August 18, 2014 Arellano University

DAP : The Supreme Court case

The Supreme Court Case Araullo v Bengino Simeon Aquino III,

GR 209287 promulgated July 1, 2014

Section 29(1) of Article VI of the 1987 Constitution

[n]o money shall be paid out of the Treasury except in pursuance of an appropriation made by law.

Under Section 25(5) of Article VI of the 1987 Constitution, the President is authorized to augment any item in the general appropriations law of his offices from savings in other items of his offices’ appropriation.

DAP

Petitioners alleged that the DAP contravened this provision by allowing the Executive to allocate public money pooled from programmed and unprogrammed funds of its various agencies in the guise of the President exercising his constitutional authority under Section 25(5) of the 1987 Constitution to transfer funds out of savings to augment the appropriations of offices within the Executive Branch of the Government

DAP The DBM submitted the following legal bases for the DAP’s use of savings,6 namely: (1) Section 25(5), Article VI of the 1987 Constitution, which granted to the President the authority to augment an item for his office in the general appropriations law; (2) Section 49 (Authority to Use Savings for Certain Purposes) and Section 38 (Suspension of Expenditure Appropriations), Chapter 5, Book VI of Executive Order (EO) No. 292 (Administrative Code of 1987); and (3) the General Appropriations Acts (GAAs) of 2011, 2012 and 2013, particularly their provisions on the (a) use of savings; (b) meanings of savings and augmentation; and (c) priority in the use of savings. As for the use of unprogrammed funds under the DAP, the DBM cited as legal bases the special provisions on unprogrammed fund contained in the GAAs of 2011, 2012 and 2013.

The Issues of the Case

Whether or not the DAP violates Sec. 29, Art. VI of the 1987 Constitution, which provides: No money shall be paid out of the Treasury except in pursuance of an appropriation made by law. Whether or not the DAP, NBC No. 541, and all other executive issuances allegedly implementing the DAP violate Sec. 25(5), Art. VI of the 1987 Constitution insofar as:

(a) They treat the unreleased appropriations and unobligated

allotments withdrawn from government agencies as savings as the term is used in Sec. 25(5), in relation to the provisions of the GAAs of 2011, 2012 and 2013;

(b) They authorize the disbursement of funds for projects or programs not provided in the GAAs for the Executive Department; and

(c) They augment discretionary lump sum appropriations in the GAAs.

DAP: The Issues

Whether or not the DAP violates: (1) the Equal Protection Clause, (2) the system of checks and balances, and (3) the principle of public accountability enshrined in the 1987 Constitution considering that it authorizes the release of funds upon the request of legislators.

Whether or not factual and legal justification exists to issue a temporary restraining order to restrain the implementation of the DAP, NBC No. 5 and all other executive issuances allegedly implementing the DAP.

Whether or not the release of unprogrammed funds under the DAP was in accord with the GAAs.

DAP : Budget System

Budget should simply be identified as the financial

plan of the Government, or the master plan of government.

Under Republic Act No. 992 (Revised Budget Act), the budget is the delineation of the services and products, or benefits that would accrue to the public together with the estimated unit cost of each type of service, product or benefit

DAP

Four phases comprise the Philippine budget process, specifically:

1. Budget Preparation;

2. Budget Legislation;

3. Budget Execution; and

4. Accountability

DAP

. The DAP was a government policy or strategy designed to stimulate the economy through accelerated spending

Unreleased appropriations and withdrawn unobligated allotments under the DAP were not savings, and the use of such appropriations contravened Section 25(5), Article VI of the 1987 Constitution.

DAP The transfer of appropriated funds, to be valid under

Section 25(5), must be made upon a concurrence of the following requisites:

(1) There is a law authorizing the President, the President of the Senate, the Speaker of the House of Representatives, the Chief Justice of the Supreme Court, and the heads of the Constitutional Commissions to transfer funds within their respective offices;

(2) The funds to be transferred are savings generated from appropriations for their respective offices;

(3) The purpose of the transfer is to augment an item in the general appropriations law for their respective offices.

Thank you

August 18, 2014 Arellano University

The meaning of Pork Barrel

The Supreme Court Case Belgica (3 petitions) v Executive Secretary

GR 208566 promulgated November 19, 2013

What is Pork barrel?

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.

Legislative control of local appropriations

In the Philippines, ―Pork Barrel has been commonly referred to as

lump-sum, discretionary funds of Members of the Legislature

The Pork Barrel System

The Pork Barrel System is 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.

Kinds of Pork Barrel Systems

The Pork Barrel System involves two (2) kinds of lump-sum discretionary funds:

a. the Congressional Pork Barrel - 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.

b. the Presidential Pork Barrel a kind of lump-sum, discretionary fund which allows the President to determine the manner of its utilization

The Issues of the Case

Substantive Issues

A. Separation of Powers

o the principle of separation of powers may be violated in two (2) ways:

o a) one branch may interfere impermissibly with the other s performance of its constitutionally assigned function; and

o b) one branch assumes a function that more properly is entrusted to another.

Separation of Powers

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.

the Legislative branch of government, much more any of its members, should not cross over the field of implementing the national budget

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

Law implementation by Congress

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 law violates the principle of separation

of powers and is thus unconstitutional.

Position of the Parties

The Petitioners position

The Congressional Pork Barrel wrecks the assignment of responsibilities between the political branches‖ as it is designed to allow individual legislators to interfere , way past the time it should have ceased or, particularly, after the GAA is passed. The CoA Report illustrates how absolute and definitive the power of legislators wield over project implementation.

The Respondents position

The separations of powers principle has not been violated since the President maintains ultimate authority to control the execution of the GAA and that he retains the final discretion to reject the legislators proposals

Post Enactment

Post enactment Authority of Legislators

a. Identification of projects through project lists, prior

consultations or program menus.

b. fund release and realignment.

SC Ruling - The 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.

Non delegability

Second Substantive Issue

Non delegability of Legislative Power

- Legislative power shall be exclusively exercised by the body to which the Constitution has conferred the same.

- 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

Non delegability

SC ruled

- The 2013 PDAF, 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 is lodged in Congress.

Checks and Balance Third substantive issue Checks and Balance Item Veto power of the President 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

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.

Budget System

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.

Accountability

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.

Local Autonomy

Local Autonomy

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

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

Presidential Pork Barrel

Presidential Pork Barrel (Malampaya Funds and Presidential Social Funds

Declared unconstitutional are

a. the phrase and for such other purposes as may be hereafter directed by the President‖ under Section 8 of PD 910 Special Fund for energy development

b. The phrase “to finance the priority infrastructure development projects under Sec of PD 6 , creating Presidential Social Fund

Reasons for the unconstitutionality of PDAF

PDAF is unconstitutional because it

violates the Principle of Separation of Powers

violates the Principle of non-delegability of legislative power

flouted the prescribed procedure of presentment and, in the process, denied the President the power to veto items

impaired public accountability

subverted genuine local autonomy;

transgressed the principle of non-delegability

What are declared unconstitutional

The entire 2013 PDAF Article;

all legal provisions of past and present Congressional Pork Barrel Laws which authorize/d legislators – whether individually or collectively organized into committees – to intervene, assume or participate in any post-enactment stage of the budget execution, such as project identification, modification and revision of project identification, fund release and/or fund realignment, unrelated to the power of congressional oversight

all legal provisions of past and present Congressional Pork Barrel Laws, which confer/red personal, lump-sum allocations to legislators from which they are able to fund specific projects which they themselves determine;

What are declared unconstitutional

All informal practices of similar import and effect, which the Court similarly deems to be acts of grave abuse of discretion

phrases (1) and for such other purposes as may be hereafter directed by the President under Section 8 of PD910

(2) to finance the priority infrastructure development projects under Sec 12 of PD 1869, as amended by PD 1993.

Effect of unconstitutionality

Doctrine of Operative Facts Remaining PDAF funds shall not be

disbursed/released but instead reverted to the unappropriated surplus of the general fund,

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

DIRECTS all prosecutorial organs of the government to, 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.

Thank you