordingly prosecute all government officials
and/or private individuals for possible criminal offenses related to the irregular, improper
and/or unlawful disbursement/utilization of all funds under the Pork Barrel System.

This Decision is immediately executory but prospective in effect.

SO ORDERED.
FACTS
HISTORY of CONGRESSIONAL PORK BARREL
The term “pork barrel”, a political parlance of American-English origin, refers to an appropriation
of government spending meant for localized projects and secured solely or primarily to bring
money to a representative’s district.
The earliest form of the pork barrel system is found in Section 3 of Act 3044, otherwise known
as the Public Works Act of 1922. Under this provision, release of funds and realignment of
unexpended portions of an item or appropriation were subject to the approval of a joint
committee elected by the Senate and the House of Representatives.
In 1950, members of Congress, by virtue of being representatives of the people, also became
involved in project identification.
The pork barrel system was temporarily discontinued when martial law was declared.
It reappeared in 1982 through an item in the General Appropriations Act (“GAA”) called “Support
for Local Development Projects” (“SLDP”). SLDP started the giving of lump-sum allocations to
individual legislators. The SLDP also began to cover not only public works project or “hard
projects” but also covered “soft projects” such as those which would fall under education, health
and livelihood.
After the EDSA People Power Revolution and the restoration of democracy, the pork barrel was
revived through the “Mindanao Development Fund” and the “Visayas Development Fund”.
In 1990, the pork barrel was renamed “Countrywide Development Fund” (“CDF”). The CDF was
meant to cover small local infrastructure and other priority community projects.
CDF Funds were, with the approval of the President, released directly to implementing agencies
subject to the submission of the required list of projects and activities. Senators and
congressmen could identify any kind of project from “hard projects” such as roads, buildings and
bridges to “soft projects” such as textbooks, medicines, and scholarships.
In 1993, the CDF was further modified such that the release of funds was to be made upon the
submission of the list of projects and activities identified by individual legislators. This was also
the first time when the Vice-President was given an allocation.
The CDF contained the same provisions from 1994-1996 except that the Department of Budget
and Management was required to submit reports to the Senate Committee on Finance and the
House Committee on Appropriations regarding the releases made from the funds.
Congressional insertions (“CIs”) were another form of congressional pork barrel aside from the
CDF. Examples of the CIs include the DepEd School Building Fund, the Congressional
Initiative Allocations, and the Public Works Fund, among others.
The allocations for the School Building Fund were made upon prior consultation with the
representative of the legislative district concerned and the legislators had the power to direct
how, where and when these appropriations were to be spent.
In 1999, the CDF was removed from the GAA and replaced by three separate forms of CIs: (i)
Food Security Program Fund, (ii) Lingap Para sa Mahihirap Fund, and (iii) Rural/Urban
Development Infrastructure Program Fund. All three contained a provision requiring prior
consultation with members of Congress for the release of funds.
In 2000, the Priority Development Assistance Fund (“PDAF”) appeared in the GAA. PDAF
required prior consultation with the representative of the district before the release of funds.
PDAF also allowed realignment of funds to any expense category except personal services and
other personnel benefits.
In 2005, the PDAF introduced the program menu concept which is essentially a list of general
programs and implementing agencies from which a particular PDAF project may be
subsequently chosen by the identifying authority. This was retained in the GAAs from 2006-
2010.
It was during the Arroyo administration when the formal participation of non-governmental
organizations in the implementation of PDAF projects was introduced.
The PDAF articles from 2002-2010 were silent with respect to specific amounts for individual
legislators.
In 2011, the PDAF Article in the GAA contained an express statement on lump-sum amounts
allocated for individual legislators and the Vice-President. It also contained a provision on
realignment of funds but with the qualification that it may be allowed only once.
The 2013 PDAF Article allowed LGUs to be identified as implementing agencies. Legislators
were also allowed to identify programs/projects outside of his legislative district. Realignment of
funds and release of funds were required to be favorably endorsed by the House Committee on
Appropriations and the Senate Committee on Finance, as the case may be.

MALAMPAYA FUNDS AND PRESIDENTIAL SOCIAL FUND

The use of the term pork barrel was expanded to include certain funds of the President such as
the Malampaya Fund and the Presidential Social Fund (“PSF”).
The Malampaya Fund was created as a special fund under Section 8 of Presidential Decree
(“PD”) No. 910 issued by President Ferdinand Marcos on March 22, 1976.
The PSF was created under Section 12, Title IV of PD No. 1869, or the Charter of the Philippine
Amusement and Gaming Corporation (“PAGCOR”), as amended by PD No. 1993. The PSF is
managed and administered by the Presidential Management Staff and is sourced from the
share of the government in the aggregate gross earnings of PAGCOR.

PORK BARREL MISUSE

In 1996, Marikina City Representative Romeo Candozo revealed that huge sums of money
regularly went into the pockets of legislators in the form of kickbacks.
In 2004, several concerned citizens sought the nullification of the PDAF but the Supreme Court
dismissed the petition for lack of evidentiary basis regarding illegal misuse of PDAF in the form
of kickbacks.
In July 2013, the National Bureau of Investigation probed the allegation that a syndicate
defrauded the government of P10 billion using funds from the pork barrel of lawmakers and
various government agencies for scores of ghost projects.
In August 2013, the Commission on Audit released the results of a three-year audit investigation
detailing the irregularities in the release of the PDAF from 2007 to 2009.
Whistle-blowers also alleged that at least P900 million from the Malampaya Funds had gone
into a dummy NGO.

ISSUE/S
PROCEDURAL ISSUES
Whether or not (a) the issues raised in the consolidated petitions involve an actual and
justiciable controversy, (b) the issues raised are matters of policy not subject to judicial review,
(c) petitioners have legal standing to sue, (d) previous decisions of the Court bar the re-litigation
of the constitutionality of the Pork Barrel system.
SUBSTANTIVE ISSUES
Whether or not the 2013 PDAF Article and all other Congressional Pork Barrel laws are
unconstitutional for violating the constitutional provisions on (a) separation of powers, (b) non-
delegability of legislative power, (c) checks and balances, (d) accountability, (e) political
dynasties, (f) local autonomy.
RULING

PROCEDURAL ISSUES
(a) There is an actual and justiciable controversy
There exists an actual and justiciable controversy in the cases. The requirement of contrariety of
legal rights is satisfied by the antagonistic positions of the parties regarding the constitutionality
of the pork barrel system.
The case is ripe for adjudication since the challenged funds and the laws allowing for their
utilization are currently existing and operational and thereby posing an immediate or threatened
injury to petitioners.
The case is not moot as the proposed reforms on the PDAF and the abolition thereof does not
actually terminate the controversy on the matter. The President does not have constitutional
authority to nullify or annul the legal existence of the PDAF.
The “moot and academic principle” cannot stop the Court from deciding the case considering
that: (a) petitioners allege grave violation of the constitution, (b) the constitutionality of the pork
barrel system presents a situation of exceptional character and is a matter of paramount public
interest, (c) there is a practical need for a definitive ruling on the system’s constitutionality to
guide the bench, the bar and the public, and (d) the preparation and passage of the national
budget is an annual occurrence.

(b) Political Question Doctrine is Inapplicable

The intrinsic constitutionality of the “Pork Barrel System” is not an issue dependent upon the
wisdom of the political branches of the government but rather a legal one which the Constitution
itself has commanded the Court to act upon.
The 1987 Constitution expanded the concept of judicial power such that the Supreme Court has
the power to determine whether there has been grave abuse of discretion amounting to lack or
excess of jurisdiction on the part of any branch or instrumentality on the part of the government.
(c) Petitioners have legal standing to sue
Petitioners have legal standing by virtue of being taxpayers and citizens of the Philippines.
As taxpayers, they are bound to suffer from the unconstitutional usage of public funds.
As citizens, the issues they have raised are matters of transcendental importance, of
overreaching significance to society, or of paramount public interest.
(d) The Petition is not barred by previous cases
The present case is not barred by the ruling in Philconsa vs. Enriquez because the Philconsa
case was a limited response to a separation of powers problem, specifically on the propriety of
conferring post-enactment identification authority to Members of Congress.
On the contrary, the present cases involve a more holistic examination of (a) the inter-relation
between the CDF and the PDAF Articles with each other, and (b) the inter-relation of post-
enactment measures contained within a particular CDF or PDAF article, including not only those
related to the area of project identification but also to the areas of fund release and realignment.
Moreover, the Philconsa case was riddled with inherent constitutional inconsistencies
considering that the authority to identify projects is an aspect of appropriation and the power of
appropriation is a form of legislative power thereby lodged in Congress. This power cannot be
exercised by individual members of Congress and the authority to appropriate cannot be
exercised after the GAA has already been passed.
The case of Lawyers Against Monopoly and Poverty vs. Secretary of Budget and Management
does not also bar judgment on the present case because it was dismissed on a procedural
technicality and hence no controlling doctrine was rendered.

SUBSTANTIVE ISSUES ON CONGRESSIONAL PORK BARREL

 (a) The separation of powers between the Executive and the Legislative Departments has been
violated.
The post-enactment measures including project identification, fund release, and fund
realignment are not related to functions of congressional oversight and, hence, allow legislators
to intervene and/or assume duties that properly belong to the sphere of budget execution, which
belongs to the executive department.
Legislators have been, in one form or another, authorized to participate in the various
operational aspects of budgeting, including ―the evaluation of work and financial plans for
individual activities and the ― regulation and release of funds in violation of the separation of
powers principle.

Any provision of law that empowers Congress or any of its members to play any role in the
implementation or enforcement of the law violates the principle of separation of powers and is
thus unconstitutional.
That the said authority to identify projects is treated as merely recommendatory in nature does
not alter its unconstitutional tenor since the prohibition covers any role in the implementation or
enforcement of the law.
Respondents also failed to prove that the role of the legislators is only recommendatory in
nature. They even admitted that the identification of the legislator constitutes a mandatory
requirement before the PDAF can be tapped as a funding source.

(b)The principle of non-delegability of legislative powers has been violated

The 2013 PDAF Article, insofar as it confers post-enactment identification authority to individual
legislators, violates the principle of non-delegability since said legislators are effectively allowed
to individually exercise the power of appropriation, which – as settled in Philconsa – is lodged in
Congress.
That the power to appropriate must be exercised only through legislation is clear from Section
29(1), Article VI of the 1987 Constitution which states that: ― No money shall be paid out of the
Treasury except in pursuance of an appropriation made by law.
The legislators are individually exercising the power of appropriation because each of them
determines (a) how much of their PDAF fund would go to and (b) a specific project or
beneficiary that they themselves also determine.
(c) Checks and balances
Under the 2013 PDAF Article, the amount of P24.79 Billion only appears as a collective
allocation limit since the said amount would be further divided among individual legislators who
would then receive personal lump-sum allocations and could, after the GAA is passed,
effectively appropriate PDAF funds based on their own discretion.
This kind of lump-sum/post-enactment legislative identification budgeting system fosters the
creation of a ―budget within a budget which subverts the prescribed procedure of presentment
and consequently impairs the President‘s power of item veto.
It forces the President to decide between (a) accepting the entire PDAF allocation without
knowing the specific projects of the legislators, which may or may not be consistent with his
national agenda and (b) rejecting the whole PDAF to the detriment of all other legislators with
legitimate projects.
In fact, even without its post-enactment legislative identification feature, the 2013 PDAF Article
would remain constitutionally flawed since it would then operate as a prohibited form of lump-
sum appropriation. This is because the appropriation law leaves the actual amounts and
purposes of the appropriation for further determination and, therefore, does not readily indicate
a discernible item which may be subject to the President‘s power of item veto.

(d) The Congressional Pork Barrel partially prevents accountability as Congress is incapable of
checking itself or its members.
The fact that individual legislators are given post-enactment roles in the implementation of the
budget makes it difficult for them to become disinterested observers when scrutinizing,
investigating or monitoring the implementation of the appropriation law.
The conduct of oversight would be tainted as said legislators, who are vested with post-
enactment authority, would, in effect, be checking on activities in which they themselves
participate.
The concept of post-enactment authorization violates Section 14, Article VI of the 1987
Constitution, which prohibits members of Congress to intervene in any matter before any office
of the Government, because it renders them susceptible to taking undue advantage of their own
office.
The Court, however, cannot completely agree that the same post-enactment authority and/or
the individual legislator‘s control of his PDAF per se would allow him to perpetuate himself in
office.
The use of his PDAF for re-election purposes is a matter which must be analyzed based on
particular facts and on a case-to-case basis.

(e) The constitutional provision regarding political dynasties is not self-executing.

Section 26, Article II of the 1987 Constitution, which provides that the state shall prohibit political
dynasties as may be defined by law, is not a self-executing provision.
Since there appears to be no standing law which crystallizes the policy on political dynasties for
enforcement, the Court must defer from ruling on this issue.

(f) The Congressional Pork Barrel violates constitutional principles on local autonomy
The Congressional Pork Barrel goes against the constitutional principles on local autonomy
since it allows district representatives, who are national officers, to substitute their judgments in
utilizing public funds for local development.
The gauge of PDAF and CDF allocation/division is based solely on the fact of office, without
taking into account the specific interests and peculiarities of the district the legislator represents.
The allocation/division limits are clearly not based on genuine parameters of equality, wherein
economic or geographic indicators have been taken into consideration.
This concept of legislator control underlying the CDF and PDAF conflicts with the functions of
the various Local Development Councils (“LDCs”) which are already legally mandated
to―assist the corresponding sanggunian in setting the direction of economic and social
development, and coordinating development efforts within its territorial jurisdiction.
Considering that LDCs are instrumentalities whose functions are essentially geared towards
managing local affairs, their programs, policies and resolutions should not be overridden nor
duplicated by individual legislators, who are national officers that have no law-making authority
except only when acting as a body.

SUBSTANTIVE ISSUES ON PRESIDENTIAL PORK BARREL

(a) Section 8 of PD No. 910 and Section 12 of PD No. 1869 are valid appropriation laws.
For an appropriation law to be valid under Section 29 (1), Article VI of the 1987 Constitution,
which provides that “No money shall be paid out of the Treasury except in pursuance of an
appropriation made by law”, it is enough that (a) the provision of law sets apart a determinate or
determinable amount of money and (b) allocates the same for a particular public purpose.
Section 8 of PD 910 is a valid appropriation law because it set apart a determinable amount: a
Special Fund comprised of ― all fees, revenues, and receipts of the [Energy Development]
Board from any and all sources.
It also specified a public purpose: energy resource development and exploitation programs and
projects of the government and for such other purposes as may be hereafter directed by the
President.
Section 12 of PD No. 1869 is also a valid appropriation law because it set apart a determinable
amount: [a]fter deducting five (5%) percent as Franchise Tax, the Fifty (50%) percent share of
the Government in the aggregate gross earnings of [PAGCOR], or 60%[,] if the aggregate gross
earnings be less than P150,000,000.00.
It also specified a public purpose: priority infrastructure development projects and x x x the
restoration of damaged or destroyed facilities due to calamities, as may be directed and
authorized by the Office of the President of the Philippines.

(b) Section 8 of PD No. 910 and Section 12 of PD No. 1869 constitutes undue delegation of
legislation powers.
The phrase “and for such other purposes as may be hereafter directed by the President” under
Section 8 of PD 910 constitutes an undue delegation of legislative power insofar as it does not
lay down a sufficient standard to adequately determine the limits of the President‘s authority
with respect to the purpose for which the Malampaya Funds may be used.
This phrase gives the President wide latitude to use the Malampaya Funds for any other
purpose he may direct and, in effect, allows him to unilaterally appropriate public funds beyond
the purview of the law.
This notwithstanding, it must be underscored that the rest of Section 8, insofar as it allows for
the use of the Malampaya Funds ―to finance energy resource development and exploitation
programs and projects of the government, remains legally effective and subsisting.
Section 12 of PD No. 1869 constitutes an undue delegation of legislative powers because it lies
independently unfettered by any sufficient standard of the delegating law.
The law does not supply a definition of “priority infrastructure development projects” and hence,
leaves the President without any guideline to construe the same.
The delimitation of a project as one of “infrastructure” is too broad of a classification since the
said term could pertain to any kind of facility.

Facts:

"Pork Barrel" is... the actions of American legislators in trying to direct federal budgets in favor of
their districts.

"Pork Barrel"... refers to an appropriation of government spending meant for localized projects
and secured solely or primarily to bring money to a representative's district.

Issues:

Procedural Issues.

Ruling:

[t]here must be a contrariety of legal rights that can be interpreted and enforced on the basis of
existing law and... jurisprudence."[122] Related to the requirement of an actual case or
controversy is the requirement of "ripeness," meaning that the questions raised for constitutional
scrutiny are already ripe for adjudication.
The requirement of contrariety of legal rights is clearly satisfied by the antagonistic positions of
the parties on the constitutionality of the "Pork Barrel System." Also, the questions in these
consolidated cases are ripe for adjudication since the challenged funds and the... provisions
allowing for their utilization such as the 2013 GAA for the PDAF, PD 910 for the Malampaya
Funds and PD 1869, as amended by PD 1993, for the Presidential Social Fund are currently
existing and operational; hence, there exists an immediate or threatened injury to... petitioners
as a result of the unconstitutional use of these public funds.

The President has no power to legally abolish PDAF.

The focal point of res judicata is the judgment. The principle states that a judgment on the
merits in a previous case rendered by a court of competent jurisdiction would bind a subsequent
case if, between the first and second actions, there exists... an identity of parties, of subject
matter, and of causes of action.[151] This required identity is not, however, attendant hereto
since Philconsa and LAMP, respectively involved constitutional challenges against the 1994
CDF

Article and 2004 PDAF Article, whereas the cases at bar call for a broader constitutional
scrutiny of the entire "Pork Barrel System." Also, the ruling in LAMP is essentially a dismissal
based on a procedural technicality and, thus, hardly a judgment on... the merits in that
petitioners therein failed to present any "convincing proof x x x showing that, indeed, there were
direct releases of funds to the Members of Congress, who actually spend them according to
their sole discretion" or "pertinent evidentiary support [to... demonstrate the] illegal misuse of
PDAF in the form of kickbacks [and] has become a common exercise of unscrupulous Members
of Congress." As such, the Court upheld, in view of the presumption of constitutionality
accorded to every law, the 2004 PDAF Article, and saw "no... need to review or reverse the
standing pronouncements in the said case." Hence, for the foregoing reasons, the res judicata
principle, insofar as the Philconsa and LAMP cases are concerned, cannot apply.

the Pork Barrel System as the collective body of rules and practices that govern the manner by
which lump-sum, discretionary funds, primarily intended for... local projects, are utilized through
the respective participations of the Legislative and Executive branches of government, including
its members.

the Congressional Pork Barrel which is herein defined as a kind of lump-sum, discretionary fund
wherein legislators, either individually or collectively organized into committees, are able to
effectively control certain aspects of the fund's utilization... through various post-enactment
measures and/or practices.
the Presidential Pork Barrel which is herein defined as a kind of lump-sum, discretionary fund
which allows the President to determine the manner of its utilization

Essentially, under the 2013 PDAF Article, individual legislators are given... a personal lump-sum
fund from which they are able to dictate (a) how much from such fund would go to (b) a specific
project or beneficiary that they themselves also determine. As these two (2) acts comprise the
exercise of the power of... appropriation as described in Bengzon, and given that the 2013
PDAF Article authorizes individual legislators to perform the same, undoubtedly, said legislators
have been conferred the power to legislate which the Constitution does not, however, allow.
Thus, keeping with the... principle of non-delegability of legislative power, the Court hereby
declares the 2013 PDAF Article, as well as all other forms of Congressional Pork Barrel which
contain the similar legislative identification feature as herein discussed, as unconstitutional.

Checks and Balances.

The Constitution has also provided for an elaborate system of checks and balances to secure...
coordination in the workings of the various departments of the government.

In contrast, what beckons constitutional infirmity are appropriations which merely provide for a
singular lump-sum amount to be tapped as a source of funding for multiple purposes. Since
such appropriation type necessitates the further determination of... both the actual amount to be
expended and the actual purpose of the appropriation which must still be chosen from the
multiple purposes stated in the law, it cannot be said that the appropriation law already indicates
a "specific... appropriation of money" and hence, without a proper line-item which the President
may veto. As a practical result, the President would then be faced with the predicament of either
vetoing the entire appropriation if he finds some of its purposes wasteful or undesirable, or...
approving the entire appropriation so as not to hinder some of its legitimate purposes. Finally, it
may not be amiss to state that such arrangement also raises non-delegability issues considering
that the implementing authority would still have to determine, again, both the... actual amount to
be expended and the actual purpose of the appropriation. Since the foregoing determinations
constitute the integral aspects of the power to appropriate, the implementing authority would, in
effect, be exercising legislative prerogatives in violation of the... principle of non-delegability.

The Court agrees with petitioners.

This kind of lump-sum/post-enactment legislative identification budgeting system fosters the

creation of a "budget within a budget" which subverts the prescribed procedure of
presentment... and consequently impairs the President's power of item veto. As petitioners aptly
point out, the above- described system forces the President to decide between (a) accepting the
entire P24.79 Billion PDAF allocation without knowing the specific projects of the... legislators,
which may or may not be consistent with his national agenda and (b) rejecting the whole PDAF
to the detriment of all other legislators with legitimate projects.

The Court also observes that this concept of legislator control underlying the CDF and PDAF
conflicts with the functions of the various Local Development Councils (LDCs) which are already
legally mandated to "assist the corresponding sanggunian in setting the direction of... economic
and social development, and coordinating development efforts within its territorial
jurisdiction."[234] Considering that LDCs are instrumentalities whose functions are essentially
geared towards managing local affairs,[235]... their programs, policies and resolutions should
not be overridden nor duplicated by individual legislators, who are national officers that have no
law-making authority except only when acting as a body. The undermining effect on local
autonomy caused by the post-enactment... authority conferred to the latter was succinctly put by
petitioners in the following wise:[236]

With PDAF, a Congressman can simply bypass the local development council and initiate
projects on his own, and even take sole credit for its execution. Indeed, this type of personality-
driven project identification has not only contributed little to the overall... development of the
district, but has even contributed to ?further weakening infrastructure planning and coordination
efforts of the government."

Thus, insofar as individual legislators are authorized to intervene in purely local matters and
thereby subvert genuine local autonomy, the 2013 PDAF Article as well as all other similar
forms of Congressional Pork Barrel is deemed unconstitutional.

As such, the Court observes that the real appropriation made... under the 2013 PDAF Article is
not the P24.79 Billion allocated for the entire PDAF, but rather the post-enactment
determinations made by the individual legislators which are, to repeat, occurrences outside of
the law. Irrefragably, the 2013 PDAF Article does not constitute an

"appropriation made by law" since it, in its truest sense, only authorizes individual legislators to
appropriate in violation of the non-delegability principle as afore-discussed.

Thus, while Section 8 of PD 910 may have passed the... completeness test since the policy of
energy development is clearly deducible from its text, the phrase "and for such other purposes
as may be hereafter directed by the President" under the same provision of law should
nonetheless be stricken down as unconstitutional as it lies... independently unfettered by any
sufficient standard of the delegating law. This notwithstanding, it must be underscored that the
rest of Section 8, insofar as it allows for the use of the Malampaya Funds "to finance energy
resource development and exploitation programs and... projects of the government," remains
legally effective and subsisting. Truth be told, the declared unconstitutionality of the
aforementioned phrase is but an assurance that the Malampaya Funds would be used as it
should be used only in accordance with the avowed purpose and... intention of PD 910.

the unconstitutionality... must only be treated as prospective in effect in view of the... operative
fact doctrine.

the operative fact doctrine exhorts the recognition that until the judiciary, in an appropriate case,
declares the invalidity of a certain legislative or executive act, such act is presumed
constitutional and thus, entitled to obedience and respect and should be... properly enforced
and complied with.

In the final analysis, the Court must strike down the Pork Barrel System as unconstitutional in
view of the inherent defects in the rules within which it operates.

To... recount, insofar as it has allowed legislators to wield, in varying gradations, non-oversight,
post- enactment authority in vital areas of budget execution, the system has violated the
principle of separation of powers; insofar as it has conferred unto legislators the... power of
appropriation by giving them personal, discretionary funds from which they are able to fund
specific projects which they themselves determine, it has similarly violated the principle of non-
delegability of legislative power; insofar as it has created a system of... budgeting wherein items
are not textualized into the appropriations bill, it has flouted the prescribed procedure of
presentment and, in the process, denied the President the power to veto items; insofar as it has
diluted the effectiveness of congressional... oversight by giving legislators a stake in the affairs
of budget execution, an aspect of governance which they may be called to monitor and
scrutinize, the system has equally impaired public accountability; insofar as it has authorized
legislators, who are national... officers, to intervene in affairs of purely local nature, despite the
existence of capable local institutions, it has likewise subverted genuine local autonomy; and
again, insofar as it has conferred to the President the power to appropriate funds intended by
law for... energy-related purposes only to other purposes he may deem fit as well as other
public funds under the broad classification of "priority infrastructure development projects," it
has once more transgressed the principle of non-delegability.

Finally, the Court hereby DIRECTS all prosecutorial organs of the government to, within the
bounds of reasonable dispatch, investigate and accordingly prosecute all government officials
and/or private individuals for possible criminal offenses related to the irregular,... improper
and/or unlawful disbursement/utilization of all funds under the Pork Barrel System.

This Decision is immediately executory but prospective in effect.

Principles:

The Court will decide cases, otherwise moot, if: first, there is a... grave violation of the
Constitution; second, the exceptional character of the situation and the paramount public
interest is involved; third, when the constitutional issue raised requires formulation of controlling
principles to guide the bench, the bar, and the... public; and fourth, the case is capable of
repetition yet evading review.

The applicability of the first exception is clear from the fundamental posture of petitioners they
essentially allege grave violations of the Constitution with respect to, inter alia, the principles of
separation of powers, non-delegability of legislative power,... checks and balances,
accountability and local autonomy.

- Bengzon
Item veto
https://lawphil.net/judjuris/juri1992/apr1992/gr_103524_1992.html

FACTS: On 15 Jan 1992, some provisions of the Special Provision for the Supreme Court and
the Lower Court’s General Appropriations were vetoed by the President because a resolution by
the Court providing for appropriations for retired justices has been enacted. The vetoed bill
provided for the increase of the pensions of the retired justices of the Supreme Court, and the
Court of Appeals as well as members of the Constitutional Commission.

ISSUE: Whether or not the veto of the President on that portion of the General Appropriations
bill is constitutional.

HELD: The Justices of the Court have vested rights to the accrued pension that is due to them
in accordance to Republic Act 1797. The president has no power to set aside and override the
decision of the Supreme Court neither does the president have the power to enact or amend
statutes promulgated by her predecessors much less to the repeal of existing laws. The veto is
unconstitutional since the power of the president to disapprove any item or items in the
appropriations bill does not grant the authority to veto part of an item and to approve the
remaining portion of said item.

NOTES: Pocket Veto Not Allowed

Under the Constitution, the President does not have the so-called pocket-veto power, i.e.,
disapproval of a bill by inaction on his part. The failure of the President to communicate his veto
of any bill represented to him within 30 days after the receipt thereof automatically causes the
bill to become a law.
This rule corrects the Presidential practice under the 1935 Constitution of releasing veto
messages long after he should have acted on the bill. It also avoids uncertainty as to what new
laws are in force.

When is it allowed?

The exception is provided in par (2),Sec 27 of Art 6 of the Constitution which grants the
President power to veto any particular item or items in an appropriation, revenue or tariff bill.
The veto in such case shall not affect the item or items to which he does not object.

3 ways how a bill becomes a law.

1. When the President signs it
2. When the President vetoes it but the veto is overridden by 2/3 vote of all the members of
each House; and
3. When the president does not act upon the measure within 30 days after it shall have been
presented to him.

In 1990, Congress sought to reenact some old laws (i.e. Republic Act No. 1797) that were
“repealed” during the time of former President Ferdinand Marcos. These old laws provided
certain retirement benefits to retired judges, justices, and members of the constitutional
commissions. Congress felt a need to restore these laws in order to standardize retirement
benefits among government officials. However, President Corazon Aquino vetoed the bill
(House Bill No. 16297) on the ground that the law should not give preferential treatment to
certain or select government officials.

Meanwhile, a group of retired judges and justices filed a petition with the Supreme Court asking
the court to readjust their pensions. They pointed out that RA 1797 was never repealed (by P.D.
No. 644) because the said PD was one of those unpublished PDs which were subject of the
case of Tanada vs. Tuvera. Hence, the repealing law never existed due to non publication and
in effect, RA 1797 was never repealed. The Supreme Court then readjusted their pensions.
Congress took notice of the readjustment and so in the General Appropriations Bill (GAB) for
1992, Congress allotted additional budget for pensions of retired justices. Congress however did
the allotment in the following manner: Congress made an item entitled: “General Fund
Adjustment”; included therein are allotments to unavoidable obligations in different brances of
the government; among such obligations is the allotment for the pensions of retired justices of
the judiciary.

However, President Aquino again vetoed the said lines which provided for the pensions of the
retired justices in the judiciary in the GAB. She explained that that portion of the GAB is already
deemed vetoed when she vetoed H.B. 16297.

This prompted Cesar Bengzon and several other retired judges and justices to question the
constitutionality of the veto made by the President. The President was represented by then
Executive Secretary Franklin Drilon.

ISSUE: Whether or not the veto of the President on that portion of the General Appropriations
bill is constitutional.

HELD: No. The Justices of the Court have vested rights to the accrued pension that is due to
them in accordance to Republic Act 1797 which was never repealed. The president has no
power to set aside and override the decision of the Supreme Court neither does the president
have the power to enact or amend statutes promulgated by her predecessors much less to the
repeal of existing laws.

The Supreme Court also explained that the veto is unconstitutional since the power of the
president to disapprove any item or items in the appropriations bill does not grant the authority
to veto part of an item and to approve the remaining portion of said item. It appears that in the
same item, the Presidents vetoed some portion of it and retained the others. This cannot be
done. The rule is: the Executive must veto a bill in its entirety or not at all; the Executive must
veto an entire line item in its entirety or not at all. In this case, the president did not veto the
entire line item of the general adjustment fund. She merely vetoed the portion which pertained
to the pensions of the justices but did not veto the other items covering obligations to the other
departments of the government.

Facts:
The petitioners are retired Justices of the Supreme Court and Court of Appeals who are
currently receiving monthly pensions under Republic Act No. 910 as amended by Republic Act
No. 1797. They filed the instant petition on their own behalf and in... representation of all other
retired Justices of the Supreme Court and the Court of Appeals similarly situated.

Named respondents are Hon. Franklin Drilon the Executive Secretary, Hon. Guillermo Carague
as Secretary of the Department of Budget and Management, and Hon. Rosalina Cajucom, the
Treasurer of the Philippines. The... respondents are sued in their official capacities, being
officials of the Executive Department involved in the implementation of the release of funds
appropriated in the Annual Appropriations Law.

On June 20, 1953, Republic Act No. 910 was enacted to provide the retirement pensions of
Justices of the Supreme Court and of the Court of Appeals who have rendered at least twenty
(20) years service either in the Judiciary or in any other branch of the Government or in both,...
having attained the age of seventy (70) years or who resign by reason of incapacity to discharge
the duties of the office. The retired Justice shall receive during the residue of his natural life the
salary which he was receiving at the time of his retirement... or resignation.

On January 15, 1992, the President vetoed the underlined portions of Section 1 and the entire
Section 4 of the Special Provisions for the Supreme Court of the Philippines and the Lower
Courts (General Appropriations Act, FY 1992, page 1071) and the underlined portions of

Section 1 and the entire Section 2, of the Special Provisions for the Court of Appeals (page
1079) and the underlined portions of Section 1.3 of Article XLV of the Special Provisions of the
General Fund Adjustments (page 1164, General Appropriations Act, FY 1992).

The reason given for the veto of said provisions is that "the resolution of this Honorable Court in
Administrative Matter No. 91-8-225-CA pursuant to which the foregoing appropriations for the
payment of the retired justices of the Supreme Court and the Court of Appeals have... been
enacted effectively nullified the veto of the President of House Bill No. 16297, the bill which
provided for the automatic increase in the retirement pensions of the Justices of the Supreme
Court and the Court of Appeals and chairmen of the Constitutional Commissions by... re-
enacting Republic Act No. 1797 and Republic Act No. 3595. The President's veto of the
aforesaid provisions was further justified by reiterating the earlier reasons for vetoing House Bill
No. 16297: "they would erode the very foundation of... our collective effort to adhere faithfully to
and enforce strictly the policy on standardization of compensation. We should not permit the
grant of distinct privileges to select group of officials whose retirement pensions under existing
laws already enjoy... preferential treatment over those of the vast majority of our civil servants."

Issues:
The issue in this petition is the constitutionality of the veto by the President of certain provisions
in the General Appropriations Act for the Fiscal Year 1992 relating to the payment of the
adjusted pensions of retired Justices of the Supreme Court and the Court of

Appeals.
Hence, the instant petition filed by the petitioners with the assertions that:
1) The subject veto is not an item veto;
2) The veto by the Executive is violative of the doctrine of separation of powers;
3) The veto deprives the retired Justices of their rights to the pensions due them;
4) The questioned veto impairs the Fiscal Autonomy guaranteed by the Constitution.

What is fiscal autonomy?

Ruling:
The act of the Executive in vetoing the particular provisions is an exercise of a constitutionally
vested power. But even as the Constitution grants the power, it also provides limitations to its
exercise. The veto power is not... absolute.

The pertinent provision of the Constitution reads:

"The President shall have the power to veto any particular item or items in an appropriation,
revenue or tariff bill but the veto shall not affect the item or items to which he does not object."
(Section 27(2), Article VI, Constitution)

An examination of the entire sections and the underlined portions of the law which were vetoed
will readily show that portions of the item have been chopped up into vetoed and unvetoed
parts. Less than all of an item has been... vetoed. Moreover, the vetoed portions are not items.
They are provisions.

Thus, the augmentation of specific appropriations found inadequate to pay retirement payments,
by transferring savings from other items of appropriation is a provision and not an item. It gives
power to the Chief Justice to transfer funds from one... item to another. There is no specific
appropriation of money involved.
Thus, Congress included in the General Appropriations Act of 1992, provisions identifying funds
and savings which may be used to pay the adjusted pensions pursuant to the Supreme Court
Resolution. As long as retirement laws remain in the... statute book, there is an existing
obligation on the part of the government to pay the adjusted pension rate pursuant to RA 1797
and AM-91-8-225-CA.

Neither may the veto power of the President be exercised as a means of repealing RA 1797.
This is arrogating unto the Presidency legislative powers which are beyond its authority. The
President has no power to enact or amend statutes... promulgated by her predecessors much
less to repeal existing laws. The President's power is merely to execute the laws as passed by
Congress.

As envisioned in the Constitution, the fiscal autonomy enjoyed by the Judiciary, the Civil Service
Commission, the Commission on Audit, the Commission on Elections, and the Office of the
Ombudsman contemplates a guarantee of full flexibility to allocate and... utilize their resources
with the wisdom and dispatch that their needs require. It recognizes the power and authority to
levy, assess and collect fees, fix rates of compensation not exceeding the highest rates
authorized by law for compensation and pay plans of... the government and allocate and
disburse such sums as may be provided by law or prescribed by them in the course of the
discharge of their functions.

Fiscal autonomy means freedom from outside control. If the Supreme Court says it needs 100
typewriters but DBM rules we need only 10 typewriters and sends its recommendations to
Congress without even informing us, the autonomy given by the Constitution... becomes an
empty and illusory platitude.

The Judiciary, the Constitutional Commissions, and the Ombudsman must have the
independence and flexibility needed in the discharge of their constitutional duties.

The imposition of restrictions and constraints on the manner the independent constitutional...
offices allocate and utilize the funds appropriated for their operations is anathema to fiscal
autonomy and violative not only of the express mandate of the Constitution but especially as
regards the Supreme Court, of the independence and separation of powers upon... which the
entire fabric of our constitutional system is based. In the interest of comity and cooperation, the
Supreme Court, Constitutional Commissions, and the Ombudsman have so far limited their
objections to constant reminders. We now... agree with the petitioners that this grant of
autonomy should cease to be a meaningless provision.
In the case at bar, the veto of these specific provisions in the General Appropriations Act is
tantamount to dictating to the Judiciary how its funds should be utilized, which is clearly
repugnant to fiscal autonomy.

Finally, it can not be denied that the retired Justices have a vested right to the accrued pensions
due them pursuant to RA 1797.

The right to a public pension is of statutory origin and statutes dealing with pensions have been
enacted by practically all the states in the United States (State ex rel. Murray v. Riley, 44 Del
505, 62 A2d 236), and presumably in most countries of the... world. Statutory provisions for the
support of Judges or Justices on retirement are founded on services rendered to the state.
Where a judge has complied with the statutory prerequisite for retirement with pay, his right to
retire and draw... salary becomes vested and may not, thereafter, be revoked or impaired. (Gay
v. Whitehurst 44 So ad 430)

Thus, in the Philippines, a number of retirement laws have been enacted, the purpose of which
is to entice competent men and women to enter the government service and to permit them to
retire therefrom with relative security, not only those who have retained... their vigor but, more
so, those who have been incapacitated by illness or accident. (In re: Amount of the Monthly
Pension of Judges and Justices Starting From the Sixth Year of their Retirement and After the
Expiration of the Initial

Five-year Period of Retirement, (190 SCRA 315 [1990])

The provisions regarding retirement pensions of Justices arise from the package of protections
given by the Constitution to guarantee and preserve the independence of the Judiciary.

The Constitution expressly vests the power of judicial review in this Court. Any institution given
the power to declare, in proper cases, that acts of both the President and Congress are
unconstitutional needs a high degree of independence in the exercise... of its functions. Our
jurisdiction may not be reduced by Congress. Neither may it be increased without our advice
and concurrence. Justices may not be removed until they reach age 70 except through...
impeachment. All courts and court personnel are under the administrative supervision of the
Supreme Court. The President may not appoint any Judge or Justice unless he or she has
been nominated by the Judicial and Bar Council which, in turn,... is under the Supreme Court's
supervision. Our salaries may not be decreased during our continuance in office. We cannot
be designated to any agency performing administrative or quasi-judicial functions. We are
specifically... given fiscal autonomy. The Judiciary is not only independent of, but also co-equal
and coordinate with the Executive and Legislative Departments. (Article VIII and Section 30,
Article VI, Constitution)
Any argument which seeks to remove special privileges given by law to former Justices of this
Court on the ground that there should be no "grant of distinct privileges" or "preferential
treatment" to retired Justices ignores these provisions of the Constitution and, in... effect, asks
that these Constitutional provisions on special protections for the Judiciary be repealed. The
integrity of our entire constitutional system is premised to a large extent on the independence of
the Judiciary. All these... provisions are intended to preserve that independence. So are the
laws on retirement benefits of Justices.

WHEREFORE, the petition is hereby GRANTED. The questioned veto is SET ASIDE as illegal
and unconstitutional. The vetoed provisions of the 1992 Appropriations Act are declared valid
and subsisting. The respondents... are ordered to automatically and regularly release pursuant
to the grant of fiscal autonomy the funds appropriated for the subject pensions as well as the
other appropriations for the Judiciary. The resolution in Administrative Matter No. 91-8-225-CA
dated

November 28, 1991 is likewise ordered to be implemented as promulgated.

Principles:

Republic Act No. 910 was amended by Republic Act No. 1797 (approved on June 21, 1957)
which provided that:

"Sec. 3-A In case the salary of Justices of the Supreme Court or of the Court of Appeals is
increased or decreased, such increased or decreased salary shall, for purposes of this Act, be
deemed to be the salary or the retirement pension which a Justice who as of June... twelve,
nineteen hundred fifty-four had ceased to be such to accept another position in the Government
or who retired was receiving at the time of his cessation in office. Provided, that any benefits
that have already accrued prior to such increase or decrease... shall not be affected thereby".

The OSG is correct when it states that the Executive must veto a bill in its entirety or not at all.
He or she cannot act like an editor crossing out specific lines, provisions, or paragraphs in a bill
that he or she dislikes. In the... exercise of the veto power, it is generally all or nothing.

The Constitution provides that only a particular item or items may be vetoed. The power to
disapprove any item or items in an appropriate bill does not grant the authority to veto a part of
an item and to approve the remaining portion of the same... item. (Gonzales v. Macaraig, Jr.,
191 SCRA 452, 464 [1990])
"The terms item and provision in budgetary legislation and practice are concededly different.
An item in a bill refers to the particulars, the details, the distinct and severable parts x x... x of
the bill (Bengzon, supra, at 916.) It is an indivisible sum of money dedicated to a stated purpose
(Commonwealth v. Dodson, 11 S.E., 2d 120, 124, 125, etc., 176 Va. 281). The United States
Supreme Court, in the case of

Bengzon v. Secretary of Justice (299 U.S. 410, 414, 57 Ct 252, 81 L. Ed., 312) declared 'that an
'item' of an appropriation bill obviously means an item which in itself is a specific appropriation
of money, not some... general provision of law, which happens to be put into an appropriation
bill.'" (id. at page 465)

Furthermore, in the case of Gonzales v. Macaraig (191 SCRA 452 [1990]), the Court upheld the
authority of the President and other key officials to augment any item or any appropriation from
savings in the interest of expediency and... efficiency. The Court stated that:

"There should be no question, therefore, that statutory authority has, in fact, been granted. And
once given, the heads of the different branches of the Government and those of the
Constitutional Commissions are afforded considerable flexibility in... the use of public funds and
resources (Demetria v. Alba, supra). The doctrine of separation of powers is in no way
endangered because the transfer is made within a department (or branch of government) and
not from one department (branch) to... another."

The Constitution, particularly Article VI Section 25(5) also provides:

"Sec. 25. (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."

Facts:
constitutionality of the veto by the President of certain provisions in the General Appropriations
Act for the Fiscal Year 1992... relating to the payment of the adjusted pensions of retired
Justices of the Supreme Court and the Court of
Appeals... petitioners are retired Justices of the Supreme Court and Court of Appeals who are
currently receiving monthly pensions under Republic Act No. 910 as amended by Republic Act
No. 1797

Hon. Franklin Drilon the Executive Secretary, Hon. Guillermo Carague as Secretary of the
Department of Budget and Management, and Hon. Rosalina Cajucom... authorized the
adjustment of the... pension of the retired Justices of the Supreme Court, Court of Appeals,
Chairman and members of the Constitutional Commissions and the officers and enlisted
members of the Armed Forces to the prevailing rates of salaries.

automatic readjustment of the retirement pension of officers and enlisted men was subsequently
restored by President Marcos.

reenactment of the repealed provisions of Republic Act No. 1797 and Republic Act No. 3595...
to restore said retirement pensions and privileges of the retired Justices and members of the
Constitutional Commissions in order to assure those serving in the Supreme Court, Court of
Appeals and Constitutional Commissions adequate old age pensions even... during the time
when the purchasing power of the peso has been diminished substantially by worldwide
recession or inflation.

presently receiving monthly pensions of P3,333.33, P2,666.66 and P2,333.33 respectively...

vetoed House Bill No. 16297 on July 11, 1990 on the ground that according to her "it would
erode the very foundation of the Government's collective effort to adhere faithfully to and
enforce strictly the policy... on standardization of compensation as articulated in Republic Act
No. 6758 known as Compensation and Position Classification Act of 1989."

Government should not grant distinct privileges to select group of officials whose retirement
benefits under... existing laws already enjoy preferential treatment over those of the vast
majority of our civil service servants... a readjustment of their monthly pensions in accordance
with Republic Act No. 1797

Presidential Decree 644 promulgated on January 24, 1975 appeared for the first time only in the
supplemental... issue of the Official Gazette, (Vol. 74 No. 14) purportedly dated April 4, 1977 but
published only on September 5, 1983. Since Presidential Decree 644 has no binding force and
effect of law, it therefore did not repeal Republic Act No. 1797.
Presidential Decree 644 repealing Republic Act No. 1797 did not become law as there... was no
valid publication pursuant to Tañada v. Tuvera

GRANTED

AUTHORIZED that their monthly pensions be adjusted and paid on the basis of RA

1797 effective January 1, 1991 without prejudice to the payment of their pension differentials
corresponding to the previous years upon the availability of funds for the purpose.

intended for the payment of the adjusted pension rates due the retired Justices of the Supreme
Court and

Court of Appeals... t and payment of adjusted... pension rates to retired Justices entitled thereto
pursuant to Administrative Matter No. 91-8-225-C.A;

President vetoed the underlined portions of Section 1 and the entire Section 4 of the Special
Provisions for the Supreme Court of the Philippines and the Lower Courts... enacted effectively
nullified the veto of the President of House Bill No. 16297, the bill which provided for the
automatic increase in the retirement pensions of the Justices of the Supreme Court and the
Court of Appeals and chairmen of the Constitutional Commissions by... re-enacting Republic Act
No. 1797 and Republic Act No. 3595

We should not permit the grant of distinct privileges to select group of officials whose retirement
pensions under existing laws already enjoy... preferential treatment over those of the vast
majority of our civil servants."

Issues:
subject veto is not an item veto... veto by the Executive is violative of the doctrine of separation
of powers... veto deprives the retired Justices of their rights to the pensions due them...
questioned veto impairs the Fiscal Autonomy... the veto constitutes no legal obstacle to the
continued payment of the adjusted pensions pursuant to the Court's resolution.

Ruling:
all other laws must conform and to which all persons, including the highest official of this... land,
must defer... hree branches of government must discharge their respective functions within the
limits of authority conferred by the Constitution... neither Congress, the President, nor the
Judiciary may encroach on fields allocated to the other branches of government... judiciary the
power to maintain inviolate what it decrees... cannot shirk the duty of seeing to it that the officers
in each branch of government do not go beyond their... constitutionally allocated boundaries
and that the entire Government itself or any of its branches does not violate the basic liberties of
the people

The veto power is not... absolute.

The President shall have the power to veto any particular item or items in an appropriation,
revenue or tariff bill but the veto shall not affect the item or items to which he does not object."
(Section 27(2), Article VI, Constitution)

Executive must veto a bill in its entirety or not at all

He or she cannot act like an editor crossing out specific lines, provisions, or paragraphs in a bill
that he or she dislikes... it is generally all or nothing... can not veto the entire bill even if it may
contain... objectionable features.

"item veto power" to avoid inexpedient... riders being attached to an indispensable appropriation
or revenue measure.

only a particular item or items may be vetoed... power to disapprove any item or items in an
appropriate bill does not grant the authority to veto a part of an item and to approve the
remaining portion of the same... item.

misimpressions or unfortunately wrong advice must have been the basis of the disputed veto...
ppropriates P500,000,000.00 to enable the Government to meet certain unavoidable obligations
which may have been inadequately funded by the specific items for the different branches,
departments, bureaus, agencies,... and offices of the government.

What were vetoed were methods or systems placed by Congress to insure that permanent and
continuing obligations to certain officials would be paid when they fell due.
the vetoed portions are not items. They are provisions.

When her finance and budget advisers... gave the wrong information that the questioned
provisions in the 1992 General Appropriations Act were simply an attempt to overcome her
earlier 1990 veto, she issued the veto now challenged in this petition.

it can be seen that when the President vetoed certain provisions of the 1992 General
Appropriations Act, she was actually vetoing Republic Act No. 1797 which, of course, is beyond
her power to accomplish.

As early as 1953, Congress passed a law providing for retirement pensions to retired Justices of
the Supreme Court and the Court of Appeals. This law was amended by Republic Act 1797 in
1957. Funds necessary to pay the retirement pensions... under these statutes are deemed
automatically appropriated every year.

The President has no power to enact or amend statutes... promulgated by her predecessors
much less to repeal existing laws

Facts. Congress passed SC and CA Justices Retirement Act which fixed their pension to the
salary the justices used to earn. Pension to Commission Members Act passed with automatic
readjusting pension features. Marcos issued a PD extending same benefits to armed forces as
the preceding Act. Another PD was issued readjusting pensions of SC and CA Justices,
Constitutional Commissions Members and Chairs, and armed forces to the prevailing salaries.
Another PD was issued giving armed forces pensions automatic readjustment.

Congress passes a bill that sought to readjust Justices pension automatically as those of the
armed forces. But Pres. Aquino vetoed the bill saying that it is against the Compensation and
Position Classification Act.

Justices filed a petition claiming that the PD pegging the pension to prevailing salaries is invalid
because it did not receive proper publication. Lower court granted it.

Recognizing the court’s grant of their petition, Congress included their new pensions in the GAA
house bill. Pres. vetoed the provisions of the bill relating to Justice’s pensions.

Issue. Does the veto deprive the Justices of pensions due to them? -Yes
Ratio. Yes, because the Judiciary has fiscal autonomy. Moreover, the reasoning the Justices
are unduly favored is unfounded. There are more members of the armed forces than the
Justices. Should there be an issue on delimitation, authorities should begin with the armed
forces.

Doctrine. The concept relevant to Legal Research appears not in the ratio but only in a passing
remark provided by the Court in this case. Before ending its opinion, the court discussed a
passage in the OSG’s comments for the respondent. Said passage cited some lines from a US
case stating: “To lay with one hand the power of the government on the property of the citizen,
and with the other to bestow upon favored individuals . . . is nonetheless a robbery because it is
done under the forms of law . . .” (LAW Association v. Topeka). To this, the court retorted that
the case is entitled Citizen’s Savings and Loan Association of Cleveland, Ohio v. Topeka City
and not as cited by the OSG. More than that, the court also notes that the cited case relates to a
decision where tax imposition cannot be for private interests. The Court pointed out that good
lawyers should read primary sources and cite relevant cases only. The citation provided by the
OSG is neither a primary nor a relevant case. In sum, OSG’s research is lax.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. 103524 April 15, 1992

The issue in this petition is the constitutionality of the veto by the President of certain provisions in
the General Appropriations Act for the Fiscal Year 1992 relating to the payment of the adjusted
pensions of retired Justices of the Supreme Court and the Court of Appeals.

The petitioners are retired Justices of the Supreme Court and Court of Appeals who are
currently receiving monthly pensions under Republic Act No. 910 as amended by Republic Act
No. 1797. They filed the instant petition on their own behalf and in representation of all other
retired Justices of the Supreme Court and the Court of Appeals similarly situated.

Named respondents are Hon. Franklin Drilon the Executive Secretary, Hon. Guillermo Carague as
Secretary of the Department of Budget and Management, and Hon. Rosalinda Cajucom, the
Treasurer of the Philippines. The respondents are sued in their official capacities, being officials
of the Executive Department involved in the implementation of the release of funds
appropriated in the Annual Appropriations Law.

We treat the Comments of the Office of the Solicitor General (OSG) as an Answer and decide the
petition on its merits.

The factual backdrop of this case is as follows:

On June 20, 1953, Republic Act No, 910 was enacted to provide the retirement pensions of Justices
of the Supreme Court and of the Court of Appeals who have rendered at least twenty (20) years
service either in the Judiciary or in any other branch of the Government or in both, having attained
the age of seventy (70) years or who resign by reason of incapacity to discharge the duties of the
office. The retired Justice shall receive during the residue of his natural life the salary which he was
receiving at the time of his retirement or resignation.

Republic Act No. 910 was amended by Republic Act No. 1797 (approved on June 21, 1957)
which provided that:

Sec. 3-A. In case the salary of Justices of the Supreme Court or of the Court of
Appeals is increased or decreased, such increased or decreased salary shall, for
purposes of this Act, be deemed to be the salary or the retirement pension which a
Justice who as of June twelve, nineteen hundred fifty-four had ceased to be such to
accept another position in the Government or who retired was receiving at the time of
his cessation in office. Provided, that any benefits that have already accrued prior to
such increase or decrease shall not be affected thereby.

Identical retirement benefits were also given to the members of the Constitutional Commissions
under Republic Act No. 1568, as amended by Republic Act No. 3595. On November 12, 1974, on
the occasion of the Armed Forces Loyalty Day, President Marcos signed Presidential Decree 578
which extended similar retirement benefits to the members of the Armed Forces giving them also the
automatic readjustment features of Republic Act No. 1797 and Republic Act No. 3595.

Two months later, however, President Marcos issued Presidential Decree 644 on January 25, 1975
repealing Section 3-A of Republic Act No. 1797 and Republic Act No. 3595 (amending Republic Act
No. 1568 and Presidential Decree No. 578) which authorized the adjustment of the pension of the
retired Justices of the Supreme Court, Court of Appeals, Chairman and members of the
Constitutional Commissions and the officers and enlisted members of the Armed Forces to the
prevailing rates of salaries.

Significantly, under Presidential Decree 1638 the automatic readjustment of the retirement pension
of officers and enlisted men was subsequently restored by President Marcos. A later decree
Presidential Decree 1909 was also issued providing for the automatic readjustment of the pensions
of members of the Armed Forces who have retired prior to September 10, 1979.

While the adjustment of the retirement pensions for members of the Armed Forces who number in
the tens of thousands was restored, that of the retired Justices of the Supreme Court and Court of
Appeals who are only a handful and fairly advanced in years, was not.

Realizing the unfairness of the discrimination against the members of the Judiciary and the
Constitutional Commissions, Congress approved in 1990 a bill for the reenactment of the repealed
provisions of Republic Act No. 1797 and Republic Act No. 3595. Congress was under the impression
that Presidential Decree 644 became law after it was published in the Official Gazette on April 7,
1977. In the explanatory note of House Bill No. 16297 and Senate Bill No. 740, the legislature saw
the need to reenact Republic Act Nos. 1797 and 3595 to restore said retirement pensions and
privileges of the retired Justices and members of the Constitutional Commissions, in order to assure
those serving in the Supreme Court, Court of Appeals and Constitutional Commissions adequate old
age pensions even during the time when the purchasing power of the peso has been diminished
substantially by worldwide recession or inflation. This is underscored by the fact that the petitioner
retired Chief Justice, a retired Associate Justice of the Supreme Court and the retired Presiding
Justice are presently receiving monthly pensions of P3,333.33, P2,666.66 and P2,333.33
respectively.

President Aquino, however vetoed House Bill No. 16297 on July 11, 1990 on the ground that
according to her "it would erode the very foundation of the Government's collective effort to adhere
faithfully to and enforce strictly the policy on standardization of compensation as articulated in
Republic Act No. 6758 known as Compensation and Position Classification Act of 1989." She further
said that "the Government should not grant distinct privileges to select group of officials whose
retirement benefits under existing laws already enjoy preferential treatment over those of the vast
majority of our civil service servants."

Prior to the instant petition, however, Retired Court of Appeals Justices Manuel P. Barcelona, Juan
P. Enriquez, Juan O. Reyes, Jr. and Guardson R. Lood filed a letter/petition dated April 22, 1991
which we treated as Administrative Matter No. 91-8-225-CA. The petitioners asked this Court far a
readjustment of their monthly pensions in accordance with Republic Act No. 1797. They reasoned
out that Presidential Decree 644 repealing Republic Act No. 1797 did not become law as there was
no valid publication pursuant to Tañada v. Tuvera, (136 SCRA 27 [1985]) and 146 SCRA 446
[1986]). Presidential Decree 644 promulgated on January 24, 1975 appeared for the first time only in
the supplemental issue of the Official Gazette, (Vol. 74, No. 14) purportedly dated April 4, 1977 but
published only on September 5, 1983. Since Presidential Decree 644 has no binding force and effect
of law, it therefore did not repeal Republic Act No. 1797.

In a Resolution dated November 28, 1991 the Court acted favorably on the request. The dispositive
portion reads as follows:

WHEREFORE, the requests of retired Justices Manuel P. Barcelona, Juan P.

Enriquez, Juan O. Reyes and Guardson Lood are GRANTED. It is hereby
AUTHORIZED that their monthly pensions be adjusted and paid on the basis of RA
1797 effective January 1, 1991 without prejudice to the payment on their pension
differentials corresponding to the previous years upon the availability of funds for the
purpose.

Pursuant to the above resolution, Congress included in the General Appropriations Bill for Fiscal
Year 1992 certain appropriations for the Judiciary intended for the payment of the adjusted pension
rates due the retired Justices of the Supreme Court and Court of Appeals.

The pertinent provisions in House Bill No. 34925 are as follows:

XXVIII. THE JUDICIARY

A. Supreme Court of the Philippines and the Lower Courts.

For general administration, administration of personnel benefits, supervision of

courts, adjudication of constitutional questions appealed and other cases, operation
and maintenance of the Judicial and Bar Council in the Supreme Court, and the
adjudication of regional court cases, metropolitan court cases, municipal trial court
cases in Cities, municipal circuit court cases, municipal, court cases, Shari'a district
court cases and Shari'a circuit court cases as indicated hereunder P2,095,651,000

xxx xxx xxx

Special Provisions.

1. Augmentation of any Item in the Court's Appropriations. Any savings in the

appropriation for the Supreme Court and the Lower Courts may be utilized by the
Chief Justice of the Supreme Court to augment any item of the Court's
appropriations for: (a) printing of decisions and publications of Philippine Reports; b)
commutable terminal leaves of Justices and other personnel of the Supreme
Court and any payment of adjusted pension rates to retired Justices entitled thereto
pursuant to Administrative Matter No. 91-8-225-CA; (c) repair, maintenance,
improvement, and other operating expenses of the courts' books and periodicals; (d)
purchase, maintenance and improvement of printing equipment; e) necessary
expenses for the employment of temporary employees, contractual and casual
employees, for judicial administration; f) maintenance and improvement of the
Court's Electronic Data Processing; (g) extraordinary expenses of the Chief Justice,
attendance in international conferences and conduct of training programs; (h)
commutable transportation and representation allowances and fringe benefits for
Justices, Clerks of Court, Court Administrator, Chief of Offices and other Court
personnel in accordance with the rates prescribed by law; and (i) compensation of
attorneys-de-oficio; PROVIDED, that as mandated by LOI No. 489 any increases in
salary and allowances shall be subject to the usual procedures and policies as
provided for under P.D. No. 985 and other pertinent laws. (page 1071, General
Appropriations Act, FY 1992; Emphasis supplied)

xxx xxx xxx

4. Payment of Adjusted Pension Rates to Retired Justices. The amount herein

appropriated for payment of pensions to retired judges and justices shall include the
payment of pensions at the adjusted rates to retired justices of the Supreme Court
entitled thereto pursuant to the ruling of the Court in Administrative Matter No. 91-8-
225-C.A. (page 1071, General Appropriations Act, FY 1992).

xxx xxx xxx

Activities and Purposes

1. General Administration and Support Services.

a. General administrative Services P 43,515,000

b. Payment of retirement gratuity
of national goverment officials
and employees P 206,717,000
c. Payment of terminal leave benefits to
officials and employees antitled thereto P 55,316,000
d. Payment of pension totired jude
and justice entitled thereto P 22,500,000

(page 1071, General Appropriations Act, FY 1992)

C. COURT OF APPEALS
 For general administration, administration
of personnel benefit, benefits and the
adjudication of appealed and other cases
as indicated hereunder P114,615,000

Special Provisions.

1. Authority to Use Savings. Subject to the approval of the Chief Justice of the
Supreme Court in accordance with Section 25(5), Article VI of the Constitution of the
Republic of the Philippines, the Presiding Justice may be authorized to use any
savings in any item of the appropriation for the Court of Appeals for purposes of: (1)
improving its compound and facilities; and (2) for augmenting any deficiency in any
item of its appropriation including its extraordinary expenses and payment of
adjusted pension rates to retired justices entitled thereto pursuant to Administrative
Matter No. 91-8-225-C.A. (page 1079, General Appropriations Act, FY 1992;
Emphasis supplied)

2. Payment of adjustment Pension Rates to Retired Justices. The amount herein

appropriated for payment of pensions to retired judges and justices shall include the
payment of pensions at the adjusted rates to retired justices of the Court of Appeals
entitled thereto pursuant to the Ruling of the Supreme Court in Administrative Matter
No. 91-6-225-C.A. (page 1079 General Appropriations Act, FY 1992).

XL. GENERAL FUND ADJUSTMENT

For general fund adjustment for

operational and special requirements
as indicated hereunder P500,000,000

xxx xxx xxx

Special Provisions

1. Use of the Fund. This fund shall be used for:

xxx xxx xxx

1.3. Authorized overdrafts and/or valid unbooked obligations,

including the payment of back salaries and related personnel benefits
arising from decision of competent authority including the Supreme
Court decision in Administrative Matter No. 91-8-225-C.A. and COA
decision in No. 1704." (page 11649 Gen. Appropriations Act, FY
1992; Emphasis supplied)

On January 15, 1992, the President vetoed the underlined portions of Section 1 and the entire
Section 4 the Special Provisions for the Supreme Court of the Philippines and the Lower Courts
(General Appropriations Act, FY 1992, page 1071) and the underlined portions of Section 1 and the
entire Section 2, of the Special Provisions for the Court of Appeals (page 1079) and the underlined
portions of Section 1.3 of Article XLV of the Special Provisions of the General Fund Adjustments
(page 1164, General Appropriations Act, FY 1992).
The reason given for the veto of said provisions is that "the resolution of this Honorable Court in
Administrative Matter No. 91-8-225-CA pursuant to which the foregoing appropriations for the
payment of the retired Justices of the Supreme Court and the Court of Appeals have been enacted
effectively nullified the veto of the President on House Bill No. 16297, the bill which provided for the
automatic increase in the retirement pensions of the Justices of the Supreme Court and the Court of
Appeals and chairmen of the Constitutional Commissions by re-enacting Republic Act No. 1797 and
Republic Act No. 3595. The President's veto of the aforesaid provisions was further justified by
reiterating the earlier reasons for vetoing House Bill No. 16297: "they would erode the very
foundation of our collective effort to adhere faithfully to and enforce strictly the policy and
standardization of compensation. We should not permit the grant of distinct privileges to select group
of officials whose retirement pensions under existing laws already enjoy preferential treatment over
those of the vast majority of our civil servants."

Hence, the instant petition filed by the petitioners with the assertions that:

1) The subject veto is not an item veto;

2) The veto by the Executive is violative of the doctrine of separation of powers;

3) The veto deprives the retired Justices of their rights to the pensions due them;

4) The questioned veto impairs the Fiscal Autonomy guaranteed by the Constitution.

Raising similar grounds, the petitioners in AM-91-8-225-CA, brought to the attention of this Court
that the veto constitutes no legal obstacle to the continued payment of the adjusted pensions
pursuant to the Court's resolution.

On February 14, 1992, the Court resolved to consolidate Administrative Matter No. 91-8-225-CA with
G.R. No. 103524.

The petitioners' contentions are well-taken.

It cannot be overstressed that in a constitutional government such as ours, the rule of law must
prevail. The Constitution is the basic and paramount law to which all other laws must conform and to
which all persons including the highest official of this land must defer. From this cardinal postulate, it
follows that the three branches of government must discharge their respective functions within the
limits of authority conferred by the Constitution. Under the principle of separation of powers, neither
Congress, the President nor the Judiciary may encroach on fields allocated to the other branches of
government. The legislature is generally limited to the enactment of laws, the executive to the
enforcement of laws and the judiciary to their interpretation and application to cases and
controversies.

The Constitution expressly confers or the judiciary the power to maintain inviolate what it decrees.
As the guardian of the Constitution we cannot shirk the duty of seeing to it that the officers in each
branch of government do not go beyond their constitutionally allocated boundaries and that the
entire Government itself or any of its branches does not violate the basic liberties of the people. The
essence of this judicial duty was emphatically explained by Justice Laurel in the leading case
of Angara v. Electoral Commission, (63 Phil. 139 [1936]) to wit:
 The Constitution is a definition of the powers of government. Who is to determine the
nature, scope and extent of such powers? The Constitution itself has provided for the
instrumentality of the judiciary as the rational way. And when the judiciary mediates
to allocate constitutional boundaries it does not assert any superiority over the other
department, it does not in reality nullify or invalidate an act of the legislature, but only
asserts the solemn and sacred obligation assigned to it by the Constitution to
determine conflicting claims of authority under the Constitution and to establish for
the parties in an actual controversy the rights which that instrument secures and
guarantees to them. (Emphasis supplied)

The act of the Executive in vetoing the particular provisions is an exercise of a constitutionally vested
power. But even as the Constitution grants the power, it also provides limitations to its exercise. The
veto power is not absolute.

The pertinent provision of the Constitution reads:

The President shall have the power to veto any particular item or items in an
appropriation, revenue or tariff bill but the veto shall not affect the item or items to
which he does not object. (Section 27(2), Article VI, Constitution)

The OSG is correct when it states that the Executive must veto a bill in its entirety or not at all. He or
she cannot act like an editor crossing out specific lines, provisions, or paragraphs in a bill that he or
she dislikes. In the exercise of the veto power, it is generally all or nothing. However, when it comes
to appropriation, revenue or tariff bills, the Administration needs the money to run the machinery of
government and it can not veto the entire bill even if it may contain objectionable features. The
President is, therefore, compelled to approve into law the entire bill, including its undesirable parts. It
is for this reason that the Constitution has wisely provided the "item veto power" to avoid inexpedient
riders being attached to an indispensable appropriation or revenue measure.

The Constitution provides that only a particular item or items may be vetoed. The power to
disapprove any item or items in an appropriate bill does not grant the authority to veto a part of an
item and to approve the remaining portion of the same item. (Gonzales v. Macaraig, Jr., 191 SCRA
452, 464 [1990])

We distinguish an item from a provision in the following manner:

The terms item and provision in budgetary legislation and practice are concededly
different. An item in a bill refers to the particulars, the details, the distinct and
severable parts . . . of the bill (Bengzon, supra, at 916.) It is an indivisible sum of
money dedicated to a stated purpose (Commonwealth v. Dodson, 11 S.E. 2d 120,
124, 125, etc., 176 Va. 281) The United States Supreme Court, in the case
of Bengzon v. Secretary of Justice (299 U.S. 410, 414, 57 Ct. 252, 81 L. Ed,
312) declared "that an "tem" of an appropriation bill obviously means an item which
in itself is a specific appropriation of money, not some general provision of law, which
happens to be put into an appropriation bill." (id. at page 465)

We regret having to state that misimpressions or unfortunately wrong advice must have been the
basis of the disputed veto.

The general fund adjustment is an item which appropriates P500,000,000.00 to enable the
Government to meet certain unavoidable obligations which may have been inadequately funded by
the specific items for the different branches, departments, bureaus, agencies, and offices of the
government.

The President did not veto this item. What were vetoed were methods or systems placed by
Congress to insure that permanent and continuing obligations to certain officials would be paid when
they fell due.

An examination of the entire sections and the underlined portions of the law which were vetoed will
readily show that portions of the item have been chopped up into vetoed and unvetoed parts. Less
than all of an item has been vetoed. Moreover, the vetoed portions are not items. They
are provisions.

Thus, the augmentation of specific appropriations found inadequate to pay retirement payments, by
transferring savings from other items of appropriation is a provision and not an item. It gives power
to the Chief Justice to transfer funds from one item to another. There is no specific appropriation of
money involved.

In the same manner, the provision which states that in compliance with decisions of the Supreme
Court and the Commission on Audit, funds still undetermined in amount may be drawn from the
general fund adjustment is not an item. It is the "general fund adjustment" itself which is the item.
This was not touched. It was not vetoed.

More ironic is the fact that misinformation led the Executive to believe that the items in the 1992
Appropriations Act were being vetoed when, in fact, the veto struck something else.

What were really vetoed are:

(1) Republic Act No. 1797 enacted as early as June 21, 1957; and

(2) The Resolution of the Supreme Court dated November 28, 1991 in Administrative Matter No. 91-
8-225-CA.

We need no lengthy justifications or citations of authorities to declare that no President may veto the
provisions of a law enacted thirty-five (35) years before his or her term of office. Neither may the
President set aside or reverse a final and executory judgment of this Court through the exercise of
the veto power.

A few background facts may be reiterated to fully explain the unhappy situation.

Republic Act No. 1797 provided for the adjustment of pensions of retired Justices which privilege
was extended to retired members of Constitutional Commissions by Republic Act No. 3595.

On January 25, 1975, President Marcos issued Presidential Decree No. 644 which repealed
Republic Acts 1797 and 3595. Subsequently, automatic readjustment of pensions for retired Armed
Forces officers and men was surreptitiously restored through Presidential Decree Nos. 1638 and
1909.

It was the impression that Presidential Decree No. 644 had reduced the pensions of Justices and
Constitutional Commissioners which led Congress to restore the repealed provisions through House
Bill No. 16297 in 1990. When her finance and budget advisers gave the wrong information that the
questioned provisions in the 1992 General Appropriations Act were simply an attempt to overcome
her earlier 1990 veto, she issued the veto now challenged in this petition.

It turns out, however, that P.D. No. 644 never became valid law. If P.D. No. 644 was not law, it
follows that Rep. Act No. 1797 was not repealed and continues to be effective up to the present. In
the same way that it was enforced from 1951 to 1975, so should it be enforced today.

House Bill No. 16297 was superfluous as it tried to restore benefits which were never taken away
validly. The veto of House Bill No. 16297 in 1991 did not also produce any effect. Both were based
on erroneous and non-existent premises.

From the foregoing discussion, it can be seen that when the President vetoed certain provisions of
the 1992 General Appropriations Act, she was actually vetoing Republic Act No. 1797 which, of
course, is beyond her power to accomplish.

Presidential Decree No. 644 which purportedly repealed Republic Act No. 1797 never achieved that
purpose because it was not properly published. It never became a law.

The case of Tañda v. Tuvera (134 SCRA 27 [1985]and 146 SCRA 446 [1986]) specifically requires
that "all laws shall immediately upon their approval or as soon thereafter as possible, be published in
full in the Official Gazette, to become effective only after fifteen days from their publication, or on
another date specified by the legislature, in accordance with Article 2 of the Civil Code." This was the
Court's answer to the petition of Senator Lorenzo Tañada and other opposition leaders who
challenged the validity of Marcos' decrees which, while never published, were being enforced.
Secret decrees are anathema in a free society.

In support of their request, the petitioners in Administrative Matter No. 91-9-225-CA secured
certification from Director Lucita C. Sanchez of the National Printing Office that the April 4, 1977
Supplement to the Official Gazette was published only on September 5, 1983 and officially released
on September 29, 1983.

On the issue of whether or not Presidential Decree 644 became law, the Court has already
categorically spoken in a definitive ruling on the matter, to wit:

xxx xxx xxx

PD 644 was promulgated by President Marcos on January 24, 1975, but was not
immediately or soon thereafter published although preceding and subsequent
decrees were duly published in the Official Gazette. It now appears that it was
intended as a secret decree "NOT FOR PUBLICATION" as the notation on the face
of the original copy thereof plainly indicates (Annex B). It is also clear that the decree
was published in the back-dated Supplement only after it was challenged in
the Tañada case as among the presidential decrees that had not become effective
for lack of the required publication. The petition was filed on May 7, 1983, four
months before the actual publication of the decree.

It took more than eight years to publish the decree after its promulgation in 1975.
Moreover, the publication was made in bad faith insofar as it purported to show that it
was done in 1977 when the now demonstrated fact is that the April 4, 1977
supplement was actually published and released only in September 1983. The
belated publication was obviously intended to refute the petitioner's claim in
 the Tañada case and to support the Solicitor General's submission that the petition
had become moot and academic.

xxx xxx xxx

We agree that PD 644 never became a law because it was not validly published and
that, consequently, it did not have the effect of repealing RA 1797. The requesting
Justices (including Justice Lood, whose request for the upgrading of his pension was
denied on January 15, 1991) are therefore entitled to be paid their monthly pensions
on the basis of the latter measure, which remains unchanged to date.

The Supreme Court has spoken and it has done so with finality, logically and rightly so as to assure
stability in legal relations, and avoid confusion. (see Ver v. Quetullo, 163 SCRA 80 [1988]) Like other
decisions of this Court, the ruling and principles set out in the Court resolution constitute binding
precedent. (Bulig-Bulig Kita Kamaganak Association, et al. v. Sulpicio Lines, Inc., Regional Trial
Court, etc., G.R. 847500 16 May 1989, En Banc, Minute Resolution)

The challenged veto has far-reaching implications which the Court can not countenance as they
undermine the principle of separation of powers. The Executive has no authority to set aside and
overrule a decision of the Supreme Court.

We must emphasize that the Supreme Court did not enact Rep. Act No. 1797. It is not within its
powers to pass laws in the first place. Its duty is confined to interpreting or defining what the law is
and whether or not it violates a provision of the Constitution.

As early as 1953, Congress passed a law providing for retirement pensions to retired Justices of the
Supreme Court and the Court of Appeals. This law was amended by Republic Act 1797 in 1957.
Funds necessary to pay the retirement pensions under these statutes are deemed automatically
appropriated every year.

Thus, Congress included in the General Appropriations Act of 1992, provisions identifying funds and
savings which may be used to pay the adjusted pensions pursuant to the Supreme Court Resolution.
As long as retirement laws remain in the statute book, there is an existing obligation on the part of
the government to pay the adjusted pension rate pursuant to RA 1797 and AM-91-8-225-CA.

Neither may the veto power of the President be exercised as a means of repealing RA 1797. This is
arrogating unto the Presidency legislative powers which are beyond its authority. The President has
no power to enact or amend statutes promulgated by her predecessors much less to repeal existing
laws. The President's power is merely to execute the laws as passed by Congress.

II

There is a matter of greater consequence arising from this petition. The attempt to use the veto
power to set aside a Resolution of this Court and to deprive retirees of benefits given them by Rep.
Act No. 1797 trenches upon the constitutional grant of fiscal autonomy to the Judiciary.

Sec. 3, Art. VIII mandates that:

Sec. 3 The Judiciary shall enjoy fiscal autonomy. Appropriations for the Judiciary
may not be reduced by the legislature below the amount appropriated for the
previous year and, after approval, shall be automatically and regularly released.
We can not overstress the importance of and the need for an independent judiciary. The Court has
on various past occasions explained the significance of judicial independence. In the case of De la
Llana v. Alba (112 SCRA 294 [1982]), it ruled:

It is a cardinal rule of faith of our constitutional regime that it is the people who are
endowed with rights, to secure which a government is instituted. Acting as it does
through public officials, it has to grant them either expressly or implicitly certain
powers. These they exercise not for their own benefit but for the body politic. . . .

A public office is a public trust. That is more than a moral adjuration. It is a legal
imperative. The law may vest in a public official certain rights. It does so to enable
them to perform his functions and fulfill his responsibilities more efficiently. . . . It is an
added guarantee that justices and judges can administer justice undeterred by any
fear of reprisal or untoward consequence. Their judgments then are even more likely
to be inspired solely by their knowledge of the law and the dictates of their
conscience, free from the corrupting influence of base or unworthy motives. The
independence of which they are assured is impressed with a significance
transcending that of a purely personal right. (At pp. 338-339)

The exercise of the veto power in this case may be traced back to the efforts of the Department of
Budget and Management (DBM) to ignore or overlook the plain mandate of the Constitution on fiscal
autonomy. The OSG Comment reflects the same truncated view of the provision.

We have repeatedly in the past few years called the attention of DBM that not only does it allocate
less than one percent (1%) of the national budget annually for the 22,769 Justices, Judges, and
court personnel all over the country but it also examines with a fine-toothed come how we spend the
funds appropriated by Congress based on DBM recommendations.

The gist of our position papers and arguments before Congress is as follows:

The DBM requires the Supreme Court, with Constitutional Commissions, and the
Ombudsman to submit budget proposals in accordance with parameters it
establishes. DBM evaluates the proposals, asks each agency to defend its proposals
during DBM budget hearings, submits its own version of the proposals to Congress
without informing the agency of major alterations and mutilations inflicted on their
proposals, and expects each agency to defend in Congress proposals not of the
agency's making.

After the general appropriations bill is passed by Congress and signed into law by
the President, the tight and officious control by DBM continues. For the release of
appropriated funds, the Judiciary, Constitutional Commissions, and Ombudsman are
instructed through "guidelines", how to prepare Work and Financial Plans and
requests for monthly allotments. The DBM evaluates and approves these plans and
requests and on the basis of its approval authorizes the release of allotments with
corresponding notices of cash allocation. These notices specify the maximum
withdrawals each month which the Supreme Court, the Commissions and the
Ombudsman may make from the servicing government bank. The above agencies
are also required to submit to DBM monthly, quarterly and year-end budget
accountability reports to indicate their performance, physical and financial operations
and income,
 The DBM reserves to itself the power to review the accountability reports and when
importuned for needed funds, to release additional allotments to the agency. Since
DBM always prunes the budget proposals to below subsistence levels and since
emergency situations usually occur during the fiscal year, the Chief Justices,
Chairmen of the Commissions, and Ombudsman are compelled to make pilgrimages
to DBM for additional funds to tide their respective agencies over the emergency.

What is fiscal autonomy?

As envisioned in the Constitution, the fiscal autonomy enjoyed by the Judiciary, the Civil Service
Commission, the Commission on Audit, the Commission on Elections, and the Office of the
Ombudsman contemplates a guarantee on full flexibility to allocate and utilize their resources with
the wisdom and dispatch that their needs require. It recognizes the power and authority to levy,
assess and collect fees, fix rates of compensation not exceeding the highest rates authorized by law
for compensation and pay plans of the government and allocate and disburse such sums as may be
provided by law or prescribed by them in the course of the discharge of their functions.

Fiscal autonomy means freedom from outside control. If the Supreme Court says it needs 100
typewriters but DBM rules we need only 10 typewriters and sends its recommendations to Congress
without even informing us, the autonomy given by the Constitution becomes an empty and illusory
platitude.

The Judiciary, the Constitutional Commissions, and the Ombudsman must have the independence
end flexibility needed in the discharge of their constitutional duties. The imposition of restrictions and
constraints on the manner the independent constitutional offices allocate and utilize the funds
appropriated for their operations is anathema to fiscal autonomy and violative not only of the express
mandate of the Constitution but especially as regards the Supreme Court, of the independence and
separation of powers upon which the entire fabric of our constitutional system is based. In the
interest of comity and cooperation, the Supreme Court, Constitutional Commissions, and the
Ombudsman have so far limited their objections to constant reminders. We now agree with the
petitioners that this grant of autonomy should cease to be a meaningless provision.

In the case at bar, the veto of these specific provisions in the General Appropriations Act is
tantamount to dictating to the Judiciary how its funds should be utilized, which is clearly repugnant to
fiscal autonomy. The freedom of the Chief Justice to make adjustments in the utilization of the funds
appropriated for the expenditures of the judiciary, including the use of any savings from any
particular item to cover deficits or shortages in other items of the Judiciary is withheld. Pursuant to
the Constitutional mandate, the Judiciary must enjoy freedom in the disposition of the funds
allocated to it in the appropriations law. It knows its priorities just as it is aware of the fiscal restraints.
The Chief Justice must be given a free hand on how to augment appropriations where augmentation
is needed.

Furthermore, in the case of Gonzales v. Macaraig (191 SCRA 452 [1990]), the Court upheld the
authority of the President and other key officials to augment any item or any appropriation from
savings in the interest of expediency and efficiency. The Court stated that:

There should be no question, therefore, that statutory authority has, in fact, been
granted. And once given, the heads of the different branches of the Government and
those of the Constitutional Commissions are afforded considerable flexibility in the
use of public funds and resources (Demetria v. Alba, supra). The doctrine of
separation of powers is in no way endangered because the transfer is made within a
 department (or branch of government) and not from one department (branch) to
another.

The Constitution, particularly Article VI, Section 25(5) also provides:

Sec. 25. (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.

In the instant case, the vetoed provisions which relate to the use of savings for augmenting items for
the payment of the pension differentials, among others, are clearly in consonance with the
abovestated pronouncements of the Court. The veto impairs the power of the Chief Justice to
augment other items in the Judiciary's appropriation, in contravention of the constitutional provision
on "fiscal autonomy."

III

Finally, it can not be denied that the retired Justices have a vested right to the accrued pensions due
them pursuant to RA 1797.

The right to a public pension is of statutory origin and statutes dealing with pensions have been
enacted by practically all the states in the United States (State ex rel. Murray v, Riley, 44 Del 505, 62
A2d 236), and presumably in most countries of the world. Statutory provisions for the support of
Judges or Justices on retirement are founded on services rendered to the state. Where a judge has
complied with the statutory prerequisite for retirement with pay, his right to retire and draw salary
becomes vested and may not, thereafter, be revoked or impaired. (Gay v. Whitehurst, 44 So ad 430)

Thus, in the Philippines, a number of retirement laws have been enacted, the purpose of which is to
entice competent men and women to enter the government service and to permit them to retire
therefrom with relative security, not only those who have retained their vigor but, more so, those who
have been incapacitated by illness or accident. (In re: Amount of the Monthly Pension of Judges and
Justices Starting From the Sixth Year of their Retirement and After the Expiration of the Initial Five-
year Period of Retirement, (190 SCRA 315 [1990]).

As early as 1953, Rep. Act No. 910 was enacted to grant pensions to retired Justices of the
Supreme Court and Court of Appeals.

This was amended by RA 1797 which provided for an automatic adjustment of the pension rates.
Through the years, laws were enacted and jurisprudence expounded to afford retirees better
benefits.

P.D. No. 1438, for one, was promulgated on June 10, 1978 amending RA 910 providing that the
lump sum of 5 years gratuity to which the retired Justices of the Supreme Court and Court of
Appeals were entitled was to be computed on the basis of the highest monthly aggregate of
transportation, living and representation allowances each Justice was receiving on the date of his
resignation. The Supreme Court in a resolution dated October 4, 1990, stated that this law on
gratuities covers the monthly pensions of retired Judges and Justices which should include the
highest monthly aggregate of transportation, living and representation allowances the retiree was
receiving on the date of retirement. (In Re: Amount of the Monthly Pension of Judges and
Justices, supra)

The rationale behind the veto which implies that Justices and Constitutional officers are unduly
favored is, again, a misimpression.

Immediately, we can state that retired Armed Forces officers and enlisted men number in the tens of
thousands while retired Justices are so few they can be immediately identified. Justices retire at age
70 while military men retire at a much younger age — some retired Generals left the military at age
50 or earlier. Yet the benefits in Rep. Act No. 1797 are made to apply equally to both groups. Any
ideas arising from an alleged violation of the equal protection clause should first be directed to
retirees in the military or civil service where the reason for the retirement provision is not based on
indubitable and constitutionally sanctioned grounds, not to a handful of retired Justices whose
retirement pensions are founded on constitutional reasons.

The provisions regarding retirement pensions of justices arise from the package of protections given
by the Constitution to guarantee and preserve the independence of the Judiciary.

The Constitution expressly vests the power of judicial review in this Court. Any institution given the
power to declare, in proper cases, that act of both the President and Congress are unconstitutional
needs a high degree of independence in the exercise of its functions. Our jurisdiction may not be
reduced by Congress. Neither may it be increased without our advice and concurrence. Justices
may not be removed until they reach age 70 except through impeachment. All courts and court
personnel are under the administrative supervision of the Supreme Court. The President may not
appoint any Judge or Justice unless he or she has been nominated by the Judicial and Bar Council
which, in turn, is under the Supreme Court's supervision. Our salaries may not be decreased during
our continuance in office. We cannot be designated to any agency performing administrative
or quasi-judicial functions. We are specifically given fiscal autonomy. The Judiciary is not only
independent of, but also co-equal and coordinate with the Executive and Legislative Departments.
(Article VIII and section 30, Article VI, Constitution)

Any argument which seeks to remove special privileges given by law to former Justices of this Court
and the ground that there should be no "grant of distinct privileges" or "preferential treatment" to
retired Justices ignores these provisions of the Constitution and, in effect, asks that these
Constitutional provisions on special protections for the Judiciary be repealed. The integrity of our
entire constitutional system is premised to a large extent on the independence of the Judiciary. All
these provisions are intended to preserve that independence. So are the laws on retirement benefits
of Justices.

One last point.

The Office of the Solicitor General argues that:

. . . Moreover, by granting these benefits to retired Justices implies that public funds,
raised from taxes on other citizens, will be paid off to select individuals who are
already leading private lives and have ceased performing public service. Said the
United States Supreme Court, speaking through Mr. Justice Miller: "To lay with one
hand the power of the government on the property of the citizen, and with the other
to bestow upon favored individuals . . . is nonetheless a robbery because it is done
under the forms of law . . ." (Law Association V. Topeka, 20 Wall. 655) (Comment, p.
16)
The above arguments are not only specious, impolite and offensive; they certainly are unbecoming
of an office whose top officials are supposed to be, under their charter, learned in the law.

Chief Justice Cesar Bengzon and Chief Justice Querube Makalintal, Justices J.B.L. Reyes, Cecilia
Muñoz Palma, Efren Plana, Vicente Abad Santos, and, in fact, all retired Justices of the Supreme
Court and the Court of Appeals may no longer be in the active service. Still, the Solicitor General
and all lawyers under him who represent the government before the two courts and whose
predecessors themselves appeared before these retirees, should show some continuing esteem and
good manners toward these Justices who are now in the evening of their years.

All that the retirees ask is to be given the benefits granted by law. To characterize them as engaging
in "robbery" is intemperate, abrasive, and disrespectful more so because the argument is
unfounded.

If the Comment is characteristic of OSG pleadings today, then we are sorry to state that the then
quality of research in that institution has severely deteriorated.

In the first place, the citation of the case is, wrong. The title is not LAW Association v.
Topeka but Citizen's Savings and Loan Association of Cleveland, Ohio v. Topeka City (20 Wall. 655;
87 U.S. 729; 22 Law. Ed. 455 [1874]. Second, the case involved the validity of a statute authorizing
cities and counties to issue bonds for the purpose of building bridges, waterpower, and other public
works to aid private railroads improve their services. The law was declared void on the ground that
the right of a municipality to impose a tax cannot be used for private interests.

The case was decided in 1874. The world has turned over more than 40,000 times since that ancient
period. Public use is now equated with public interest. Public money may now be used for slum
clearance, low-cost housing, squatter resettlement, urban and agrarian reform where only private
persons are the immediate beneficiaries. What was "robbery" in 1874 is now called "social justice."
There is nothing about retirement benefits in the cited case. Obviously, the OSG lawyers cited from
an old textbook or encyclopedia which could not even spell "loan" correctly. Good lawyers are
expected to go to primary sources and to use only relevant citations.

The Court has been deluged with letters and petitions by former colleagues in the Judiciary
requesting adjustments in their pensions just so they would be able to cope with the everyday living
expenses not to mention the high cost of medical bills that old age entails. As Justice Cruz aptly
stated in Teodoro J. Santiago v. COA, (G.R. No. 92284, July 12, 1991);

Retirement laws should be interpreted liberally in favor of the retiree because their
intention is to provide for his sustenance, and hopefully even comfort, when he no
longer has the stamina to continue earning his livelihood. After devoting the best
years of his life to the public service, he deserves the appreciation of a grateful
government as best concretely expressed in a generous retirement gratuity
commensurate with the value and length of his services. That generosity is the least
he should expect now that his work is done and his youth is gone. Even as he feels
the weariness in his bones and glimpses the approach of the lengthening shadows,
he should be able to luxuriate in the thought that he did his task well, and was
rewarded for it.

For as long as these retired Justices are entitled under laws which continue to be effective, the
government can not deprive them of their vested right to the payment of their pensions.
WHEREFORE, the petition is hereby GRANTED. The questioned veto is SET ASIDE as illegal and
unconstitutional. The vetoed provisions of the 1992 Appropriations Act are declared valid and
subsisting. The respondents are ordered to automatically and regularly release pursuant to the grant
of fiscal autonomy the funds appropriated for the subject pensions as well as the other
appropriations for the Judiciary. The resolution in Administrative Matter No. 91-8-225-CA dated
November 28, 1991 is likewise ordered to be implemented as promulgated.

SO ORDERED.

- Tañada
Effectivity of laws:
https://lawphil.net/judjuris/juri1985/apr1985/gr_l63915_1985.html

Facts:
The petitioners sought a writ of mandamus from the Court in order to compel the respondent
public officials to publish in the Official Gazette various presidential decrees, letters of
instructions, general orders, proclamations, executive implementations, and administrative
orders. They did so because of the right of the people to be informed on matters of public
concern, a right recognized in Section 6, Article IV of the 1973 Constitution. In addition,
petitioners stress that Article 2 of the Civil Code requires the publication of laws as a
requirement for their effectivity.

Issue:
Can laws of general application take effect even without being published as long as it provides
the date of effectivity?

Ruling:
No. “Article 2 does not preclude the requirement of publication in the Official Gazette, even if the
law itself provides for the date of its effectivity.” This is because if laws are allowed to take effect
without publication, the public would not be informed of the existence of the law that essentially
governs them. Without such publication, Article 3 of the Civil Code, which provides that
“ignorance of the law excuses no one from compliance therewith” would have no basis. Thus,
the Court ruled that all unpublished laws which are of general application have no binding force
and effect.

NOTES
Another Issue
• There is another issue in this case, which is the legal standing of the petitioners. It has been
ruled by the Court that since the matter involves a public right and therefore a concern for the
public, the petitioners have the standing in this case.
Legislative Powers of the President
• The Court recognized in this case the importance of publication of laws since the president
now has the power to make laws. They point out that while the public can be aware of the laws
made by the legislative department through the broadcasting of debates and deliberations in the
Batasang Pambansa, they do not have the same privilege with legislation made by the
president.

IV. Delegation of powers.

A. Non-delegation of powers – “Potestas delegata non potest delegare”.

Based on the ethical principle that delegated power constitutes not only a right but a
duty to be performed by the delegate though the instrumentality of his own judgment and
not through the intervening mind of another.

-Belgica vs. Ochoa – G.R. No. 208566 dated 19 November 2013

https://lawphil.net/judjuris/juri2013/nov2013/gr_208566_2013.html

B. Exception: (PETAL)

Delegation to:

1. The People at large;

2. Emergency Powers to the President – Section 23 (2) Article VI of the 1987 Constitution;

3. Tariff powers to the President – Section 28 (2), Article VI of the Constitution;

4. Administrative bodies or the “Power of Subordinate Legislation”;

a. Reason for allowing delegation of powers

- Tablarin vs. Gutierrez – G.R. No. 78164 dated 31 July 1987

https://lawphil.net/judjuris/juri1987/jul1987/gr_78164_1987.html

b. Administrative Rules and Regulations have the force and effect of law

- Victorias Milling Co., vs. Social Security Commission – G.R. No. L-16704 dated 17 March
1963

https://lawphil.net/judjuris/juri1962/mar1962/gr_l-16704_1962.html

c. Test of valid delegation / Undue delegation

- Osmeña vs. Orbos – G.R. No. 99886 dated 31 March 1993

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

5. Local Government units. – (Subordinate legislation)

a. City of Manila vs. Laguio Jr. – G.R. No. 118127 dated 12 Aril 2005
https://elibrary.judiciary.gov.ph/thebookshelf/showdocs/1/43608

b. Lagao vs. Labra – G.R. No. 155746 dated 13 October 2004

https://lawphil.net/judjuris/juri2004/oct2004/gr_155746_2004.html

V. Judicial Department

Rule-making power of the Supreme Court

•Article VIII, Section 5, Paragraph 5 vs. Article 18, section 10 of the 1987 Constitution

-Echegaray vs. Secretary of Justice – G.R. No. 132601 dated 19 January 1999
https://lawphil.net/judjuris/juri1999/jan1999/gr_132601_1999.html

-Neypes vs. CA – G.R. No. 141524 dated 14 September 2005

https://lawphil.net/judjuris/juri2005/sep2005/gr_141524_2005.html

-GSIS vs. Heirs of Fernando Caballero - G.R. No. 158090 dated 4 October 2010
https://lawphil.net/judjuris/juri2010/oct2010/gr_158090_2010.html