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Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. 71977 February 27, 1987

DEMETRIO G. DEMETRIA, M.P., AUGUSTO S. SANCHEZ, M.P., ORLANDO S. MERCADO, M.P., HONORATO Y. AQUINO, M.P., ZAFIRO L.RESPICIO, M.P., DOUGLAS R. CAGAS, M.P., OSCAR F. SANTOS, M.P., ALBERTO G. ROMULO, M.P., CIRIACO R. ALFELOR, M.P., ISIDORO E.REAL, M.P., EMIGDIO L. LINGAD, M.P., ROLANDO C. MARCIAL, M.P., PEDRO M. MARCELLANA, M.P., VICTOR S. ZIGA, M.P., and ROGELIO V.GARCIA. M.P., petitioners,vs.HON. MANUEL ALBA in his capacity as the MINISTER OF THE BUDGET and VICTOR MACALINGCAG in his capacity as the TREASURER OFTHE PHILIPPINES, respondents.

FERNAN, J.:

Assailed in this petition for prohibition with prayer for a writ of preliminary injunction is the constitutionality of the first paragraph of Section 44 ofPresidential Decree No. 1177, otherwise known as the "Budget Reform Decree of 1977."

Petitioners, who filed the instant petition as concerned citizens of this country, as members of the National Assembly/Batasan Pambansa representingtheir millions of constituents, as parties with general interest common to all the people of the Philippines, and as taxpayers whose vital interests may be

affected by the outcome of the reliefs prayed for"1

listed the grounds relied upon in this petition as follows:

A. SECTION 44 OF THE 'BUDGET REFORM DECREE OF 1977' INFRINGES UPON THE FUNDAMENTAL LAW BYAUTHORIZING THE ILLEGAL TRANSFER OF PUBLIC MONEYS.

B. SECTION 44 OF PRESIDENTIAL DECREE NO. 1177 IS REPUGNANT TO THE CONSTITUTION AS IT FAILS TO SPECIFYTHE OBJECTIVES AND PURPOSES FOR WHICH THE PROPOSED TRANSFER OF FUNDS ARE TO BE MADE.

C. SECTION 44 OF PRESIDENTIAL DECREE NO. 1177 ALLOWS THE PRESIDENT TO OVERRIDE THE SAFEGUARDS, FORMAND PROCEDURE PRESCRIBED BY THE CONSTITUTION IN APPROVING APPROPRIATIONS.

D. SECTION 44 OF THE SAME DECREE AMOUNTS TO AN UNDUE DELEGATION OF LEGISLATIVE POWERS TO THEEXECUTIVE.

E. THE THREATENED AND CONTINUING TRANSFER OF FUNDS BY THE PRESIDENT AND THE IMPLEMENTATIONTHEREOF BY THE BUDGET MINISTER AND THE TREASURER OF THE PHILIPPINES ARE WITHOUT OR IN EXCESS OFTHEIR AUTHORITY AND JURISDICTION. 2

Commenting on the petition in compliance with the Court resolution dated September 19, 1985, the Solicitor General, for the public respondents,questioned the legal standing of petitioners, who were allegedly merely begging an advisory opinion from the Court, there being no justiciablecontroversy fit for resolution or determination. He further contended that the provision under consideration was enacted pursuant to Section 16[5], ArticleVIII of the 1973 Constitution; and that at any rate, prohibition will not lie from one branch of the government to a coordinate branch to enjoin theperformance of duties within the latter's sphere of responsibility.

On February 27, 1986, the Court required the petitioners to f ile a Reply to the Comment. This, they did, stating, among others, that as a result of thechange in the administration, there is a need to hold the resolution of the present case in abeyance "until developments arise to enable the parties toconcretize their respective stands." 3

Thereafter, We required public respondents to file a rejoinder. The Solicitor General filed a rejoinder with a motion to dismiss, setting forth as grounds

therefor the abrogation of Section 16[5], Art icle VIII of the 1973 Constitution by the Freedom Constitution of March 25, 1986, which has allegedlyrendered the instant petition moot and academic. He likewise cited the "seven pillars" enunciated by Justice Brandeis inAshwander v. TVA, 297 U.S.288 (1936) 4as basis for the petition's dismissal.

In the case ofEvelio B. Javier v. The Commission on Elections and Arturo F. Pacificador, G.R. Nos. 68379-81, September 22, 1986, W e stated that:

The abolition of the Batasang Pambansa and the disappearance of the office in dispute between the petitioner and the privaterespondents both of whom have gone their separate ways could be a convenient justification for dismissing the case. Butthere are larger issues involved that must be resolved now, once and for all, not only to dispel the legal ambiguities here raised. Themore important purpose is to manifest in the clearest possible terms that this Court will not disregard and in effect condone wrongon the simplistic and tolerant pretext that the case has become moot and academic.

The Supreme Court is not only the highest arbiter of legal questions but also the conscience of the government. The citizen comesto us in quest of law but we must also give him justice. The two are not always the same. There are times when we cannot grant the

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latter because the issue has been settled and decision is no longer possible according to the law. But there are also times whenalthough the dispute has disappeared, as in this case, it nevertheless cries out to be resolved. Justice demands that we act then,not only for the vindication of the outraged right, though gone, but also for the guidance of and as a restraint upon the future.

It is in the discharge of our role in society, as above-quoted, as well as to avoid great disservice to national interest that We take cognizance of thispetition and thus deny public respondents' motion to dismiss. Likewise noteworthy is the fact that the new Constitution, ratified by the Filipino people inthe plebiscite held on February 2, 1987, carries verbatim section 16[5], Article VIII of the 1973 Constitution under Section 24[5], Article VI. And whileCongress has not officially reconvened, We see no cogent reason for further delaying the resolution of the case at bar.

The exception taken to petitioners' legal standing deserves scant consideration. The case ofPascual v. Secretary of Public Works, et al., 110 Phil. 331,is authority in support of petitioners' locus standi. Thus:

Again, it is well-settled that the validity of a statute may be contested only by one who will sustain a direct injury in consequence ofits enforcement. Yet, there are many decisions nullifying at the instance of taxpayers, laws providing for the disbursement of publicfunds, upon the theory that the expenditure of public funds by an officer of the state for the purpose of administering anunconstitutional actconstitutes a misapplication of such funds which may be enjoined at the request of a taxpayer. Although thereare some decisions to the contrary, the prevailing view in the United States is stated in the American Jurisprudence as follows:

In the determination of the degree of interest essential to give the requisite standing to attack theconstitutionality of a statute, the general rule is that not only persons individually affected, but also taxpayershave sufficient interest in preventing the illegal expenditures of moneys raised by taxation and may thereforequestion the constitutionality of statutes requiringexpenditure of public moneys. [ 11 Am. Jur. 761, Emphasissupplied. ]

Moreover, in Tan v. Macapagal, 43 SCRA 677 and Sanidad v. Comelec, 73 SCRA 333, We said that as regards taxpayers' suits, this Court enjoys thatopen discretion to entertain the same or not.

The conflict between paragraph 1 of Section 44 of Presidential Decree No. 1177 and Section 16[5], Article VIII of the 1973 Constitution is readilyperceivable from a mere cursory reading thereof. Said paragraph 1 of Section 44 provides:

The President shall have the authority to transfer any fund, appropriated for the different departments, bureaus, offices andagencies of the Executive Department, which are included in the General Appropriations Act, to any program, project or activity ofany department, bureau, or office included in the General Appropriations Act or approved after its enactment.

On the other hand, the constitutional provision under consideration reads as follows:

Sec. 16[5]. No law shall be passed authorizing any transfer of appropriations, however, the President, the Prime Minister, theSpeaker, the Chief Justice of the Supreme Court, and the heads of constitutional commis ions may by law be authorized to augmentany item in the general appropriations law for their respective offices from savings in other items of their respective appropriations.

The prohibition to transfer an appropriation for one item to another was explicit and categorical under the 1973 Constitution. However, to afford theheads of the different branches of the government and those of the constitutional commissions considerable flexibility in the use of public funds andresources, the constitution allowed the enactment of a law authorizing the transfer of funds for the purpose of augmenting an item from savings inanother item in the appropriation of the government branch or constitutional body concerned. The leeway granted was thus limited. The purpose andconditions for which funds may be transferred were specified, i.e. transfer may be allowed for the purpose of augmenting an item and such transfer maybe made only if there are savings from another item in the appropriation of the government branch or constitutional body.

Paragraph 1 of Section 44 of P.D. No. 1177 unduly over extends the privilege granted under said Section 16[5]. It empowers the President toindiscriminately transfer funds from one department, bureau, office or agency of the Executive Department to any program, project or activity of anydepartment, bureau or office included in the General Appropriations Act or approved after its enactment, without regard as to whether or not the funds tobe transferred are actually savings in the item from which the same are to be taken, or whether or not the transfer is for the purpose of augmenting theitem to which said transfer is to be made. It does not only completely disregard the standards set in the fundamental law, thereby amounting to an unduedelegation of legislative powers, but likewise goes beyond the tenor thereof. Indeed, such constitutional infirmities render the provision in question nulland void.

"For the love of money is the root of all evil: ..." and money belonging to no one in particular, i.e. public funds, provide an even greater temptation for

misappropriation and embezzlement. This, evidently, was foremost in the minds of the framers of the constitution in meticulously prescribing the rulesregarding the appropriation and disposition of public funds as embodied in Sections 16 and 18 of Article VIII of the 1973 Constitution. Hence, theconditions on the release of money from the treasury [Sec. 18(1)]; the restrictions on the use of public funds for public purpose [Sec. 18(2)]; theprohibition to transfer an appropriation for an item to another [See. 16(5) and the requirement of specifications [Sec. 16(2)], among others, were allsafeguards designed to forestall abuses in the expenditure of public funds. Paragraph 1 of Section 44 puts all these safeguards to naught. For, ascorrectly observed by petitioners, in view of the unlimited authority bestowed upon the President, "... Pres. Decree No. 1177 opens the floodgates for theenactment of unfunded appropriations, results in uncontrolled executive expenditures, diffuses accountability for budgetary performance and entrenchesthe pork barrel system as the ruling party may well expand [sic] public money not on the basis of development priorities but on political and personalexpediency." 5The contention of public respondents that paragraph 1 of Section 44 of P.D. 1177 was enacted pursuant to Section 16(5) of Article VIII ofthe 1973 Constitution must perforce fall flat on its face.

Another theory advanced by public respondents is that prohibition will not lie from one branch of the government against a coordinate branch to enjointhe performance of duties within the latter's sphere of responsibility.

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Thomas M. Cooley in his "A Treatise on the Constitutional Limitations," Vol. 1, Eight Edition, Little, Brown and Company, Boston, explained:

... The legislative and judicial are coordinate departments of the government, of equal dignity; each is alike supreme in the exerciseof its proper functions, and cannot directly or indirectly, while acting within the limits of its authority, be subjected to the control orsupervision of the other, without an unwarrantable assumption by that other of power which, by the Constitution, is not conferredupon it. The Constitution apportions the powers of government, but it does not make any one of the three departments subordinateto another, when exercising the trust committed to it. The courts may declare legislative enactments unconstitutional and void insome cases, but not because the judicial power is superior in degree or dignity to the legislative. Being required to declare what thelaw is in the cases which come before them, they must enforce the Constitution, as the paramount law, whenever a legislativeenactment comes in conflict with it. But the courts sit, not to review or revise the legislative action, but to enforce the legislative will,and it is only where they find that the legislature has failed to keep within its constitutional limits, that they are at liberty to disregardits action; and in doing so, they only do what every private citizen may do in respect to the mandates of the courts when the judgesassumed to act and to render judgments or decrees without jurisdiction. " In exercising this high authority, the judges claim no judiciasupremacy; they are only the administrators of the public will. If an act of the legislature is held void, it is not because the judgeshave any control over the legislative power, but because the act is f orbidden by the Constitution, and because the will of the people,which is therein declared, is paramount to that of their representatives expressed in any law." [Lindsay v. Commissioners, & c., 2Bay, 38, 61; People v. Rucker, 5 Col. 5; Russ v. Com., 210 Pa. St. 544; 60 Atl. 169, 1 L.R.A. [N.S.] 409, 105 Am. St. Rep. 825] (pp.332-334).

Indeed, where the legislature or the executive branch is acting within the limits of its authority, the judiciary cannot and ought not to interfere with theformer. But where the legislature or the executive acts beyond the scope of its constitutional powers, it becomes the duty of the judiciary to declare whatthe other branches of the government had assumed to do as void. This is the essence of judicial power conferred by the Constitution "in one SupremeCourt and in such lower courts as may be established by law" [Art. VIII, Section 1 of the 1935 Constitution; Art. X, Section 1 of the 1973 Constitution andwhich was adopted as part of the Freedom Constitution, and Art. VIII, Section 1 of the 1987 Constitution] and which power this Court has exercised inmany instances. *

Public respondents are being enjoined from acting under a provision of law which We have earlier mentioned to be constitutionally infirm. The general

principle relied upon cannot therefore accord them the protection sought as they are not acting within their "sphere of responsibility" but without it.

The nation has not recovered from the shock, and worst, the economic destitution brought about by the plundering of the Treasury by the deposeddictator and his cohorts. A provision which allows even the slightest possibility of a repetition of this sad experience cannot remain written in our statutebooks.

WHEREFORE, the instant petition is granted. Paragraph 1 of Section 44 of Presidential Decree No. 1177 is hereby declared null and void for beingunconstitutional.

SO ORDER RED.

Teehankee, C.J., Yap, Narvasa, Melencio-Herrera, Alampay, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin, Sarmiento and Cortes, JJ.,concur.

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. 94571 April 22, 1991

TEOFISTO T. GUINGONA, JR. and AQUILINO Q. PIMENTEL, JR., petitioners,vs.

HON. GUILLERMO CARAGUE, in his capacity as Secretary, Budget & Management, HON. ROZALINA S. CAJUCOM in her capacity as NationalTreasurer and COMMISSION ON AUDIT, respondents.

Ramon A. Gonzales for petitioners.

GANCAYCO, J.:p

This is a case of first impression whereby petitioners question the constitutionality of the automatic appropriation for debt service in the 1990 budget.

As alleged in the petition, the facts are as follows:

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The 1990 budget consists of P98.4 Billion in automatic appropriation (with P86.8 Billion for debt service) and P155.3 Billion appropriated under RepublicAct No. 6831, otherwise known as the General Appropriations Act, or a total of P233.5 Billion, 1while the appropriations for the Department of EducationCulture and Sports amount to P27,017,813,000.00. 2

The said automatic appropriation for debt service is authorized by P.D. No. 81, entitled "Amending Certain Provisions of Republic Act Numbered FourThousand Eight Hundred Sixty, as Amended (Re: Foreign Borrowing Act)," by P.D. No. 1177, entitled "Revising the Budget Process in Order toInstitutionalize the Budgetary Innovations of the New Society," and by P.D. No. 1967, entitled "An Act Strenghthening the Guarantee and PaymentPositions of the Republic of the Philippines on Its Contingent Liabilities Arising out of Relent and Guaranteed Loan by Appropriating Funds For ThePurpose.

There can be no question that petitioners as Senators of the Republic of the Philippines may bring this suit where a constitutional issue is raised. 3

Indeed, even a taxpayer has personality to restrain unlawful expenditure of public funds.

The petitioner seek the declaration of the unconstitutionality of P.D. No. 81, Sections 31 of P.D. 1177, and P.D. No. 1967. The petition also seeks torestrain the disbursement for debt service under the 1990 budget pursuant to said decrees.

Respondents contend that the petition involves a pure political question which is the repeal or amendment of said laws addressed to the judgment,wisdom and patriotism of the legislative body and not this Court.

In Gonzales, 5 the main issue was the unconstitutionality of the presidential veto of certain provision particularly Section 16 of the General AppropriationsAct of 1990, R.A. No. 6831. This Court, in disposing of the issue, stated

The political question doctrine neither interposes an obstacle to judicial determination of the rival claims. The jurisdiction to delimitconstitutional boundaries has been given to this Court. It cannot abdicate that obligation mandated by the 1987 Constitution,although said provision by no means does away with the applicability of the principle in appropriate cases.

Sec. 1. The judicial power shad be vested in one Supreme Court and in such lower courts as may beestablished by law.

Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which arelegally demandable and enforceable, and to determine whether or not there has been a grave abuse ofdiscretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of theGovernment.

With the Senate maintaining that the President's veto is unconstitutional and that charge being controverted, there is an actual caseor justiciable controversybetween the Upper House of Congress and the executive department that may be taken cognizance of bythis Court.

The questions raised in the instant petition are

I. IS THE APPROPRIATION OF P86 BILLION IN THE P233 BILLION 1990 BUDGET VIOLATIVE OF SECTION 5, ARTICLE XIVOF THE CONSTITUTION?

II. ARE PD No. 81, PD No. 1177 AND PD No. 1967 STILL OPERATIVE UNDER THE CONSTITUTION?

III. ARE THEY VIOLATIVE OF SECTION 29(l), ARTICLE VI OF THE CONSTITUTION? 6

There is thus a justiciable controversy raised in the petition which this Court may properly take cognizance of On the first issue, the petitioners aver

According to Sec. 5, Art. XIV of the Constitution:

(5) The State shall assign the highest budgetary priority to education and ensure that teaching will attract andretain its rightful share of the best available talents through adequate remuneration and other means of jobsatisfaction and fulfillment.

The reason behind the said provision is stated, thus:

In explaining his proposed amendment, Mr. Ople stated that all the great and sincere piety professed by everyPresident and every Congress of the Philippines since the end of W orld War II for the economic welfare of thepublic schoolteachers always ended up in failure and this failure, he s tated, had caused mass defection of thebest and brightest teachers to other careers, including menial jobs in overseas employmentand concertedactions by them to project their grievances, mainly over low pay and abject working conditions.

He pointed to the high expectations generated by the February Revolution, especially keen among publicschoolteachers, which at present exacerbate these long frustrated hopes.

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Mr. Ople stated that despite the sincerity of all administrations that tried vainly to respond to the needs of theteachers, the central problem that always defeated their pious intentions was really the one budgetary priority inthe sense that any proposed increase for public schoolteachers had to be multiplied many t imes by the numberof government employees in general and their equitable claims to any pay standardization such that the payrate of teachers is hopelessly pegged to the rate of government workers in general. This, he stated, foredoomedthe prospect of a significant pay increase for teachers.

Mr. Ople pointed out that the recognition by the Constitution of the highest priority for public schoolteachers,and by implication, for all teachers, would ensure that the President and Congress would be strongly urged by aconstitutional mandate to grant to them such a level of remuneration and other incentives that would maketeaching competitive again and attractive to the best available talents in the nation.

Finally, Mr. Ople recalled that before World War II, teaching competed most successfully against all othercareer choices for the best and the brightest of the younger generation. It is for this reason, he stated, that hisproposed amendment if approved, would ensure that teaching would be restored to its lost glory as the careerof choice for the most talented and most public-spirited of the younger generation in the sense that it wouldbecome the countervailing measure against the continued decline of teaching and the wholesale desertion ofthis noble profession presently taking place. He further stated that this would ensure that the future and thequality of the population would be asserted as a top priority against many clamorous and importunate but lessimportant claims of the present. (Journal of the Constitutional Commission, Vol. II, p. 1172)

However, as against this constitutional intention, P86 Billion is appropriated for debt service while only P27 Billion is appropriated forthe Department of Education in the 1990 budget. It plain, therefore, that the said appropriation for debt services is inconsistent withthe Constitution, hence, viod (Art. 7, New Civil Code). 7

While it is true that under Section 5(5), Article XIV of the Constitution Congress is mandated to "assign the highest budgetary priority to education" inorder to "insure that teaching will attract and retain its rightful share of the best available talents through adequate remuneration and other means of jobsatisfaction and fulfillment," it does not thereby follow that the hands of Congress are so hamstrung as to deprive it the power to respond to theimperatives of the national interest and for the attainment of other state policies or objectives.

As aptly observed by respondents, since 1985, the budget for education has tripled to upgrade and improve the facility of the public school system. Thecompensation of teachers has been doubled. The amount ofP29,740,611,000.00 8 set aside for the Department of Education, Culture and Sports under the General Appropriations Act (R.A. No. 6831), is thehighest budgetary allocation among all department budgets. This is a clear compliance with the aforesaid constitutional mandate according highestpriority to education.

Having faithfully complied therewith, Congress is certainly not without any power, guided only by its good judgment, to provide an appropriation, that canreasonably service our enormous debt, the greater portion of which was inherited from the previous administration. It is not only a matter of honor and toprotect the credit standing of the country. More especially, the very survival of our economy is at stake. Thus, if in the process Congress appropriated anamount for debt service bigger than the share allocated to education, the Court finds and so holds that said appropriation cannot be thereby assailed asunconstitutional.

Now to the second issue. The petitioners made the following observations:

To begin with, Rep. Act 4860 entitled "AN ACTAUTHORIZING THE PRESIDENT OF THE PHILIPPINES TO OBTAIN SUCHFOREIGN LOANS AND CREDITS, OR TO INCUR SUCH FOREIGN INDEBTEDNESS, AS MAY BE NECESSARY TO FINANCEAPPROVED ECONOMIC DEVELOPMENT PURPOSES OR PROJECTS, AND TO GUARANTEE, IN BEHALF OF THE REPUBLICOF THE PHILIPPINES, FOREIGN LOANS OBTAINED OR BONDS ISSUED BY CORPORATIONS OWNED OR CONTROLLEDBY THE GOVERNMENT OF THE PHILIPPINES FOR ECONOMIC DEVELOPMENT PURPOSES INCLUDING THOSE INCURREDFOR PURPOSES OF RELENDING TO THE PRIVATE SECTOR,APPROPRIATING THENECESSARY FUNDS THEREFOR, ANDFOR OTHER PURPOSES, provides:

Sec. 2. The total amount of loans, credits and indebtedness, excluding interests, which the President of thePhilippines is authorized to incur under this Act shall not exceed one billion United States dollars or itsequivalent in other foreign currencies at the exchange rate prevailing at the time the loans, credits andindebtedness are incurred: Provided, however, That the total loans, credits and indebtedness incurred underthis Act shall not exceed two hundred fifty million in the fiscal year of the approval of this Act, and two hundred

fifty million every fiscal year thereafter, all in United States dollars or its equivalent in other currencies.

Sec. 5. It shall be the duty of the President, within thirty days after the opening of every regular session, toreport to the Congress the amount of loans, credits and indebtedness contracted, as well as the guaranteesextended, and the purposes and projects for which the loans, credits and indebtedness were incurred, and theguarantees extended, as well as such loans which may be reloaned to Filipino owned or controlled corporationsand similar purposes.

Sec. 6. The Congress shall appropriate the necessary amount out of any funds in the National Treasury nototherwise appropriated, to cover the payment of the principal and interest on such loans, credits orindebtedness as and when they shall become due.

However, after the declaration of martial law, President Marcos issued PD 81 amending Section 6, thus:

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Sec. 7. Section six of the same Act is hereby further amended to read as follows:

Sec. 6. Any provision of law to the contrary notwithstanding, and in orderto enable theRepublic of the Philippines to pay the principal, interest, taxes and other normal bankingcharges on the loans, credits or indebtedness, or on the bonds, debentures, securities or

other evidences of indebtedness sold in international markets incurred under the authorityof this Act, the proceeds of which are deemed appropriated for the projects, all the revenuerealized from the projects financed by such loans, credits or indebtedness, or on the bonds,debentures, securities or other evidences of indebtedness, shall be turned over in full, afterdeducting actual and necessary expenses for the operation and maintenance of saidprojects, to the National Treasury by the government office, agency or instrumentality, orgovernment-owned or controlled corporation concerned, which is hereby appropriated forthe purpose as and when they shall become due. In case the revenue realized isinsufficient to cover the principal, interest and other charges, such portion of the budgetarysavings as may be necessary to cover the balance or deficiency shall be set asideexclusively for the purpose by the government office, agency or instrumentality, orgovernment-owned or controlled corporation concerned: Provided, That, if there stillremains a deficiency, such amount necessary to cover the payment of the principal andinterest on such loans, credit or indebtedness as and when they shall become due ishereby appropriated out of any funds in the national treasury not otherwise appropriated: . ..

President Marcos also issued PD 1177, which provides:

Sec. 31.Automatic appropriations. All expenditures for (a) personnel retirement premiums, governmentservice insurance, and other similar fixed expenditures, (b) principal and interest on public debt, (c) nationalgovernment guarantees of obligations which are drawn upon, are automatically appropriated; Provided, that no

obligations shall be incurred or payments made from funds thus automatically appropriated except as issued inthe form of regular budgetary allotments.

and PD 1967, which provides:

Sec. 1. There is hereby appropriated, out of any funds in the National Treasurynot otherwise appropriated, such amounts as maybe necessary to effect payments on foreign or domestic loans, or foreign or domestic loans whereon creditors make a call on thedirect and indirect guarantee of the Republic of the Philippines, obtained by:

a. The Republic of the Philippines the proceeds of which were relent to government-owned or controlledcorporations and/or government financial institutions;

b. government-owned or controlled corporations and/or government financial institutions the proceeds of whichwere relent to public or private institutions;

c. government-owned or controlled corporations and/or financial institutions and guaranteed by the Republic ofthe Philippines;

d. other public or private institutions and guaranteed by government-owned or controlled corporations and/orgovernment financial institutions.

Sec. 2. All repayments made by borrower institutions on the loans for whose account advances were made by the National Treasurywill revert to the General Fund.

Sec. 3. In the event that any borrower institution is unable to settle the advances made out of the appropriation provided therein, theTreasurer of the Philippines shall make the proper recommendation to the Minister of Finance on whether such advances shall be

treated as equity or subsidy of the National Government to the institution concerned, which shall be considered in the budgetaryprogram of the Government.

In the "Budget of Expenditures and Sources of Financing Fiscal Year 1990," which accompanied her budget message to Congress,the President of the Philippines, Corazon C. Aquino, stated:

Sources Appropriation

The P233.5 billion budget proposed for fiscal year 1990 will require P132.1 billion of new programmedappropriations out of a total P155.3 billion in new legislative authorization from Congress. The rest of thebudget, totalling P101.4 billion, will be sourced from existing appropriations: P98.4 billion from AutomaticAppropriations and P3.0 billion from Continuing Appropriations (Fig. 4).

And according to Figure 4, . . . , P86.8 billion out of the P98.4 Billion are programmed for debt service. In other words, the Presidenthad, on her own, determined and set aside the said amount of P98.4 Billion with the rest of the appropriations of P155.3 Billion to bedetermined and fixed by Congress, which is now Rep. Act 6831. 9

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Petitioners argue that the said automatic appropriations under the aforesaid decrees of then President Marcos became functus oficio when he wasousted in February, 1986; that upon the expiration of the one-man legislature in the person of President Marcos, the legislative power was restored toCongress on February 2, 1987 when the Constitution was ratified by the people; that there is a need for a new legislation by Congress providing forautomatic appropriation, but Congress, up to the present, has not approved any such law; and thus the said P86.8 Bi llion automatic appropriation in the1990 budget is an administrative act that rests on no law, and thus, it cannot be enforced.

Moreover, petitioners contend that assuming arguendo that P.D. No. 81, P.D. No. 1177 and P.D. No. 1967 did not expire with the ouster of PresidentMarcos, after the adoption of the 1987 Constitution, the said decrees are inoperative under Section 3, Article XVIII which provides

Sec. 3. All existinglaws, decrees, executive orders, proclamations, letters of instructions, and other executive issuances notinconsistent with this Constitution shall remain operative until amended, repealed, or revoked." (Emphasis supplied.)

They then point out that since the said decrees are inconsistent with Section 24, Article VI of the Constitution, i.e.,

Sec. 24. All appropriation, revenue or tariffbills, bills authorizing increase of the public debt, bills of local application, and private billsshall originate exclusivelyin the House ofRepresentatives, but the Senate may propose or concur with amendments. (Emphasissupplied.)

whereby bills have to be approved by the President, 10 then a law must be passed by Congress to authorize said automatic appropriation.Further, petitioners state said decrees violate Section 29(l) of Article VI of the Constitution which provides as follows

Sec. 29(l). No money shall be paid out of the Treasury except in pursuance of an appropriation made by law.

They assert that there must be definiteness, certainty and exactness in an appropriation, 11 otherwise it is an undue delegation of legislative power to thePresident who determines in advance the amount appropriated for the debt service. 12

The Court is not persuaded.

Section 3, Article XVIII of the Constitution recognizes that "All existinglaws, decrees, executive orders, proclamations, letters of instructions and otherexecutive issuances not inconsistent with the Constitution shall remain operative until amended, repealed or revoked."

This transitory provision of the Constitution has precisely been adopted by its framers to preserve the social order so that legislation by the thenPresident Marcos may be recognized. Such laws are to remain in force and effect unless they are inconsistent with the Constitution or, are otherwiseamended, repealed or revoked.

An examination of the aforecited presidential decrees show the clear intent that the amounts needed to cover the payment of the principal and intereston all foreign loans, including those guaranteed by the national government, should be made available when they shall become due precisely without thenecessity of periodic enactments of separate laws appropriating funds therefor, since both the periods and necessities are incapable of determination inadvance.

The automatic appropriation provides the flexibility for the effective execution of debt management policies. Its political wisdom has been convincinglydiscussed by the Solicitor General as he argues

. . . First, for example, it enables the Government to take advantage of a favorable turn of market conditions by redeeming high-interest securities and borrowing at lower rates, or to shift f rom short-term to long-term instruments, or to enter into arrangementsthat could lighten our outstanding debt burden debt-to-equity, debt to asset, debt-to-debt or other such schemes. Second, theautomatic appropriation obviates the serious difficulties in debt servicing arising from any deviation from what has been previouslyprogrammed. The annual debt service estimates, which are usually made one year in advance, are based on a mathematical set ormatrix or, in layman's parlance, "basket" of foreign exchange and interest rate assumptions which may significantly differ from actuarates not even in proportion to changes on the basis of the assumptions. Absent an automatic appropriation clause, the PhilippineGovernment has to await and depend upon Congressional action, which by the t ime this comes, may no longer be responsive to theintended conditions which in the meantime may have already drastically changed. In the meantime, also, delayed payments andarrearages may have supervened, only to worsen our debt service-to-total expenditure ratio in the budget due to penalties and/ordemand for immediate payment even before due dates.

Clearly, the claim that payment of the loans and indebtedness is conditioned upon the continuance of the person of PresidentMarcos and his legislative power goes against the intent and purpose of the law. The purpose is foreseen to subsist with or withoutthe person of Marcos. 13

The argument of petitioners that the said presidential decrees did not meet the requirement and are therefore inconsistent with Sections 24 and 27 ofArticle VI of the Constitution which requires, among others, that "all appropriations, . . . bills authorizing increase of public debt" must be passed byCongress and approved by the President is untenable. Certainly, the framers of the Constitution did not contemplate that existing laws in the statutebooks including existing presidential decrees appropriating public money are reduced to mere "bills" that must again go through the legislative millionThe only reasonable interpretation of said provisions of the Constitution which refer to "bills" is that they mean appropriation measures still to be passedby Congress. If the intention of the framers thereof were otherwise they should have expressed their decision in a more direct or express manner.

Well-known is the rule that repeal or amendment by implication is frowned upon. Equally fundamental is the principle that construction of the Constitutionand law is generally applied prospectively and not retrospectively unless it is so clearly stated.

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continuing review of government fiscal position, the regulation of funds releases, the implementation of cash payment schedules,and other related activities comprise this phase of the budget cycle.

Release from the debt service fired is triggered by a request of the Bureau of the Treasury for allotments from the Department ofBudget and Management, one quarter in advance of payment schedule, to ensure prompt payments. The Bureau of Treasury, uponreceiving official billings from the creditors, remits payments to creditors through the Central Bank or to the Sinking Fund establishedfor government security issues (Annex F).

4. Budget accountability. The fourth phase refers to the evaluation of actual performance and initially approved work targets,obligations incurred, personnel hired and work accomplished are compared with the targets set at the t ime the agency budgets wereapproved.

There being no undue delegation of legislative power as clearly above shown, petitioners insist nevertheless that subjectpresidential decrees constitute undue delegation of legislative power to the executive on the alleged ground that the appropriationstherein are not exact, certain ordefinite, invoking in support therefor the Constitution of Nebraska, the constitution under which thecase of State v. Moore, 69 NW 974, cited by petitioners, was decided. Unlike the Constitution of Nebraska, however, ourConstitution does not require a definite, certain, exact or"specificappropriation made by law." Section 29, Article VI of our 1987Constitution omits any of these words and simply states:

Section 29(l). No money shall be paid out of the treasury except in pursuance of an appropriation made by law.

More significantly, there is no provision in our Constitution that provides or prescribes any particular form of words or religiousrecitals in which an authorization or appropriation by Congress shall be made, except that it be "made by law," such as precisely theauthorization or appropriation under the questioned presidential decrees. In other words, in terms of time horizons, an appropriationmay be made impliedly (as by past but subsisting legislations) as well as expressly for the current fiscal year (as by enactment oflaws 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 orspecial application which appropriate public funds for specific public purposes, such as the questioned decrees. An appropriationmeasure is sufficient if the legislative intention clearly and certainly appears from the language employed (In re ContinuingAppropriations, 32 P. 272), whether in the past or in the present. 17

Thus, in accordance with Section 22, Article VII of the 1987 Constitution, President Corazon C. Aquino submitted to Congress the Budget ofExpenditures and Sources of Financing for the Fiscal Year 1990. The proposed 1990 expenditure program covering the estimated obligation that will beincurred by the national government during the fiscal year amounts to P233.5 Billion. Of the proposed budget, P86.8 is set aside for debt servicing asfollows:

National Government Debt

Service Expenditures, 1990

(in million pesos)

DomesticForeignTotal

RA 245, asRA 4860

amendedas amended,

PD 1967

Interest

Payments P36,861 P18,570 P55,431

Principal

Amortization 16,310 15,077 31,387

Total P53,171 P33,647 P86,818 18

as authorized under P.D. 1967 and R.A. 4860 and 245, as amended.

The Court, therefor, finds that R.A. No. 4860, as amended by P.D. No. 81, Section 31 of P.D. 1177 and P.D. No. 1967 constitute lawful authorizations orappropriations, unless they are repealed or otherwise amended by Congress. The Executive was thus merely complying with the duty to implement thesame.

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There can be no question as to the patriotism and good motive of petitioners in f iling this petition. Unfortunately, the petition must fail on theconstitutional and legal issues raised. As to whether or not the country should honor its international debt, more especially the enormous amount thathad been incurred by the past administration, which appears to be the ultimate objective of the petition, is not an issue that is presented or proposed tobe addressed by the Court. Indeed, it is more of a political decision for Congress and the Executive to determine in the exercise of their wisdom andsound discretion.

WHEREFORE, the petition is DISMISSED, without pronouncement as to costs.

SO ORDERED.

Fernan, C.J., Narvasa, Melencio-Herrera, Feliciano, Bidin, Grio-Aquino, Medialdea,Regalado and Davide, Jr., JJ., concur.

Separate Opinions

PARAS, J., dissenting:

I dissent. Any law that undermines our economy and therefore our security is per se unconstitutional.

CRUZ, J., dissenting:

I regret I must dissent.

One of the essential requirements of a valid appropriation is that the amount appropriated must be certain, which means that the sum authorized to bereleased should either be determinate or at least determinable. As has been uniformly held:

It is essential to the validity of an appropriation law that it should state the exact amount appropriated or the maximum sum fromwhich the authorized expenses shall be paid, otherwise it would be void for uncertainty, since the legislative power overappropriation in effect could have been delegated in such case to the recipient of the funds appropriated or to the official authorizedto spend them. (State v. Eggers, 16 L.R.A., N.S. 630; State v. La Grave, 41 Pac. 1075).

Thus, a law which provided that there should be paid out of the State Treasury to any person, firm or corporation engaged in themanufacture of sugar in that State the sum of five-eights of one per cent per pound upon each pound manufactured under theconditions and restrictions of the Act was held as invalid appropriation for lack of certainty in the amount to be paid out of theTreasury, the legislature having failed to fix the amount to be appropriated. (State of Nebraska v. Moore, 50 Neb. 88, cited inGonzales, Phil. Political Law, p. 213).

The presidential decrees on which the respondents rely do not satisfy this requirement.

Section 7 of P.D. 81 provides that "all the revenue realized from the projects financed by such loans," after deducting the actual and necessary operatingand maintenance expenses, is appropriated for servicing the foreign debts.

The same sections says that in case of deficiency, "such amount necessaryto cover the payment of the principal and interest on such loans, credit or

indebteedness as and when they shall become due is hereby appropriated."

Section 31 of P.D. 1717 provides that "all expenditures for the payment of the principal and interest on public debt" are automatically appropriated.

Section 1 of P.D. 1967 appropriates "such amounts as may be necessaryto effect payments on foreign or domestic loans."

It is easy to see that in none of these decrees is the amount appropriated fixed, either by an exact figure or by an indication at least of its maximum.

The ponencia says that "the amounts are made certain by the legislative parameters provided in the degree." I am afraid I do not see those parameters.I see only the appropriation of "all the revenue derived from the projects financed by such loans" and "such amounts as may be necessaryto effectpayment on foreign or domestic loans" or "the principal and interest on public debt, as and when they shall become due ." All these are uncertain.

Even President Marcos as a legislator, did not know how much he was appropriating.

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The ponencia assures us that "no uncertainty arises in executive implementation as the limit will be the exact amounts as shown by the books of theTreasury." That is cold comfort, indeed, if we consider that it is the Treasury itselfthat is sought to be limited by the requirement for certainty. Theintention precisely is to prevent the disbursement of public funds by the Treasury itself from "running riot."

We surely cannot defend an appropriation, say, of "such amounts as may be necessary for the construction of a bridge across the Pasig River" even ifthe exact cost may be shown later by the books of the Treasury. This would be no different from the uncertain appropriations the Court is heresustaining.

I think it is a mistake for this government to justify its acts on the basis of the decrees of President Marcos. These are on the whole tainted withauthoritarianism and enfeebled by lack of proper study and draftmanship, let alone suspect motives. I suggest that these decrees must be reviewedcarefully and whenever proper, set aright by necessary modification or outright revocation. Instead, the respondents are invoking them blindly.

Sarmiento, J., concurs.

PADILLA, J., dissenting

I join Mr. Justice Cruz in his dissent. I only wish to add the following:

Section 29(l), Article VI of the 1987 Constitution provides:

Sec. 29(l). No money shall be paid out of the Treasury except in pursuance of an appropriation made by law.

It is quite obvious from this provision that there must first be a lawenacted by Congress (and approved by the President) appropriating a particular sumorsums before payment thereof from the Treasury can be made.

If the above constitutional provision is to be meaningful and effective at all, I believe that the law appropriating a particular sum orsums fordebt service,whether involving domestic or foreign loans of the Government, should be enacted by the Congress, composed of the most recently electedrepresentatives of the people. To construe the term "lay" in the above provision to mean the decrees issued by then President Marcos would, in effect,be supporting a continuing governance of a large segment of the Philippine economy by a past regime which, as every one knows, centralized for agood number of years legislative and executive powers in only one person.

Besides, these decrees issued by President Marcos relative to debt service were tailoredfor the periods covered by said decrees. Today it is Congressthat should determine and approve the proper appropriations for debt servicing, as this is a matter of policy that, in my opinion, pertains to the legislativedepartment, as the policy determining body of the Government.

Separate Opinions

PARAS, J., dissenting:

I dissent. Any law that undermines our economy and therefore our security is per se unconstitutional.

CRUZ, J., dissenting:

I regret I must dissent.

One of the essential requirements of a valid appropriation is that the amount appropriated must be certain, which means that the sum authorized to be

released should either be determinate or at least determinable. As has been uniformly held:

It is essential to the validity of an appropriation law that it should state the exact amount appropriated or the maximum sum fromwhich the authorized expenses shall be paid, otherwise it would be void for uncertainty, since the legislative power overappropriation in effect could have been delegated in such case to the recipient of the funds appropriated or to the official authorizedto spend them. (State v. Eggers, 16 L.R.A., N.S. 630; State v. La Grave, 41 Pac. 1075).

Thus, a law which provided that there should be paid out of the State Treasury to any person, firm or corporation engaged in themanufacture of sugar in that State the sum of five-eights of one per cent per pound upon each pound manufactured under theconditions and restrictions of the Act was held as invalid appropriation for lack of certainty in the amount to be paid out of theTreasury, the legislature having failed to fix the amount to be appropriated. (State of Nebraska v. Moore, 50 Neb. 88, cited inGonzales, Phil. Political Law, p. 213).

The presidential decrees on which the respondents rely do not satisfy this requirement.

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Section 7 of P.D. 81 provides that "all the revenue realized from the projects financed by such loans," after deducting the actual and necessary operatingand maintenance expenses, is appropriated for servicing the foreign debts.

The same sections says that in case of deficiency, "such amount necessaryto cover the payment of the principal and interest on such loans, credit orindebteedness as and when they shall become due is hereby appropriated."

Section 31 of P.D. 1717 provides that "all expenditures for the payment of the principal and interest on public debt" are automatically appropriated.

Section 1 of P.D. 1967 appropriates "such amounts as may be necessaryto effect payments on foreign or domestic loans."

It is easy to see that in none of these decrees is the amount appropriated fixed, either by an exact figure or by an indication at least of its maximum.

The ponencia says that "the amounts are made certain by the legislative parameters provided in the degree." I am afraid I do not see those parameters.I see only the appropriation of "all the revenue derived from the projects financed by such loans" and "such amounts as may be necessaryto effectpayment on foreign or domestic loans" or "the principal and interest on public debt, as and when they shall become due ." All these are uncertain.

Even President Marcos as a legislator, did not know how much he was appropriating.

The ponencia assures us that "no uncertainty arises in executive implementation as the limit will be the exact amounts as shown by the books of theTreasury." That is cold comfort, indeed, if we consider that it is the Treasury itselfthat is sought to be limited by the requirement for certainty. Theintention precisely is to prevent the disbursement of public funds by the Treasury itself from "running riot."

We surely cannot defend an appropriation, say, of "such amounts as may be necessary for the construction of a bridge across the Pasig River" even ifthe exact cost may be shown later by the books of the Treasury. This would be no different from the uncertain appropriations the Court is heresustaining.

I think it is a mistake for this government to justify its acts on the basis of the decrees of President Marcos. These are on the whole tainted withauthoritarianism and enfeebled by lack of proper study and draftmanship, let alone suspect motives. I suggest that these decrees must be reviewedcarefully and whenever proper, set aright by necessary modification or outright revocation. Instead, the respondents are invoking them blindly.

Sarmiento, J., concurs.

PADILLA, J., dissenting

I join Mr. Justice Cruz in his dissent. I only wish to add the following:

Section 29(l), Article VI of the 1987 Constitution provides:

Sec. 29(l). No money shall be paid out of the Treasury except in pursuance of an appropriation made by law.

It is quite obvious from this provision that there must first be a lawenacted by Congress (and approved by the President) appropriating a particular sumorsums before payment thereof from the Treasury can be made.

If the above constitutional provision is to be meaningful and effective at all, I believe that the law appropriating a particular sum orsums fordebt service,whether involving domestic or foreign loans of the Government, should be enacted by the Congress, composed of the most recently electedrepresentatives of the people. To construe the term "lay" in the above provision to mean the decrees issued by then President Marcos would, in effect,be supporting a continuing governance of a large segment of the Philippine economy by a past regime which, as every one knows, centralized for agood number of years legislative and executive powers in only one person.

Besides, these decrees issued by President Marcos relative to debt service were tailoredfor the periods covered by said decrees. Today it is Congressthat should determine and approve the proper appropriations for debt servicing, as this is a matter of policy that, in my opinion, pertains to the legislativedepartment, as the policy determining body of the Government.

Republic of the PhilippinesSUPREME COURT

Manila

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EN BANC

G.R. No. 113105 August 19, 1994

PHILIPPINE CONSTITUTION ASSOCIATION, EXEQUIEL B. GARCIA and A. GONZALES, petitioners,vs.HON. SALVADOR ENRIQUEZ, as Secretary of Budget and Management; HON. VICENTE T. TAN, as National Treasurer and COMMISSION ONAUDIT, respondents.

G.R. No. 113174 August 19, 1994

RAUL S. ROCO, as Member of the Philippine Senate, NEPTALI A. GONZALES, Chairman of the Committee on Finance of the PhilippineSenate, and EDGARDO J. ANGARA, as President and Chief Executive of the Philippine Senate, all of whom also sue as taxpayers, in theirown behalf and in representation of Senators HEHERSON ALVAREZ, AGAPITO A. AQUINO, RODOLFO G. BIAZON, JOSE D. LINA, JR.,ERNESTO F. HERRERA, BLAS F. OPLE, JOHN H. OSMENA, GLORIA MACAPAGAL- ARROYO, VICENTE C. SOTTO III, ARTURO M.TOLENTINO, FRANCISCO S. TATAD, WIGBERTO E. TAADA and FREDDIE N. WEBB, petitioners,vs.THE EXECUTIVE SECRETARY, THE DEPARTMENT OF BUDGET AND MANAGEMENT, and THE NATIONAL TREASURER, THE COMMISSIONON AUDIT, impleaded herein as an unwillingco-petitioner, respondents.

G.R. No. 113766 August 19, 1994

WIGBERTO E. TAADA and ALBERTO G. ROMULO, as Members of the Senate and as taxpayers, and FREEDOM FROM DEBT COALITION,petitioners,vs.HON. TEOFISTO T. GUINGONA, JR. in his capacity as Executive Secretary, HON. SALVADOR ENRIQUEZ, JR., in his capacity as Secretary ofthe Department of Budget and Management, HON. CARIDAD VALDEHUESA, in her capacity as National Treasurer, and THE COMMISSION ONAUDIT, respondents.

G.R. No. 113888 August 19, 1994

WIGBERTO E. TAADA and ALBERTO G. ROMULO, as Members of the Senate and as taxpayers, petitioners,vs.HON. TEOFISTO T. GUINGONA, JR., in his capacity as Executive Secretary, HON. SALVADOR ENRIQUEZ, JR., in his capacity as Secretary ofthe Department of Budget and Management, HON. CARIDAD VALDEHUESA, in her capacity as National Treasurer, and THE COMMISSION ONAUDIT, respondents.

Ramon R. Gonzales for petitioners in G.R. No. 113105.

Eddie Tamondong for petitioners in G.R. Nos. 113766 & 113888.

Roco, Buag, Kapunan, Migallos & Jardeleza for petitioners Raul S. Roco, Neptali A. Gonzales andEdgardo Angara.

Ceferino Padua Law Office fro intervenor Lawyers Against Monopoly and Poverty (Lamp).

QUIASON, J.:

Once again this Court is called upon to rule on the conflicting claims of authority between the Legislative and the Executive in the clash of the powers ofthe purse and the sword. Providing the focus for the contest between the President and the Congress over control of the national budget are the fourcases at bench. Judicial intervention is being sought by a group of concerned taxpayers on the claim that Congress and the President haveimpermissibly exceeded their respective authorities, and by several Senators on the claim that the President has committed grave abuse of discretion oracted without jurisdiction in the exercise of his veto power.

I

House Bill No. 10900, the General Appropriation Bill of 1994 (GAB of 1994), was passed and approved by both houses of Congress on December 17,1993. As passed, it imposed conditions and limitations on certain items of appropriations in the proposed budget previously submitted by the President.It also authorized members of Congress to propose and identify projects in the "pork barrels" allotted to them and to realign their respective operatingbudgets.

Pursuant to the procedure on the passage and enactment of b ills as prescribed by the Constitution, Congress presented the said bill to the President forconsideration and approval.

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On December 30, 1993, the President signed the bill into law, and declared the same to have become Republic Act No. 7663, entitled "AN ACTAPPROPRIATING FUNDS FOR THE OPERATION OF THE GOVERNMENT OF THE PHILIPPINES FROM JANUARY ONE TO DECEMBER THIRTYONE, NINETEEN HUNDRED AND NINETY-FOUR, AND FOR OTHER PURPOSES" (GAA of 1994). On the same day, the President delivered hisPresidential Veto Message, specifying the provisions of the bill he vetoed and on which he imposed certain conditions.

No step was taken in either House of Congress to override the vetoes.

In G.R. No. 113105, the Philippine Constitution Association, Exequiel B. Garcia and Ramon A. Gonzales as taxpayers, prayed for a writ of prohibition todeclare as unconstitutional and void: (a) Article XLI on the Countrywide Development Fund, the special provision in Article I entitled Realignment ofAllocation for Operational Expenses, and Article XLVIII on the Appropriation for Debt Service or the amount appropriated under said Article XLVIII inexcess of the P37.9 Billion allocated for the Department of Education, Culture and Sports; and (b) the veto of the President of the Special Provision of

Article XLVIII of the GAA of 1994 (Rollo, pp. 88-90, 104-105)

In G.R. No. 113174, sixteen members of the Senate led by Senate President Edgardo J. Angara, Senator Neptali A. Gonzales, the Chairman of theCommittee on Finance, and Senator Raul S. Roco, sought the issuance of the writs of certiorari, prohibition and mandamus against the ExecutiveSecretary, the Secretary of the Department of Budget and Management, and the National Treasurer.

Suing as members of the Senate and taxpayers, petitioners question: (1) the constitutionality of the conditions imposed by the President in the items ofthe GAA of 1994: (a) for the Supreme Court, (b) Commission on Audit (COA), (c) Ombudsman, (d) Commission on Human Rights (CHR), (e) CitizenArmed Forces Geographical Units (CAFGU'S) and (f) State Universities and Colleges (SUC's); and (2) the constitutionality of the veto of the specialprovision in the appropriation for debt service.

In G.R. No. 113766, Senators Alberto G. Romulo and Wigberto Taada (a co-petitioner in G.R. No. 113174), together with the Freedom from DebtCoalition, a non-stock domestic corporation, sought the issuance of the writs of prohibition and mandamus against the Executive Secretary, theSecretary of the Department of Budget and Management, the National Treasurer, and the COA.

Petitioners Taada and Romulo sued as members of the Philippine Senate and taxpayers, while petitioner Freedom from Debt Coalition sued as ataxpayer. They challenge the constitutionality of the Presidential veto of the special provision in the appropriations for debt service and the automaticappropriation of funds therefor.

In G.R. No. 11388, Senators Taada and Romulo sought the issuance of the writs of prohibition and mandamus against the same respondents in G.R.No. 113766. In this petition, petitioners contest the constitutionality of: (1) the veto on four special provision added to items in the GAA of 1994 for theArmed Forces of the Philippines (AFP) and the Department of Public W orks and Highways (DPWH); and (2) the conditions imposed by the President inthe implementation of certain appropriations for the CAFGU's, the DPWH, and the National Housing Authority (NHA).

Petitioners also sought the issuance of temporary restraining orders to enjoin respondents Secretary of Budget and Management, National Treasurerand COA from enforcing the questioned provisions of the GAA of 1994, but the Court declined to grant said provisional reliefs on the time- honoredprinciple of according the presumption of validity to statutes and the presumption of regularity to official acts.

In view of the importance and novelty of most of the issues raised in the four petitions, the Court invited former Chief Justice Enrique M. Fernando andformer Associate Justice Irene Cortes to submit their respective memoranda asAmicus curiae, which they graciously did.

II

Locus Standi

When issues of constitutionality are raised, the Court can exercise its power of judicial review only if the following requisites are compresent: (1) theexistence of an actual and appropriate case; (2) a personal and substantial interest of the party raising the constitutional question; (3) the exercise ofjudicial review is pleaded at the earliest opportunity; and (4) the constitutional question is the lis mota of the case (Luz Farms v. Secretary of theDepartment of Agrarian Reform, 192 SCRA 51 [1990]; Dumlao v. Commission on Elections, 95 SCRA 392 [1980]; People v. Vera, 65 Phil. 56 [1937]).

While the Solicitor General did not question the locus standiof petitioners in G.R. No. 113105, he claimed that the remedy of the Senators in the otherpetitions is political (i.e., to override the vetoes) in effect saying that they do not have the requisite legal standing to bring the suits.

The legal standing of the Senate, as an institution, was recognized in Gonzales v. Macaraig, Jr., 191 SCRA 452 (1990). In said case, 23 Senators,

comprising the entire membership of the Upper House of Congress, filed a petition to nullify the presidential veto of Section 55 of the GAA of 1989. Thefiling of the suit was authorized by Senate Resolution No. 381, adopted on February 2, 1989, and which reads as follows:

Authorizing and Directing the Committee on Finance to Bring in the Name of the Senate of the Philippines the Proper Suit with theSupreme Court of the Philippines contesting the Constitutionality of the Veto by the President of Special and General Provisions,particularly Section 55, of the General Appropriation Bill of 1989 (H.B. No. 19186) and For Other Purposes.

In the United States, the legal standing of a House of Congress to sue has been recognized (United States v. American Tel. & Tel. Co., 551 F. 2d 384,391 [1976]; Notes: Congressional Access To The Federal Courts, 90 Harvard Law Review 1632 [1977]).

While the petition in G.R. No. 113174 was filed by 16 Senators, including the Senate President and the Chairman of the Committee on Finance, the suitwas not authorized by the Senate itself. Likewise, the petitions inG.R. Nos. 113766 and 113888 were filed without an enabling resolution for the purpose.

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Therefore, the question of the legal standing of petitioners in the three cases becomes a preliminary issue before this Court can inquire into the validityof the presidential veto and the conditions for the implementation of some items in the GAA of 1994.

We rule that a member of the Senate, and of the House of Representatives for that matter, has the legal standing to question the validity of a presidentiaveto or a condition imposed on an item in an appropriation bill.

Where the veto is claimed to have been made without or in excess of the authority vested on the President by the Constitution, the issue of animpermissible intrusion of the Executive into the domain of the Legislature arises (Notes: Congressional Standing ToChallenge Executive Action, 122University of Pennsylvania Law Review 1366 [1974]).

To the extent the power of Congress are impaired, so is the power of each member thereof, since his office confers a right to participate in the exerciseof the powers of that institution (Coleman v. Miller, 307 U.S. 433 [1939]; Holtzman v. Schlesinger, 484 F. 2d 1307 [1973]).

An act of the Executive which injures the institution of Congress causes a derivative but nonetheless substantial injury, which can be questioned by amember of Congress (Kennedy v. Jones, 412 F. Supp. 353 [1976]). In such a case, any member of Congress can have a resort to the courts.

Former Chief Justice Enrique M. Fernando, asAmicus Curiae, noted:

This is, then, the clearest case of the Senate as a whole or individual Senators as such having a substantial interest in the questionat issue. It could likewise be said that there was the requisite injury to their rights as Senators. It would then be futile to raise anylocus standiissue. Any intrusion into the domain appertaining to the Senate is to be resisted. Similarly, if the situation werereversed, and it is the Executive Branch that could allege a transgression, its officials could likewise file the corresponding action.What cannot be denied is that a Senator has standing to maintain inviolate the prerogatives, powers and privileges vested by theConstitution in his office (Memorandum, p. 14).

It is true that the Constitution provides a mechanism for overriding a veto (Art. VI, Sec. 27 [1]). Said remedy, however, is available only when thepresidential veto is based on policy or political considerations but not when the veto is claimed to be ultra vires. In the latter case, it becomes the duty ofthe Court to draw the dividing line where the exercise of executive power ends and the bounds of legislative jurisdiction begin.

III

G.R. No. 113105

1. Countrywide Development Fund

Article XLI of the GAA of 1994 sets up a Countrywide Development Fund of P2,977,000,000.00 to "be used for infrastructure, purchase of ambulancesand computers and other priority projects and activities and credit facilities to qualified beneficiaries." Said Article provides:

COUNTRYWIDE DEVELOPMENT FUND

For Fund requirements of countrywidedevelopment projects P 2,977,000,000

New Appropriations, by PurposeCurrent OperatingExpenditures

A. PURPOSE

Personal Maintenance Capital TotalServices and Other OutlaysOperatingExpenses

1. For CountrywideDevelopments Projects P250,000,000 P2,727,000,000 P2,977,000,000

TOTAL NEWAPPROPRIATIONS P250,000,000 P2,727,000,000 P2,977,000,000

Special Provisions

1. Use and Release of Funds. The amount herein appropriated shall be used for infrastructure, purchase of ambulances andcomputers and other priority projects and activities, and credit facilities to qualified beneficiaries as proposed and identified byofficials concerned according to the following allocations: Representatives, P12,500,000 each; Senators, P18,000,000 each; Vice-President, P20,000,000; PROVIDED, That, the said credit facilities shall be constituted as a revolving fund to be administered by agovernment financial institution (GFI) as a trust fund for lending operations. Prior years releases to local government units and

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Step Increments 1,073Honoraria and Commutable Allowances 3,731Compensation Insurance Premiums 1,579Pag-I.B.I.G. Contributions 1,184Medicare Premiums 888Bonus and Cash Gift 14,791Terminal Leave Benefits 2,000Personnel Economic Relief Allowance 10,266Additional Compensation of P500 under A.O. 53 11,130Others 57,173Total Other Compensation 103,815

01 Total Personal Services 264,032=======

Maintenance and Other Operating Expenses

02 Traveling Expenses 32,84103 Communication Services 7,66604 Repair and Maintenance of Government Facilities 1,22005 Repair and Maintenance of Government Vehicles 31806 Transportation Services 12807 Supplies and Materials 20,18908 Rents 24,58414 Water/Illumination and Power 6,56115 Social Security Benefits and Other Claims 3,27017 Training and Seminars Expenses 2,225

18 Extraordinary and Miscellaneous Expenses 9,36023 Advertising and Publication24 Fidelity Bonds and Insurance Premiums 1,32529 Other Services 89,778Total Maintenance and Other Operating Expenditures 200,415Total Current Operating Expenditures 464,447=======

(GAA of 1994, pp. 3-4)

The 1994 operating expenditures for the House of Representatives are as follows:

Personal Services

Salaries, Permanent 261,557Salaries/Wages, Contractual/Emergency 143,643Total Salaries and Wages 405,200=======

Other Compensation

Step Increments 4,312Honoraria and CommutableAllowances 4,764Compensation InsurancePremiums 1,159Pag-I.B.I.G. Contributions 5,231

Medicare Premiums 2,281

Bonus and Cash Gift 35,669Terminal Leave Benefits 29Personnel Economic ReliefAllowance 21,150Additional Compensation of P500 under A.O. 53Others 106,140Total Other Compensation 202,86301 Total Personal Services 608,063=======

Maintenance and Other Operating Expenses

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02 Traveling Expenses 139,61103 Communication Services 22,51404 Repair and Maintenance of Government Facilities 5,11605 Repair and Maintenance of Government Vehicles 1,86306 Transportation Services 17807 Supplies and Materials 55,24810 Grants/Subsidies/Contributions 94014 Water/Illumination and Power 14,45815 Social Security Benefits and Other Claims 32517 Training and Seminars Expenses 7,23618 Extraordinary and Miscellaneous Expenses 14,47420 Anti-Insurgency/Contingency Emergency Expenses 9,400

23 Advertising and Publication 24224 Fidelity Bonds and Insurance Premiums 1,42029 Other Services 284,209Total Maintenance and Other Operating Expenditures 557,234Total Current Operating Expenditures 1,165,297=======

(GAA of 1994, pp. 11-12)

The Special Provision Applicable to the Congress of the Philippines provides:

4. Realignment of Allocation for Operational Expenses. A member of Congress may realign his allocation for operational expensesto any other expenses category provide the total of said allocation is not exceeded. (GAA of 1994, p. 14).

The appropriation for operating expenditures for each House is further divided into expenditures for salaries, personal services, other compensationbenefits, maintenance expenses and other operating expenses. In turn, each member of Congress is allotted for his own operating expenditure aproportionate share of the appropriation for the House to which he belongs. If he does not spend for one items of expense, the provision in questionallows him to transfer his allocation in said item to another item of expense.

Petitioners assail the special provision allowing a member of Congress to realign his allocation for operational expenses to any other expense category(Rollo, pp. 82-92), claiming that this practice is prohibited by Section 25(5), Article VI of the Constitution. Said section provides:

No law shall be passed authorizing any transfer of appropriations: however, the President, the President of the Senate, the Speakerof the House of Representatives, the Chief Justice of the Supreme Court, and the heads of Constitutional Commissions may, bylaw, be authorized to augment any item in the general appropriations law for their respective offices from savings in other items oftheir respective appropriations.

The proviso of said Article of the Constitution grants the President of the Senate and the Speaker of the House of Representatives the power to augmen

items in an appropriation act for their respective offices from savings in other items of their appropriations, whenever there is a law authorizing suchaugmentation.

The special provision on realignment of the operating expenses of members of Congress is authorized by Section 16 of the General Provisions of theGAA of 1994, which provides:

Expenditure Components. Except by act of the Congress of the Philippines, no change or modification shall be made in theexpenditure items authorized in this Act and other appropriation laws unless in casesof augmentations from savings in appropriations as authorized under Section 25(5) of Art icle VI of the Constitution (GAA of 1994, p.1273).

Petitioners argue that the Senate President and the Speaker of the House of Representatives, but not the individual members of Congress are the onesauthorized to realign the savings as appropriated.

Under the Special Provisions applicable to the Congress of the Philippines, the members of Congress only determine the necessity of the realignment ofthe savings in the allotments for their operating expenses. They are in the best position to do so because they are the ones who know whether there aresavings available in some items and whether there are deficiencies in other items of their operating expenses that need augmentation. However, it is theSenate President and the Speaker of the House of Representatives, as the case may be, who shall approve the realignment. Before giving their stampof approval, these two officials will have to see to it that:

(1) The funds to be realigned or transferred are actually savings in the items of expenditures from which the same are to be taken; and

(2) The transfer or realignment is for the purposes of augmenting the items of expenditure to which said transfer or realignment is to be made.

3. Highest Priority for Debt Service

While Congress appropriated P86,323,438,000.00 for debt service (Article XLVII of the GAA of 1994), it appropriated only P37,780,450,000.00 for theDepartment of Education Culture and Sports. Petitioners urged that Congress cannot give debt service the highest priority in the GAA of 1994 (Rollo, pp

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93-94) because under the Constitution it should be education that is entitled to the highest funding. They invoke Section 5(5), Article XIV thereof, whichprovides:

(5) The State shall assign the highest budgetary priority to education and ensure that teaching will attract and retain its rightful shareof the best available talents through adequate remuneration and other means of job satisfaction and fulfillment.

This issue was raised in Guingona, Jr. v. Carague, 196 SCRA 221 (1991), where this Court held that Section 5(5), Article XIV of the Constitution, ismerely directory, thus:

While it is true that under Section 5(5), Article XIV of the Constitution, Congress is mandated to "assign the highest budgetarypriority to education" in order to "insure that teaching will attract and retain its r ightful share of the best available talents throughadequate remuneration and other means of job satisfaction and fulfillment," it does not thereby follow that the hands of Congressare so hamstrung as to deprive it the power to respond to the imperatives of the national interest and for the attainment of otherstate policies or objectives.

As aptly observed by respondents, since 1985, the budget for education has tripled to upgrade and improve the facility of the publicschool system. The compensation of teachers has been doubled. The amount of P29,740,611,000.00 set aside for the Departmentof Education, Culture and Sports under the General Appropriations Act (R.A. No. 6381), is the highest budgetary allocation amongall department budgets. This is a clear compliance with the aforesaid constitutional mandate according highest priority to education.

Having faithfully complied therewith, Congress is certainly not without any power, guided only by its good judgment, to provide anappropriation, that can reasonably service our enormous debt, the greater portion of which was inherited from the previousadministration. It is not only a matter of honor and to protect the credit standing of the country. More especially, the very survival ofour economy is at stake. Thus, if in the process Congress appropriated an amount for debt service bigger than the share allocatedto education, the Court finds and so holds that said appropriation cannot be thereby assailed as unconstitutional.

G.R. No. 113105G.R. No. 113174

Veto of Provision on Debt Ceiling

The Congress added a Special Provision to Article XLVIII (Appropriations for Debt Service) of the GAA of 1994 which provides:

Special Provisions

1. Use of the Fund. The appropriation authorized herein shall be used for payment of principal and interest of foreign and domesticindebtedness; PROVIDED, That any payment in excess of the amount herein appropriated shall be subject to the approval of thePresident of the Philippines with the concurrence of the Congress of the Philippines; PROVIDED,FURTHER, That in no case shallthis fund be used to pay for the liabilities of the Central Bank Board of Liquidators.

2. Reporting Requirement. The Bangko Sentral ng Pilipinas and the Department of Finance shall submit a quarterly report of actualforeign and domestic debt service payments to the House Committee on Appropriations and Senate Finance Committee within one(1) month after each quarter (GAA of 1944, pp. 1266).

The President vetoed the first Special Provision, without vetoing the P86,323,438,000.00 appropriation for debt service in said Article. According to thePresident's Veto Message:

IV. APPROPRIATIONS FOR DEBT SERVICE

I would like to emphasize that I concur fully with the desire of Congress to reduce the debt burden by decreasing the appropriationfor debt service as well as the inclusion of the Special Provision quoted below. Nevertheless, I believe that this debt reductionscheme cannot be validly done through the 1994 GAA. This must be addressed by revising our debt policy by way of innovative andcomprehensive debt reduction programs conceptualized within the ambit of the Medium-Term Philippine Development Plan.

Appropriations for payment of public debt, whether foreign or domestic, are automatically appropriated pursuant to the ForeignBorrowing Act and Section 31 of P.D. No. 1177 as reiterated under Section 26, Chapter 4, Book VI of E.O. No. 292, theAdministrative Code of 1987. I wish to emphasize that the constitutionality of such automatic provisions on debt servicing has beenupheld by the Supreme Court in the case of "Teofisto T. Guingona, Jr., and Aquilino Q. Pimentel, Jr. v. Hon. Guillermo N. Carague,in his capacity as Secretary of Budget and Management, et al.," G.R. No. 94571, dated April 22, 1991.

I am, therefore vetoing the following special provision for the reason that the GAA is not the appropriate legislative measure toamend the provisions of the Foreign Borrowing Act, P.D. No. 1177 and E.O. No. 292:

Use of the Fund. The appropriation authorized herein shall be used for payment of principal and interest offoreign and domestic indebtedness: PROVIDED, That any payment in excess of the amount hereinappropriated shall be subject to the approval of the President of the Philippines with the concurrence of theCongress of the Philippines: PROVIDED,FURTHER, That in no case shall this fund be used to pay for theliabilities of the Central Bank Board of Liquidators (GAA of 1994, p. 1290).

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Petitioners claim that the President cannot veto the Special Provision on the appropriation for debt service without vetoing the entire amount ofP86,323,438.00 for said purpose (Rollo, G.R. No. 113105, pp. 93-98; Rollo, G.R. No. 113174, pp. 16-18). The Solicitor General counterposed that theSpecial Provision did not relate to the item of appropriation for debt service and could therefore be the subject of an item veto (Rollo, G.R. No. 113105,pp. 54-60; Rollo, G.R. No. 113174, pp. 72-82).

This issue is a mere rehash of the one put to rest in Gonzales v. Macaraig, Jr., 191 SCRA 452 (1990). In that case, the issue was stated by the Court,thus:

The fundamental issue raised is whether or not the veto by the President of Section 55 of the 1989 Appropriations Bill (Section 55FY '89), and subsequently of its counterpart Section 16 of the 1990 Appropriations Bill (Section 16 FY '90), is unconstitutional andwithout effect.

The Court re-stated the issue, just so there would not be any misunderstanding about it, thus:

The focal issue for resolution is whether or not the President exceeded the item-veto power accorded by the Constitution. Ordifferently put, has the President the power to veto "provisions" of an Appropriations Bill?

The bases of the petition in Gonzales, which are similar to those invoked in the present case, are stated as follows:

In essence, petitioners' cause is anchored on the following grounds: (1) the President's line-veto power as regards appropriationbills is limited to item/s and does not cover provision/s; therefore, she exceeded her authority when she vetoed Section 55 (FY '89)and Section 16 (FY '90) which are provisions; (2) when the President objects to a provision of an appropriation bill, she cannotexercise the item-veto power but should veto the entire bill; (3) the item-veto power does not carry with it the power to strike outconditions or restrictions for that would be legislation, in violation of the doctrine of separation of powers; and (4) the power ofaugmentation in Article VI, Section 25 [5] of the 1987 Constitution, has to be provided for by law and, therefore, Congress is alsovested with the prerogative to impose restrictions on the exercise of that power.

The restrictive interpretation urged by petitioners that the President may not veto a provision without vetoing the entire bill not onlydisregards the basic principle that a distinct and severable part of a bill may be the subject of a separate veto but also overlooks theConstitutional mandate that any provision in the general appropriations bill shall relate specifically to some particular appropriationtherein and that any such provision shall be limited in its operation to the appropriation to which it relates (1987 Constitution, ArticleVI, Section 25 [2]). In other words, in the true sense of the term, a provision in an Appropriations Bill is limited in its operation tosome particular appropriation to which it relates, and does not relate to the entire bill.

The Court went one step further and ruled that even assuming arguendo that "provisions" are beyond the executive power to veto, and Section 55(FY '89) and Section 16 (FY '90) were not "provisions" in the budgetary sense of the term, they are "inappropriate provisions" that should be treated as"items" for the purpose of the President's veto power.

The Court, citing Henry v.Edwards, La., 346 So. 2d 153 (1977), said that Congress cannot include in a general appropriations bill matters that should bemore properly enacted in separate legislation, and if it does that, the inappropriate provisions inserted by it must be treated as "item", which can bevetoed by the President in the exercise of his item-veto power.

It is readily apparent that the Special Provision applicable to the appropriation for debt service insofar as it refers to funds in excess of the amountappropriated in the bill, is an "inappropriate" provision referring to funds other than the P86,323,438,000.00 appropriated in the General AppropriationsAct of 1991.

Likewise the vetoed provision is clearly an attempt to repeal Section 31 of P.D. No. 1177 (Foreign Borrowing Act) and E.O. No. 292, and to reverse thedebt payment policy. As held by the Court in Gonzales, the repeal of these laws should be done in a separate law, not in the appropriations law.

The Court will indulge every intendment in favor of the constitutionality of a veto, the same as it will presume the constitutionality of an act of Congress(Texas Co. v. State, 254 P. 1060; 31 Ariz, 485, 53 A.L.R. 258 [1927]).

The veto power, while exercisable by the President, is actually a part of the legislative process (Memorandum of Justice Irene Cortes as AmicusCuriae,pp. 3-7). That is why it is found in Article VI on the Legislative Department rather than in Ar ticle VII on the Executive Department in the Constitution.There is, therefore, sound basis to indulge in the presumption of validity of a veto. The burden shifts on those questioning the validity thereof to show

that its use is a violation of the Constitution.

Under his general veto power, the President has to veto the entire bill, not merely parts thereof (1987 Constitution, Art. VI, Sec. 27[1]). The exception tothe general veto power is the power given to the President to veto any particular item or items in a general appropriations bill (1987 Constitution, Art. VI,Sec. 27[2]). In so doing, the President must veto the entire item.

A general appropriations bill is a special type of legislation, whose content is limited to specified sums of money dedicated to a specific purpose or aseparate fiscal unit (Beckman, The Item Veto Power of the Executive,31 Temple Law Quarterly 27 [1957]).

The item veto was first introduced by the Organic Act of the Philippines passed by the U.S. Congress on August 29, 1916. The concept was adoptedfrom some State Constitutions.

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Cognizant of the legislative practice of inserting provisions, including conditions, restrictions and limitations, to items in appropriations bills, theConstitutional Convention added the following sentence to Section 20(2), Article VI of the 1935 Constitution:

. . . When a provision of an appropriation bill affect one or more items of the same, the President cannot veto the provision without athe same time vetoing the particular item or items to which it relates . . . .

In short, under the 1935 Constitution, the President was empowered to veto separately not only items in an appropriations bill but also "provisions".

While the 1987 Constitution did not retain the aforementioned sentence added to Section 11(2) of Article VI of the 1935 Constitution, it included thefollowing provision:

No provision or enactment shall be embraced in the general appropriations bill unless it relates specifically to some particularappropriation therein. Any such provision or enactment shall be limited in i ts operation to the appropriation to which it relates (Art. VISec. 25[2]).

In Gonzales, we made it clear that the omission of that sentence of Section 16(2) of the 1935 Constitution in the 1987 Constitution should not beinterpreted to mean the disallowance of the power of the President to veto a "provision".

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