G.R. No.

157870, November 3, 2008

SOCIAL JUSTICE SOCIETY (SJS), petitioner,

- versus -

DANGEROUS DRUGS BOARD and PHILIPPINE DRUG ENFORCEMENT AGENCY (PDEA), respondents.

DECISION

VELASCO, JR., J.:

In these kindred petitions, the constitutionality of Section 36 of Republic Act No. (RA) 9165, otherwise known as
theComprehensive Dangerous Drugs Act of 2002, insofar as it requires mandatory drug testing of candidates for public
office, students of secondary and tertiary schools, officers and employees of public and private offices, and persons
charged before the prosecutors office with certain offenses, among other personalities, is put in issue.

As far as pertinent, the challenged section reads as follows:

SEC. 36. Authorized Drug Testing.Authorized drug testing shall be done by any government forensic laboratories or by any
of the drug testing laboratories accredited and monitored by the DOH to safeguard the quality of the test results. x x x The
drug testing shall employ, among others, two (2) testing methods, the screening test which will determine the positive
result as well as the type of drug used and the confirmatory test which will confirm a positive screening test. x x x The
following shall be subjected to undergo drug testing: x x x x

(c) Students of secondary and tertiary schools.Students of secondary and tertiary schools shall, pursuant to the related
rules and regulations as contained in the schools student handbook and with notice to the parents, undergo a random
drug testing x x x;

(d) Officers and employees of public and private offices.Officers and employees of public and private offices, whether
domestic or overseas, shall be subjected to undergo a random drug test as contained in the companys work rules and
regulations, x x x for purposes of reducing the risk in the workplace. Any officer or employee found positive for use of
dangerous drugs shall be dealt with administratively which shall be a ground for suspension or termination, subject to the
provisions of Article 282 of the Labor Code and pertinent provisions of the Civil Service Law;x x x x

(f) All persons charged before the prosecutors office with a criminal offense having an imposable penalty of imprisonment
of not less than six (6) years and one (1) day shall undergo a mandatory drug test;

(g) All candidates for public office whether appointed or elected both in the national or local government shall undergo a
mandatory drug test.

In addition to the above stated penalties in this Section, those found to be positive for dangerous drugs use shall be
subject to the provisions of Section 15 of this Act.

G.R. No. 161658 (Aquilino Q. Pimentel, Jr. v. Commission on Elections)

On December 23, 2003, the Commission on Elections (COMELEC) issued Resolution No. 6486, prescribing the rules and
regulations on the mandatory drug testing of candidates for public office in connection with the May 10,
2004synchronized national and local elections. The pertinent portions of the said resolution read as follows:

WHEREAS, Section 36 (g) of Republic Act No. 9165 provides:

SEC. 36. Authorized Drug Testing.x x x

(g) All candidates for public office x x x both in the national or local government shall undergo a mandatory drug test.
WHEREAS, Section 1, Article XI of the 1987 Constitution provides that public officers and employees must at all times be
accountable to the people, serve them with utmost responsibility, integrity, loyalty and efficiency;

WHEREAS, by requiring candidates to undergo mandatory drug test, the public will know the quality of candidates they
are electing and they will be assured that only those who can serve with utmost responsibility, integrity, loyalty, and
efficiency would be elected x x x.

NOW THEREFORE, The [COMELEC], pursuant to the authority vested in it under the Constitution, Batas Pambansa Blg. 881
(Omnibus Election Code), [RA] 9165 and other election laws, RESOLVED to promulgate, as it hereby promulgates, the
following rules and regulations on the conduct of mandatory drug testing to candidates for public office[:]

SECTION 1. Coverage.All candidates for public office, both national and local, in the May 10, 2004 Synchronized National
and Local Elections shall undergo mandatory drug test in government forensic laboratories or any drug testing
laboratories monitored and accredited by the Department of Health.

SEC. 3. x x x

On March 25, 2004, in addition to the drug certificates filed with their respective offices, the Comelec Offices and
employees concerned shall submit to the Law Department two (2) separate lists of candidates. The first list shall consist of
those candidates who complied with the mandatory drug test while the second list shall consist of those candidates who
failed to comply x x x.

SEC. 4. Preparation and publication of names of candidates.Before the start of the campaign period, the [COMELEC] shall
prepare two separate lists of candidates. The first list shall consist of those candidates who complied with the mandatory
drug test while the second list shall consist of those candidates who failed to comply with said drug test. x x x

SEC. 5. Effect of failure to undergo mandatory drug test and file drug test certificate.No person elected to any public office
shall enter upon the duties of his office until he has undergone mandatory drug test and filed with the offices enumerated
under Section 2 hereof the drug test certificate herein required. (Emphasis supplied.)

Petitioner Aquilino Q. Pimentel, Jr., a senator of the Republic and a candidate for re-election in the May 10, 2004elections,
[1] filed a Petition for Certiorari and Prohibition under Rule 65. In it, he seeks (1) to nullify Sec. 36(g) of RA 9165 and
COMELEC Resolution No. 6486 dated December 23, 2003 for being unconstitutional in that they impose a qualification for
candidates for senators in addition to those already provided for in the 1987 Constitution; and (2) to enjoin the COMELEC
from implementing Resolution No. 6486.

Pimentel invokes as legal basis for his petition Sec. 3, Article VI of the Constitution, which states:

SECTION 3. No person shall be a Senator unless he is a natural-born citizen of the Philippines, and, on the day of the
election, is at least thirty-five years of age, able to read and write, a registered voter, and a resident of the Philippines for
not less than two years immediately preceding the day of the election.

According to Pimentel, the Constitution only prescribes a maximum of five (5) qualifications for one to be a candidate for,
elected to, and be a member of the Senate. He says that both the Congress and COMELEC, by requiring, via RA 9165 and
Resolution No. 6486, a senatorial aspirant, among other candidates, to undergo a mandatory drug test, create an
additional qualification that all candidates for senator must first be certified as drug free. He adds that there is no
provision in the Constitution authorizing the Congress or COMELEC to expand the qualification requirements of
candidates for senator.

G.R. No. 157870 (Social Justice Society v. Dangerous Drugs Board and Philippine Drug Enforcement Agency)

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

G.R. No. 158633 (Atty. Manuel J. Laserna, Jr. v. Dangerous 

Drugs Board and Philippine Drug Enforcement Agency)

Petitioner Atty. Manuel J. Laserna, Jr., as citizen and taxpayer, also seeks in his Petition for Certiorari and Prohibition
under Rule 65 that Sec. 36(c), (d), (f), and (g) of RA 9165 be struck down as unconstitutional for infringing on the
constitutional right to privacy, the right against unreasonable search and seizure, and the right against self-incrimination,
and for being contrary to the due process and equal protection guarantees.

The Issue on Locus Standi

First off, we shall address the justiciability of the cases at bench and the matter of the standing of petitioners SJS and
Laserna to sue. As respondents DDB and PDEA assert, SJS and Laserna failed to allege any incident amounting to a
violation of the constitutional rights mentioned in their separate petitions.[2]

It is basic that the power of judicial review can only be exercised in connection with a bona fide controversy which
involves the statute sought to be reviewed.[3] But even with the presence of an actual case or controversy, the Court may
refuse to exercise judicial review unless the constitutional question is brought before it by a party having the requisite
standing to challenge it.[4] To have standing, one must establish that he or she has suffered some actual or threatened
injury as a result of the allegedly illegal conduct of the government; the injury is fairly traceable to the challenged action;
and the injury is likely to be redressed by a favorable action.[5]

The rule on standing, however, is a matter of procedure; hence, it can be relaxed for non-traditional plaintiffs, like
ordinary citizens, taxpayers, and legislators when the public interest so requires, such as when the matter is of
transcendental importance, of overarching significance to society, or of paramount public interest.[6] There is no doubt
that Pimentel, as senator of the Philippines and candidate for the May 10, 2004 elections, possesses the requisite standing
since he has substantial interests in the subject matter of the petition, among other preliminary considerations. Regarding
SJS and Laserna, this Court is wont to relax the rule on locus standi owing primarily to the transcendental importance and
the paramount public interest involved in the enforcement of Sec. 36 of RA 9165.

The Consolidated Issues

The principal issues before us are as follows:

(1) Do Sec. 36(g) of RA 9165 and COMELEC Resolution No. 6486 impose an additional qualification for candidates for
senator? Corollarily, can Congress enact a law prescribing qualifications for candidates for senator in addition to those laid
down by the Constitution? and

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

Pimentel Petition

(Constitutionality of Sec. 36[g] of RA 9165 and COMELEC Resolution No. 6486)

In essence, Pimentel claims that Sec. 36(g) of RA 9165 and COMELEC Resolution No. 6486 illegally impose an additional
qualification on candidates for senator. He points out that, subject to the provisions on nuisance candidates, a candidate
for senator needs only to meet the qualifications laid down in Sec. 3, Art. VI of the Constitution, to wit: (1) citizenship, (2)
voter registration, (3) literacy, (4) age, and (5) residency. Beyond these stated qualification requirements, candidates for
senator need not possess any other qualification to run for senator and be voted upon and elected as member of the
Senate. The Congress cannot validly amend or otherwise modify these qualification standards, as it cannot disregard,
evade, or weaken the force of a constitutional mandate,[7] or alter or enlarge the Constitution.
Pimentels contention is well-taken. Accordingly, Sec. 36(g) of RA 9165 should be, as it is hereby declared as,
unconstitutional. It is basic that if a law or an administrative rule violates any norm of the Constitution, that issuance is
null and void and has no effect. The Constitution is the basic law to which all laws must conform; no act shall be valid if it
conflicts with the Constitution.[8] In the discharge of their defined functions, the three departments of government have
no choice but to yield obedience to the commands of the Constitution. Whatever limits it imposes must be observed.[9]

Congress inherent legislative powers, broad as they may be, are subject to certain limitations. As early as 1927,
inGovernment v. Springer, the Court has defined, in the abstract, the limits on legislative power in the following wise:

Someone has said that the powers of the legislative department of the Government, like the boundaries of the ocean, are
unlimited. In constitutional governments, however, as well as governments acting under delegated authority, the powers
of each of the departments x x x are limited and confined within the four walls of the constitution or the charter, and each
department can only exercise such powers as are necessarily implied from the given powers. The Constitution is the shore
of legislative authority against which the waves of legislative enactment may dash, but over which it cannot leap.[10]

Thus, legislative power remains limited in the sense that it is subject to substantive and constitutional limitations which
circumscribe both the exercise of the power itself and the allowable subjects of legislation.[11] The substantive
constitutional limitations are chiefly found in the Bill of Rights[12] and other provisions, such as Sec. 3, Art. VI of the
Constitution prescribing the qualifications of candidates for senators.

In the same vein, the COMELEC cannot, in the guise of enforcing and administering election laws or promulgating rules
and regulations to implement Sec. 36(g), validly impose qualifications on candidates for senator in addition to what the
Constitution prescribes. If Congress cannot require a candidate for senator to meet such additional qualification, the
COMELEC, to be sure, is also without such power. The right of a citizen in the democratic process of election should not be
defeated by unwarranted impositions of requirement not otherwise specified in the Constitution.[13]

Sec. 36(g) of RA 9165, as sought to be implemented by the assailed COMELEC resolution, effectively enlarges the
qualification requirements enumerated in the Sec. 3, Art. VI of the Constitution. As couched, said Sec. 36(g) unmistakably
requires a candidate for senator to be certified illegal-drug clean, obviously as a pre-condition to the validity of a
certificate of candidacy for senator or, with like effect, a condition sine qua non to be voted upon and, if proper, be
proclaimed as senator-elect. The COMELEC resolution completes the chain with the proviso that [n]o person elected to
any public office shall enter upon the duties of his office until he has undergone mandatory drug test.Viewed, therefore, in
its proper context, Sec. 36(g) of RA 9165 and the implementing COMELEC Resolution add another qualification layer to
what the 1987 Constitution, at the minimum, requires for membership in the Senate. Whether or not the drug-free bar
set up under the challenged provision is to be hurdled before or after election is really of no moment, as getting elected
would be of little value if one cannot assume office for non-compliance with the drug-testing requirement.

It may of course be argued, in defense of the validity of Sec. 36(g) of RA 9165, that the provision does not expressly state
that non-compliance with the drug test imposition is a disqualifying factor or would work to nullify a certificate of
candidacy. This argument may be accorded plausibility if the drug test requirement is optional. But the particular section
of the law, without exception, made drug-testing on those covered mandatory, necessarily suggesting that the obstinate
ones shall have to suffer the adverse consequences for not adhering to the statutory command. And since the provision
deals with candidates for public office, it stands to reason that the adverse consequence adverted to can only refer to and
revolve around the election and the assumption of public office of the candidates. Any other construal would reduce the
mandatory nature of Sec. 36(g) of RA 9165 into a pure jargon without meaning and effect whatsoever.

While it is anti-climactic to state it at this juncture, COMELEC Resolution No. 6486 is no longer enforceable, for by its
terms, it was intended to cover only the May 10, 2004 synchronized elections and the candidates running in that electoral
event. Nonetheless, to obviate repetition, the Court deems it appropriate to review and rule, as it hereby rules, on its
validity as an implementing issuance.
It ought to be made abundantly clear, however, that the unconstitutionality of Sec. 36(g) of RA 9165 is rooted on its
having infringed the constitutional provision defining the qualification or eligibility requirements for one aspiring to run
for and serve as senator.

SJS Petition

(Constitutionality of Sec. 36[c], [d], [f], and [g] of RA 9165)

The drug test prescribed under Sec. 36(c), (d), and (f) of RA 9165 for secondary and tertiary level students and public and
private employees, while mandatory, is a random and suspicionless arrangement. The objective is to stamp out illegal
drug and safeguard in the process the well being of [the] citizenry, particularly the youth, from the harmful effects of
dangerous drugs. This statutory purpose, per the policy-declaration portion of the law, can be achieved via the pursuit by
the state of an intensive and unrelenting campaign against the trafficking and use of dangerous drugs x x x through an
integrated system of planning, implementation and enforcement of anti-drug abuse policies, programs and projects.
[14] The primary legislative intent is not criminal prosecution, as those found positive for illegal drug use as a result of this
random testing are not necessarily treated as criminals. They may even be exempt from criminal liability should the illegal
drug user consent to undergo rehabilitation. Secs. 54 and 55 of RA 9165 are clear on this point:

Sec. 54. Voluntary Submission of a Drug Dependent to Confinement, Treatment and Rehabilitation.A drug dependent or
any person who violates Section 15 of this Act may, by himself/herself or through his/her parent, [close relatives] x x x
apply to the Board x x x for treatment and rehabilitation of the drug dependency. Upon such application, the Board shall
bring forth the matter to the Court which shall order that the applicant be examined for drug dependency. If the
examination x x x results in the certification that the applicant is a drug dependent, he/she shall be ordered by the Court
to undergo treatment and rehabilitation in a Center designated by the Board x x x.

Sec. 55. Exemption from the Criminal Liability Under the Voluntary Submission Program.A drug dependent under the
voluntary submission program, who is finally discharged from confinement, shall be exempt from the criminal liability
under Section 15 of this Act subject to the following conditions:

School children, the US Supreme Court noted, are most vulnerable to the physical, psychological, and addictive effects of
drugs. Maturing nervous systems of the young are more critically impaired by intoxicants and are more inclined to drug
dependency. Their recovery is also at a depressingly low rate.[15]

The right to privacy has been accorded recognition in this jurisdiction as a facet of the right protected by the guarantee
against unreasonable search and seizure[16] under Sec. 2, Art. III[17] of the Constitution. But while the right to privacy has
long come into its own, this case appears to be the first time that the validity of a state-decreed search or intrusion
through the medium of mandatory random drug testing among students and employees is, in this jurisdiction, made the
focal point. Thus, the issue tendered in these proceedings is veritably one of first impression.

US jurisprudence is, however, a rich source of persuasive jurisprudence. With respect to random drug testing among
school children, we turn to the teachings of Vernonia School District 47J v. Acton (Vernonia) and Board of Education of
Independent School District No. 92 of Pottawatomie County, et al. v. Earls, et al. (Board of Education),[18]both fairly
pertinent US Supreme Court-decided cases involving the constitutionality of governmental search.

In Vernonia, school administrators in Vernonia, Oregon wanted to address the drug menace in their respective institutions
following the discovery of frequent drug use by school athletes. After consultation with the parents, they required random
urinalysis drug testing for the schools athletes. James Acton, a high school student, was denied participation in the
football program after he refused to undertake the urinalysis drug testing. Acton forthwith sued, claiming that the schools
drug testing policy violated, inter alia, the Fourth Amendment[19] of the US Constitution.

The US Supreme Court, in fashioning a solution to the issues raised in Vernonia, considered the following: (1) schools
stand in loco parentis over their students; (2) school children, while not shedding their constitutional rights at the school
gate, have less privacy rights; (3) athletes have less privacy rights than non-athletes since the former observe communal
undress before and after sports events; (4) by joining the sports activity, the athletes voluntarily subjected themselves to a
higher degree of school supervision and regulation; (5) requiring urine samples does not invade a students privacy since a
student need not undress for this kind of drug testing; and (6) there is need for the drug testing because of the dangerous
effects of illegal drugs on the young. The US Supreme Court held that the policy constituted reasonable search under the
Fourth[20] and 14th Amendments and declared the random drug-testing policy constitutional.

In Board of Education, the Board of Education of a school in Tecumseh, Oklahoma required a drug test for high school
students desiring to join extra-curricular activities. Lindsay Earls, a member of the show choir, marching band, and
academic team declined to undergo a drug test and averred that the drug-testing policy made to apply to non-athletes
violated the Fourth and 14th Amendments. As Earls argued, unlike athletes who routinely undergo physical examinations
and undress before their peers in locker rooms, non-athletes are entitled to more privacy.

The US Supreme Court, citing Vernonia, upheld the constitutionality of drug testing even among non-athletes on the basis
of the schools custodial responsibility and authority. In so ruling, said court made no distinction between a non-athlete
and an athlete. It ratiocinated that schools and teachers act in place of the parents with a similar interest and duty of
safeguarding the health of the students. And in holding that the school could implement its random drug-testing policy,
the Court hinted that such a test was a kind of search in which even a reasonable parent might need to engage.

In sum, what can reasonably be deduced from the above two cases and applied to this jurisdiction are: (1) schools and
their administrators stand in loco parentis with respect to their students; (2) minor students have contextually fewer
rights than an adult, and are subject to the custody and supervision of their parents, guardians, and schools; (3) schools,
acting in loco parentis, have a duty to safeguard the health and well-being of their students and may adopt such measures
as may reasonably be necessary to discharge such duty; and (4) schools have the right to impose conditions on applicants
for admission that are fair, just, and non-discriminatory.

Guided by Vernonia and Board of Education, the Court is of the view and so holds that the provisions of RA 9165 requiring
mandatory, random, and suspicionless drug testing of students are constitutional. Indeed, it is within the prerogative of
educational institutions to require, as a condition for admission, compliance with reasonable school rules and regulations
and policies. To be sure, the right to enroll is not absolute; it is subject to fair, reasonable, and equitable requirements.

The Court can take judicial notice of the proliferation of prohibited drugs in the country that threatens the well-being of
the people,[21] particularly the youth and school children who usually end up as victims. Accordingly, and until a more
effective method is conceptualized and put in motion, a random drug testing of students in secondary and tertiary schools
is not only acceptable but may even be necessary if the safety and interest of the student population, doubtless a
legitimate concern of the government, are to be promoted and protected. To borrow from Vernonia, [d]eterring drug use
by our Nations schoolchildren is as important as enhancing efficient enforcement of the Nations laws against the
importation of drugs; the necessity for the State to act is magnified by the fact that the effects of a drug-infested school
are visited not just upon the users, but upon the entire student body and faculty.[22] Needless to stress, the random
testing scheme provided under the law argues against the idea that the testing aims to incriminate unsuspecting
individual students.

Just as in the case of secondary and tertiary level students, the mandatory but random drug test prescribed by Sec. 36 of
RA 9165 for officers and employees of public and private offices is justifiable, albeit not exactly for the same reason. The
Court notes in this regard that petitioner SJS, other than saying that subjecting almost everybody to drug testing, without
probable cause, is unreasonable, an unwarranted intrusion of the individual right to privacy,[23] has failed to show how
the mandatory, random, and suspicionless drug testing under Sec. 36(c) and (d) of RA 9165 violates the right to privacy
and constitutes unlawful and/or unconsented search under Art. III, Secs. 1 and 2 of the Constitution.[24] Petitioner
Lasernas lament is just as simplistic, sweeping, and gratuitous and does not merit serious consideration. Consider what he
wrote without elaboration:

The US Supreme Court and US Circuit Courts of Appeals have made various rulings on the constitutionality of mandatory
drug tests in the school and the workplaces. The US courts have been consistent in their rulings that the mandatory drug
tests violate a citizens constitutional right to privacy and right against unreasonable search and seizure. They are quoted
extensively hereinbelow.[25]

The essence of privacy is the right to be left alone.[26] In context, the right to privacy means the right to be free from
unwarranted exploitation of ones person or from intrusion into ones private activities in such a way as to cause
humiliation to a persons ordinary sensibilities. [27] And while there has been general agreement as to the basic function
of the guarantee against unwarranted search, translation of the abstract prohibition against unreasonable searches and
seizures into workable broad guidelines for the decision of particular cases is a difficult task, to borrow from C. Camara v.
Municipal Court.[28] Authorities are agreed though that the right to privacy yields to certain paramount rights of the
public and defers to the states exercise of police power.[29]

As the warrantless clause of Sec. 2, Art III of the Constitution is couched and as has been held, reasonableness is the
touchstone of the validity of a government search or intrusion.[30] And whether a search at issue hews to the
reasonableness standard is judged by the balancing of the government-mandated intrusion on the individuals privacy
interest against the promotion of some compelling state interest.[31] In the criminal context, reasonableness requires
showing of probable cause to be personally determined by a judge. Given that the drug-testing policy for employeesand
students for that matterunder RA 9165 is in the nature of administrative search needing what was referred to
in Vernonia as swift and informal disciplinary procedures, the probable-cause standard is not required or even practicable.
Be that as it may, the review should focus on the reasonableness of the challenged administrative search in question.

The first factor to consider in the matter of reasonableness is the nature of the privacy interest upon which the drug
testing, which effects a search within the meaning of Sec. 2, Art. III of the Constitution, intrudes. In this case, the office or
workplace serves as the backdrop for the analysis of the privacy expectation of the employees and the reasonableness of
drug testing requirement. The employees privacy interest in an office is to a large extent circumscribed by the companys
work policies, the collective bargaining agreement, if any, entered into by management and the bargaining unit, and the
inherent right of the employer to maintain discipline and efficiency in the workplace. Their privacy expectation in a
regulated office environment is, in fine, reduced; and a degree of impingement upon such privacy has been upheld.

Just as defining as the first factor is the character of the intrusion authorized by the challenged law. Reduced to a question
form, is the scope of the search or intrusion clearly set forth, or, as formulated in Ople v. Torres, is the enabling law
authorizing a search narrowly drawn or narrowly focused?[32]

The poser should be answered in the affirmative. For one, Sec. 36 of RA 9165 and its implementing rules and regulations
(IRR), as couched, contain provisions specifically directed towards preventing a situation that would unduly embarrass the
employees or place them under a humiliating experience. While every officer and employee in a private establishment is
under the law deemed forewarned that he or she may be a possible subject of a drug test, nobody is really singled out in
advance for drug testing. The goal is to discourage drug use by not telling in advance anyone when and who is to be
tested. And as may be observed, Sec. 36(d) of RA 9165 itself prescribes what, in Ople, is a narrowing ingredient by
providing that the employees concerned shall be subjected to random drug test as contained in the companys work rules
and regulations x x x for purposes of reducing the risk in the work place.

For another, the random drug testing shall be undertaken under conditions calculated to protect as much as possible the
employees privacy and dignity. As to the mechanics of the test, the law specifies that the procedure shall employ two
testing methods, i.e., the screening test and the confirmatory test, doubtless to ensure as much as possible the
trustworthiness of the results. But the more important consideration lies in the fact that the test shall be conducted by
trained professionals in access-controlled laboratories monitored by the Department of Health (DOH) to safeguard against
results tampering and to ensure an accurate chain of custody.[33] In addition, the IRR issued by the DOH provides that
access to the drug results shall be on the need to know basis;[34] that the drug test result and the records shall be [kept]
confidential subject to the usual accepted practices to protect the confidentiality of the test results.[35]Notably, RA 9165
does not oblige the employer concerned to report to the prosecuting agencies any information or evidence relating to the
violation of the Comprehensive Dangerous Drugs Act received as a result of the operation of the drug testing. All told,
therefore, the intrusion into the employees privacy, under RA 9165, is accompanied by proper safeguards, particularly
against embarrassing leakages of test results, and is relatively minimal.

To reiterate, RA 9165 was enacted as a measure to stamp out illegal drug in the country and thus protect the well-being of
the citizens, especially the youth, from the deleterious effects of dangerous drugs. The law intends to achieve this through
the medium, among others, of promoting and resolutely pursuing a national drug abuse policy in the workplace via a
mandatory random drug test.[36] To the Court, the need for drug testing to at least minimize illegal drug use is substantial
enough to override the individuals privacy interest under the premises. The Court can consider that the illegal drug
menace cuts across gender, age group, and social- economic lines. And it may not be amiss to state that the sale,
manufacture, or trafficking of illegal drugs, with their ready market, would be an investors dream were it not for the illegal
and immoral components of any of such activities. The drug problem has hardly abated since the martial law public
execution of a notorious drug trafficker. The state can no longer assume a laid back stance with respect to this modern-
day scourge. Drug enforcement agencies perceive a mandatory random drug test to be an effective way of preventing and
deterring drug use among employees in private offices, the threat of detection by random testing being higher than other
modes. The Court holds that the chosen method is a reasonable and enough means to lick the problem.

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

Like their counterparts in the private sector, government officials and employees also labor under reasonable supervision
and restrictions imposed by the Civil Service law and other laws on public officers, all enacted to promote a high standard
of ethics in the public service.[37] And if RA 9165 passes the norm of reasonableness for private employees, the more
reason that it should pass the test for civil servants, who, by constitutional command, are required to be accountable at all
times to the people and to serve them with utmost responsibility and efficiency.[38]

Petitioner SJS next posture that Sec. 36 of RA 9165 is objectionable on the ground of undue delegation of power hardly
commends itself for concurrence. Contrary to its position, the provision in question is not so extensively drawn as to give
unbridled options to schools and employers to determine the manner of drug testing. Sec. 36 expressly provides how drug
testing for students of secondary and tertiary schools and officers/employees of public/private offices should be
conducted. It enumerates the persons who shall undergo drug testing. In the case of students, the testing shall be in
accordance with the school rules as contained in the student handbook and with notice to parents. On the part of
officers/employees, the testing shall take into account the companys work rules. In either case, the random procedure
shall be observed, meaning that the persons to be subjected to drug test shall be picked by chance or in an unplanned
way. And in all cases, safeguards against misusing and compromising the confidentiality of the test results are established.

Lest it be overlooked, Sec. 94 of RA 9165 charges the DDB to issue, in consultation with the DOH, Department of the
Interior and Local Government, Department of Education, and Department of Labor and Employment, among other
agencies, the IRR necessary to enforce the law. In net effect then, the participation of schools and offices in the drug
testing scheme shall always be subject to the IRR of RA 9165. It is, therefore, incorrect to say that schools and employers
have unchecked discretion to determine how often, under what conditions, and where the drug tests shall be conducted.

The validity of delegating legislative power is now a quiet area in the constitutional landscape.[39] In the face of the
increasing complexity of the task of the government and the increasing inability of the legislature to cope directly with the
many problems demanding its attention, resort to delegation of power, or entrusting to administrative agencies the
power of subordinate legislation, has become imperative, as here.

Laserna Petition (Constitutionality of Sec. 36[c], [d], [f], and [g] of RA 9165)

Unlike the situation covered by Sec. 36(c) and (d) of RA 9165, the Court finds no valid justification for mandatory drug
testing for persons accused of crimes. In the case of students, the constitutional viability of the mandatory, random, and
suspicionless drug testing for students emanates primarily from the waiver by the students of their right to privacy when
they seek entry to the school, and from their voluntarily submitting their persons to the parental authority of school
authorities. In the case of private and public employees, the constitutional soundness of the mandatory, random, and
suspicionless drug testing proceeds from the reasonableness of the drug test policy and requirement.

We find the situation entirely different in the case of persons charged before the public prosecutors office with criminal
offenses punishable with six (6) years and one (1) day imprisonment. The operative concepts in the mandatory drug
testing are randomness and suspicionless. In the case of persons charged with a crime before the prosecutors office, a
mandatory drug testing can never be random or suspicionless. The ideas of randomness and being suspicionless are
antithetical to their being made defendants in a criminal complaint. They are not randomly picked; neither are they
beyond suspicion. When persons suspected of committing a crime are charged, they are singled out and are impleaded
against their will. The persons thus charged, by the bare fact of being haled before the prosecutors office and peaceably
submitting themselves to drug testing, if that be the case, do not necessarily consent to the procedure, let alone waive
their right to privacy.[40] To impose mandatory drug testing on the accused is a blatant attempt to harness a medical test
as a tool for criminal prosecution, contrary to the stated objectives of RA 9165. Drug testing in this case would violate a
persons right to privacy guaranteed under Sec. 2, Art. III of the Constitution. Worse still, the accused persons are veritably
forced to incriminate themselves.

WHEREFORE, the Court resolves to GRANT the petition in G.R. No. 161658 and declares Sec. 36(g) of RA
9165and COMELEC Resolution No. 6486 as UNCONSTITUTIONAL; and to PARTIALLY GRANT the petition in G.R. Nos.
157870 and 158633 by declaring Sec. 36(c) and (d) of RA 9165 CONSTITUTIONAL, but declaring its Sec.
36(f)UNCONSTITUTIONAL. All concerned agencies are, accordingly, permanently enjoined from implementing Sec. 36(f)
and (g) of RA 9165. No costs.

SO ORDERED.

PRESBITERO J. VELASCO, JR.

Associate Justice
G.R. No. 213847               August 18, 2015
JUAN PONCE ENRILE, Petitioner, 
vs.
SANDIGANBAYAN (THIRD DIVISION), AND PEOPLE OF THE PHILIPPINES, Respondents.
DECISION
BERSAMIN, J.:
The decision whether to detain or release an accused before and during trial is ultimately an incident of the judicial power
to hear and determine his criminal case. The strength of the Prosecution's case, albeit a good measure of the accused’s
propensity for flight or for causing harm to the public, is subsidiary to the primary objective of bail, which is to ensure that
the accused appears at trial.1
The Case
Before the Court is the petition for certiorari filed by Senator Juan Ponce Enrile to assail and annul the resolutions dated
July 14, 20142 and August 8, 20143 issued by the Sandiganbayan (Third Division) in Case No. SB-14-CRM-0238, where he
has been charged with plunder along with several others. Enrile insists that the resolutions, which respectively denied his
Motion To Fix Bail and his Motion For Reconsideration, were issued with grave abuse of discretion amounting to lack or
excess of jurisdiction.

Antecedents

On June 5, 2014, the Office of the Ombudsman charged Enrile and several others with plunder in the Sandiganbayan on
the basis of their purported involvement in the diversion and misuse of appropriations under the Priority Development
Assistance Fund (PDAF).4 On June 10, 2014 and June 16, 2014, Enrile respectively filed his Omnibus Motion5 and
Supplemental Opposition,6 praying, among others, that he be allowed to post bail should probable cause be found against
him. The motions were heard by the Sandiganbayan after the Prosecution filed its Consolidated Opposition.7

On July 3, 2014, the Sandiganbaya n issued its resolution denying Enrile’s motion, particularly on the matter of bail, on the
ground of its prematurity considering that Enrile had not yet then voluntarily surrendered or been placed under the
custody of the law.8 Accordingly, the Sandiganbayan ordered the arrest of Enrile.9

On the same day that the warrant for his arrest was issued, Enrile voluntarily surrendered to Director Benjamin Magalong
of the Criminal Investigation and Detection Group (CIDG) in Camp Crame, Quezon City, and was later on confined at the
Philippine National Police (PNP) General Hospital following his medical examination.10

Thereafter, Enrile filed his Motion for Detention at the PNP General Hospital ,11 and his Motion to Fix Bail ,12 both dated
July 7, 2014, which were heard by the Sandiganbayan on July 8, 2014.13 In support of the motions, Enrile argued that he
should be allowed to post bail because: (a) the Prosecution had not yet established that the evidence of his guilt was
strong; (b) although he was charged with plunder, the penalty as to him would only be reclusion temporal , not reclusion
perpetua ; and (c) he was not a flight risk, and his age and physical condition must further be seriously considered.

On July 14, 2014, the Sandiganbayan issued its first assailed resolution denying Enrile’s Motion to Fix Bail, disposing thusly:

x x x [I]t is only after the prosecution shall have presented its evidence and the Court shall have made a determination
that the evidence of guilt is not strong against accused Enrile can he demand bail as a matter of right. Then and only then
will the Court be duty-bound to fix the amount of his bail.

To be sure, no such determination has been made by the Court. In fact, accused Enrile has not filed an application for bail.
Necessarily, no bail hearing can even commence. It is thus exceedingly premature for accused Enrile to ask the Court to fix
his bail.

Accused Enrile next argues that the Court should grant him bail because while he is charged with plunder, "the maximum
penalty that may be possibly imposed on him is reclusion temporal, not reclusion perpetua." He anchors this claim on
Section 2 of R.A. No. 7080, as amended, and on the allegation that he is over seventy (70) years old and that he voluntarily
surrendered. "Accordingly, it may be said that the crime charged against Enrile is not punishable by reclusion perpetua,
and thus bailable."

The argument has no merit.

x x x [F]or purposes of bail, the presence of mitigating circumstance/s is not taken into consideration. These circumstances
will only be appreciated in the imposition of the proper penalty after trial should the accused be found guilty of the
offense charged. x x x

Lastly, accused Enrile asserts that the Court should already fix his bail because he is not a flight risk and his physical
condition must also be seriously considered by the Court.

Admittedly, the accused’s age, physical condition and his being a flight risk are among the factors that are considered in
fixing a reasonable amount of bail. However, as explained above, it is premature for the Court to fix the amount of bail
without an anterior showing that the evidence of guilt against accused Enrile is not strong.

WHEREFORE, premises considered, accused Juan Ponce Enrile’s Motion to Fix Bail dated July 7, 2014 is DENIED for lack of
merit.

SO ORDERED.14

On August 8, 2014, the Sandiganbayan issued it s second assailed resolution to deny Enrile’s motion for reconsideration
filed vis-à-vis the July 14, 2014 resolution.15

Enrile raises the following grounds in support of his petition for certiorari , namely:

A. Before judgment of the Sandiganbayan, Enrile is bailable as a matter of right. Enrile may be deemed to fall within the
exception only upon concurrence of two (2) circumstances: (i) where the offense is punishable by reclusion perpetua, and
(ii) when evidence of guilt is strong.

B. The prosecution failed to show clearly and conclusively that Enrile, if ever he would be convicted, is punishable by
reclusion perpetua; hence, Enrile is entitled to bail as a matter of right.

C. The prosecution failed to show clearly and conclusively that evidence of Enrile’s guilt (if ever) is strong; hence, Enrile is
entitled to bail as a matter of right.

D. At any rate, Enrile may be bailable as he is not a flight risk.16

Enrile claims that before judgment of conviction, an accused is entitled to bail as matter of right; th at it is the duty and
burden of the Prosecution to show clearly and conclusively that Enrile comes under the exception and cannot be excluded
from enjoying the right to bail; that the Prosecution has failed to establish that Enrile, if convicted of plunder, is
punishable by reclusion perpetua considering the presence of two mitigating circumstances – his age and his voluntary
surrender; that the Prosecution has not come forward with proof showing that his guilt for the crime of plunder is strong;
and that he should not be considered a flight risk taking into account that he is already over the age of 90, his medical
condition, and his social standing.

In its Comment ,17 the Ombudsman contends that Enrile’s right to bail is discretionary as he is charged with a capital
offense; that to be granted bail, it is mandatory that a bail hearing be conducted to determine whether there is strong
evidence of his guilt, or the lack of it; and that entitlement to bail considers the imposable penalty, regardless of the
attendant circumstances.

Ruling of the Court

The petition for certiorari is meritorious.

1.
Bail protects the right of the accused to
due process and to be presumed innocent

In all criminal prosecutions, the accused shall be presumed innocent until the contrary is proved.18 The presumption of
innocence is rooted in the guarantee of due process, and is safeguarded by the constitutional right to be released on
bail,19and further binds the court to wait until after trial to impose any punishment on the accused.20

It is worthy to note that bail is not granted to prevent the accused from committing additional crimes.[[21] The purpose of
bail is to guarantee the appearance of the accused at the trial, or whenever so required by the trial court. The amount of
bail should be high enough to assure the presence of the accused when so required, but it should be no higher than is
reasonably calculated to fulfill this purpose.22 Thus, bail acts as a reconciling mechanism to accommodate both the
accused’s interest in his provisional liberty before or during the trial, and the society’s interest in assuring the accused’s
presence at trial.23

2.
Bail may be granted as a
matter of right or of discretion

The right to bail is expressly afforded by Section 13, Article III (Bill of Rights) of the Constitution, viz.:

x x x All persons, except those charged with offenses punishable by reclusion perpetua when evidence of guilt is strong,
shall, before conviction, be bailable by sufficient sureties, or be released on recognizance as may be provided by law. The
right to bail shall not be impaired even when the privilege of the writ of habeas corpus is suspended. Excessive bail shall
not be required.

This constitutional provision is repeated in Section 7, Rule 11424 of the Rules of Court , as follows:

Section 7. Capital offense or an offense punishable by reclusion perpetua or life imprisonment, not bailable. — No person
charged with a capital offense, or an offense punishable by reclusion perpetua or life imprisonment, shall be admitted to
bail when evidence of guilt is strong, regardless of the stage of the criminal prosecution.

A capital offense in the context of the rule refers to an offense that, under the law existing at the time of its commission
and the application for admission to bail, may be punished with death.25

The general rule is, therefore, that any person, before being convicted of any criminal offense, shall be bailable, unless he
is charged with a capital offense, or with an offense punishable with reclusion perpetua or life imprisonment, and the
evidence of his guilt is strong. Hence, from the moment he is placed under arrest, or is detained or restrained by the
officers of the law, he can claim the guarantee of his provisional liberty under the Bill of Rights, and he retains his right to
bail unless he is charged with a capital offense, or with an offense punishable with reclusion perpetua or life
imprisonment, and the evidence of his guilt is strong.26 Once it has been established that the evidence of guilt is strong,
no right to bail shall be recognized.27

As a result, all criminal cases within the competence of the Metropolitan Trial Court, Municipal Trial Court, Municipal Trial
Court in Cities, or Municipal Circuit Trial Court are bailable as matter of right because these courts have no jurisdiction to
try capital offenses, or offenses punishable with reclusion perpetua or life imprisonment. Likewise, bail is a matter of right
prior to conviction by the Regional Trial Court (RTC) for any offense not punishable by death, reclusion perpetua , or life
imprisonment, or even prior to conviction for an offense punishable by death, reclusion perpetua , or life imprisonment
when evidence of guilt is not strong.28
On the other hand, the granting of bail is discretionary: (1) upon conviction by the RTC of an offense not punishable by
death, reclusion perpetua or life imprisonment;29 or (2) if the RTC has imposed a penalty of imprisonment exceeding six
years, provided none of the circumstances enumerated under paragraph 3 of Section 5, Rule 114 is present, as follows:

(a) That he is a recidivist, quasi-recidivist, or habitual delinquent, or has committed the crime aggravated by the
circumstance of reiteration;

(b) That he has previously escaped from legal confinement, evaded sentence, or violated the conditions of his bail without
valid justification;

(c) That he committed the offense while under probation, parole, or conditional pardon;

(d) That the circumstances of hi s case indicate the probability of flight if released on bail; or

(e) That there is undue risk that he may commit another crime during the pendency of the appeal.

3.
Admission to bail in offenses punished
by death, or life imprisonment, or reclusion
perpetua is subject to judicial discretion

For purposes of admission to bail, the determination of whether or not evidence of guilt is strong in criminal cases
involving capital offenses, or offenses punishable with reclusion perpetua or life imprisonment lies within the discretion of
the trial court. But, as the Court has held in Concerned Citizens v. Elma ,30 "such discretion may be exercised only after
the hearing called to ascertain the degree of guilt of the accused for the purpose of whether or not he should be granted
provisional liberty." It is axiomatic, therefore, that bail cannot be allowed when its grant is a matter of discretion on the
part of the trial court unless there has been a hearing with notice to the Prosecution.31 The indispensability of the hearing
with notice has been aptly explained in Aguirre v. Belmonte, viz. :32

x x x Even before its pronouncement in the Lim case, this Court already ruled in People vs. Dacudao, etc., et al. that a
hearing is mandatory before bail can be granted to an accused who is charged with a capital offense, in this wise:

The respondent court acted irregularly in granting bail in a murder case without any hearing on the motion asking for it,
without bothering to ask the prosecution for its conformity or comment, as it turned out later, over its strong objections.
The court granted bail on the sole basis of the complaint and the affidavits of three policemen, not one of whom
apparently witnessed the killing. Whatever the court possessed at the time it issued the questioned ruling was intended
only for prima facie determining whether or not there is sufficient ground to engender a well-founded belief that the
crime was committed and pinpointing the persons who probably committed it. Whether or not the evidence of guilt is
strong for each individual accused still has to be established unless the prosecution submits the issue on whatever it has
already presented. To appreciate the strength or weakness of the evidence of guilt, the prosecution must be consulted or
heard. It is equally entitled as the accused to due process.

Certain guidelines in the fixing of a bailbond call for the presentation of evidence and reasonable opportunity for the
prosecution to refute it. Among them are the nature and circumstances of the crime, character and reputation of the
accused, the weight of the evidence against him, the probability of the accused appearing at the trial, whether or not the
accused is a fugitive from justice, and whether or not the accused is under bond in other cases. (Section 6, Rule 114, Rules
of Court) It is highly doubtful if the trial court can appreciate these guidelines in an ex-parte determination where the
Fiscal is neither present nor heard.

The hearing, which may be either summary or otherwise, in the discretion of the court, should primarily determine
whether or not the evidence of guilt against the accused is strong. For this purpose, a summary hearing means:
x x x such brief and speedy method of receiving and considering the evidence of guilt as is practicable and consistent with
the purpose of hearing which is merely to determine the weight of evidence for purposes of bail. On such hearing, the
court does not sit to try the merits or to enter into any nice inquiry as to the weight that ought to be allowed to the
evidence for or against the accused, nor will it speculate on the outcome of the trial or on what further evidence may be
therein offered or admitted. The course of inquiry may be left to the discretion of the court which may confine itself to
receiving such evidence as has reference to substantial matters, avoiding unnecessary thoroughness in the examination
and cross examination.33

In resolving bail applications of the accused who is charged with a capital offense, or an offense punishable by reclusion
perpetua or life imprisonment, the trial judge is expected to comply with the guidelines outlined in Cortes v. Catral,34 to
wit:

1. In all cases, whether bail is a matter of right or of discretion, notify the prosecutor of the hearing of the application for
bail or require him to submit his recommendation (Section 18, Rule 114 of the Rules of Court, as amended);

2. Where bail is a matter of discretion, conduct a hearing of the application for bail regardless of whether or not the
prosecution refuses to present evidence to show that the guilt of the accused is strong for the purpose of enabling the
court to exercise its sound discretion; (Section 7 and 8, supra)

3. Decide whether the guilt of the accused is strong based on the summary of evidence of the prosecution;

4. If the guilt of the accused is no t strong, discharge the accused upon the approval of the bailbond (Section 19, supra)
Otherwise petition should be denied.

3.
Enrile’s poor health justifies his admission to bail

We first note that Enrile has averred in his Motion to Fix Bail the presence of two mitigating circumstances that should be
appreciated in his favor, namely: that he was already over 70 years at the time of the alleged commission of the offense,
and that he voluntarily surrendered.35

Enrile’s averment has been mainly uncontested by the Prosecution, whose Opposition to the Motion to Fix Bail has only
argued that –

8. As regards the assertion that the maximum possible penalty that might be imposed upon Enrile is only reclusion
temporal due to the presence of two mitigating circumstances, suffice it to state that the presence or absence of
mitigating circumstances is also not consideration that the Constitution deemed worthy. The relevant clause in Section 13
is "charged with an offense punishable by." It is, therefore, the maximum penalty provided by the offense that has bearing
and not the possibility of mitigating circumstances being appreciated in the accused’s favor.36

Yet, we do not determine now the question of whether or not Enrile’s averment on the presence of the two mitigating
circumstances could entitle him to bail despite the crime alleged against him being punishable with reclusion perpetua ,
37simply because the determination, being primarily factual in context, is ideally to be made by the trial court.

Nonetheless, in now granting Enrile’s petition for certiorari, the Court is guided by the earlier mentioned principal purpose
of bail, which is to guarantee the appearance of the accused at the trial, or whenever so required by the court. The Court
is further mindful of the Philippines’ responsibility in the international community arising from the national commitment
under the Universal Declaration of Human Rights to:

x x x uphold the fundamental human rights as well as value the worth and dignity of every person. This commitment is
enshrined in Section II, Article II of our Constitution which provides: "The State values the dignity of every human person
and guarantees full respect for human rights." The Philippines, therefore, has the responsibility of protecting and
promoting the right of every person to liberty and due process, ensuring that those detained or arrested can participate in
the proceedings before a court, to enable it to decide without delay on the legality of the detention and order their
release if justified. In other words, the Philippine authorities are under obligation to make available to every person under
detention such remedies which safeguard their fundamental right to liberty. These remedies include the right to be
admitted to bail.38

This national commitment to uphold the fundamental human rights as well as value the worth and dignity of every person
has authorized the grant of bail not only to those charged in criminal proceedings but also to extraditees upon a clear and
convincing showing: (1 ) that the detainee will not be a flight risk or a danger to the community; and (2 ) that there exist
special, humanitarian and compelling circumstances.39

In our view, his social and political standing and his having immediately surrendered to the authorities upon his being
charged in court indicate that the risk of his flight or escape from this jurisdiction is highly unlikely. His personal
disposition from the onset of his indictment for plunder, formal or otherwise, has demonstrated his utter respect for the
legal processes of this country. We also do not ignore that at an earlier time many years ago when he had been charged
with rebellion with murder and multiple frustrated murder, he already evinced a similar personal disposition of respect for
the legal processes, and was granted bail during the pendency of his trial because he was not seen as a flight risk.40 With
his solid reputation in both his public and his private lives, his long years of public service, and history’s judgment of him
being at stake, he should be granted bail.

The currently fragile state of Enrile’s health presents another compelling justification for his admission to bail, but which
the Sandiganbayan did not recognize.

In his testimony in the Sandiganbayan,41 Dr. Jose C. Gonzales, the Director of the Philippine General Hospital (PGH),
classified Enrile as a geriatric patient who was found during the medical examinations conducted at the UP-PGH to be
suffering from the following conditions:

(1) Chronic Hypertension with fluctuating blood pressure levels on multiple drug therapy; (Annexes 1.1, 1.2, 1.3);

(2) Diffuse atherosclerotic cardiovascular disease composed of the following :

a. Previous history of cerebrovascular disease with carotid and vertebral artery disease ; (Annexes 1.4, 4.1)

b. Heavy coronary artery calcifications; (Annex 1.5)

c. Ankle Brachial Index suggestive of arterial calcifications. (Annex 1.6)

(3) Atrial and Ventricular Arrhythmia (irregular heart beat) documented by Holter monitoring ; (Annexes 1.7.1, 1.7.2)

(4) Asthma-COPD Overlap Syndrom (ACOS) and postnasal drip syndrome; (Annexes 2.1, 2.2)

(5) Ophthalmology:

a. Age-related mascular degeneration, neovascular s/p laser of the Retina, s/p Lucentis intra-ocular injections; (Annexes
3.0, 3.1, 3.2)

b. S/p Cataract surgery with posterior chamber intraocular lens. (Annexes 3.1, 3.2)

(6) Historical diagnoses of the following:

a. High blood sugar/diabetes on medications;

b. High cholesterol levels/dyslipidemia;

c. Alpha thalassemia;

d. Gait/balance disorder;

e. Upper gastrointestinal bleeding (etiology uncertain) in 2014;

f. Benign prostatic hypertrophy (with documented enlarged prostate on recent ultrasound).42

Dr. Gonzales attested that the following medical conditions, singly or collectively, could pose significant risk s to the life of
Enrile, to wit: (1) uncontrolled hypertension, because it could lead to brain or heart complications, including recurrence of
stroke; (2) arrhythmia, because it could lead to fatal or non-fatal cardiovascular events, especially under stressful
conditions; (3) coronary calcifications associated with coronary artery disease, because they could indicate a future risk
for heart attack under stressful conditions; and (4) exacerbations of ACOS, because they could be triggered by certain
circumstances (like excessive heat, humidity, dust or allergen exposure) which could cause a deterioration in patients with
asthma or COPD.43

Based on foregoing, there is no question at all that Enrile’s advanced age and ill health required special medical attention.
His confinement at the PNP General Hospital, albeit at his own instance,44 was not even recommended by the officer-in-
charge (O IC) and the internist doctor of that medical facility because of the limitations in the medical support at that
hospital. Their testimonies ran as follows:

JUSTICE MARTIRES:

The question is, do you feel comfortable with the continued confinement of Senator Enrile at the Philippine National
Police Hospital?

DR. SERVILLANO:

No, Your Honor.

JUSTICE MARTIRES:

Director, doctor, do you feel comfortable with the continued confinement of Senator Enrile at the PNP Hospital ?

PSUPT. JOCSON:

No, Your Honor.

JUSTICE MARTIRES:

Why?

PSUPT. JOCSON:

Because during emergency cases, Your Honor, we cannot give him the best.

JUSTICE MARTIRES:

At present, since you are the attending physician of the accused, Senator Enrile, are you happy or have any fear in your
heart of the present condition of the accused vis a vis the facilities of the hospital?

DR. SERVILLANO:
Yes, Your Honor. I have a fear.

JUSTICE MARTIRES:

That you will not be able to address in an emergency situation?

DR. SERVILLANO:

Your Honor, in case of emergency situation we can handle it but probably if the condition of the patient worsen, we have
no facilities to do those things, Your Honor.45

Bail for the provisional liberty of the accused, regardless of the crime charged, should be allowed independently of the
merits of the charge, provided his continued incarceration is clearly shown to be injurious to his health or to endanger his
life. Indeed, denying him bail despite imperiling his health and life would not serve the true objective of preventive
incarceration during the trial.

Granting bail to Enrile on the foregoing reasons is not unprecedented. The Court has already held in Dela Rama v. The
People’s Court:46

x x x This court, in disposing of the first petition for certiorari, held the following:

x x x [ U]nless allowance of bail is forbidden by law in the particular case, the illness of the prisoner,

independently of the merits of the case, is a circumstance, and the humanity of the law makes it a consideration which
should, regardless of the charge and the stage of the proceeding, influence the court to exercise its discretion to admit the
prisoner to bail ;47

xxx

Considering the report of the Medical Director of the Quezon Institute to the effect that the petitioner "is actually
suffering from minimal, early, unstable type of pulmonary tuberculosis, and chronic, granular pharyngitis," and that in said
institute they "have seen similar cases, later progressing into advance stages when the treatment and medicine are no
longer of any avail;" taking into consideration that the petitioner’s previous petition for bail was denied by the People’s
Court on the ground that the petitioner was suffering from quiescent and not active tuberculosis, and the implied purpose
of the People’s Court in sending the petitioner to the Quezon Institute for clinical examination and diagnosis of the actual
condition of his lungs, was evidently to verify whether the petitioner is suffering from active tuberculosis, in order to act
accordingly in deciding his petition for bail; and considering further that the said People’s Court has adopted and applied
the well-established doctrine cited in our above-quoted resolution, in several cases, among them, the cases against Pio
Duran (case No. 3324) and Benigno Aquino (case No. 3527), in which the said defendants were released on bail on the
ground that they were ill and their continued confinement in New Bilibid Prison would be injurious to their health or
endanger their life; it is evident and we consequently hold that the People’s Court acted with grave abuse of discretion in
refusing to re lease the petitioner on bail.48

It is relevant to observe that granting provisional liberty to Enrile will then enable him to have his medical condition be
properly addressed and better attended to by competent physicians in the hospitals of his choice. This will not only aid in
his adequate preparation of his defense but, more importantly , will guarantee his appearance in court for the trial.

On the other hand, to mark time in order to wait for the trial to finish before a meaningful consideration of the application
for bail can be had is to defeat the objective of bail, which is to entitle the accused to provisional liberty pending the trial.
There may be circumstances decisive of the issue of bail – whose existence is either admitted by the Prosecution, or is
properly the subject of judicial notice – that the courts can already consider in resolving the application for bail without
awaiting the trial to finish.49 The Court thus balances the scales of justice by protecting the interest of the People through
ensuring his personal appearance at the trial, and at the same time realizing for him the guarantees of due process as well
as to be presumed innocent until proven guilty.

Accordingly, we conclude that the Sandiganbayan arbitrarily ignored the objective of bail to ensure the appearance of the
accused during the trial; and unwarrantedly disregarded the clear showing of the fragile health and advanced age of
Enrile. As such, the Sandiganbayan gravely abused its discretion in denying Enrile’s Motion To Fix Bail. Grave abuse of
discretion, as the ground for the issuance of the writ of certiorari , connotes whimsical and capricious exercise of
judgment as is equivalent to excess, or lack of jurisdiction.50 The abuse must be so patent and gross as to amount to an
evasion of a positive duty or to a virtual refusal to perform a duty enjoined by law, or to act at all in contemplation of law
as where the power is exercised in an arbitrary and despotic manner by reason of passion or hostility.51 WHEREFORE, the
Court GRANTS the petition for certiorari ; ISSUES the writ of certiorari ANNULING and SETTING ASIDE the Resolutions
issued by the Sandiganbayan (Third Division) in Case No. SB-14 CRM-0238 on July 14, 2014 and August 8, 2014; ORDERS
the PROVISIONAL RELEASE of petitioner Juan Ponce Enrile in Case No. SB-14-CRM-0238 upon posting of a cash bond of
₱1,000,000.00 in the Sandiganbayan; and DIRECTS the immediate release of petitioner Juan Ponce Enrile from custody
unless he is being detained for some other lawful cause.

No pronouncement on costs of suit.

SO ORDERED

LUCAS P. BERSAMIN
Associate Justice
G.R. No. 169777             April 20, 2006

SENATE OF THE PHILIPPINES, represented by FRANKLIN M. DRILON, in his capacity as Senate President, JUAN M. FLAVIER,
in his capacity as Senate President Pro Tempore, FRANCIS N. PANGILINAN, in his capacity as Majority Leader, AQUILINO Q.
PIMENTEL, JR., in his capacity as Minority Leader, SENATORS RODOLFO G. BIAZON, "COMPANERA" PIA S. CAYETANO,
JINGGOY EJERCITO ESTRADA, LUISA "LOI" EJERCITO ESTRADA, JUAN PONCE ENRILE, RICHARD J. GORDON, PANFILO M.
LACSON, ALFREDO S.LIM, M. A. MADRIGAL, SERGIO OSMENA III, RALPH G. RECTO, and MAR ROXAS, Petitioners, 
vs.
EDUARDO R. ERMITA, in his capacity as Executive Secretary and alter-ego of President Gloria Macapagal-Arroyo, and
anyone acting in his stead and in behalf of the President of the Philippines, Respondents.
DECISION

CARPIO MORALES, J.:

A transparent government is one of the hallmarks of a truly republican state. Even in the early history of republican
thought, however, it has been recognized that the head of government may keep certain information confidential in
pursuit of the public interest. Explaining the reason for vesting executive power in only one magistrate, a distinguished
delegate to the U.S. Constitutional Convention said: "Decision, activity, secrecy, and dispatch will generally characterize
the proceedings of one man, in a much more eminent degree than the proceedings of any greater number; and in
proportion as the number is increased, these qualities will be diminished."1

History has been witness, however, to the fact that the power to withhold information lends itself to abuse, hence, the
necessity to guard it zealously.

The present consolidated petitions for certiorari and prohibition proffer that the President has abused such power by
issuing Executive Order No. 464 (E.O. 464) last September 28, 2005. They thus pray for its declaration as null and void for
being unconstitutional.

In resolving the controversy, this Court shall proceed with the recognition that the issuance under review has come from a
co-equal branch of government, which thus entitles it to a strong presumption of constitutionality. Once the challenged
order is found to be indeed violative of the Constitution, it is duty-bound to declare it so. For the Constitution, being the
highest expression of the sovereign will of the Filipino people, must prevail over any issuance of the government that
contravenes its mandates.

In the exercise of its legislative power, the Senate of the Philippines, through its various Senate Committees, conducts
inquiries or investigations in aid of legislation which call for, inter alia, the attendance of officials and employees of the
executive department, bureaus, and offices including those employed in Government Owned and Controlled
Corporations, the Armed Forces of the Philippines (AFP), and the Philippine National Police (PNP).

On September 21 to 23, 2005, the Committee of the Senate as a whole issued invitations to various officials of the
Executive Department for them to appear on September 29, 2005 as resource speakers in a public hearing on the railway
project of the North Luzon Railways Corporation with the China National Machinery and Equipment Group (hereinafter
North Rail Project). The public hearing was sparked by a privilege speech of Senator Juan Ponce Enrile urging the Senate to
investigate the alleged overpricing and other unlawful provisions of the contract covering the North Rail Project.

The Senate Committee on National Defense and Security likewise issued invitations2 dated September 22, 2005 to the
following officials of the AFP: the Commanding General of the Philippine Army, Lt. Gen. Hermogenes C. Esperon; Inspector
General of the AFP Vice Admiral Mateo M. Mayuga; Deputy Chief of Staff for Intelligence of the AFP Rear Admiral Tirso R.
Danga; Chief of the Intelligence Service of the AFP Brig. Gen. Marlu Q. Quevedo; Assistant Superintendent of the
Philippine Military Academy (PMA) Brig. Gen. Francisco V. Gudani; and Assistant Commandant, Corps of Cadets of the
PMA, Col. Alexander F. Balutan, for them to attend as resource persons in a public hearing scheduled on September 28,
2005 on the following: (1) Privilege Speech of Senator Aquilino Q. Pimentel Jr., delivered on June 6, 2005 entitled "Bunye
has Provided Smoking Gun or has Opened a Can of Worms that Show Massive Electoral Fraud in the Presidential Election
of May 2005"; (2) Privilege Speech of Senator Jinggoy E. Estrada delivered on July 26, 2005 entitled "The Philippines as the
Wire-Tapping Capital of the World"; (3) Privilege Speech of Senator Rodolfo Biazon delivered on August 1, 2005 entitled
"Clear and Present Danger"; (4) Senate Resolution No. 285 filed by Senator Maria Ana Consuelo Madrigal – Resolution
Directing the Committee on National Defense and Security to Conduct an Inquiry, in Aid of Legislation, and in the National
Interest, on the Role of the Military in the So-called "Gloriagate Scandal"; and (5) Senate Resolution No. 295 filed by
Senator Biazon – Resolution Directing the Committee on National Defense and Security to Conduct an Inquiry, in Aid of
Legislation, on the Wire-Tapping of the President of the Philippines.

Also invited to the above-said hearing scheduled on September 28 2005 was the AFP Chief of Staff, General Generoso S.
Senga who, by letter3 dated September 27, 2005, requested for its postponement "due to a pressing operational situation
that demands [his utmost personal attention" while "some of the invited AFP officers are currently attending to other
urgent operational matters."

On September 28, 2005, Senate President Franklin M. Drilon received from Executive Secretary Eduardo R. Ermita a
letter4dated September 27, 2005 "respectfully request[ing] for the postponement of the hearing [regarding the NorthRail
project] to which various officials of the Executive Department have been invited" in order to "afford said officials ample
time and opportunity to study and prepare for the various issues so that they may better enlighten the Senate Committee
on its investigation."

Senate President Drilon, however, wrote5 Executive Secretary Ermita that the Senators "are unable to accede to [his
request]" as it "was sent belatedly" and "[a]ll preparations and arrangements as well as notices to all resource persons
were completed [the previous] week."

Senate President Drilon likewise received on September 28, 2005 a letter6 from the President of the North Luzon Railways
Corporation Jose L. Cortes, Jr. requesting that the hearing on the NorthRail project be postponed or cancelled until a copy
of the report of the UP Law Center on the contract agreements relative to the project had been secured.

On September 28, 2005, the President issued E.O. 464, "Ensuring Observance of the Principle of Separation of Powers,
Adherence to the Rule on Executive Privilege and Respect for the Rights of Public Officials Appearing in Legislative
Inquiries in Aid of Legislation Under the Constitution, and For Other Purposes,"7 which, pursuant to Section 6 thereof,
took effect immediately. The salient provisions of the Order are as follows:

SECTION 1. Appearance by Heads of Departments Before Congress. – In accordance with Article VI, Section 22 of the
Constitution and to implement the Constitutional provisions on the separation of powers between co-equal branches of
the government, all heads of departments of the Executive Branch of the government shall secure the consent of the
President prior to appearing before either House of Congress.

When the security of the State or the public interest so requires and the President so states in writing, the appearance
shall only be conducted in executive session.

SECTION. 2. Nature, Scope and Coverage of Executive Privilege. –

(a) Nature and Scope. - The rule of confidentiality based on executive privilege is fundamental to the operation of
government and rooted in the separation of powers under the Constitution (Almonte vs. Vasquez, G.R. No. 95367, 23 May
1995). Further, Republic Act No. 6713 or the Code of Conduct and Ethical Standards for Public Officials and Employees
provides that Public Officials and Employees shall not use or divulge confidential or classified information officially known
to them by reason of their office and not made available to the public to prejudice the public interest.

Executive privilege covers all confidential or classified information between the President and the public officers covered
by this executive order, including:

Conversations and correspondence between the President and the public official covered by this executive order
(Almonte vs. Vasquez G.R. No. 95367, 23 May 1995; Chavez v. Public Estates Authority, G.R. No. 133250, 9 July 2002);
Military, diplomatic and other national security matters which in the interest of national security should not be divulged
(Almonte vs. Vasquez, G.R. No. 95367, 23 May 1995; Chavez v. Presidential Commission on Good Government, G.R. No.
130716, 9 December 1998).

Information between inter-government agencies prior to the conclusion of treaties and executive agreements (Chavez v.
Presidential Commission on Good Government, G.R. No. 130716, 9 December 1998);

Discussion in close-door Cabinet meetings (Chavez v. Presidential Commission on Good Government, G.R. No. 130716, 9
December 1998);

Matters affecting national security and public order (Chavez v. Public Estates Authority, G.R. No. 133250, 9 July 2002).

(b) Who are covered. – The following are covered by this executive order:

Senior officials of executive departments who in the judgment of the department heads are covered by the executive
privilege;

Generals and flag officers of the Armed Forces of the Philippines and such other officers who in the judgment of the Chief
of Staff are covered by the executive privilege;

Philippine National Police (PNP) officers with rank of chief superintendent or higher and such other officers who in the
judgment of the Chief of the PNP are covered by the executive privilege;

Senior national security officials who in the judgment of the National Security Adviser are covered by the executive
privilege; and

Such other officers as may be determined by the President.

SECTION 3. Appearance of Other Public Officials Before Congress. – All public officials enumerated in Section 2 (b) hereof
shall secure prior consent of the President prior to appearing before either House of Congress to ensure the observance of
the principle of separation of powers, adherence to the rule on executive privilege and respect for the rights of public
officials appearing in inquiries in aid of legislation. (Emphasis and underscoring supplied)

Also on September 28, 2005, Senate President Drilon received from Executive Secretary Ermita a copy of E.O. 464, and
another letter8 informing him "that officials of the Executive Department invited to appear at the meeting [regarding the
NorthRail project] will not be able to attend the same without the consent of the President, pursuant to [E.O. 464]" and
that "said officials have not secured the required consent from the President." On even date which was also the scheduled
date of the hearing on the alleged wiretapping, Gen. Senga sent a letter9 to Senator Biazon, Chairperson of the
Committee on National Defense and Security, informing him "that per instruction of [President Arroyo], thru the Secretary
of National Defense, no officer of the [AFP] is authorized to appear before any Senate or Congressional hearings without
seeking a written approval from the President" and "that no approval has been granted by the President to any AFP officer
to appear before the public hearing of the Senate Committee on National Defense and Security scheduled [on] 28
September 2005."

Despite the communications received from Executive Secretary Ermita and Gen. Senga, the investigation scheduled by the
Committee on National Defense and Security pushed through, with only Col. Balutan and Brig. Gen. Gudani among all the
AFP officials invited attending.

For defying President Arroyo’s order barring military personnel from testifying before legislative inquiries without her
approval, Brig. Gen. Gudani and Col. Balutan were relieved from their military posts and were made to face court martial
proceedings.
As to the NorthRail project hearing scheduled on September 29, 2005, Executive Secretary Ermita, citing E.O. 464, sent
letter of regrets, in response to the invitations sent to the following government officials: Light Railway Transit Authority
Administrator Melquiades Robles, Metro Rail Transit Authority Administrator Roberto Lastimoso, Department of Justice
(DOJ) Chief State Counsel Ricardo V. Perez, then Presidential Legal Counsel Merceditas Gutierrez, Department of
Transportation and Communication (DOTC) Undersecretary Guiling Mamonding, DOTC Secretary Leandro Mendoza,
Philippine National Railways General Manager Jose Serase II, Monetary Board Member Juanita Amatong, Bases
Conversion Development Authority Chairperson Gen. Narciso Abaya and Secretary Romulo L. Neri.10 NorthRail President
Cortes sent personal regrets likewise citing E.O. 464.11

On October 3, 2005, three petitions, docketed as G.R. Nos. 169659, 169660, and 169667, for certiorari and prohibition,
were filed before this Court challenging the constitutionality of E.O. 464.

In G.R. No. 169659, petitioners party-list Bayan Muna, House of Representatives Members Satur Ocampo, Crispin Beltran,
Rafael Mariano, Liza Maza, Joel Virador and Teodoro Casino, Courage, an organization of government employees, and
Counsels for the Defense of Liberties (CODAL), a group of lawyers dedicated to the promotion of justice, democracy and
peace, all claiming to have standing to file the suit because of the transcendental importance of the issues they posed,
pray, in their petition that E.O. 464 be declared null and void for being unconstitutional; that respondent Executive
Secretary Ermita, in his capacity as Executive Secretary and alter-ego of President Arroyo, be prohibited from imposing,
and threatening to impose sanctions on officials who appear before Congress due to congressional summons.
Additionally, petitioners claim that E.O. 464 infringes on their rights and impedes them from fulfilling their respective
obligations. Thus, Bayan Muna alleges that E.O. 464 infringes on its right as a political party entitled to participate in
governance; Satur Ocampo, et al. allege that E.O. 464 infringes on their rights and duties as members of Congress to
conduct investigation in aid of legislation and conduct oversight functions in the implementation of laws; Courage alleges
that the tenure of its members in public office is predicated on, and threatened by, their submission to the requirements
of E.O. 464 should they be summoned by Congress; and CODAL alleges that its members have a sworn duty to uphold the
rule of law, and their rights to information and to transparent governance are threatened by the imposition of E.O. 464.

In G.R. No. 169660, petitioner Francisco I. Chavez, claiming that his constitutional rights as a citizen, taxpayer and law
practitioner, are affected by the enforcement of E.O. 464, prays in his petition that E.O. 464 be declared null and void for
being unconstitutional.

In G.R. No. 169667, petitioner Alternative Law Groups, Inc.12 (ALG), alleging that as a coalition of 17 legal resource non-
governmental organizations engaged in developmental lawyering and work with the poor and marginalized sectors in
different parts of the country, and as an organization of citizens of the Philippines and a part of the general public, it has
legal standing to institute the petition to enforce its constitutional right to information on matters of public concern, a
right which was denied to the public by E.O. 464,13 prays, that said order be declared null and void for being
unconstitutional and that respondent Executive Secretary Ermita be ordered to cease from implementing it.

On October 11, 2005, Petitioner Senate of the Philippines, alleging that it has a vital interest in the resolution of the issue
of the validity of E.O. 464 for it stands to suffer imminent and material injury, as it has already sustained the same with its
continued enforcement since it directly interferes with and impedes the valid exercise of the Senate’s powers and
functions and conceals information of great public interest and concern, filed its petition for certiorari and prohibition,
docketed as G.R. No. 169777 and prays that E.O. 464 be declared unconstitutional.

On October 14, 2005, PDP-Laban, a registered political party with members duly elected into the Philippine Senate and
House of Representatives, filed a similar petition for certiorari and prohibition, docketed as G.R. No. 169834, alleging that
it is affected by the challenged E.O. 464 because it hampers its legislative agenda to be implemented through its members
in Congress, particularly in the conduct of inquiries in aid of legislation and transcendental issues need to be resolved to
avert a constitutional crisis between the executive and legislative branches of the government.

Meanwhile, by letter14 dated February 6, 2006, Senator Biazon reiterated his invitation to Gen. Senga for him and other
military officers to attend the hearing on the alleged wiretapping scheduled on February 10, 2005. Gen. Senga replied,
however, by letter15 dated February 8, 2006, that "[p]ursuant to Executive Order No. 464, th[e] Headquarters requested
for a clearance from the President to allow [them] to appear before the public hearing" and that "they will attend once
[their] request is approved by the President." As none of those invited appeared, the hearing on February 10, 2006 was
cancelled.16

In another investigation conducted jointly by the Senate Committee on Agriculture and Food and the Blue Ribbon
Committee on the alleged mismanagement and use of the fertilizer fund under the Ginintuang Masaganang Ani program
of the Department of Agriculture (DA), several Cabinet officials were invited to the hearings scheduled on October 5 and
26, November 24 and December 12, 2005 but most of them failed to attend, DA Undersecretary Belinda Gonzales, DA
Assistant Secretary Felix Jose Montes, Fertilizer and Pesticide Authority Executive Director Norlito R. Gicana,17 and those
from the Department of Budget and Management18 having invoked E.O. 464.

In the budget hearings set by the Senate on February 8 and 13, 2006, Press Secretary and Presidential Spokesperson
Ignacio R. Bunye,19 DOJ Secretary Raul M. Gonzalez20 and Department of Interior and Local Government Undersecretary
Marius P. Corpus21 communicated their inability to attend due to lack of appropriate clearance from the President
pursuant to E.O. 464. During the February 13, 2005 budget hearing, however, Secretary Bunye was allowed to attend by
Executive Secretary Ermita.

On February 13, 2006, Jose Anselmo I. Cadiz and the incumbent members of the Board of Governors of the Integrated Bar
of the Philippines, as taxpayers, and the Integrated Bar of the Philippines as the official organization of all Philippine
lawyers, all invoking their constitutional right to be informed on matters of public interest, filed their petition for certiorari
and prohibition, docketed as G.R. No. 171246, and pray that E.O. 464 be declared null and void.

All the petitions pray for the issuance of a Temporary Restraining Order enjoining respondents from implementing,
enforcing, and observing E.O. 464.

In the oral arguments on the petitions conducted on February 21, 2006, the following substantive issues were ventilated:
(1) whether respondents committed grave abuse of discretion in implementing E.O. 464 prior to its publication in the
Official Gazette or in a newspaper of general circulation; and (2) whether E.O. 464 violates the following provisions of the
Constitution: Art. II, Sec. 28, Art. III, Sec. 4, Art. III, Sec. 7, Art. IV. Sec. 1, Art. VI, Sec. 21, Art. VI, Sec. 22, Art. XI, Sec. 1, and
Art. XIII, Sec. 16. The procedural issue of whether there is an actual case or controversy that calls for judicial review was
not taken up; instead, the parties were instructed to discuss it in their respective memoranda.

After the conclusion of the oral arguments, the parties were directed to submit their respective memoranda, paying
particular attention to the following propositions: (1) that E.O. 464 is, on its face, unconstitutional; and (2) assuming that it
is not, it is unconstitutional as applied in four instances, namely: (a) the so called Fertilizer scam; (b) the NorthRail
investigation (c) the Wiretapping activity of the ISAFP; and (d) the investigation on the Venable contract.22

Petitioners in G.R. No. 16966023 and G.R. No. 16977724 filed their memoranda on March 7, 2006, while those in G.R. No.
16966725 and G.R. No. 16983426 filed theirs the next day or on March 8, 2006. Petitioners in G.R. No. 171246 did not file
any memorandum.

Petitioners Bayan Muna et al. in G.R. No. 169659, after their motion for extension to file memorandum27 was granted,
subsequently filed a manifestation28 dated March 14, 2006 that it would no longer file its memorandum in the interest of
having the issues resolved soonest, prompting this Court to issue a Resolution reprimanding them.29

Petitioners submit that E.O. 464 violates the following constitutional provisions:

Art. VI, Sec. 2130

Art. VI, Sec. 2231

Art. VI, Sec. 132

Art. XI, Sec. 133

Art. III, Sec. 734

Art. III, Sec. 435

Art. XIII, Sec. 16 36

Art. II, Sec. 2837

Respondents Executive Secretary Ermita et al., on the other hand, pray in their consolidated memorandum38 on March
13, 2006 for the dismissal of the petitions for lack of merit.

The Court synthesizes the issues to be resolved as follows:

1. Whether E.O. 464 contravenes the power of inquiry vested in Congress;

2. Whether E.O. 464 violates the right of the people to information on matters of public concern; and

3. Whether respondents have committed grave abuse of discretion when they implemented E.O. 464 prior to its
publication in a newspaper of general circulation.

Essential requisites for judicial review

Before proceeding to resolve the issue of the constitutionality of E.O. 464, ascertainment of whether the requisites for a
valid exercise of the Court’s power of judicial review are present is in order.

Like almost all powers conferred by the Constitution, the power of judicial review is subject to limitations, to wit: (1) there
must be an actual case or controversy calling for the exercise of judicial power; (2) the person challenging the act must
have standing to challenge the validity of the subject act or issuance; otherwise stated, he must have a personal and
substantial interest in the case such that he has sustained, or will sustain, direct injury as a result of its enforcement; (3)
the question of constitutionality must be raised at the earliest opportunity; and (4) the issue of constitutionality must be
the very lis mota of the case.39

Except with respect to the requisites of standing and existence of an actual case or controversy where the disagreement
between the parties lies, discussion of the rest of the requisites shall be omitted.

Standing

Respondents, through the Solicitor General, assert that the allegations in G.R. Nos. 169659, 169660 and 169667 make it
clear that they, adverting to the non-appearance of several officials of the executive department in the investigations
called by the different committees of the Senate, were brought to vindicate the constitutional duty of the Senate or its
different committees to conduct inquiry in aid of legislation or in the exercise of its oversight functions. They maintain that
Representatives Ocampo et al. have not shown any specific prerogative, power, and privilege of the House of
Representatives which had been effectively impaired by E.O. 464, there being no mention of any investigation called by
the House of Representatives or any of its committees which was aborted due to the implementation of E.O. 464.

As for Bayan Muna’s alleged interest as a party-list representing the marginalized and underrepresented, and that of the
other petitioner groups and individuals who profess to have standing as advocates and defenders of the Constitution,
respondents contend that such interest falls short of that required to confer standing on them as parties "injured-in-
fact."40
Respecting petitioner Chavez, respondents contend that Chavez may not claim an interest as a taxpayer for the
implementation of E.O. 464 does not involve the exercise of taxing or spending power.41

With regard to the petition filed by the Senate, respondents argue that in the absence of a personal or direct injury by
reason of the issuance of E.O. 464, the Senate and its individual members are not the proper parties to assail the
constitutionality of E.O. 464.

Invoking this Court’s ruling in National Economic Protectionism Association v. Ongpin42 and Valmonte v. Philippine
Charity Sweepstakes Office,43 respondents assert that to be considered a proper party, one must have a personal and
substantial interest in the case, such that he has sustained or will sustain direct injury due to the enforcement of E.O.
464.44

That the Senate of the Philippines has a fundamental right essential not only for intelligent public decision-making in a
democratic system, but more especially for sound legislation45 is not disputed. E.O. 464, however, allegedly stifles the
ability of the members of Congress to access information that is crucial to law-making.46 Verily, the Senate, including its
individual members, has a substantial and direct interest over the outcome of the controversy and is the proper party to
assail the constitutionality of E.O. 464. Indeed, legislators have standing to maintain inviolate the prerogative, powers and
privileges vested by the Constitution in their office and are allowed to sue to question the validity of any official action
which they claim infringes their prerogatives as legislators.47

In the same vein, party-list representatives Satur Ocampo (Bayan Muna), Teodoro Casino (Bayan Muna), Joel Virador
(Bayan Muna), Crispin Beltran (Anakpawis), Rafael Mariano (Anakpawis), and Liza Maza (Gabriela) are allowed to sue to
question the constitutionality of E.O. 464, the absence of any claim that an investigation called by the House of
Representatives or any of its committees was aborted due to the implementation of E.O. 464 notwithstanding, it being
sufficient that a claim is made that E.O. 464 infringes on their constitutional rights and duties as members of Congress to
conduct investigation in aid of legislation and conduct oversight functions in the implementation of laws.

The national political party, Bayan Muna, likewise meets the standing requirement as it obtained three seats in the House
of Representatives in the 2004 elections and is, therefore, entitled to participate in the legislative process consonant with
the declared policy underlying the party list system of affording citizens belonging to marginalized and underrepresented
sectors, organizations and parties who lack well-defined political constituencies to contribute to the formulation and
enactment of legislation that will benefit the nation.48

As Bayan Muna and Representatives Ocampo et al. have the standing to file their petitions, passing on the standing of
their co-petitioners Courage and Codal is rendered unnecessary.49

In filing their respective petitions, Chavez, the ALG which claims to be an organization of citizens, and the incumbent
members of the IBP Board of Governors and the IBP in behalf of its lawyer members,50 invoke their constitutional right to
information on matters of public concern, asserting that the right to information, curtailed and violated by E.O. 464, is
essential to the effective exercise of other constitutional rights51 and to the maintenance of the balance of power among
the three branches of the government through the principle of checks and balances.52

It is well-settled that when suing as a citizen, the interest of the petitioner in assailing the constitutionality of laws,
presidential decrees, orders, and other regulations, must be direct and personal. In Franciso v. House of
Representatives,53this Court held that when the proceeding involves the assertion of a public right, the mere fact that he
is a citizen satisfies the requirement of personal interest.

As for petitioner PDP-Laban, it asseverates that it is clothed with legal standing in view of the transcendental issues raised
in its petition which this Court needs to resolve in order to avert a constitutional crisis. For it to be accorded standing on
the ground of transcendental importance, however, it must establish (1) the character of the funds (that it is public) or
other assets involved in the case, (2) the presence of a clear case of disregard of a constitutional or statutory prohibition
by the public respondent agency or instrumentality of the government, and (3) the lack of any party with a more direct
and specific interest in raising the questions being raised.54 The first and last determinants not being present as no public
funds or assets are involved and petitioners in G.R. Nos. 169777 and 169659 have direct and specific interests in the
resolution of the controversy, petitioner PDP-Laban is bereft of standing to file its petition. Its allegation that E.O. 464
hampers its legislative agenda is vague and uncertain, and at best is only a "generalized interest" which it shares with the
rest of the political parties. Concrete injury, whether actual or threatened, is that indispensable element of a dispute
which serves in part to cast it in a form traditionally capable of judicial resolution.55 In fine, PDP-Laban’s alleged interest
as a political party does not suffice to clothe it with legal standing.

Actual Case or Controversy

Petitioners assert that an actual case exists, they citing the absence of the executive officials invited by the Senate to its
hearings after the issuance of E.O. 464, particularly those on the NorthRail project and the wiretapping controversy.

Respondents counter that there is no case or controversy, there being no showing that President Arroyo has actually
withheld her consent or prohibited the appearance of the invited officials.56 These officials, they claim, merely
communicated to the Senate that they have not yet secured the consent of the President, not that the President
prohibited their attendance.57 Specifically with regard to the AFP officers who did not attend the hearing on September
28, 2005, respondents claim that the instruction not to attend without the President’s consent was based on its role as
Commander-in-Chief of the Armed Forces, not on E.O. 464.

Respondents thus conclude that the petitions merely rest on an unfounded apprehension that the President will abuse its
power of preventing the appearance of officials before Congress, and that such apprehension is not sufficient for
challenging the validity of E.O. 464.

The Court finds respondents’ assertion that the President has not withheld her consent or prohibited the appearance of
the officials concerned immaterial in determining the existence of an actual case or controversy insofar as E.O. 464 is
concerned. For E.O. 464 does not require either a deliberate withholding of consent or an express prohibition issuing from
the President in order to bar officials from appearing before Congress.

As the implementation of the challenged order has already resulted in the absence of officials invited to the hearings of
petitioner Senate of the Philippines, it would make no sense to wait for any further event before considering the present
case ripe for adjudication. Indeed, it would be sheer abandonment of duty if this Court would now refrain from passing on
the constitutionality of E.O. 464.

Constitutionality of E.O. 464

E.O. 464, to the extent that it bars the appearance of executive officials before Congress, deprives Congress of the
information in the possession of these officials. To resolve the question of whether such withholding of information
violates the Constitution, consideration of the general power of Congress to obtain information, otherwise known as the
power of inquiry, is in order.

The power of inquiry

The Congress power of inquiry is expressly recognized in Section 21 of Article VI of the Constitution which reads:

SECTION 21. The Senate or the House of Representatives or any of its respective committees may conduct inquiries in aid
of legislation in accordance with its duly published rules of procedure. The rights of persons appearing in or affected by
such inquiries shall be respected. (Underscoring supplied)

This provision is worded exactly as Section 8 of Article VIII of the 1973 Constitution except that, in the latter, it vests the
power of inquiry in the unicameral legislature established therein – the Batasang Pambansa – and its committees.

The 1935 Constitution did not contain a similar provision. Nonetheless, in Arnault v. Nazareno,58 a case decided in 1950
under that Constitution, the Court already recognized that the power of inquiry is inherent in the power to legislate.
Arnault involved a Senate investigation of the reportedly anomalous purchase of the Buenavista and Tambobong Estates
by the Rural Progress Administration. Arnault, who was considered a leading witness in the controversy, was called to
testify thereon by the Senate. On account of his refusal to answer the questions of the senators on an important point, he
was, by resolution of the Senate, detained for contempt. Upholding the Senate’s power to punish Arnault for contempt,
this Court held:

Although there is no provision in the Constitution expressly investing either House of Congress with power to make
investigations and exact testimony to the end that it may exercise its legislative functions advisedly and effectively, such
power is so far incidental to the legislative function as to be implied. In other words, the power of inquiry – with process
to enforce it – is an essential and appropriate auxiliary to the legislative function. A legislative body cannot legislate wisely
or effectively in the absence of information respecting the conditions which the legislation is intended to affect or change;
and where the legislative body does not itself possess the requisite information – which is not infrequently true – recourse
must be had to others who do possess it. Experience has shown that mere requests for such information are often
unavailing, and also that information which is volunteered is not always accurate or complete; so some means of
compulsion is essential to obtain what is needed.59 . . . (Emphasis and underscoring supplied)

That this power of inquiry is broad enough to cover officials of the executive branch may be deduced from the same case.
The power of inquiry, the Court therein ruled, is co-extensive with the power to legislate.60 The matters which may be a
proper subject of legislation and those which may be a proper subject of investigation are one. It follows that the
operation of government, being a legitimate subject for legislation, is a proper subject for investigation.

Thus, the Court found that the Senate investigation of the government transaction involved in Arnault was a proper
exercise of the power of inquiry. Besides being related to the expenditure of public funds of which Congress is the
guardian, the transaction, the Court held, "also involved government agencies created by Congress and officers whose
positions it is within the power of Congress to regulate or even abolish."

Since Congress has authority to inquire into the operations of the executive branch, it would be incongruous to hold that
the power of inquiry does not extend to executive officials who are the most familiar with and informed on executive
operations.

As discussed in Arnault, the power of inquiry, "with process to enforce it," is grounded on the necessity of information in
the legislative process. If the information possessed by executive officials on the operation of their offices is necessary for
wise legislation on that subject, by parity of reasoning, Congress has the right to that information and the power to
compel the disclosure thereof.

As evidenced by the American experience during the so-called "McCarthy era," however, the right of Congress to conduct
inquiries in aid of legislation is, in theory, no less susceptible to abuse than executive or judicial power. It may thus be
subjected to judicial review pursuant to the Court’s certiorari powers under Section 1, Article VIII of the Constitution.

For one, as noted in Bengzon v. Senate Blue Ribbon Committee,61 the inquiry itself might not properly be in aid of
legislation, and thus beyond the constitutional power of Congress. Such inquiry could not usurp judicial functions.
Parenthetically, one possible way for Congress to avoid such a result as occurred in Bengzon is to indicate in its invitations
to the public officials concerned, or to any person for that matter, the possible needed statute which prompted the need
for the inquiry. Given such statement in its invitations, along with the usual indication of the subject of inquiry and the
questions relative to and in furtherance thereof, there would be less room for speculation on the part of the person
invited on whether the inquiry is in aid of legislation.

Section 21, Article VI likewise establishes crucial safeguards that proscribe the legislative power of inquiry. The provision
requires that the inquiry be done in accordance with the Senate or House’s duly published rules of procedure, necessarily
implying the constitutional infirmity of an inquiry conducted without duly published rules of procedure. Section 21 also
mandates that the rights of persons appearing in or affected by such inquiries be respected, an imposition that obligates
Congress to adhere to the guarantees in the Bill of Rights.
These abuses are, of course, remediable before the courts, upon the proper suit filed by the persons affected, even if they
belong to the executive branch. Nonetheless, there may be exceptional circumstances, none appearing to obtain at
present, wherein a clear pattern of abuse of the legislative power of inquiry might be established, resulting in palpable
violations of the rights guaranteed to members of the executive department under the Bill of Rights. In such instances,
depending on the particulars of each case, attempts by the Executive Branch to forestall these abuses may be accorded
judicial sanction.

Even where the inquiry is in aid of legislation, there are still recognized exemptions to the power of inquiry, which
exemptions fall under the rubric of "executive privilege." Since this term figures prominently in the challenged order, it
being mentioned in its provisions, its preambular clauses,62 and in its very title, a discussion of executive privilege is
crucial for determining the constitutionality of E.O. 464.

Executive privilege

The phrase "executive privilege" is not new in this jurisdiction. It has been used even prior to the promulgation of the
1986 Constitution.63 Being of American origin, it is best understood in light of how it has been defined and used in the
legal literature of the United States.

Schwartz defines executive privilege as "the power of the Government to withhold information from the public, the
courts, and the Congress."64 Similarly, Rozell defines it as "the right of the President and high-level executive branch
officers to withhold information from Congress, the courts, and ultimately the public."65

Executive privilege is, nonetheless, not a clear or unitary concept. 66 It has encompassed claims of varying kinds.67 Tribe,
in fact, comments that while it is customary to employ the phrase "executive privilege," it may be more accurate to speak
of executive privileges "since presidential refusals to furnish information may be actuated by any of at least three distinct
kinds of considerations, and may be asserted, with differing degrees of success, in the context of either judicial or
legislative investigations."

One variety of the privilege, Tribe explains, is the state secrets privilege invoked by U.S. Presidents, beginning with
Washington, on the ground that the information is of such nature that its disclosure would subvert crucial military or
diplomatic objectives. Another variety is the informer’s privilege, or the privilege of the Government not to disclose the
identity of persons who furnish information of violations of law to officers charged with the enforcement of that law.
Finally, a generic privilege for internal deliberations has been said to attach to intragovernmental documents reflecting
advisory opinions, recommendations and deliberations comprising part of a process by which governmental decisions and
policies are formulated. 68

Tribe’s comment is supported by the ruling in In re Sealed Case, thus:

Since the beginnings of our nation, executive officials have claimed a variety of privileges to resist disclosure of
information the confidentiality of which they felt was crucial to fulfillment of the unique role and responsibilities of the
executive branch of our government. Courts ruled early that the executive had a right to withhold documents that might
reveal military or state secrets. The courts have also granted the executive a right to withhold the identity of government
informers in some circumstances and a qualified right to withhold information related to pending investigations. x x
x"69 (Emphasis and underscoring supplied)

The entry in Black’s Law Dictionary on "executive privilege" is similarly instructive regarding the scope of the doctrine.

This privilege, based on the constitutional doctrine of separation of powers, exempts the executive from disclosure
requirements applicable to the ordinary citizen or organization where such exemption is necessary to the discharge of
highly important executive responsibilities involved in maintaining governmental operations, and extends not only to
military and diplomatic secrets but also to documents integral to an appropriate exercise of the executive’ domestic
decisional and policy making functions, that is, those documents reflecting the frank expression necessary in intra-
governmental advisory and deliberative communications.70 (Emphasis and underscoring supplied)

That a type of information is recognized as privileged does not, however, necessarily mean that it would be considered
privileged in all instances. For in determining the validity of a claim of privilege, the question that must be asked is not
only whether the requested information falls within one of the traditional privileges, but also whether that privilege
should be honored in a given procedural setting.71

The leading case on executive privilege in the United States is U.S. v. Nixon, 72 decided in 1974. In issue in that case was
the validity of President Nixon’s claim of executive privilege against a subpoena issued by a district court requiring the
production of certain tapes and documents relating to the Watergate investigations. The claim of privilege was based on
the President’s general interest in the confidentiality of his conversations and correspondence. The U.S. Court held that
while there is no explicit reference to a privilege of confidentiality in the U.S. Constitution, it is constitutionally based to
the extent that it relates to the effective discharge of a President’s powers. The Court, nonetheless, rejected the
President’s claim of privilege, ruling that the privilege must be balanced against the public interest in the fair
administration of criminal justice. Notably, the Court was careful to clarify that it was not there addressing the issue of
claims of privilege in a civil litigation or against congressional demands for information.

Cases in the U.S. which involve claims of executive privilege against Congress are rare.73 Despite frequent assertion of the
privilege to deny information to Congress, beginning with President Washington’s refusal to turn over treaty negotiation
records to the House of Representatives, the U.S. Supreme Court has never adjudicated the issue.74 However, the U.S.
Court of Appeals for the District of Columbia Circuit, in a case decided earlier in the same year as Nixon, recognized the
President’s privilege over his conversations against a congressional subpoena.75 Anticipating the balancing approach
adopted by the U.S. Supreme Court in Nixon, the Court of Appeals weighed the public interest protected by the claim of
privilege against the interest that would be served by disclosure to the Committee. Ruling that the balance favored the
President, the Court declined to enforce the subpoena. 76

In this jurisdiction, the doctrine of executive privilege was recognized by this Court in Almonte v. Vasquez.77 Almonte
used the term in reference to the same privilege subject of Nixon. It quoted the following portion of the Nixon decision
which explains the basis for the privilege:

"The expectation of a President to the confidentiality of his conversations and correspondences, like the claim of
confidentiality of judicial deliberations, for example, has all the values to which we accord deference for the privacy of all
citizens and, added to those values, is the necessity for protection of the public interest in candid, objective, and even
blunt or harsh opinions in Presidential decision-making. A President and those who assist him must be free to explore
alternatives in the process of shaping policies and making decisions and to do so in a way many would be unwilling to
express except privately. These are the considerations justifying a presumptive privilege for Presidential communications.
The privilege is fundamental to the operation of government and inextricably rooted in the separation of powers under
the Constitution x x x " (Emphasis and underscoring supplied)

Almonte involved a subpoena duces tecum issued by the Ombudsman against the therein petitioners. It did not involve, as
expressly stated in the decision, the right of the people to information.78 Nonetheless, the Court recognized that there
are certain types of information which the government may withhold from the public, thus acknowledging, in substance if
not in name, that executive privilege may be claimed against citizens’ demands for information.

In Chavez v. PCGG,79 the Court held that this jurisdiction recognizes the common law holding that there is a
"governmental privilege against public disclosure with respect to state secrets regarding military, diplomatic and other
national security matters."80 The same case held that closed-door Cabinet meetings are also a recognized limitation on
the right to information.

Similarly, in Chavez v. Public Estates Authority,81 the Court ruled that the right to information does not extend to matters
recognized as "privileged information under the separation of powers,"82 by which the Court meant Presidential
conversations, correspondences, and discussions in closed-door Cabinet meetings. It also held that information on military
and diplomatic secrets and those affecting national security, and information on investigations of crimes by law
enforcement agencies before the prosecution of the accused were exempted from the right to information.

From the above discussion on the meaning and scope of executive privilege, both in the United States and in this
jurisdiction, a clear principle emerges. Executive privilege, whether asserted against Congress, the courts, or the public, is
recognized only in relation to certain types of information of a sensitive character. While executive privilege is a
constitutional concept, a claim thereof may be valid or not depending on the ground invoked to justify it and the context
in which it is made. Noticeably absent is any recognition that executive officials are exempt from the duty to disclose
information by the mere fact of being executive officials. Indeed, the extraordinary character of the exemptions indicates
that the presumption inclines heavily against executive secrecy and in favor of disclosure.

Validity of Section 1

Section 1 is similar to Section 3 in that both require the officials covered by them to secure the consent of the President
prior to appearing before Congress. There are significant differences between the two provisions, however, which
constrain this Court to discuss the validity of these provisions separately.

Section 1 specifically applies to department heads. It does not, unlike Section 3, require a prior determination by any
official whether they are covered by E.O. 464. The President herself has, through the challenged order, made the
determination that they are. Further, unlike also Section 3, the coverage of department heads under Section 1 is not made
to depend on the department heads’ possession of any information which might be covered by executive privilege. In fact,
in marked contrast to Section 3 vis-à-vis Section 2, there is no reference to executive privilege at all. Rather, the required
prior consent under Section 1 is grounded on Article VI, Section 22 of the Constitution on what has been referred to as the
question hour.

SECTION 22. The heads of departments may upon their own initiative, with the consent of the President, or upon the
request of either House, as the rules of each House shall provide, appear before and be heard by such House on any
matter pertaining to their departments. Written questions shall be submitted to the President of the Senate or the
Speaker of the House of Representatives at least three days before their scheduled appearance. Interpellations shall not
be limited to written questions, but may cover matters related thereto. When the security of the State or the public
interest so requires and the President so states in writing, the appearance shall be conducted in executive session.

Determining the validity of Section 1 thus requires an examination of the meaning of Section 22 of Article VI. Section 22
which provides for the question hour must be interpreted vis-à-vis Section 21 which provides for the power of either
House of Congress to "conduct inquiries in aid of legislation." As the following excerpt of the deliberations of the
Constitutional Commission shows, the framers were aware that these two provisions involved distinct functions of
Congress.

MR. MAAMBONG. x x x When we amended Section 20 [now Section 22 on the Question Hour] yesterday, I noticed that
members of the Cabinet cannot be compelled anymore to appear before the House of Representatives or before the
Senate. I have a particular problem in this regard, Madam President, because in our experience in the Regular Batasang
Pambansa – as the Gentleman himself has experienced in the interim Batasang Pambansa – one of the most competent
inputs that we can put in our committee deliberations, either in aid of legislation or in congressional investigations, is the
testimonies of Cabinet ministers. We usually invite them, but if they do not come and it is a congressional investigation,
we usually issue subpoenas.

I want to be clarified on a statement made by Commissioner Suarez when he said that the fact that the Cabinet ministers
may refuse to come to the House of Representatives or the Senate [when requested under Section 22] does not mean
that they need not come when they are invited or subpoenaed by the committee of either House when it comes to
inquiries in aid of legislation or congressional investigation. According to Commissioner Suarez, that is allowed and their
presence can be had under Section 21. Does the gentleman confirm this, Madam President?
MR. DAVIDE. We confirm that, Madam President, because Section 20 refers only to what was originally the Question
Hour, whereas, Section 21 would refer specifically to inquiries in aid of legislation, under which anybody for that matter,
may be summoned and if he refuses, he can be held in contempt of the House.83 (Emphasis and underscoring supplied)

A distinction was thus made between inquiries in aid of legislation and the question hour. While attendance was meant to
be discretionary in the question hour, it was compulsory in inquiries in aid of legislation. The reference to Commissioner
Suarez bears noting, he being one of the proponents of the amendment to make the appearance of department heads
discretionary in the question hour.

So clearly was this distinction conveyed to the members of the Commission that the Committee on Style, precisely in
recognition of this distinction, later moved the provision on question hour from its original position as Section 20 in the
original draft down to Section 31, far from the provision on inquiries in aid of legislation. This gave rise to the following
exchange during the deliberations:

MR. GUINGONA. [speaking in his capacity as Chairman of the Committee on Style] We now go, Mr. Presiding Officer, to
the Article on Legislative and may I request the chairperson of the Legislative Department, Commissioner Davide, to give
his reaction.

THE PRESIDING OFFICER (Mr. Jamir). Commissioner Davide is recognized.|avvphi|.net

MR. DAVIDE. Thank you, Mr. Presiding Officer. I have only one reaction to the Question Hour. I propose that instead of
putting it as Section 31, it should follow Legislative Inquiries.

THE PRESIDING OFFICER. What does the committee say?

MR. GUINGONA. I ask Commissioner Maambong to reply, Mr. Presiding Officer.

MR. MAAMBONG. Actually, we considered that previously when we sequenced this but we reasoned that in Section 21,
which is Legislative Inquiry, it is actually a power of Congress in terms of its own lawmaking; whereas, a Question Hour is
not actually a power in terms of its own lawmaking power because in Legislative Inquiry, it is in aid of legislation. And so
we put Question Hour as Section 31. I hope Commissioner Davide will consider this.

MR. DAVIDE. The Question Hour is closely related with the legislative power, and it is precisely as a complement to or a
supplement of the Legislative Inquiry. The appearance of the members of Cabinet would be very, very essential not only in
the application of check and balance but also, in effect, in aid of legislation.

MR. MAAMBONG. After conferring with the committee, we find merit in the suggestion of Commissioner Davide. In other
words, we are accepting that and so this Section 31 would now become Section 22. Would it be, Commissioner Davide?

MR. DAVIDE. Yes.84 (Emphasis and underscoring supplied)

Consistent with their statements earlier in the deliberations, Commissioners Davide and Maambong proceeded from the
same assumption that these provisions pertained to two different functions of the legislature. Both Commissioners
understood that the power to conduct inquiries in aid of legislation is different from the power to conduct inquiries during
the question hour. Commissioner Davide’s only concern was that the two provisions on these distinct powers be placed
closely together, they being complementary to each other. Neither Commissioner considered them as identical functions
of Congress.

The foregoing opinion was not the two Commissioners’ alone. From the above-quoted exchange, Commissioner
Maambong’s committee – the Committee on Style – shared the view that the two provisions reflected distinct functions of
Congress. Commissioner Davide, on the other hand, was speaking in his capacity as Chairman of the Committee on the
Legislative Department. His views may thus be presumed as representing that of his Committee.
In the context of a parliamentary system of government, the "question hour" has a definite meaning. It is a period of
confrontation initiated by Parliament to hold the Prime Minister and the other ministers accountable for their acts and
the operation of the government,85 corresponding to what is known in Britain as the question period. There was a
specific provision for a question hour in the 1973 Constitution86 which made the appearance of ministers mandatory. The
same perfectly conformed to the parliamentary system established by that Constitution, where the ministers are also
members of the legislature and are directly accountable to it.

An essential feature of the parliamentary system of government is the immediate accountability of the Prime Minister and
the Cabinet to the National Assembly. They shall be responsible to the National Assembly for the program of government
and shall determine the guidelines of national policy. Unlike in the presidential system where the tenure of office of all
elected officials cannot be terminated before their term expired, the Prime Minister and the Cabinet remain in office only
as long as they enjoy the confidence of the National Assembly. The moment this confidence is lost the Prime Minister and
the Cabinet may be changed.87

The framers of the 1987 Constitution removed the mandatory nature of such appearance during the question hour in the
present Constitution so as to conform more fully to a system of separation of powers.88 To that extent, the question
hour, as it is presently understood in this jurisdiction, departs from the question period of the parliamentary system. That
department heads may not be required to appear in a question hour does not, however, mean that the legislature is
rendered powerless to elicit information from them in all circumstances. In fact, in light of the absence of a mandatory
question period, the need to enforce Congress’ right to executive information in the performance of its legislative function
becomes more imperative. As Schwartz observes:

Indeed, if the separation of powers has anything to tell us on the subject under discussion, it is that the Congress has the
right to obtain information from any source – even from officials of departments and agencies in the executive branch. In
the United States there is, unlike the situation which prevails in a parliamentary system such as that in Britain, a clear
separation between the legislative and executive branches. It is this very separation that makes the congressional right to
obtain information from the executive so essential, if the functions of the Congress as the elected representatives of the
people are adequately to be carried out. The absence of close rapport between the legislative and executive branches in
this country, comparable to those which exist under a parliamentary system, and the nonexistence in the Congress of an
institution such as the British question period have perforce made reliance by the Congress upon its right to obtain
information from the executive essential, if it is intelligently to perform its legislative tasks. Unless the Congress possesses
the right to obtain executive information, its power of oversight of administration in a system such as ours becomes a
power devoid of most of its practical content, since it depends for its effectiveness solely upon information parceled out
ex gratia by the executive.89 (Emphasis and underscoring supplied)

Sections 21 and 22, therefore, while closely related and complementary to each other, should not be considered as
pertaining to the same power of Congress. One specifically relates to the power to conduct inquiries in aid of legislation,
the aim of which is to elicit information that may be used for legislation, while the other pertains to the power to conduct
a question hour, the objective of which is to obtain information in pursuit of Congress’ oversight function.

When Congress merely seeks to be informed on how department heads are implementing the statutes which it has
issued, its right to such information is not as imperative as that of the President to whom, as Chief Executive, such
department heads must give a report of their performance as a matter of duty. In such instances, Section 22, in keeping
with the separation of powers, states that Congress may only request their appearance. Nonetheless, when the inquiry in
which Congress requires their appearance is "in aid of legislation" under Section 21, the appearance is mandatory for the
same reasons stated in Arnault.90

In fine, the oversight function of Congress may be facilitated by compulsory process only to the extent that it is performed
in pursuit of legislation. This is consistent with the intent discerned from the deliberations of the Constitutional
Commission.

Ultimately, the power of Congress to compel the appearance of executive officials under Section 21 and the lack of it
under Section 22 find their basis in the principle of separation of powers. While the executive branch is a co-equal branch
of the legislature, it cannot frustrate the power of Congress to legislate by refusing to comply with its demands for
information.

When Congress exercises its power of inquiry, the only way for department heads to exempt themselves therefrom is by a
valid claim of privilege. They are not exempt by the mere fact that they are department heads. Only one executive official
may be exempted from this power — the President on whom executive power is vested, hence, beyond the reach of
Congress except through the power of impeachment. It is based on her being the highest official of the executive branch,
and the due respect accorded to a co-equal branch of government which is sanctioned by a long-standing custom.

By the same token, members of the Supreme Court are also exempt from this power of inquiry. Unlike the Presidency,
judicial power is vested in a collegial body; hence, each member thereof is exempt on the basis not only of separation of
powers but also on the fiscal autonomy and the constitutional independence of the judiciary. This point is not in dispute,
as even counsel for the Senate, Sen. Joker Arroyo, admitted it during the oral argument upon interpellation of the Chief
Justice.

Having established the proper interpretation of Section 22, Article VI of the Constitution, the Court now proceeds to pass
on the constitutionality of Section 1 of E.O. 464.

Section 1, in view of its specific reference to Section 22 of Article VI of the Constitution and the absence of any reference
to inquiries in aid of legislation, must be construed as limited in its application to appearances of department heads in the
question hour contemplated in the provision of said Section 22 of Article VI. The reading is dictated by the basic rule of
construction that issuances must be interpreted, as much as possible, in a way that will render it constitutional.

The requirement then to secure presidential consent under Section 1, limited as it is only to appearances in the question
hour, is valid on its face. For under Section 22, Article VI of the Constitution, the appearance of department heads in the
question hour is discretionary on their part.

Section 1 cannot, however, be applied to appearances of department heads in inquiries in aid of legislation. Congress is
not bound in such instances to respect the refusal of the department head to appear in such inquiry, unless a valid claim
of privilege is subsequently made, either by the President herself or by the Executive Secretary.

Validity of Sections 2 and 3

Section 3 of E.O. 464 requires all the public officials enumerated in Section 2(b) to secure the consent of the President
prior to appearing before either house of Congress. The enumeration is broad. It covers all senior officials of executive
departments, all officers of the AFP and the PNP, and all senior national security officials who, in the judgment of the
heads of offices designated in the same section (i.e. department heads, Chief of Staff of the AFP, Chief of the PNP, and the
National Security Adviser), are "covered by the executive privilege."

The enumeration also includes such other officers as may be determined by the President. Given the title of Section 2 —
"Nature, Scope and Coverage of Executive Privilege" —, it is evident that under the rule of ejusdem generis, the
determination by the President under this provision is intended to be based on a similar finding of coverage under
executive privilege.

En passant, the Court notes that Section 2(b) of E.O. 464 virtually states that executive privilege actually covers persons.
Such is a misuse of the doctrine. Executive privilege, as discussed above, is properly invoked in relation to specific
categories of information and not to categories of persons.

In light, however, of Sec 2(a) of E.O. 464 which deals with the nature, scope and coverage of executive privilege, the
reference to persons being "covered by the executive privilege" may be read as an abbreviated way of saying that the
person is in possession of information which is, in the judgment of the head of office concerned, privileged as defined in
Section 2(a). The Court shall thus proceed on the assumption that this is the intention of the challenged order.
Upon a determination by the designated head of office or by the President that an official is "covered by the executive
privilege," such official is subjected to the requirement that he first secure the consent of the President prior to appearing
before Congress. This requirement effectively bars the appearance of the official concerned unless the same is permitted
by the President. The proviso allowing the President to give its consent means nothing more than that the President may
reverse a prohibition which already exists by virtue of E.O. 464.

Thus, underlying this requirement of prior consent is the determination by a head of office, authorized by the President
under E.O. 464, or by the President herself, that such official is in possession of information that is covered by executive
privilege. This determination then becomes the basis for the official’s not showing up in the legislative investigation.

In view thereof, whenever an official invokes E.O. 464 to justify his failure to be present, such invocation must be
construed as a declaration to Congress that the President, or a head of office authorized by the President, has determined
that the requested information is privileged, and that the President has not reversed such determination. Such
declaration, however, even without mentioning the term "executive privilege," amounts to an implied claim that the
information is being withheld by the executive branch, by authority of the President, on the basis of executive privilege.
Verily, there is an implied claim of privilege.

The letter dated September 28, 2005 of respondent Executive Secretary Ermita to Senate President Drilon illustrates the
implied nature of the claim of privilege authorized by E.O. 464. It reads:

In connection with the inquiry to be conducted by the Committee of the Whole regarding the Northrail Project of the
North Luzon Railways Corporation on 29 September 2005 at 10:00 a.m., please be informed that officials of the Executive
Department invited to appear at the meeting will not be able to attend the same without the consent of the President,
pursuant to Executive Order No. 464 (s. 2005), entitled "Ensuring Observance Of The Principle Of Separation Of Powers,
Adherence To The Rule On Executive Privilege And Respect For The Rights Of Public Officials Appearing In Legislative
Inquiries In Aid Of Legislation Under The Constitution, And For Other Purposes". Said officials have not secured the
required consent from the President. (Underscoring supplied)

The letter does not explicitly invoke executive privilege or that the matter on which these officials are being requested to
be resource persons falls under the recognized grounds of the privilege to justify their absence. Nor does it expressly state
that in view of the lack of consent from the President under E.O. 464, they cannot attend the hearing.

Significant premises in this letter, however, are left unstated, deliberately or not. The letter assumes that the invited
officials are covered by E.O. 464. As explained earlier, however, to be covered by the order means that a determination
has been made, by the designated head of office or the President, that the invited official possesses information that is
covered by executive privilege. Thus, although it is not stated in the letter that such determination has been made, the
same must be deemed implied. Respecting the statement that the invited officials have not secured the consent of the
President, it only means that the President has not reversed the standing prohibition against their appearance before
Congress.

Inevitably, Executive Secretary Ermita’s letter leads to the conclusion that the executive branch, either through the
President or the heads of offices authorized under E.O. 464, has made a determination that the information required by
the Senate is privileged, and that, at the time of writing, there has been no contrary pronouncement from the President.
In fine, an implied claim of privilege has been made by the executive.

While there is no Philippine case that directly addresses the issue of whether executive privilege may be invoked against
Congress, it is gathered from Chavez v. PEA that certain information in the possession of the executive may validly be
claimed as privileged even against Congress. Thus, the case holds:

There is no claim by PEA that the information demanded by petitioner is privileged information rooted in the separation
of powers. The information does not cover Presidential conversations, correspondences, or discussions during closed-door
Cabinet meetings which, like internal-deliberations of the Supreme Court and other collegiate courts, or executive
sessions of either house of Congress, are recognized as confidential. This kind of information cannot be pried open by a
co-equal branch of government. A frank exchange of exploratory ideas and assessments, free from the glare of publicity
and pressure by interested parties, is essential to protect the independence of decision-making of those tasked to exercise
Presidential, Legislative and Judicial power. This is not the situation in the instant case.91 (Emphasis and underscoring
supplied)

Section 3 of E.O. 464, therefore, cannot be dismissed outright as invalid by the mere fact that it sanctions claims of
executive privilege. This Court must look further and assess the claim of privilege authorized by the Order to determine
whether it is valid.

While the validity of claims of privilege must be assessed on a case to case basis, examining the ground invoked therefor
and the particular circumstances surrounding it, there is, in an implied claim of privilege, a defect that renders it invalid
per se. By its very nature, and as demonstrated by the letter of respondent Executive Secretary quoted above, the implied
claim authorized by Section 3 of E.O. 464 is not accompanied by any specific allegation of the basis thereof (e.g., whether
the information demanded involves military or diplomatic secrets, closed-door Cabinet meetings, etc.). While Section 2(a)
enumerates the types of information that are covered by the privilege under the challenged order, Congress is left to
speculate as to which among them is being referred to by the executive. The enumeration is not even intended to be
comprehensive, but a mere statement of what is included in the phrase "confidential or classified information between
the President and the public officers covered by this executive order."

Certainly, Congress has the right to know why the executive considers the requested information privileged. It does not
suffice to merely declare that the President, or an authorized head of office, has determined that it is so, and that the
President has not overturned that determination. Such declaration leaves Congress in the dark on how the requested
information could be classified as privileged. That the message is couched in terms that, on first impression, do not seem
like a claim of privilege only makes it more pernicious. It threatens to make Congress doubly blind to the question of why
the executive branch is not providing it with the information that it has requested.

A claim of privilege, being a claim of exemption from an obligation to disclose information, must, therefore, be clearly
asserted. As U.S. v. Reynolds teaches:

The privilege belongs to the government and must be asserted by it; it can neither be claimed nor waived by a private
party. It is not to be lightly invoked. There must be a formal claim of privilege, lodged by the head of the department
which has control over the matter, after actual personal consideration by that officer. The court itself must determine
whether the circumstances are appropriate for the claim of privilege, and yet do so without forcing a disclosure of the
very thing the privilege is designed to protect.92 (Underscoring supplied)

Absent then a statement of the specific basis of a claim of executive privilege, there is no way of determining whether it
falls under one of the traditional privileges, or whether, given the circumstances in which it is made, it should be
respected.93These, in substance, were the same criteria in assessing the claim of privilege asserted against the
Ombudsman in Almonte v. Vasquez94 and, more in point, against a committee of the Senate in Senate Select Committee
on Presidential Campaign Activities v. Nixon.95

A.O. Smith v. Federal Trade Commission is enlightening:

[T]he lack of specificity renders an assessment of the potential harm resulting from disclosure impossible, thereby
preventing the Court from balancing such harm against plaintiffs’ needs to determine whether to override any claims of
privilege.96 (Underscoring supplied)

And so is U.S. v. Article of Drug:97

On the present state of the record, this Court is not called upon to perform this balancing operation. In stating its
objection to claimant’s interrogatories, government asserts, and nothing more, that the disclosures sought by claimant
would inhibit the free expression of opinion that non-disclosure is designed to protect. The government has not shown –
nor even alleged – that those who evaluated claimant’s product were involved in internal policymaking, generally, or in
this particular instance. Privilege cannot be set up by an unsupported claim. The facts upon which the privilege is based
must be established. To find these interrogatories objectionable, this Court would have to assume that the evaluation and
classification of claimant’s products was a matter of internal policy formulation, an assumption in which this Court is
unwilling to indulge sua sponte.98 (Emphasis and underscoring supplied)

Mobil Oil Corp. v. Department of Energy99 similarly emphasizes that "an agency must provide ‘precise and certain’
reasons for preserving the confidentiality of requested information."

Black v. Sheraton Corp. of America100 amplifies, thus:

A formal and proper claim of executive privilege requires a specific designation and description of the documents within
its scope as well as precise and certain reasons for preserving their confidentiality. Without this specificity, it is impossible
for a court to analyze the claim short of disclosure of the very thing sought to be protected. As the affidavit now stands,
the Court has little more than its sua sponte speculation with which to weigh the applicability of the claim. An improperly
asserted claim of privilege is no claim of privilege. Therefore, despite the fact that a claim was made by the proper
executive as Reynolds requires, the Court can not recognize the claim in the instant case because it is legally insufficient to
allow the Court to make a just and reasonable determination as to its applicability. To recognize such a broad claim in
which the Defendant has given no precise or compelling reasons to shield these documents from outside scrutiny, would
make a farce of the whole procedure.101 (Emphasis and underscoring supplied)

Due respect for a co-equal branch of government, moreover, demands no less than a claim of privilege clearly stating the
grounds therefor. Apropos is the following ruling in McPhaul v. U.S:102

We think the Court’s decision in United States v. Bryan, 339 U.S. 323, 70 S. Ct. 724, is highly relevant to these questions.
For it is as true here as it was there, that ‘if (petitioner) had legitimate reasons for failing to produce the records of the
association, a decent respect for the House of Representatives, by whose authority the subpoenas issued, would have
required that (he) state (his) reasons for noncompliance upon the return of the writ. Such a statement would have given
the Subcommittee an opportunity to avoid the blocking of its inquiry by taking other appropriate steps to obtain the
records. ‘To deny the Committee the opportunity to consider the objection or remedy is in itself a contempt of its
authority and an obstruction of its processes. His failure to make any such statement was "a patent evasion of the duty of
one summoned to produce papers before a congressional committee[, and] cannot be condoned." (Emphasis and
underscoring supplied; citations omitted)

Upon the other hand, Congress must not require the executive to state the reasons for the claim with such particularity as
to compel disclosure of the information which the privilege is meant to protect.103 A useful analogy in determining the
requisite degree of particularity would be the privilege against self-incrimination. Thus, Hoffman v. U.S.104 declares:

The witness is not exonerated from answering merely because he declares that in so doing he would incriminate himself –
his say-so does not of itself establish the hazard of incrimination. It is for the court to say whether his silence is justified,
and to require him to answer if ‘it clearly appears to the court that he is mistaken.’ However, if the witness, upon
interposing his claim, were required to prove the hazard in the sense in which a claim is usually required to be established
in court, he would be compelled to surrender the very protection which the privilege is designed to guarantee. To sustain
the privilege, it need only be evident from the implications of the question, in the setting in which it is asked, that a
responsive answer to the question or an explanation of why it cannot be answered might be dangerous because injurious
disclosure could result." x x x (Emphasis and underscoring supplied)

The claim of privilege under Section 3 of E.O. 464 in relation to Section 2(b) is thus invalid per se. It is not asserted. It is
merely implied. Instead of providing precise and certain reasons for the claim, it merely invokes E.O. 464, coupled with an
announcement that the President has not given her consent. It is woefully insufficient for Congress to determine whether
the withholding of information is justified under the circumstances of each case. It severely frustrates the power of inquiry
of Congress.

In fine, Section 3 and Section 2(b) of E.O. 464 must be invalidated.

No infirmity, however, can be imputed to Section 2(a) as it merely provides guidelines, binding only on the heads of office
mentioned in Section 2(b), on what is covered by executive privilege. It does not purport to be conclusive on the other
branches of government. It may thus be construed as a mere expression of opinion by the President regarding the nature
and scope of executive privilege.

Petitioners, however, assert as another ground for invalidating the challenged order the alleged unlawful delegation of
authority to the heads of offices in Section 2(b). Petitioner Senate of the Philippines, in particular, cites the case of the
United States where, so it claims, only the President can assert executive privilege to withhold information from Congress.

Section 2(b) in relation to Section 3 virtually provides that, once the head of office determines that a certain information is
privileged, such determination is presumed to bear the President’s authority and has the effect of prohibiting the official
from appearing before Congress, subject only to the express pronouncement of the President that it is allowing the
appearance of such official. These provisions thus allow the President to authorize claims of privilege by mere silence.

Such presumptive authorization, however, is contrary to the exceptional nature of the privilege. Executive privilege, as
already discussed, is recognized with respect to information the confidential nature of which is crucial to the fulfillment of
the unique role and responsibilities of the executive branch,105 or in those instances where exemption from disclosure is
necessary to the discharge of highly important executive responsibilities.106 The doctrine of executive privilege is thus
premised on the fact that certain informations must, as a matter of necessity, be kept confidential in pursuit of the public
interest. The privilege being, by definition, an exemption from the obligation to disclose information, in this case to
Congress, the necessity must be of such high degree as to outweigh the public interest in enforcing that obligation in a
particular case.

In light of this highly exceptional nature of the privilege, the Court finds it essential to limit to the President the power to
invoke the privilege. She may of course authorize the Executive Secretary to invoke the privilege on her behalf, in which
case the Executive Secretary must state that the authority is "By order of the President," which means that he personally
consulted with her. The privilege being an extraordinary power, it must be wielded only by the highest official in the
executive hierarchy. In other words, the President may not authorize her subordinates to exercise such power. There is
even less reason to uphold such authorization in the instant case where the authorization is not explicit but by mere
silence. Section 3, in relation to Section 2(b), is further invalid on this score.

It follows, therefore, that when an official is being summoned by Congress on a matter which, in his own judgment, might
be covered by executive privilege, he must be afforded reasonable time to inform the President or the Executive Secretary
of the possible need for invoking the privilege. This is necessary in order to provide the President or the Executive
Secretary with fair opportunity to consider whether the matter indeed calls for a claim of executive privilege. If, after the
lapse of that reasonable time, neither the President nor the Executive Secretary invokes the privilege, Congress is no
longer bound to respect the failure of the official to appear before Congress and may then opt to avail of the necessary
legal means to compel his appearance.

The Court notes that one of the expressed purposes for requiring officials to secure the consent of the President under
Section 3 of E.O. 464 is to ensure "respect for the rights of public officials appearing in inquiries in aid of legislation." That
such rights must indeed be respected by Congress is an echo from Article VI Section 21 of the Constitution mandating that
"[t]he rights of persons appearing in or affected by such inquiries shall be respected."

In light of the above discussion of Section 3, it is clear that it is essentially an authorization for implied claims of executive
privilege, for which reason it must be invalidated. That such authorization is partly motivated by the need to ensure
respect for such officials does not change the infirm nature of the authorization itself.

Right to Information

E.O 464 is concerned only with the demands of Congress for the appearance of executive officials in the hearings
conducted by it, and not with the demands of citizens for information pursuant to their right to information on matters of
public concern. Petitioners are not amiss in claiming, however, that what is involved in the present controversy is not
merely the legislative power of inquiry, but the right of the people to information.

There are, it bears noting, clear distinctions between the right of Congress to information which underlies the power of
inquiry and the right of the people to information on matters of public concern. For one, the demand of a citizen for the
production of documents pursuant to his right to information does not have the same obligatory force as a subpoena
duces tecum issued by Congress. Neither does the right to information grant a citizen the power to exact testimony from
government officials. These powers belong only to Congress and not to an individual citizen.

Thus, while Congress is composed of representatives elected by the people, it does not follow, except in a highly qualified
sense, that in every exercise of its power of inquiry, the people are exercising their right to information.

To the extent that investigations in aid of legislation are generally conducted in public, however, any executive issuance
tending to unduly limit disclosures of information in such investigations necessarily deprives the people of information
which, being presumed to be in aid of legislation, is presumed to be a matter of public concern. The citizens are thereby
denied access to information which they can use in formulating their own opinions on the matter before Congress —
opinions which they can then communicate to their representatives and other government officials through the various
legal means allowed by their freedom of expression. Thus holds Valmonte v. Belmonte:

It is in the interest of the State that the channels for free political discussion be maintained to the end that the
government may perceive and be responsive to the people’s will. Yet, this open dialogue can be effective only to the
extent that the citizenry is informed and thus able to formulate its will intelligently. Only when the participants in the
discussion are aware of the issues and have access to information relating thereto can such bear fruit.107 (Emphasis and
underscoring supplied)

The impairment of the right of the people to information as a consequence of E.O. 464 is, therefore, in the sense
explained above, just as direct as its violation of the legislature’s power of inquiry.

Implementation of E.O. 464 prior to its publication

While E.O. 464 applies only to officials of the executive branch, it does not follow that the same is exempt from the need
for publication. On the need for publishing even those statutes that do not directly apply to people in general, Tañada v.
Tuvera states:

The term "laws" should refer to all laws and not only to those of general application, for strictly speaking all laws relate to
the people in general albeit there are some that do not apply to them directly. An example is a law granting citizenship to
a particular individual, like a relative of President Marcos who was decreed instant naturalization. It surely cannot be said
that such a law does not affect the public although it unquestionably does not apply directly to all the people. The subject
of such law is a matter of public interest which any member of the body politic may question in the political forums or, if
he is a proper party, even in courts of justice.108 (Emphasis and underscoring supplied)

Although the above statement was made in reference to statutes, logic dictates that the challenged order must be
covered by the publication requirement. As explained above, E.O. 464 has a direct effect on the right of the people to
information on matters of public concern. It is, therefore, a matter of public interest which members of the body politic
may question before this Court. Due process thus requires that the people should have been apprised of this issuance
before it was implemented.

Conclusion

Congress undoubtedly has a right to information from the executive branch whenever it is sought in aid of legislation. If
the executive branch withholds such information on the ground that it is privileged, it must so assert it and state the
reason therefor and why it must be respected.
The infirm provisions of E.O. 464, however, allow the executive branch to evade congressional requests for information
without need of clearly asserting a right to do so and/or proffering its reasons therefor. By the mere expedient of invoking
said provisions, the power of Congress to conduct inquiries in aid of legislation is frustrated. That is impermissible. For

[w]hat republican theory did accomplish…was to reverse the old presumption in favor of secrecy, based on the divine
right of kings and nobles, and replace it with a presumption in favor of publicity, based on the doctrine of popular
sovereignty. (Underscoring supplied)109

Resort to any means then by which officials of the executive branch could refuse to divulge information cannot be
presumed valid. Otherwise, we shall not have merely nullified the power of our legislature to inquire into the operations
of government, but we shall have given up something of much greater value – our right as a people to take part in
government.

WHEREFORE, the petitions are PARTLY GRANTED. Sections 2(b) and 3 of Executive Order No. 464 (series of 2005),
"Ensuring Observance of the Principle of Separation of Powers, Adherence to the Rule on Executive

Privilege and Respect for the Rights of Public Officials Appearing in Legislative Inquiries in Aid of Legislation Under the
Constitution, and For Other Purposes," are declared VOID. Sections 1 and 2(a) are, however, VALID.

SO ORDERED.

CONCHITA CARPIO MORALES 

Associate Justice
No. 209287               July 1, 2014

MARIA CAROLINA P. ARAULLO, CHAIRPERSON, BAGONG ALYANSANG MAKABAYAN; JUDY M. TAGUIWALO, PROFESSOR,
UNIVERSITY OF THE PHILIPPINES DILIMAN, CO-CHAIRPERSON, PAGBABAGO; HENRI KAHN, CONCERNED CITIZENS
MOVEMENT; REP. LUZ ILAGAN, GABRIELA WOMEN'S PARTY REPRESENTATIVE; REP. CARLOS ISAGANI ZARATE, BAY AN
MUNA PARTY-LIST REPRESENTATIVE; RENATO M. REYES, JR., SECRETARY GENERAL OF BAYAN; MANUEL K. DAYRIT,
CHAIRMAN, ANG KAPATIRAN PARTY; VENCER MARI E. CRISOSTOMO, CHAIRPERSON, ANAKBAYAN; VICTOR VILLANUEVA,
CONVENOR, YOUTH ACT NOW, Petitioners, 
vs.
BENIGNO SIMEON C. AQUINO III, PRESIDENT OF THE REPUBLIC OF THE PHILIPPINES; PAQUITO N. OCHOA, JR., EXECUTIVE
SECRETARY; AND FLORENCIO B. ABAD, SECRETARY OF THE DEPARTMENT OF BUDGET AND MANAGEMENT,Respondents.
DECISION

BERSAMIN, J.:

For resolution are the consolidated petitions assailing the constitutionality of the Disbursement Acceleration
Program(DAP), National Budget Circular (NBC) No. 541, and related issuances of the Department of Budget and
Management (DBM) implementing the DAP.

At the core of the controversy is Section 29(1) of Article VI of the 1987 Constitution, a provision of the fundamental law
that firmly ordains that "[n]o money shall be paid out of the Treasury except in pursuance of an appropriation made by
law." The tenor and context of the challenges posed by the petitioners against the DAP indicate that the DAP contravened
this provision by allowing the Executive to allocate public money pooled from programmed and unprogrammed funds of
its various agencies in the guise of the President exercising his constitutional authority under Section 25(5) of the 1987
Constitution to transfer funds out of savings to augment the appropriations of offices within the Executive Branch of the
Government. But the challenges are further complicated by the interjection of allegations of transfer of funds to agencies
or offices outside of the Executive.

Antecedents

What has precipitated the controversy?

On September 25, 2013, Sen. Jinggoy Ejercito Estrada delivered a privilege speech in the Senate of the Philippines to
reveal that some Senators, including himself, had been allotted an additional ₱50 Million each as "incentive" for voting in
favor of the impeachment of Chief Justice Renato C. Corona.

Responding to Sen. Estrada’s revelation, Secretary Florencio Abad of the DBM issued a public statement entitled Abad:
Releases to Senators Part of Spending Acceleration Program,1 explaining that the funds released to the Senators had been
part of the DAP, a program designed by the DBM to ramp up spending to accelerate economic expansion. He clarified that
the funds had been released to the Senators based on their letters of request for funding; and that it was not the first time
that releases from the DAP had been made because the DAP had already been instituted in 2011 to ramp up spending
after sluggish disbursements had caused the growth of the gross domestic product (GDP) to slow down. He explained that
the funds under the DAP were usually taken from (1) unreleased appropriations under Personnel Services;2 (2)
unprogrammed funds; (3) carry-over appropriations unreleased from the previous year; and (4) budgets for slow-moving
items or projects that had been realigned to support faster-disbursing projects.

The DBM soon came out to claim in its website3 that the DAP releases had been sourced from savings generated by the
Government, and from unprogrammed funds; and that the savings had been derived from (1) the pooling of unreleased
appropriations, like unreleased Personnel Services4 appropriations that would lapse at the end of the year, unreleased
appropriations of slow-moving projects and discontinued projects per zero based budgeting findings;5 and (2) the
withdrawal of unobligated allotments also for slow-moving programs and projects that had been earlier released to the
agencies of the National Government.
The DBM listed the following as the legal bases for the DAP’s use of savings,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 revelation of Sen. Estrada and the reactions of Sec. Abad and the DBM brought the DAP to the consciousness of the
Nation for the first time, and made this present controversy inevitable. That the issues against the DAP came at a time
when the Nation was still seething in anger over Congressional pork barrel – "an appropriation of government spending
meant for localized projects and secured solely or primarily to bring money to a representative’s district"7 – excited the
Nation as heatedly as the pork barrel controversy.

Nine petitions assailing the constitutionality of the DAP and the issuances relating to the DAP were filed within days of
each other, as follows: G.R. No. 209135 (Syjuco), on October 7, 2013; G.R. No. 209136 (Luna), on October 7, 2013; G.R. No.
209155 (Villegas),8 on October 16, 2013; G.R. No. 209164 (PHILCONSA), on October 8, 2013; G.R. No. 209260 (IBP), on
October 16, 2013; G.R. No. 209287 (Araullo), on October 17, 2013; G.R. No. 209442 (Belgica), on October 29, 2013; G.R.
No. 209517 (COURAGE), on November6, 2013; and G.R. No. 209569 (VACC), on November 8, 2013.

In G.R. No. 209287 (Araullo), the petitioners brought to the Court’s attention NBC No. 541 (Adoption of Operational
Efficiency Measure – Withdrawal of Agencies’ Unobligated Allotments as of June 30, 2012), alleging that NBC No. 541,
which was issued to implement the DAP, directed the withdrawal of unobligated allotments as of June 30, 2012 of
government agencies and offices with low levels of obligations, both for continuing and current allotments.

In due time, the respondents filed their Consolidated Comment through the Office of the Solicitor General (OSG).

The Court directed the holding of oral arguments on the significant issues raised and joined.

Issues

Under the Advisory issued on November 14, 2013, the presentations of the parties during the oral arguments were limited
to the following, to wit:

Procedural Issue:

A. Whether or not certiorari, prohibition, and mandamus are proper remedies to assail the constitutionality and validity of
the Disbursement Acceleration Program (DAP), National Budget Circular (NBC) No. 541, and all other executive issuances
allegedly implementing the DAP. Subsumed in this issue are whether there is a controversy ripe for judicial determination,
and the standing of petitioners.

Substantive Issues:

B. Whether or not the DAP violates Sec. 29, Art. VI of the 1987 Constitution, which provides: "No money shall be paid out
of the Treasury except in pursuance of an appropriation made by law."

C. Whether or not the DAP, NBC No. 541, and all other executive issuances allegedly implementing the DAP violate Sec.
25(5), Art. VI of the 1987 Constitution insofar as:

(a)They treat the unreleased appropriations and unobligated allotments withdrawn from government agencies as
"savings" as the term is used in Sec. 25(5), in relation to the provisions of the GAAs of 2011, 2012 and 2013;
(b)They authorize the disbursement of funds for projects or programs not provided in the GAAs for the Executive
Department; and

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

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

E. Whether or not factual and legal justification exists to issue a temporary restraining order to restrain the
implementation of the DAP, NBC No. 541, and all other executive issuances allegedly implementing the DAP.

In its Consolidated Comment, the OSG raised the matter of unprogrammed funds in order to support its argument
regarding the President’s power to spend. During the oral arguments, the propriety of releasing unprogrammed funds to
support projects under the DAP was considerably discussed. The petitioners in G.R. No. 209287 (Araullo) and G.R. No.
209442 (Belgica) dwelled on unprogrammed funds in their respective memoranda. Hence, an additional issue for the oral
arguments is stated as follows:

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

During the oral arguments held on November 19, 2013, the Court directed Sec. Abad to submit a list of savings brought
under the DAP that had been sourced from (a) completed programs; (b) discontinued or abandoned programs; (c) unpaid
appropriations for compensation; (d) a certified copy of the President’s directive dated June 27, 2012 referred to in NBC
No. 541; and (e) all circulars or orders issued in relation to the DAP.9

In compliance, the OSG submitted several documents, as follows:

(1) A certified copy of the Memorandum for the President dated June 25, 2012 (Omnibus Authority to Consolidate
Savings/Unutilized Balances and their Realignment);10

(2) Circulars and orders, which the respondents identified as related to the DAP, namely:

a. NBC No. 528 dated January 3, 2011 (Guidelines on the Release of Funds for FY 2011);

b. NBC No. 535 dated December 29, 2011 (Guidelines on the Release of Funds for FY 2012);

c. NBC No. 541 dated July 18, 2012 (Adoption of Operational Efficiency Measure – Withdrawal of Agencies’ Unobligated
Allotments as of June 30, 2012);

d. NBC No. 545 dated January 2, 2013 (Guidelines on the Release of Funds for FY 2013);

e. DBM Circular Letter No. 2004-2 dated January 26, 2004 (Budgetary Treatment of Commitments/Obligations of the
National Government);

f. COA-DBM Joint Circular No. 2013-1 dated March 15, 2013 (Revised Guidelines on the Submission of Quarterly
Accountability Reports on Appropriations, Allotments, Obligations and Disbursements);

g. NBC No. 440 dated January 30, 1995 (Adoption of a Simplified Fund Release System in the Government).

(3) A breakdown of the sources of savings, including savings from discontinued projects and unpaid appropriations for
compensation from 2011 to 2013
On January 28, 2014, the OSG, to comply with the Resolution issued on January 21, 2014 directing the respondents to
submit the documents not yet submitted in compliance with the directives of the Court or its Members, submitted several
evidence packets to aid the Court in understanding the factual bases of the DAP, to wit:

(1) First Evidence Packet11 – containing seven memoranda issued by the DBM through Sec. Abad, inclusive of annexes,
listing in detail the 116 DAP identified projects approved and duly signed by the President, as follows:

a. Memorandum for the President dated October 12, 2011 (FY 2011 Proposed Disbursement Acceleration Program
(Projects and Sources of Funds);

b. Memorandum for the President dated December 12, 2011 (Omnibus Authority to Consolidate Savings/Unutilized
Balances and its Realignment);

c. Memorandum for the President dated June 25, 2012 (Omnibus Authority to Consolidate Savings/Unutilized Balances
and their Realignment);

d. Memorandum for the President dated September 4, 2012 (Release of funds for other priority projects and expenditures
of the Government);

e. Memorandum for the President dated December 19, 2012 (Proposed Priority Projects and Expenditures of the
Government);

f. Memorandum for the President dated May 20, 2013 (Omnibus Authority to Consolidate Savings/Unutilized Balances
and their Realignment to Fund the Quarterly Disbursement Acceleration Program); and

g. Memorandum for the President dated September 25, 2013 (Funding for the Task Force Pablo Rehabilitation Plan).

(2) Second Evidence Packet12 – consisting of 15 applications of the DAP, with their corresponding Special Allotment
Release Orders (SAROs) and appropriation covers;

(3) Third Evidence Packet13 – containing a list and descriptions of 12 projects under the DAP;

(4) Fourth Evidence Packet14 – identifying the DAP-related portions of the Annual Financial Report (AFR) of the
Commission on Audit for 2011 and 2012;

(5) Fifth Evidence Packet15 – containing a letter of Department of Transportation and Communications(DOTC) Sec. Joseph
Abaya addressed to Sec. Abad recommending the withdrawal of funds from his agency, inclusive of annexes; and

(6) Sixth Evidence Packet16 – a print-out of the Solicitor General’s visual presentation for the January 28, 2014 oral
arguments.

On February 5, 2014,17 the OSG forwarded the Seventh Evidence Packet,18 which listed the sources of funds brought
under the DAP, the uses of such funds per project or activity pursuant to DAP, and the legal bases thereof.

On February 14, 2014, the OSG submitted another set of documents in further compliance with the Resolution dated
January 28, 2014, viz:

(1) Certified copies of the certifications issued by the Bureau of Treasury to the effect that the revenue collections
exceeded the original revenue targets for the years 2011, 2012 and 2013, including collections arising from sources not
considered in the original revenue targets, which certifications were required for the release of the unprogrammed funds
as provided in Special Provision No. 1 of Article XLV, Article XVI, and Article XLV of the 2011, 2012 and 2013 GAAs; and (2)
A report on releases of savings of the Executive Department for the use of the Constitutional Commissions and other
branches of the Government, as well as the fund releases to the Senate and the Commission on Elections (COMELEC).
RULING

I.

Procedural Issue:

a) The petitions under Rule 65 are proper remedies

All the petitions are filed under Rule 65 of the Rules of Court, and include applications for the issuance of writs of
preliminary prohibitory injunction or temporary restraining orders. More specifically, the nature of the petitions is
individually set forth hereunder, to wit:

G.R. No. 209135 (Syjuco)Certiorari, Prohibition and MandamusG.R. No. 209136 (Luna)Certiorariand ProhibitionG.R. No.
209155 (Villegas)Certiorariand ProhibitionG.R. No. 209164 (PHILCONSA)Certiorariand ProhibitionG.R. No. 209260
(IBP)ProhibitionG.R. No. 209287 (Araullo)Certiorariand ProhibitionG.R. No. 209442 (Belgica)CertiorariG.R. No. 209517
(COURAGE)Certiorari and ProhibitionG.R. No. 209569 (VACC)Certiorari and Prohibition

The respondents submit that there is no actual controversy that is ripe for adjudication in the absence of adverse claims
between the parties;19 that the petitioners lacked legal standing to sue because no allegations were made to the effect
that they had suffered any injury as a result of the adoption of the DAP and issuance of NBC No. 541; that their being
taxpayers did not immediately confer upon the petitioners the legal standing to sue considering that the adoption and
implementation of the DAP and the issuance of NBC No. 541 were not in the exercise of the taxing or spending power of
Congress;20 and that even if the petitioners had suffered injury, there were plain, speedy and adequate remedies in the
ordinary course of law available to them, like assailing the regularity of the DAP and related issuances before the
Commission on Audit (COA) or in the trial courts.21

The respondents aver that the special civil actions of certiorari and prohibition are not proper actions for directly assailing
the constitutionality and validity of the DAP, NBC No. 541, and the other executive issuances implementing the DAP.22

In their memorandum, the respondents further contend that there is no authorized proceeding under the Constitution
and the Rules of Court for questioning the validity of any law unless there is an actual case or controversy the resolution
of which requires the determination of the constitutional question; that the jurisdiction of the Court is largely appellate;
that for a court of law to pass upon the constitutionality of a law or any act of the Government when there is no case or
controversy is for that court to set itself up as a reviewer of the acts of Congress and of the President in violation of the
principle of separation of powers; and that, in the absence of a pending case or controversy involving the DAP and NBC
No. 541, any decision herein could amount to a mere advisory opinion that no court can validly render.23

The respondents argue that it is the application of the DAP to actual situations that the petitioners can question either in
the trial courts or in the COA; that if the petitioners are dissatisfied with the ruling either of the trial courts or of the COA,
they can appeal the decision of the trial courts by petition for review on certiorari, or assail the decision or final order of
the COA by special civil action for certiorari under Rule 64 of the Rules of Court.24

The respondents’ arguments and submissions on the procedural issue are bereft of merit.

Section 1, Article VIII of the 1987 Constitution expressly provides:

Section 1. The judicial power shall be vested in one Supreme Court and in such lower courts as may be established by law.

Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally
demandable and enforceable, and to determine whether or not there has been a grave abuse of discretion amounting to
lack or excess of jurisdiction on the part of any branch or instrumentality of the Government.
Thus, the Constitution vests judicial power in the Court and in such lower courts as may be established by law. In creating
a lower court, Congress concomitantly determines the jurisdiction of that court, and that court, upon its creation,
becomes by operation of the Constitution one of the repositories of judicial power.25 However, only the Court is a
constitutionally created court, the rest being created by Congress in its exercise of the legislative power.

The Constitution states that judicial power includes the duty of the courts of justice not only "to settle actual
controversies involving rights which are legally demandable and enforceable" but also "to determine whether or not there
has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or
instrumentality of the Government." It has thereby expanded the concept of judicial power, which up to then was
confined to its traditional ambit of settling actual controversies involving rights that were legally demandable and
enforceable.

The background and rationale of the expansion of judicial power under the 1987 Constitution were laid out during the
deliberations of the 1986 Constitutional Commission by Commissioner Roberto R. Concepcion (a former Chief Justice of
the Philippines) in his sponsorship of the proposed provisions on the Judiciary, where he said:–

The Supreme Court, like all other courts, has one main function: to settle actual controversies involving conflicts of rights
which are demandable and enforceable. There are rights which are guaranteed by law but cannot be enforced by a
judicial party. In a decided case, a husband complained that his wife was unwilling to perform her duties as a wife. The
Court said: "We can tell your wife what her duties as such are and that she is bound to comply with them, but we cannot
force her physically to discharge her main marital duty to her husband. There are some rights guaranteed by law, but they
are so personal that to enforce them by actual compulsion would be highly derogatory to human dignity." This is why the
first part of the second paragraph of Section 1 provides that: Judicial power includes the duty of courts to settle actual
controversies involving rights which are legally demandable or enforceable…

The courts, therefore, cannot entertain, much less decide, hypothetical questions. In a presidential system of government,
the Supreme Court has, also, another important function. The powers of government are generally considered divided
into three branches: the Legislative, the Executive and the Judiciary. Each one is supreme within its own sphere and
independent of the others. Because of that supremacy power to determine whether a given law is valid or not is vested in
courts of justice.

Briefly stated, courts of justice determine the limits of power of the agencies and offices of the government as well as
those of its officers. In other words, the judiciary is the final arbiter on the question whether or not a branch of
government or any of its officials has acted without jurisdiction or in excess of jurisdiction, or so capriciously as to
constitute an abuse of discretion amounting to excess of jurisdiction or lack of jurisdiction. This is not only a judicial power
but a duty to pass judgmenton matters of this nature.

This is the background of paragraph 2 of Section 1, which means that the courts cannot hereafter evade the duty to settle
matters of this nature, by claiming that such matters constitute a political question. (Bold emphasis supplied)26

Upon interpellation by Commissioner Nolledo, Commissioner Concepcion clarified the scope of judicial power in the
following manner:–

MR. NOLLEDO. x x x

The second paragraph of Section 1 states: "Judicial power includes the duty of courts of justice to settle actual
controversies…" The term "actual controversies" according to the Commissioner should refer to questions which are
political in nature and, therefore, the courts should not refuse to decide those political questions. But do I understand it
right that this is restrictive or only an example? I know there are cases which are not actual yet the court can assume
jurisdiction. An example is the petition for declaratory relief.

May I ask the Commissioner’s opinion about that?

MR. CONCEPCION. The Supreme Court has no jurisdiction to grant declaratory judgments.

MR. NOLLEDO. The Gentleman used the term "judicial power" but judicial power is not vested in the Supreme Court alone
but also in other lower courts as may be created by law.

MR. CONCEPCION. Yes.

MR. NOLLEDO. And so, is this only an example?

MR. CONCEPCION. No, I know this is not. The Gentleman seems to identify political questions with jurisdictional
questions. But there is a difference.

MR. NOLLEDO. Because of the expression "judicial power"?

MR. CONCEPCION. No. Judicial power, as I said, refers to ordinary cases but where there is a question as to whether the
government had authority or had abused its authority to the extent of lacking jurisdiction or excess of jurisdiction, that is
not a political question. Therefore, the court has the duty to decide.27

Our previous Constitutions equally recognized the extent of the power of judicial review and the great responsibility of
the Judiciary in maintaining the allocation of powers among the three great branches of Government. Speaking for the
Court in Angara v. Electoral Commission,28 Justice Jose P. Laurel intoned:

x x x In times of social disquietude or political excitement, the great landmarks of the Constitution are apt to be forgotten
or marred, if not entirely obliterated. In cases of conflict, the judicial department is the only constitutional organ which
can be called upon to determine the proper allocation of powers between the several department and among the integral
or constituent units thereof.

xxxx

The Constitution is a definition of the powers of government. Who is to determine the nature, scope and extent of such
powers? The Constitution itself has provided for the instrumentality of the judiciary as the rational way. And when the
judiciary mediates to allocate constitutional boundaries, it does not assert any superiority over the other department; it
does not in reality nullify or invalidate an act of the legislature, but only asserts the solemn and sacred obligation assigned
to it by the Constitution to determine conflicting claims of authority under the Constitution and to establish for the parties
in an actual controversy the rights which that instrument secures and guarantees to them. This is in truth all that is
involved in what is termed "judicial supremacy" which properly is the power of judicial review under the Constitution. x x
x29

What are the remedies by which the grave abuse of discretion amounting to lack or excess of jurisdiction on the part of
any branch or instrumentality of the Government may be determined under the Constitution?

The present Rules of Court uses two special civil actions for determining and correcting grave abuse of discretion
amounting to lack or excess of jurisdiction. These are the special civil actions for certiorari and prohibition, and both are
governed by Rule 65. A similar remedy of certiorari exists under Rule 64, but the remedy is expressly applicable only to the
judgments and final orders or resolutions of the Commission on Elections and the Commission on Audit.

The ordinary nature and function of the writ of certiorari in our present system are aptly explained in Delos Santos v.
Metropolitan Bank and Trust Company:30

In the common law, from which the remedy of certiorari evolved, the writ of certiorari was issued out of Chancery, or the
King’s Bench, commanding agents or officers of the inferior courts to return the record of a cause pending before them, so
as to give the party more sure and speedy justice, for the writ would enable the superior court to determine from an
inspection of the record whether the inferior court’s judgment was rendered without authority. The errors were of such a
nature that, if allowed to stand, they would result in a substantial injury to the petitioner to whom no other remedy was
available. If the inferior court acted without authority, the record was then revised and corrected in matters of law. The
writ of certiorari was limited to cases in which the inferior court was said to be exceeding its jurisdiction or was not
proceeding according to essential requirements of law and would lie only to review judicial or quasi-judicial acts.

The concept of the remedy of certiorari in our judicial system remains much the same as it has been in the common law.
In this jurisdiction, however, the exercise of the power to issue the writ of certiorari is largely regulated by laying down
the instances or situations in the Rules of Court in which a superior court may issue the writ of certiorari to an inferior
court or officer. Section 1, Rule 65 of the Rules of Court compellingly provides the requirements for that purpose, viz:

xxxx

The sole office of the writ of certiorari is the correction of errors of jurisdiction, which includes the commission of grave
abuse of discretion amounting to lack of jurisdiction. In this regard, mere abuse of discretion is not enough to warrant the
issuance of the writ. The abuse of discretion must be grave, which means either that the judicial or quasi-judicial power
was exercised in an arbitrary or despotic manner by reason of passion or personal hostility, or that the respondent judge,
tribunal or board evaded a positive duty, or virtually refused to perform the duty enjoined or to act in contemplation of
law, such as when such judge, tribunal or board exercising judicial or quasi-judicial powers acted in a capricious or
whimsical manner as to be equivalent to lack of jurisdiction.31

Although similar to prohibition in that it will lie for want or excess of jurisdiction, certiorari is to be distinguished from
prohibition by the fact that it is a corrective remedy used for the re-examination of some action of an inferior tribunal, and
is directed to the cause or proceeding in the lower court and not to the court itself, while prohibition is a preventative
remedy issuing to restrain future action, and is directed to the court itself.32 The Court expounded on the nature and
function of the writ of prohibition in Holy Spirit Homeowners Association, Inc. v. Defensor:33

A petition for prohibition is also not the proper remedy to assail an IRR issued in the exercise of a quasi-legislative
function. Prohibition is an extraordinary writ directed against any tribunal, corporation, board, officer or person, whether
exercising judicial, quasi-judicial or ministerial functions, ordering said entity or person to desist from further proceedings
when said proceedings are without or in excess of said entity’s or person’s jurisdiction, or are accompanied with grave
abuse of discretion, and there is no appeal or any other plain, speedy and adequate remedy in the ordinary course of law.
Prohibition lies against judicial or ministerial functions, but not against legislative or quasi-legislative functions. Generally,
the purpose of a writ of prohibition is to keep a lower court within the limits of its jurisdiction in order to maintain the
administration of justice in orderly channels. Prohibition is the proper remedy to afford relief against usurpation of
jurisdiction or power by an inferior court, or when, in the exercise of jurisdiction in handling matters clearly within its
cognizance the inferior court transgresses the bounds prescribed to it by the law, or where there is no adequate remedy
available in the ordinary course of law by which such relief can be obtained. Where the principal relief sought is to
invalidate an IRR, petitioners’ remedy is an ordinary action for its nullification, an action which properly falls under the
jurisdiction of the Regional Trial Court. In any case, petitioners’ allegation that "respondents are performing or
threatening to perform functions without or in excess of their jurisdiction" may appropriately be enjoined by the trial
court through a writ of injunction or a temporary restraining order.

With respect to the Court, however, the remedies of certiorari and prohibition are necessarily broader in scope and reach,
and the writ of certiorari or prohibition may be issued to correct errors of jurisdiction committed not only by a tribunal,
corporation, board or officer exercising judicial, quasi-judicial or ministerial functions but also to set right, undo and
restrain any act of grave abuse of discretion amounting to lack or excess of jurisdiction by any branch or instrumentality of
the Government, even if the latter does not exercise judicial, quasi-judicial or ministerial functions. This application is
expressly authorized by the text of the second paragraph of Section 1, supra.

Thus, petitions for certiorari and prohibition are appropriate remedies to raise constitutional issues and to review and/or
prohibit or nullify the acts of legislative and executive officials.34
Necessarily, in discharging its duty under Section 1, supra, to set right and undo any act of grave abuse of discretion
amounting to lack or excess of jurisdiction by any branch or instrumentality of the Government, the Court is not at all
precluded from making the inquiry provided the challenge was properly brought by interested or affected parties. The
Court has been thereby entrusted expressly or by necessary implication with both the duty and the obligation of
determining, in appropriate cases, the validity of any assailed legislative or executive action. This entrustment is
consistent with the republican system of checks and balances.35

Following our recent dispositions concerning the congressional pork barrel, the Court has become more alert to discharge
its constitutional duty. We will not now refrain from exercising our expanded judicial power in order to review and
determine, with authority, the limitations on the Chief Executive’s spending power.

b) Requisites for the exercise of the

power of judicial review were
complied with

The requisites for the exercise of the power of judicial review are the following, namely: (1) there must bean actual case
or justiciable controversy before the Court; (2) the question before the Court must be ripe for adjudication; (3) the person
challenging the act must be a proper party; and (4) the issue of constitutionality must be raised at the earliest opportunity
and must be the very litis mota of the case.36

The first requisite demands that there be an actual case calling for the exercise of judicial power by the Court.37 An actual
case or controversy, in the words of Belgica v. Executive Secretary Ochoa:38

x x x is one which involves a conflict of legal rights, an assertion of opposite legal claims, susceptible of judicial resolution
as distinguished from a hypothetical or abstract difference or dispute. In other words, "[t]here must be a contrariety of
legal rights that can be interpreted and enforced on the basis of existing law and jurisprudence." Related to the
requirement of an actual case or controversy is the requirement of "ripeness," meaning that the questions raised for
constitutional scrutiny are already ripe for adjudication. "A question is ripe for adjudication when the act being challenged
has had a direct adverse effect on the individual challenging it. It is a prerequisite that something had then been
accomplished or performed by either branch before a court may come into the picture, and the petitioner must allege the
existence of an immediate or threatened injury to itself as a result of the challenged action." "Withal, courts will decline to
pass upon constitutional issues through advisory opinions, bereft as they are of authority to resolve hypothetical or moot
questions."

An actual and justiciable controversy exists in these consolidated cases. The incompatibility of the perspectives of the
parties on the constitutionality of the DAP and its relevant issuances satisfy the requirement for a conflict between legal
rights. The issues being raised herein meet the requisite ripeness considering that the challenged executive acts were
already being implemented by the DBM, and there are averments by the petitioners that such implementation was
repugnant to the letter and spirit of the Constitution. Moreover, the implementation of the DAP entailed the allocation
and expenditure of huge sums of public funds. The fact that public funds have been allocated, disbursed or utilized by
reason or on account of such challenged executive acts gave rise, therefore, to an actual controversy that is ripe for
adjudication by the Court.

It is true that Sec. Abad manifested during the January 28, 2014 oral arguments that the DAP as a program had been
meanwhile discontinued because it had fully served its purpose, saying: "In conclusion, Your Honors, may I inform the
Court that because the DAP has already fully served its purpose, the Administration’s economic managers have
recommended its termination to the President. x x x."39

The Solicitor General then quickly confirmed the termination of the DAP as a program, and urged that its termination had
already mooted the challenges to the DAP’s constitutionality, viz:

DAP as a program, no longer exists, thereby mooting these present cases brought to challenge its constitutionality. Any
constitutional challenge should no longer be at the level of the program, which is now extinct, but at the level of its prior
applications or the specific disbursements under the now defunct policy. We challenge the petitioners to pick and choose
which among the 116 DAP projects they wish to nullify, the full details we will have provided by February 5. We urge this
Court to be cautious in limiting the constitutional authority of the President and the Legislature to respond to the dynamic
needs of the country and the evolving demands of governance, lest we end up straight jacketing our elected
representatives in ways not consistent with our constitutional structure and democratic principles.40

A moot and academic case is one that ceases to present a justiciable controversy by virtue of supervening events, so that
a declaration thereon would be of no practical use or value.41

The Court cannot agree that the termination of the DAP as a program was a supervening event that effectively mooted
these consolidated cases. Verily, the Court had in the past exercised its power of judicial review despite the cases being
rendered moot and academic by supervening events, like: (1) when there was a grave violation of the Constitution; (2)
when the case involved a situation of exceptional character and was of paramount public interest; (3) when the
constitutional issue raised required the formulation of controlling principles to guide the Bench, the Bar and the public;
and (4) when the case was capable of repetition yet evading review.42

Assuming that the petitioners’ several submissions against the DAP were ultimately sustained by the Court here, these
cases would definitely come under all the exceptions. Hence, the Court should not abstain from exercising its power of
judicial review.

Did the petitioners have the legal standing to sue?

Legal standing, as a requisite for the exercise of judicial review, refers to "a right of appearance in a court of justice on a
given question."43 The concept of legal standing, or locus standi, was particularly discussed in De Castro v. Judicial and
Bar Council,44 where the Court said:

In public or constitutional litigations, the Court is often burdened with the determination of the locus standi of the
petitioners due to the ever-present need to regulate the invocation of the intervention of the Court to correct any official
action or policy in order to avoid obstructing the efficient functioning of public officials and offices involved in public
service. It is required, therefore, that the petitioner must have a personal stake in the outcome of the controversy, for, as
indicated in Agan, Jr. v. Philippine International Air Terminals Co., Inc.:

The question on legal standing is whether such parties have "alleged such a personal stake in the outcome of the
controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the court so
largely depends for illumination of difficult constitutional questions." Accordingly, it has been held that the interest of a
person assailing the constitutionality of a statute must be direct and personal. He must be able to show, not only that the
law or any government act is invalid, but also that he sustained or is in imminent danger of sustaining some direct injury
as a result of its enforcement, and not merely that he suffers thereby in some indefinite way. It must appear that the
person complaining has been or is about to be denied some right or privilege to which he is lawfully entitled or that he is
about to be subjected to some burdens or penalties by reason of the statute or act complained of.

It is true that as early as in 1937, in People v. Vera, the Court adopted the direct injury test for determining whether a
petitioner in a public action had locus standi. There, the Court held that the person who would assail the validity of a
statute must have "a personal and substantial interest in the case such that he has sustained, or will sustain direct injury
as a result." Vera was followed in Custodio v. President of the Senate, Manila Race Horse Trainers’ Association v. De la
Fuente, Anti-Chinese League of the Philippines v. Felix, and Pascual v. Secretary of Public Works.

Yet, the Court has also held that the requirement of locus standi, being a mere procedural technicality, can be waived by
the Court in the exercise of its discretion. For instance, in 1949, in Araneta v. Dinglasan, the Court liberalized the approach
when the cases had "transcendental importance." Some notable controversies whose petitioners did not pass the direct
injury test were allowed to be treated in the same way as in Araneta v. Dinglasan.
In the 1975 decision in Aquino v. Commission on Elections, this Court decided to resolve the issues raised by the petition
due to their "far reaching implications," even if the petitioner had no personality to file the suit. The liberal approach of
Aquino v. Commission on Elections has been adopted in several notable cases, permitting ordinary citizens, legislators,
and civic organizations to bring their suits involving the constitutionality or validity of laws, regulations, and rulings.

However, the assertion of a public right as a predicate for challenging a supposedly illegal or unconstitutional executive or
legislative action rests on the theory that the petitioner represents the public in general. Although such petitioner may not
be as adversely affected by the action complained against as are others, it is enough that he sufficiently demonstrates in
his petition that he is entitled to protection or relief from the Court in the vindication of a public right.

Quite often, as here, the petitioner in a public action sues as a citizen or taxpayer to gain locus standi. That is not
surprising, for even if the issue may appear to concern only the public in general, such capacities nonetheless equip the
petitioner with adequate interest to sue. In David v. Macapagal-Arroyo, the Court aptly explains why:

Case law in most jurisdiction snow allows both "citizen" and "taxpayer" standing in public actions. The distinction was first
laid down in Beauchamp v. Silk, where it was held that the plaintiff in a taxpayer’s suit is in a different category from the
plaintiff in a citizen’s suit. In the former, the plaintiff is affected by the expenditure of public funds, while in the latter, he is
but the mere instrument of the public concern. As held by the New York Supreme Court in People ex rel Case v. Collins: "In
matter of mere public right, however…the people are the real parties…It is at least the right, if not the duty, of every
citizen to interfere and see that a public offence be properly pursued and punished, and that a public grievance be
remedied." With respect to taxpayer’s suits, Terr v. Jordan held that "the right of a citizen and a taxpayer to maintain an
action in courts to restrain the unlawful use of public funds to his injury cannot be denied."45

The Court has cogently observed in Agan, Jr. v. Philippine International Air Terminals Co., Inc.46 that "[s]tanding is a
peculiar concept in constitutional law because in some cases, suits are not brought by parties who have been personally
injured by the operation of a law or any other government act but by concerned citizens, taxpayers or voters who actually
sue in the public interest."

Except for PHILCONSA, a petitioner in G.R. No. 209164, the petitioners have invoked their capacities as taxpayers who, by
averring that the issuance and implementation of the DAP and its relevant issuances involved the illegal disbursements of
public funds, have an interest in preventing the further dissipation of public funds. The petitioners in G.R. No. 209287
(Araullo) and G.R. No. 209442 (Belgica) also assert their right as citizens to sue for the enforcement and observance of the
constitutional limitations on the political branches of the Government.47

On its part, PHILCONSA simply reminds that the Court has long recognized its legal standing to bring cases upon
constitutional issues.48 Luna, the petitioner in G.R. No. 209136, cites his additional capacity as a lawyer. The IBP, the
petitioner in G.R. No. 209260, stands by "its avowed duty to work for the rule of law and of paramount importance of the
question in this action, not to mention its civic duty as the official association of all lawyers in this country."49

Under their respective circumstances, each of the petitioners has established sufficient interest in the outcome of the
controversy as to confer locus standi on each of them.

In addition, considering that the issues center on the extent of the power of the Chief Executive to disburse and allocate
public funds, whether appropriated by Congress or not, these cases pose issues that are of transcendental importance to
the entire Nation, the petitioners included. As such, the determination of such important issues call for the Court’s
exercise of its broad and wise discretion "to waive the requirement and so remove the impediment to its addressing and
resolving the serious constitutional questions raised."50

II.
Substantive Issues

1.
Overview of the Budget System
An understanding of the Budget System of the Philippines will aid the Court in properly appreciating and justly resolving
the substantive issues.

a) Origin of the Budget System

The term "budget" originated from the Middle English word bouget that had derived from the Latin word bulga (which
means bag or purse).51

In the Philippine setting, Commonwealth Act (CA) No. 246 (Budget Act) defined "budget" as the financial program of the
National Government for a designated fiscal year, consisting of the statements of estimated receipts and expenditures for
the fiscal year for which it was intended to be effective based on the results of operations during the preceding fiscal
years. The term was given a different meaning under Republic Act No. 992 (Revised Budget Act) by describing the budget
as 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.52 For a forthright definition, budget should simply be identified as
the financial plan of the Government,53 or "the master plan of government."54

The concept of budgeting has not been the product of recent economies. In reality, financing public goals and activities
was an idea that existed from the creation of the State.55 To protect the people, the territory and sovereignty of the
State, its government must perform vital functions that required public expenditures. At the beginning, enormous public
expenditures were spent for war activities, preservation of peace and order, security, administration of justice, religion,
and supply of limited goods and services.56 In order to finance those expenditures, the State raised revenues through
taxes and impositions.57 Thus, budgeting became necessary to allocate public revenues for specific government
functions.58 The State’s budgeting mechanism eventually developed through the years with the growing functions of its
government and changes in its market economy.

The Philippine Budget System has been greatly influenced by western public financial institutions. This is because of the
country’s past as a colony successively of Spain and the United States for a long period of time. Many aspects of the
country’s public fiscal administration, including its Budget System, have been naturally patterned after the practices and
experiences of the western public financial institutions. At any rate, the Philippine Budget System is presently guided by
two principal objectives that are vital to the development of a progressive democratic government, namely: (1) to carry
on all government activities under a comprehensive fiscal plan developed, authorized and executed in accordance with
the Constitution, prevailing statutes and the principles of sound public management; and (2) to provide for the periodic
review and disclosure of the budgetary status of the Government in such detail so that persons entrusted by law with the
responsibility as well as the enlightened citizenry can determine the adequacy of the budget actions taken, authorized or
proposed, as well as the true financial position of the Government.59

b) Evolution of the Philippine Budget System

The budget process in the Philippines evolved from the early years of the American Regime up to the passage of the Jones
Law in 1916. A Budget Office was created within the Department of Finance by the Jones Law to discharge the budgeting
function, and was given the responsibility to assist in the preparation of an executive budget for submission to the
Philippine Legislature.60

As early as under the 1935 Constitution, a budget policy and a budget procedure were established, and subsequently
strengthened through the enactment of laws and executive acts.61 EO No. 25, issued by President Manuel L. Quezon on
April 25, 1936, created the Budget Commission to serve as the agency that carried out the President’s responsibility of
preparing the budget.62 CA No. 246, the first budget law, went into effect on January 1, 1938 and established the
Philippine budget process. The law also provided a line-item budget as the framework of the Government’s budgeting
system,63 with emphasis on the observance of a "balanced budget" to tie up proposed expenditures with existing
revenues.
CA No. 246 governed the budget process until the passage on June 4, 1954 of Republic Act (RA) No. 992,whereby Congress
introduced performance-budgeting to give importance to functions, projects and activities in terms of expected
results.64 RA No. 992 also enhanced the role of the Budget Commission as the fiscal arm of the Government.65

The 1973 Constitution and various presidential decrees directed a series of budgetary reforms that culminated in the
enactment of PD No. 1177 that President Marcos issued on July30, 1977, and of PD No. 1405, issued on June 11, 1978.
The latter decree converted the Budget Commission into the Ministry of Budget, and gave its head the rank of a Cabinet
member.

The Ministry of Budget was later renamed the Office of Budget and Management (OBM) under EO No. 711. The OBM
became the DBM pursuant to EO No. 292 effective on November 24, 1989.

c) The Philippine Budget Cycle66

Four phases comprise the Philippine budget process, specifically: (1) Budget Preparation; (2) Budget Legislation; (3)
Budget Execution; and (4) Accountability. Each phase is distinctly separate from the others but they overlap in the
implementation of the budget during the budget year.

c.1.Budget Preparation67

The budget preparation phase is commenced through the issuance of a Budget Call by the DBM. The Budget Call contains
budget parameters earlier set by the Development Budget Coordination Committee (DBCC) as well as policy guidelines
and procedures to aid government agencies in the preparation and submission of their budget proposals. The Budget Call
is of two kinds, namely: (1) a National Budget Call, which is addressed to all agencies, including state universities and
colleges; and (2) a Corporate Budget Call, which is addressed to all government-owned and -controlled corporations
(GOCCs) and government financial institutions (GFIs).

Following the issuance of the Budget Call, the various departments and agencies submit their respective Agency Budget
Proposals to the DBM. To boost citizen participation, the current administration has tasked the various departments and
agencies to partner with civil society organizations and other citizen-stakeholders in the preparation of the Agency Budget
Proposals, which proposals are then presented before a technical panel of the DBM in scheduled budget hearings wherein
the various departments and agencies are given the opportunity to defend their budget proposals. DBM bureaus
thereafter review the Agency Budget Proposals and come up with recommendations for the Executive Review Board,
comprised by the DBM Secretary and the DBM’s senior officials. The discussions of the Executive Review Board cover the
prioritization of programs and their corresponding support vis-à-vis the priority agenda of the National Government, and
their implementation.

The DBM next consolidates the recommended agency budgets into the National Expenditure Program (NEP)and a Budget
of Expenditures and Sources of Financing (BESF). The NEP provides the details of spending for each department and
agency by program, activity or project (PAP), and is submitted in the form of a proposed GAA. The Details of Selected
Programs and Projects is the more detailed disaggregation of key PAPs in the NEP, especially those in line with the
National Government’s development plan. The Staffing Summary provides the staffing complement of each department
and agency, including the number of positions and amounts allocated.

The NEP and BESF are thereafter presented by the DBM and the DBCC to the President and the Cabinet for further
refinements or reprioritization. Once the NEP and the BESF are approved by the President and the Cabinet, the DBM
prepares the budget documents for submission to Congress. The budget documents consist of: (1) the President’s Budget
Message, through which the President explains the policy framework and budget priorities; (2) the BESF, mandated by
Section 22, Article VII of the Constitution,68 which contains the macroeconomic assumptions, public sector context,
breakdown of the expenditures and funding sources for the fiscal year and the two previous years; and (3) the NEP.

Public or government expenditures are generally classified into two categories, specifically: (1) capital expenditures or
outlays; and (2) current operating expenditures. Capital expenditures are the expenses whose usefulness lasts for more
than one year, and which add to the assets of the Government, including investments in the capital of government-owned
or controlled corporations and their subsidiaries.69 Current operating expenditures are the purchases of goods and
services in current consumption the benefit of which does not extend beyond the fiscal year.70 The two components of
current expenditures are those for personal services (PS), and those for maintenance and other operating
expenses(MOOE).

Public expenditures are also broadly grouped according to their functions into: (1) economic development expenditures
(i.e., expenditures on agriculture and natural resources, transportation and communications, commerce and industry, and
other economic development efforts);71 (2) social services or social development expenditures (i.e., government outlay
on education, public health and medicare, labor and welfare and others);72 (3) general government or general public
services expenditures (i.e., expenditures for the general government, legislative services, the administration of justice, and
for pensions and gratuities);73 (4) national defense expenditures (i.e., sub-divided into national security expenditures and
expenditures for the maintenance of peace and order);74 and (5) public debt.75

Public expenditures may further be classified according to the nature of funds, i.e., general fund, special fund or bond
fund.76

On the other hand, public revenues complement public expenditures and cover all income or receipts of the government
treasury used to support government expenditures.77

Classical economist Adam Smith categorized public revenues based on two principal sources, stating: "The revenue which
must defray…the necessary expenses of government may be drawn either, first from some fund which peculiarly belongs
to the sovereign or commonwealth, and which is independent of the revenue of the people, or, secondly, from the
revenue of the people."78 Adam Smith’s classification relied on the two aspects of the nature of the State: first, the State
as a juristic person with an artificial personality, and, second, the State as a sovereign or entity possessing supreme
power. Under the first aspect, the State could hold property and engage in trade, thereby deriving what is called its quasi
private income or revenues, and which "peculiarly belonged to the sovereign." Under the second aspect, the State could
collect by imposing charges on the revenues of its subjects in the form of taxes.79

In the Philippines, public revenues are generally derived from the following sources, to wit: (1) tax revenues(i.e.,
compulsory contributions to finance government activities); 80 (2) capital revenues(i.e., proceeds from sales of fixed
capital assets or scrap thereof and public domain, and gains on such sales like sale of public lands, buildings and other
structures, equipment, and other properties recorded as fixed assets); 81 (3) grants(i.e., voluntary contributions and aids
given to the Government for its operation on specific purposes in the form of money and/or materials, and do not require
any monetary commitment on the part of the recipient);82 (4) extraordinary income(i.e., repayment of loans and
advances made by government corporations and local governments and the receipts and shares in income of the Banko
Sentral ng Pilipinas, and other receipts);83 and (5) public borrowings(i.e., proceeds of repayable obligations generally with
interest from domestic and foreign creditors of the Government in general, including the National Government and its
political subdivisions).84

More specifically, public revenues are classified as follows:85

General Income1.Subsidy Income from National

Government2.Subsidy from Central Office3.Subsidy from Regional 
Office/Staff Bureaus4.Income from Government 
Services5.Income from Government 
Business Operations6.Sales Revenue7.Rent Income8.Insurance Income9.Dividend Income10.Interest Income11.Sale of
Confiscated Goods and
Properties12.Foreign Exchange (FOREX)
Gains13.Miscellaneous Operating and
Service Income14.Fines and Penalties-Government
Services and Business Operations15.Income from Grants and
DonationsSpecific Income1.Income Taxes2.Property Taxes3.Taxes on Goods and Services4.Taxes on International Trade
and
Transactions5.Other Taxes 6.Fines and Penalties-Tax Revenue7.Other Specific Income

c.2. Budget Legislation86

The Budget Legislation Phase covers the period commencing from the time Congress receives the President’s Budget,
which is inclusive of the NEPand the BESF, up to the President’s approval of the GAA. This phase is also known as the
Budget Authorization Phase, and involves the significant participation of the Legislative through its deliberations.

Initially, the President’s Budget is assigned to the House of Representatives’ Appropriations Committee on First Reading.
The Appropriations Committee and its various Sub-Committees schedule and conduct budget hearings to examine the
PAPs of the departments and agencies. Thereafter, the House of Representatives drafts the General Appropriations Bill
(GAB).87

The GABis sponsored, presented and defended by the House of Representatives’ Appropriations Committee and Sub-
Committees in plenary session. As with other laws, the GAB is approved on Third Reading before the House of
Representatives’ version is transmitted to the Senate.88

After transmission, the Senate conducts its own committee hearings on the GAB. To expedite proceedings, the Senate
may conduct its committee hearings simultaneously with the House of Representatives’ deliberations. The Senate’s
Finance Committee and its Sub-Committees may submit the proposed amendments to the GAB to the plenary of the
Senate only after the House of Representatives has formally transmitted its version to the Senate. The Senate version of
the GAB is likewise approved on Third Reading.89

The House of Representatives and the Senate then constitute a panel each to sit in the Bicameral Conference Committee
for the purpose of discussing and harmonizing the conflicting provisions of their versions of the GAB. The "harmonized"
version of the GAB is next presented to the President for approval.90 The President reviews the GAB, and prepares the
Veto Message where budget items are subjected to direct veto,91 or are identified for conditional implementation.

If, by the end of any fiscal year, the Congress shall have failed to pass the GAB for the ensuing fiscal year, the GAA for the
preceding fiscal year shall be deemed re-enacted and shall remain in force and effect until the GAB is passed by the
Congress.92

c.3. Budget Execution93

With the GAA now in full force and effect, the next step is the implementation of the budget. The Budget Execution Phase
is primarily the function of the DBM, which is tasked to perform the following procedures, namely: (1) to issue the
programs and guidelines for the release of funds; (2) to prepare an Allotment and Cash Release Program; (3) to release
allotments; and (4) to issue disbursement authorities.

The implementation of the GAA is directed by the guidelines issued by the DBM. Prior to this, the various departments
and agencies are required to submit Budget Execution Documents(BED) to outline their plans and performance targets by
laying down the physical and financial plan, the monthly cash program, the estimate of monthly income, and the list of
obligations that are not yet due and demandable.

Thereafter, the DBM prepares an Allotment Release Program (ARP)and a Cash Release Program (CRP).The ARP sets a limit
for allotments issued in general and to a specific agency. The CRP fixes the monthly, quarterly and annual disbursement
levels.

Allotments, which authorize an agency to enter into obligations, are issued by the DBM. Allotments are lesser in scope
than appropriations, in that the latter embrace the general legislative authority to spend. Allotments may be released in
two forms – through a comprehensive Agency Budget Matrix (ABM),94 or, individually, by SARO.95
Armed with either the ABM or the SARO, agencies become authorized to incur obligations96 on behalf of the Government
in order to implement their PAPs. Obligations may be incurred in various ways, like hiring of personnel, entering into
contracts for the supply of goods and services, and using utilities.

In order to settle the obligations incurred by the agencies, the DBM issues a disbursement authority so that cash may be
allocated in payment of the obligations. A cash or disbursement authority that is periodically issued is referred to as a
Notice of Cash Allocation (NCA),97 which issuance is based upon an agency’s submission of its Monthly Cash Program and
other required documents. The NCA specifies the maximum amount of cash that can be withdrawn from a government
servicing bank for the period indicated. Apart from the NCA, the DBM may issue a Non-Cash Availment Authority(NCAA)
to authorize non-cash disbursements, or a Cash Disbursement Ceiling(CDC) for departments with overseas operations to
allow the use of income collected by their foreign posts for their operating requirements.

Actual disbursement or spending of government funds terminates the Budget Execution Phase and is usually
accomplished through the Modified Disbursement Scheme under which disbursements chargeable against the National
Treasury are coursed through the government servicing banks.

c.4. Accountability98

Accountability is a significant phase of the budget cycle because it ensures that the government funds have been
effectively and efficiently utilized to achieve the State’s socio-economic goals. It also allows the DBM to assess the
performance of agencies during the fiscal year for the purpose of implementing reforms and establishing new policies.

An agency’s accountability may be examined and evaluated through (1) performance targets and outcomes; (2) budget
accountability reports; (3) review of agency performance; and (4) audit conducted by the Commission on Audit(COA).

2.

Nature of the DAP as a fiscal plan

a. DAP was a program designed to

promote economic growth

Policy is always a part of every budget and fiscal decision of any Administration.99 The national budget the Executive
prepares and presents to Congress represents the Administration’s "blueprint for public policy" and reflects the
Government’s goals and strategies.100 As such, the national budget becomes a tangible representation of the programs
of the Government in monetary terms, specifying therein the PAPs and services for which specific amounts of public funds
are proposed and allocated.101 Embodied in every national budget is government spending.102

When he assumed office in the middle of 2010, President Aquino made efficiency and transparency in government
spending a significant focus of his Administration. Yet, although such focus resulted in an improved fiscal deficit of 0.5% in
the gross domestic product (GDP) from January to July of 2011, it also unfortunately decelerated government project
implementation and payment schedules.103 The World Bank observed that the Philippines’ economic growth could be
reduced, and potential growth could be weakened should the Government continue with its underspending and fail to
address the large deficiencies in infrastructure.104 The economic situation prevailing in the middle of 2011 thus paved the
way for the development and implementation of the DAP as a stimulus package intended to fast-track public spending
and to push economic growth by investing on high-impact budgetary PAPs to be funded from the "savings" generated
during the year as well as from unprogrammed funds.105 In that respect, the DAP was the product of "plain executive
policy-making" to stimulate the economy by way of accelerated spending.106 The Administration would thereby
accelerate government spending by: (1) streamlining the implementation process through the clustering of infrastructure
projects of the Department of Public Works and Highways (DPWH) and the Department of Education (DepEd),and (2)
front loading PPP-related projects107 due for implementation in the following year.108
Did the stimulus package work?

The March 2012 report of the World Bank,109 released after the initial implementation of the DAP, revealed that the DAP
was partially successful. The disbursements under the DAP contributed 1.3 percentage points to GDP growth by the fourth
quarter of 2011.110 The continued implementation of the DAP strengthened growth by 11.8% year on year while
infrastructure spending rebounded from a 29% contraction to a 34% growth as of September 2013.111

The DAP thus proved to be a demonstration that expenditure was a policy instrument that the Government could use to
direct the economies towards growth and development.112 The Government, by spending on public infrastructure, would
signify its commitment of ensuring profitability for prospective investors.113 The PAPs funded under the DAP were
chosen for this reason based on their: (1) multiplier impact on the economy and infrastructure development; (2) beneficial
effect on the poor; and (3) translation into disbursements.114

b. History of the implementation of

the DAP, and sources of funds
under the DAP

How the Administration’s economic managers conceptualized and developed the DAP, and finally presented it to the
President remains unknown because the relevant documents appear to be scarce.

The earliest available document relating to the genesis of the DAP was the memorandum of October 12,2011 from Sec.
Abad seeking the approval of the President to implement the proposed DAP. The memorandum, which contained a list of
the funding sources for ₱72.11 billion and of the proposed priority projects to be funded,115 reads:

MEMORANDUM FOR THE PRESIDENT

xxxx

SUBJECT: FY 2011 PROPOSED DISBURSEMENT ACCELERATION PROGRAM (PROJECTS AND SOURCES OF FUNDS)

DATE: OCTOBER 12, 2011

Mr. President, this is to formally confirm your approval of the Disbursement Acceleration Program totaling ₱72.11 billion.
We are already working with all the agencies concerned for the immediate execution of the projects therein.

A. Fund Sources for the Acceleration Program

Fund SourcesAmount
(In million
Php)DescriptionAction
RequestedFY 2011
Unreleased
Personal
Services (PS)
Appropriations30,000Unreleased Personnel
Services (PS)
appropriations which
will lapse at the end of
FY 2011 but may be
pooled as savings and
realigned for priority
programs that require
immediate fundingDeclare as
savings and
approve/
authorize its use
for the 2011
Disbursement
Acceleration
ProgramFY 2011
Unreleased
Appropriations482Unreleased
appropriations (slow
moving projects and
programs for
discontinuance) FY 2010
Unprogrammed
Fund12,336Supported by the GFI
DividendsApprove and
authorize its use
for the 2011
Disbursement
Acceleration
ProgramFY 2010
Carryover
Appropriation21,544Unreleased
appropriations (slow
moving projects and
programs for
discontinuance) and
savings from Zero-based Budgeting
InitiativeWith prior
approval from
the President in
November 2010
to declare as
savings and with
authority to use
for priority
projectsFY 2011 Budget
items for
realignment7,748FY 2011 Agency
Budget items that can
be realigned within the
agency to fund new fast
disbursing projects
DPWH-3.981 Billion
DA – 2.497 Billion
DOT – 1.000 Billion
DepEd – 270 MillionFor informationTOTAL72.110  

B. Projects in the Disbursement Acceleration Program

(Descriptions of projects attached as Annex A)

GOCCs and GFIsAgency/Project

(SARO and NCA Release)Allotment
(in Million Php)1. LRTA: Rehabilitation of LRT 1 and 21,8682. NHA:

a. Resettlement of North Triangle residents to

Camarin A7
b. Housing for BFP/BJMP
c. On-site development for families living
along dangerous
d. Relocation sites for informal settlers
along Iloilo River and its tributaries11,050450

500
10,000

1003. PHIL. HEART CENTER: Upgrading of

ageing physical plant and medical equipment357

4. CREDIT INFO CORP: Establishment of

centralized credit information system

75

5. PIDS: purchase of land to relocate the PIDS

office and building construction

100

6. HGC: Equity infusion for credit insurance

and mortgage guaranty operations of HGC

4007. PHIC: Obligations incurred (premium

subsidy for indigent families) in January-June
2010, booked for payment in Jul[y] – Dec
2010. The delay in payment is due to the
delay in the certification of the LGU
counterpart. Without it, the NG is obliged to
pay the full amount.1,4968. Philpost: Purchase of foreclosed property.
Payment of Mandatory Obligations, (GSIS,
PhilHealth, ECC), Franking Privilege644

9. BSP: First equity infusion out of Php 40B

capitalization under the BSP Law

10,000

10. PCMC: Capital and Equipment Renovation

28011. LCOP:
a. Pediatric Pulmonary Program
b. Bio-regenerative Technology Program
(Stem-Cell Research – subject to legal
review and presentation)1053570
12. TIDCORP: NG Equity infusion

570TOTAL26,945
NGAs/LGUsAgency/ProjectAllotment
(SARO)
(In Million
Php)
Cash
Requirement
(NCA)13. DOF-BIR: NPSTAR
centralization of data
processing and others (To be
synchronized with GFMIS
activities)

758
 
75814. COA: IT infrastructure
program and hiring of
additional litigational experts
 
144
 
14415. DND-PAF: On Base Housing
Facilities and Communication
Equipment
 
30
 
3016. DA:
a. Irrigation, FMRs and
Integrated Community Based Multi-Species
Hatchery and Aquasilvi
Farming
b. Mindanao Rural
Development Project2,959

1,629

9192,223
 
1,629

183c. NIA Agno River Integrated

Irrigation Project
411
41117. DAR:
a. Agrarian Reform
Communities Project 2
b. Landowners Compensation1,293

1,2931,293
132
5,43218. DBM: Conduct of National
Survey of
Farmers/Fisherfolks/Ips
 
625
 
62519. DOJ: Operating requirements
of 50 investigation agents and
15 state attorneys
 
11
 
1120. DOT: Preservation of the Cine
Corregidor Complex
25
2521. OPAPP: Activities for Peace
Process (PAMANA- Project
details: budget breakdown,
implementation plan, and
conditions on fund release
attached as Annex B)
 
1,819
 
1,81922. DOST
a. Establishment of National
Meterological and Climate
Center
b. Enhancement of Doppler
Radar Network for National
Weather Watch, Accurate
Forecasting and Flood Early
Warning425

275
 
190425
 
275
 
190
23. DOF-BOC: To settle the
principal obligations with
PDIC consistent with the
agreement with the CISS and
SGS
 
 
 
2,800
 
 
 
2,80024. OEO-FDCP: Establishment of
the National Film Archive and
local cinematheques, and other
local activities
 
 
20
 
 
2025. DPWH: Various infrastructure
projects
5,500
5,50026. DepEd/ERDT/DOST: Thin
Client Cloud Computing
Project
 
270
 
27027. DOH: Hiring of nurses and
midwives
294
29428. TESDA: Training Program in
partnership with BPO industry
and other sectors
 
1,100
 
1,10029. DILG: Performance Challenge
Fund (People Empowered
Community Driven
Development with DSWD and
NAPC)
 
250
 
 
5030. ARMM: Comprehensive Peace
and Development Intervention
8,592
8,59231. DOTC-MRT: Purchase of
additional MRT cars
4,500
-32. LGU Support Fund6,5006,50033. Various Other Local Projects6,5006,50034. Development Assistance to the
Province of Quezon
750
750TOTAL45,16544,000

C. Summary

 Fund Sources
Identified for
Approval
(In Million
Php)
Allotments
for Release
Cash
Requirements for
Release in FY
2011
Total72,11072,11070,895GOCCs26,89526,895NGAs/LGUs45,16544,000

For His Excellency’s Consideration

(Sgd.) FLORENCIO B. ABAD

[/] APPROVED

[ ] DISAPPROVED

(Sgd.) H.E. BENIGNO S. AQUINO, III

OCT 12, 2011

The memorandum of October 12, 2011 was followed by another memorandum for the President dated December 12,
2011116requesting omnibus authority to consolidate the savings and unutilized balances for fiscal year 2011. Pertinent
portions of the memorandum of December 12, 2011 read:

MEMORANDUM FOR THE PRESIDENT

xxxx

SUBJECT: Omnibus Authority to Consolidate Savings/Unutilized Balances and its Realignment

DATE: December 12, 2011

This is to respectfully request for the grant of Omnibus Authority to consolidate savings/unutilized balances in FY 2011
corresponding to completed or discontinued projects which may be pooled to fund additional projects or expenditures.

In addition, Mr. President, this measure will allow us to undertake projects even if their implementation carries over to
2012 without necessarily impacting on our budget deficit cap next year.

BACKGROUND

1.0 The DBM, during the course of performance reviews conducted on the agencies’ operations, particularly on the
implementation of their projects/activities, including expenses incurred in undertaking the same, have identified savings
out of the 2011 General Appropriations Act. Said savings correspond to completed or discontinued projects under certain
departments/agencies which may be pooled, for the following:

1.1 to provide for new activities which have not been anticipated during preparation of the budget;

1.2 to augment additional requirements of on-going priority projects; and

1.3 to provide for deficiencies under the Special Purpose Funds, e.g., PDAF, Calamity Fund, Contingent Fund
1.4 to cover for the modifications of the original allotment class allocation as a result of on-going priority projects and
implementation of new activities

2.0 x x x x

2.1 x x x

2.2 x x x

ON THE UTILIZATION OF POOLED SAVINGS

3.0 It may be recalled that the President approved our request for omnibus authority to pool savings/unutilized balances
in FY 2010 last November 25, 2010.

4.0 It is understood that in the utilization of the pooled savings, the DBM shall secure the corresponding
approval/confirmation of the President. Furthermore, it is assured that the proposed realignments shall be within the
authorized Expenditure level.

5.0 Relative thereto, we have identified some expenditure items that may be sourced from the said pooled appropriations
in FY 2010 that will expire on December 31, 2011 and appropriations in FY 2011 that may be declared as savings to fund
additional expenditures.

5.1 The 2010 Continuing Appropriations (pooled savings) is proposed to be spent for the projects that we have identified
to be immediate actual disbursements considering that this same fund source will expire on December 31, 2011.

5.2 With respect to the proposed expenditure items to be funded from the FY 2011 Unreleased Appropriations, most of
these are the same projects for which the DBM is directed by the Office of the President, thru the Executive Secretary, to
source funds.

6.0 Among others, the following are such proposed additional projects that have been chosen given their multiplier
impact on economy and infrastructure development, their beneficial effect on the poor, and their translation into
disbursements. Please note that we have classified the list of proposed projects as follows:

7.0 x x x

FOR THE PRESIDENT’S APPROVAL

8.0 Foregoing considered, may we respectfully request for the President’s approval for the following:

8.1 Grant of omnibus authority to consolidate FY 2011 savings/unutilized balances and its realignment; and

8.2 The proposed additional projects identified for funding.

For His Excellency’s consideration and approval.

(Sgd.)

[/] APPROVED

[ ] DISAPPROVED

(Sgd.) H.E. BENIGNO S. AQUINO, III

DEC 21, 2011

Substantially identical requests for authority to pool savings and to fund proposed projects were contained in various
other memoranda from Sec. Abad dated June 25, 2012,117 September 4, 2012,118 December 19, 2012,119 May 20,
2013,120 and September 25, 2013.121 The President apparently approved all the requests, withholding approval only of
the proposed projects contained in the June 25, 2012 memorandum, as borne out by his marginal note therein to the
effect that the proposed projects should still be "subject to further discussions."122

In order to implement the June25, 2012 memorandum, Sec. Abad issued NBC No. 541 (Adoption of Operational Efficiency
Measure – Withdrawal of Agencies’ Unobligated Allotments as of June 30, 2012),123 reproduced herein as follows:

NATIONAL BUDGET CIRCULAR No. 541

July 18, 2012

TO: All Heads of Departments/Agencies/State Universities and Colleges and other Offices of the National Government,
Budget and Planning Officers; Heads of Accounting Units and All Others Concerned

SUBJECT : Adoption of Operational Efficiency Measure – Withdrawal of Agencies’ Unobligated Allotments as of June 30,
2012

1.0 Rationale

The DBM, as mandated by Executive Order (EO) No. 292 (Administrative Code of 1987), periodically reviews and evaluates
the departments/agencies’ efficiency and effectiveness in utilizing budgeted funds for the delivery of services and
production of goods, consistent with the government priorities.

In the event that a measure is necessary to further improve the operational efficiency of the government, the President is
authorized to suspend or stop further use of funds allotted for any agency or expenditure authorized in the General
Appropriations Act. Withdrawal and pooling of unutilized allotment releases can be effected by DBM based on authority
of the President, as mandated under Sections 38 and 39, Chapter 5, Book VI of EO 292.

For the first five months of 2012, the National Government has not met its spending targets. In order to accelerate
spending and sustain the fiscal targets during the year, expenditure measures have to be implemented to optimize the
utilization of available resources.

Departments/agencies have registered low spending levels, in terms of obligations and disbursements per initial review of
their 2012 performance. To enhance agencies’ performance, the DBM conducts continuous consultation meetings and/or
send call-up letters, requesting them to identify slow-moving programs/projects and the factors/issues affecting their
performance (both pertaining to internal systems and those which are outside the agencies’ spheres of control). Also,
they are asked to formulate strategies and improvement plans for the rest of 2012.

Notwithstanding these initiatives, some departments/agencies have continued to post low obligation levels as of end of
first semester, thus resulting to substantial unobligated allotments.

In line with this, the President, per directive dated June 27, 2012 authorized the withdrawal of unobligated allotments of
agencies with low levels of obligations as of June 30, 2012, both for continuing and current allotments. This measure will
allow the maximum utilization of available allotments to fund and undertake other priority expenditures of the national
government.

2.0 Purpose
2.1 To provide the conditions and parameters on the withdrawal of unobligated allotments of agencies as of June 30,
2012 to fund priority and/or fast-moving programs/projects of the national government;

2.2 To prescribe the reports and documents to be used as bases on the withdrawal of said unobligated allotments; and

2.3 To provide guidelines in the utilization or reallocation of the withdrawn allotments.

3.0 Coverage

3.1 These guidelines shall cover the withdrawal of unobligated allotments as of June 30, 2012 of all national government
agencies (NGAs) charged against FY 2011 Continuing Appropriation (R.A. No.10147) and FY 2012 Current Appropriation
(R.A. No. 10155), pertaining to:

3.1.1 Capital Outlays (CO);

3.1.2 Maintenance and Other Operating Expenses (MOOE) related to the implementation of programs and projects, as
well as capitalized MOOE; and

3.1.3 Personal Services corresponding to unutilized pension benefits declared as savings by the agencies concerned based
on their updated/validated list of pensioners.

3.2 The withdrawal of unobligated allotments may cover the identified programs, projects and activities of the
departments/agencies reflected in the DBM list shown as Annex A or specific programs and projects as may be identified
by the agencies.

4.0 Exemption

These guidelines shall not apply to the following:

4.1 NGAs

4.1.1 Constitutional Offices/Fiscal Autonomy Group, granted fiscal autonomy under the Philippine Constitution; and

4.1.2 State Universities and Colleges, adopting the Normative Funding allocation scheme i.e., distribution of a
predetermined budget ceiling.

4.2 Fund Sources

4.2.1 Personal Services other than pension benefits;

4.2.2 MOOE items earmarked for specific purposes or subject to realignment conditions per General Provisions of the
GAA:

• Confidential and Intelligence Fund;

• Savings from Traveling, Communication, Transportation and Delivery, Repair and Maintenance, Supplies and Materials
and Utility which shall be used for the grant of Collective Negotiation Agreement incentive benefit;

• Savings from mandatory expenditures which can be realigned only in the last quarter after taking into consideration the
agency’s full year requirements, i.e., Petroleum, Oil and Lubricants, Water, Illumination, Power Services, Telephone, other
Communication Services and Rent.

4.2.3 Foreign-Assisted Projects (loan proceeds and peso counterpart);

4.2.4 Special Purpose Funds such as: E-Government Fund, International Commitments Fund, PAMANA, Priority
Development Assistance Fund, Calamity Fund, Budgetary Support to GOCCs and Allocation to LGUs, among others;

4.2.5 Quick Response Funds; and

4.2.6 Automatic Appropriations i.e., Retirement Life Insurance Premium and Special Accounts in the General Fund.

5.0 Guidelines

5.1 National government agencies shall continue to undertake procurement activities notwithstanding the
implementation of the policy of withdrawal of unobligated allotments until the end of the third quarter, FY 2012. Even
without the allotments, the agency shall proceed in undertaking the procurement processes (i.e., procurement planning
up to the conduct of bidding but short of awarding of contract) pursuant to GPPB Circular Nos. 02-2008 and 01-2009 and
DBM Circular Letter No. 2010-9.

5.2 For the purpose of determining the amount of unobligated allotments that shall be withdrawn, all
departments/agencies/operating units (OUs) shall submit to DBM not later than July 30, 2012, the following budget
accountability reports as of June 30, 2012;

• Statement of Allotments, Obligations and Balances (SAOB);

• Financial Report of Operations (FRO); and

• Physical Report of Operations.

5.3 In the absence of the June 30, 2012 reports cited under item 5.2 of this Circular, the agency’s latest report available
shall be used by DBM as basis for withdrawal of allotment. The DBM shall compute/approximate the agency’s obligation
level as of June 30 to derive its unobligated allotments as of same period. Example: If the March 31 SAOB or FRO reflects
actual obligations of P 800M then the June 30 obligation level shall approximate to ₱1,600 M (i.e., ₱800 M x 2 quarters).

5.4 All released allotments in FY 2011 charged against R.A. No. 10147 which remained unobligated as of June 30, 2012
shall be immediately considered for withdrawal. This policy is based on the following considerations:

5.4.1 The departments/agencies’ approved priority programs and projects are assumed to be implementation-ready and
doable during the given fiscal year; and

5.4.2 The practice of having substantial carryover appropriations may imply that the agency has a slower-than-
programmed implementation capacity or agency tends to implement projects within a two-year timeframe.

5.5. Consistent with the President’s directive, the DBM shall, based on evaluation of the reports cited above and results of
consultations with the departments/agencies, withdraw the unobligated allotments as of June 30, 2012 through issuance
of negative Special Allotment Release Orders (SAROs).

5.6 DBM shall prepare and submit to the President, a report on the magnitude of withdrawn allotments. The report shall
highlight the agencies which failed to submit the June 30 reports required under this Circular.

5.7 The withdrawn allotments may be:

5.7.1 Reissued for the original programs and projects of the agencies/OUs concerned, from which the allotments were
withdrawn;

5.7.2 Realigned to cover additional funding for other existing programs and projects of the agency/OU; or
5.7.3 Used to augment existing programs and projects of any agency and to fund priority programs and projects not
considered in the 2012 budget but expected to be started or implemented during the current year.

5.8 For items 5.7.1 and 5.7.2 above, agencies/OUs concerned may submit to DBM a Special Budget Request (SBR),
supported with the following:

5.8.1 Physical and Financial Plan (PFP);

5.8.2 Monthly Cash Program (MCP); and

5.8.3 Proof that the project/activity has started the procurement processes i.e., Proof of Posting and/or Advertisement of
the Invitation to Bid.

5.9 The deadline for submission of request/s pertaining to these categories shall be until the end of the third quarter i.e.,
September 30, 2012. After said cut-off date, the withdrawn allotments shall be pooled and form part of the overall savings
of the national government.

5.10 Utilization of the consolidated withdrawn allotments for other priority programs and projects as cited under item
5.7.3 of this Circular, shall be subject to approval of the President. Based on the approval of the President, DBM shall issue
the SARO to cover the approved priority expenditures subject to submission by the agency/OU concerned of the SBR and
supported with PFP and MCP.

5.11 It is understood that all releases to be made out of the withdrawn allotments (both 2011 and 2012 unobligated
allotments) shall be within the approved Expenditure Program level of the national government for the current year. The
SAROs to be issued shall properly disclose the appropriation source of the release to determine the extent of allotment
validity, as follows:

• For charges under R.A. 10147 – allotments shall be valid up to December 31, 2012; and

• For charges under R.A. 10155 – allotments shall be valid up to December 31, 2013.

5.12 Timely compliance with the submission of existing BARs and other reportorial requirements is reiterated for
monitoring purposes.

6.0 Effectivity

This circular shall take effect immediately.

(Sgd.) FLORENCIO B. ABAD

Secretary

As can be seen, NBC No. 541 specified that the unobligated allotments of all agencies and departments as of June 30,
2012 that were charged against the continuing appropriations for fiscal year 2011 and the 2012 GAA (R.A. No. 10155)
were subject to withdrawal through the issuance of negative SAROs, but such allotments could be either: (1) reissued for
the original PAPs of the concerned agencies from which they were withdrawn; or (2) realigned to cover additional funding
for other existing PAPs of the concerned agencies; or (3) used to augment existing PAPs of any agency and to fund priority
PAPs not considered in the 2012 budget but expected to be started or implemented in 2012. Financing the other priority
PAPs was made subject to the approval of the President. Note here that NBC No. 541 used terminologies like
"realignment" and "augmentation" in the application of the withdrawn unobligated allotments.

Taken together, all the issuances showed how the DAP was to be implemented and funded, that is — (1) by declaring
"savings" coming from the various departments and agencies derived from pooling unobligated allotments and
withdrawing unreleased appropriations; (2) releasing unprogrammed funds; and (3) applying the "savings" and
unprogrammed funds to augment existing PAPs or to support other priority PAPs.

c. DAP was not an appropriation

measure; hence, no appropriation
law was required to adopt or to
implement it

Petitioners Syjuco, Luna, Villegas and PHILCONSA state that Congress did not enact a law to establish the DAP, or to
authorize the disbursement and release of public funds to implement the DAP. Villegas, PHILCONSA, IBP, Araullo, and
COURAGE observe that the appropriations funded under the DAP were not included in the 2011, 2012 and 2013 GAAs. To
petitioners IBP, Araullo, and COURAGE, the DAP, being actually an appropriation that set aside public funds for public use,
should require an enabling law for its validity. VACC maintains that the DAP, because it involved huge allocations that
were separate and distinct from the GAAs, circumvented and duplicated the GAAs without congressional authorization
and control.

The petitioners contend in unison that based on how it was developed and implemented the DAP violated the mandate of
Section 29(1), Article VI of the 1987 Constitution that "[n]o money shall be paid out of the Treasury except in pursuance of
an appropriation made by law."

The OSG posits, however, that no law was necessary for the adoption and implementation of the DAP because of its being
neither a fund nor an appropriation, but a program or an administrative system of prioritizing spending; and that the
adoption of the DAP was by virtue of the authority of the President as the Chief Executive to ensure that laws were
faithfully executed.

We agree with the OSG’s position.

The DAP was a government policy or strategy designed to stimulate the economy through accelerated spending. In the
context of the DAP’s adoption and implementation being a function pertaining to the Executive as the main actor during
the Budget Execution Stage under its constitutional mandate to faithfully execute the laws, including the GAAs, Congress
did not need to legislate to adopt or to implement the DAP. Congress could appropriate but would have nothing more to
do during the Budget Execution Stage. Indeed, appropriation was the act by which Congress "designates a particular fund,
or sets apart a specified portion of the public revenue or of the money in the public treasury, to be applied to some
general object of governmental expenditure, or to some individual purchase or expense."124 As pointed out in Gonzales
v. Raquiza:125‘"In a strict sense, appropriation has been defined ‘as nothing more than the legislative authorization
prescribed by the Constitution that money may be paid out of the Treasury,’ while appropriation made by law refers to
‘the act of the legislature setting apart or assigning to a particular use a certain sum to be used in the payment of debt or
dues from the State to its creditors.’"126

On the other hand, the President, in keeping with his duty to faithfully execute the laws, had sufficient discretion during
the execution of the budget to adapt the budget to changes in the country’s economic situation.127 He could adopt a plan
like the DAP for the purpose. He could pool the savings and identify the PAPs to be funded under the DAP. The pooling of
savings pursuant to the DAP, and the identification of the PAPs to be funded under the DAP did not involve appropriation
in the strict sense because the money had been already set apart from the public treasury by Congress through the GAAs.
In such actions, the Executive did not usurp the power vested in Congress under Section 29(1), Article VI of the
Constitution.

3.
Unreleased appropriations and withdrawn
unobligated allotments under the DAP
were not savings, and the use of such
appropriations contravened Section 25(5),
Article VI of the 1987 Constitution.
Notwithstanding our appreciation of the DAP as a plan or strategy validly adopted by the Executive to ramp up spending
to accelerate economic growth, the challenges posed by the petitioners constrain us to dissect the mechanics of the
actual execution of the DAP. The management and utilization of the public wealth inevitably demands a most careful
scrutiny of whether the Executive’s implementation of the DAP was consistent with the Constitution, the relevant GAAs
and other existing laws.

a. Although executive discretion

and flexibility are necessary in
the execution of the budget, any
transfer of appropriated funds
should conform to Section 25(5),
Article VI of the Constitution

We begin this dissection by reiterating that Congress cannot anticipate all issues and needs that may come into play once
the budget reaches its execution stage. Executive discretion is necessary at that stage to achieve a sound fiscal
administration and assure effective budget implementation. The heads of offices, particularly the President, require
flexibility in their operations under performance budgeting to enable them to make whatever adjustments are needed to
meet established work goals under changing conditions.128 In particular, the power to transfer funds can give the
President the flexibility to meet unforeseen events that may otherwise impede the efficient implementation of the PAPs
set by Congress in the GAA.

Congress has traditionally allowed much flexibility to the President in allocating funds pursuant to the
GAAs,129 particularly when the funds are grouped to form lump sum accounts.130 It is assumed that the agencies of the
Government enjoy more flexibility when the GAAs provide broader appropriation items.131 This flexibility comes in the
form of policies that the Executive may adopt during the budget execution phase. The DAP – as a strategy to improve the
country’s economic position – was one policy that the President decided to carry out in order to fulfill his mandate under
the GAAs.

Denying to the Executive flexibility in the expenditure process would be counterproductive. In Presidential Spending
Power,132 Prof. Louis Fisher, an American constitutional scholar whose specialties have included budget policy, has
justified extending discretionary authority to the Executive thusly:

[T]he impulse to deny discretionary authority altogether should be resisted. There are many number of reasons why
obligations and outlays by administrators may have to differ from appropriations by legislators. Appropriations are made
many months, and sometimes years, in advance of expenditures. Congress acts with imperfect knowledge in trying to
legislate in fields that are highly technical and constantly undergoing change. New circumstances will develop to make
obsolete and mistaken the decisions reached by Congress at the appropriation stage. It is not practicable for Congress to
adjust to each new development by passing separate supplemental appropriation bills. Were Congress to control
expenditures by confining administrators to narrow statutory details, it would perhaps protect its power of the purse but
it would not protect the purse itself. The realities and complexities of public policy require executive discretion for the
sound management of public funds.

xxxx

x x x The expenditure process, by its very nature, requires substantial discretion for administrators. They need to exercise
judgment and take responsibility for their actions, but those actions ought to be directed toward executing congressional,
not administrative policy. Let there be discretion, but channel it and use it to satisfy the programs and priorities
established by Congress.

In contrast, by allowing to the heads of offices some power to transfer funds within their respective offices, the
Constitution itself ensures the fiscal autonomy of their offices, and at the same time maintains the separation of powers
among the three main branches of the Government. The Court has recognized this, and emphasized so in Bengzon v.
Drilon,133 viz:

The Judiciary, the Constitutional Commissions, and the Ombudsman must have the independence and flexibility needed in
the discharge of their constitutional duties. The imposition of restrictions and constraints on the manner the independent
constitutional offices allocate and utilize the funds appropriated for their operations is anathema to fiscal autonomy and
violative not only of the express mandate of the Constitution but especially as regards the Supreme Court, of the
independence and separation of powers upon which the entire fabric of our constitutional system is based.

In the case of the President, the power to transfer funds from one item to another within the Executive has not been the
mere offshoot of established usage, but has emanated from law itself. It has existed since the time of the American
Governors-General.134 Act No. 1902 (An Act authorizing the Governor-General to direct any unexpended balances of
appropriations be returned to the general fund of the Insular Treasury and to transfer from the general fund moneys
which have been returned thereto), passed on May 18, 1909 by the First Philippine Legislature,135 was the first enabling
law that granted statutory authority to the President to transfer funds. The authority was without any limitation, for the
Act explicitly empowered the Governor-General to transfer any unexpended balance of appropriations for any bureau or
office to another, and to spend such balance as if it had originally been appropriated for that bureau or office.

From 1916 until 1920, the appropriations laws set a cap on the amounts of funds that could be transferred, thereby
limiting the power to transfer funds. Only 10% of the amounts appropriated for contingent or miscellaneous expenses
could be transferred to a bureau or office, and the transferred funds were to be used to cover deficiencies in the
appropriations also for miscellaneous expenses of said bureau or office.

In 1921, the ceiling on the amounts of funds to be transferred from items under miscellaneous expenses to any other item
of a certain bureau or office was removed.

During the Commonwealth period, the power of the President to transfer funds continued to be governed by the GAAs
despite the enactment of the Constitution in 1935. It is notable that the 1935 Constitution did not include a provision on
the power to transfer funds. At any rate, a shift in the extent of the President’s power to transfer funds was again
experienced during this era, with the President being given more flexibility in implementing the budget. The GAAs
provided that the power to transfer all or portions of the appropriations in the Executive Department could be made in
the "interest of the public, as the President may determine."136

In its time, the 1971 Constitutional Convention wanted to curtail the President’s seemingly unbounded discretion in
transferring funds.137 Its Committee on the Budget and Appropriation proposed to prohibit the transfer of funds among
the separate branches of the Government and the independent constitutional bodies, but to allow instead their
respective heads to augment items of appropriations from savings in their respective budgets under certain
limitations.138 The clear intention of the Convention was to further restrict, not to liberalize, the power to transfer
appropriations.139 Thus, the Committee on the Budget and Appropriation initially considered setting stringent limitations
on the power to augment, and suggested that the augmentation of an item of appropriation could be made "by not more
than ten percent if the original item of appropriation to be augmented does not exceed one million pesos, or by not more
than five percent if the original item of appropriation to be augmented exceeds one million pesos."140 But two members
of the Committee objected to the ₱1,000,000.00 threshold, saying that the amount was arbitrary and might not be
reasonable in the future. The Committee agreed to eliminate the ₱1,000,000.00 threshold, and settled on the ten percent
limitation.141

In the end, the ten percent limitation was discarded during the plenary of the Convention, which adopted the following
final version under Section 16, Article VIII of the 1973 Constitution, to wit:

(5) No law shall be passed authorizing any transfer of appropriations; however, the President, the Prime Minister, the
Speaker, the Chief Justice of the Supreme Court, and the heads of Constitutional Commissions may by law be authorized
to augment any item in the general appropriations law for their respective offices from savings in other items of their
respective appropriations.
The 1973 Constitution explicitly and categorically prohibited the transfer of funds from one item to another, unless
Congress enacted a law authorizing the President, the Prime Minister, the Speaker, the Chief Justice of the Supreme
Court, and the heads of the Constitutional omissions to transfer funds for the purpose of augmenting any item from
savings in another item in the GAA of their respective offices. The leeway was limited to augmentation only, and was
further constricted by the condition that the funds to be transferred should come from savings from another item in the
appropriation of the office.142

On July 30, 1977, President Marcos issued PD No. 1177, providing in its Section 44 that:

Section 44. Authority to Approve Fund Transfers. The President shall have the authority to transfer any fund appropriated
for the different departments, bureaus, offices and agencies of the Executive Department which are included in the
General Appropriations Act, to any program, project, or activity of any department, bureau or office included in the
General Appropriations Act or approved after its enactment.

The President shall, likewise, have the authority to augment any appropriation of the Executive Department in the
General Appropriations Act, from savings in the appropriations of another department, bureau, office or agency within
the Executive Branch, pursuant to the provisions of Article VIII, Section 16 (5) of the Constitution.

In Demetria v. Alba, however, the Court struck down the first paragraph of Section 44 for contravening Section 16(5)of the
1973 Constitution, ruling:

Paragraph 1 of Section 44 of P.D. No. 1177 unduly over-extends the privilege granted under said Section 16. It empowers
the President to indiscriminately transfer funds from one department, bureau, office or agency of the Executive
Department to any program, project or activity of any department, bureau or office included in the General
Appropriations Act or approved after its enactment, without regard as to whether or not the funds to be transferred are
actually savings in the item from which the same are to be taken, or whether or not the transfer is for the purpose of
augmenting the item to which said transfer is to be made. It does not only completely disregard the standards set in the
fundamental law, thereby amounting to an undue delegation of legislative powers, but likewise goes beyond the tenor
thereof. Indeed, such constitutional infirmities render the provision in question null and void.143

It is significant that Demetria was promulgated 25 days after the ratification by the people of the 1987 Constitution,
whose Section 25(5) of Article VI is identical to Section 16(5), Article VIII of the 1973 Constitution, to wit:

Section 25. x x x

xxxx

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

xxxx

The foregoing history makes it evident that the Constitutional Commission included Section 25(5), supra, to keep a tight
rein on the exercise of the power to transfer funds appropriated by Congress by the President and the other high officials
of the Government named therein. The Court stated in Nazareth v. Villar:144

In the funding of current activities, projects, and programs, the general rule should still be that the budgetary amount
contained in the appropriations bill is the extent Congress will determine as sufficient for the budgetary allocation for the
proponent agency. The only exception is found in Section 25 (5), Article VI of the Constitution, by which the President, the
President of the Senate, the Speaker of the House of Representatives, the Chief Justice of the Supreme Court, and the
heads of Constitutional Commissions are authorized to transfer appropriations to augmentany item in the GAA for their
respective offices from the savings in other items of their respective appropriations. The plain language of the
constitutional restriction leaves no room for the petitioner’s posture, which we should now dispose of as untenable.

It bears emphasizing that the exception in favor of the high officials named in Section 25(5), Article VI of the Constitution
limiting the authority to transfer savings only to augment another item in the GAA is strictly but reasonably construed as
exclusive. As the Court has expounded in Lokin, Jr. v. Commission on Elections:

When the statute itself enumerates the exceptions to the application of the general rule, the exceptions are strictly but
reasonably construed. The exceptions extend only as far as their language fairly warrants, and all doubts should be
resolved in favor of the general provision rather than the exceptions. Where the general rule is established by a statute
with exceptions, none but the enacting authority can curtail the former. Not even the courts may add to the latter by
implication, and it is a rule that an express exception excludes all others, although it is always proper in determining the
applicability of the rule to inquire whether, in a particular case, it accords with reason and justice.

The appropriate and natural office of the exception is to exempt something from the scope of the general words of a
statute, which is otherwise within the scope and meaning of such general words. Consequently, the existence of an
exception in a statute clarifies the intent that the statute shall apply to all cases not excepted. Exceptions are subject to
the rule of strict construction; hence, any doubt will be resolved in favor of the general provision and against the
exception. Indeed, the liberal construction of a statute will seem to require in many circumstances that the exception, by
which the operation of the statute is limited or abridged, should receive a restricted construction.

Accordingly, we should interpret Section 25(5), supra, in the context of a limitation on the President’s discretion over the
appropriations during the Budget Execution Phase.

b. Requisites for the valid transfer of

appropriated funds under Section
25(5), Article VI of the 1987
Constitution

The transfer of appropriated funds, to be valid under Section 25(5), supra, must be made upon a concurrence of the
following requisites, namely:

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

(2) The funds to be transferred are savings generated from the appropriations for their respective offices; and (3) The
purpose of the transfer is to augment an item in the general appropriations law for their respective offices.

b.1. First Requisite–GAAs of 2011 and

2012 lacked valid provisions to
authorize transfers of funds under
the DAP; hence, transfers under the
DAP were unconstitutional

Section 25(5), supra, not being a self-executing provision of the Constitution, must have an implementing law for it to be
operative. That law, generally, is the GAA of a given fiscal year. To comply with the first requisite, the GAAs should
expressly authorize the transfer of funds.

Did the GAAs expressly authorize the transfer of funds?

In the 2011 GAA, the provision that gave the President and the other high officials the authority to transfer funds was
Section 59, as follows:

Section 59. Use of Savings. The President of the Philippines, the Senate President, the Speaker of the House of
Representatives, the Chief Justice of the Supreme Court, the Heads of Constitutional Commissions enjoying fiscal
autonomy, and the Ombudsman are hereby authorized to augment any item in this Act from savings in other items of
their respective appropriations.

In the 2012 GAA, the empowering provision was Section 53, to wit:

Section 53. Use of Savings. The President of the Philippines, the Senate President, the Speaker of the House of
Representatives, the Chief Justice of the Supreme Court, the Heads of Constitutional Commissions enjoying fiscal
autonomy, and the Ombudsman are hereby authorized to augment any item in this Act from savings in other items of
their respective appropriations.

In fact, the foregoing provisions of the 2011 and 2012 GAAs were cited by the DBM as justification for the use of savings
under the DAP.145

A reading shows, however, that the aforequoted provisions of the GAAs of 2011 and 2012 were textually unfaithful to the
Constitution for not carrying the phrase "for their respective offices" contained in Section 25(5), supra. The impact of the
phrase "for their respective offices" was to authorize only transfers of funds within their offices (i.e., in the case of the
President, the transfer was to an item of appropriation within the Executive). The provisions carried a different phrase ("to
augment any item in this Act"), and the effect was that the 2011 and 2012 GAAs thereby literally allowed the transfer of
funds from savings to augment any item in the GAAs even if the item belonged to an office outside the Executive. To that
extent did the 2011 and 2012 GAAs contravene the Constitution. At the very least, the aforequoted provisions cannot be
used to claim authority to transfer appropriations from the Executive to another branch, or to a constitutional
commission.

Apparently realizing the problem, Congress inserted the omitted phrase in the counterpart provision in the 2013 GAA, to
wit:

Section 52. Use of Savings. The President of the Philippines, the Senate President, the Speaker of the House of
Representatives, the Chief Justice of the Supreme Court, the Heads of Constitutional Commissions enjoying fiscal
autonomy, and the Ombudsman are hereby authorized to use savings in their respective appropriations to augment
actual deficiencies incurred for the current year in any item of their respective appropriations.

Even had a valid law authorizing the transfer of funds pursuant to Section 25(5), supra, existed, there still remained two
other requisites to be met, namely: that the source of funds to be transferred were savings from appropriations within the
respective offices; and that the transfer must be for the purpose of augmenting an item of appropriation within the
respective offices.

b.2. Second Requisite – There were

no savings from which funds
could be sourced for the DAP
Were the funds used in the DAP actually savings?

The petitioners claim that the funds used in the DAP — the unreleased appropriations and withdrawn unobligated
allotments — were not actual savings within the context of Section 25(5), supra, and the relevant provisions of the GAAs.
Belgica argues that "savings" should be understood to refer to the excess money after the items that needed to be funded
have been funded, or those that needed to be paid have been paid pursuant to the budget.146 The petitioners posit that
there could be savings only when the PAPs for which the funds had been appropriated were actually implemented and
completed, or finally discontinued or abandoned. They insist that savings could not be realized with certainty in the
middle of the fiscal year; and that the funds for "slow-moving" PAPs could not be considered as savings because such
PAPs had not actually been abandoned or discontinued yet.147 They stress that NBC No. 541, by allowing the withdrawn
funds to be reissued to the "original program or project from which it was withdrawn," conceded that the PAPs from
which the supposed savings were taken had not been completed, abandoned or discontinued.148

The OSG represents that "savings" were "appropriations balances," being the difference between the appropriation
authorized by Congress and the actual amount allotted for the appropriation; that the definition of "savings" in the GAAs
set only the parameters for determining when savings occurred; that it was still the President (as well as the other officers
vested by the Constitution with the authority to augment) who ultimately determined when savings actually existed
because savings could be determined only during the stage of budget execution; that the President must be given a wide
discretion to accomplish his tasks; and that the withdrawn unobligated allotments were savings inasmuch as they were
clearly "portions or balances of any programmed appropriation…free from any obligation or encumbrances which are (i)
still available after the completion or final discontinuance or abandonment of the work, activity or purpose for which the
appropriation is authorized…"

We partially find for the petitioners.

In ascertaining the meaning of savings, certain principles should be borne in mind. The first principle is that Congress
wields the power of the purse. Congress decides how the budget will be spent; what PAPs to fund; and the amounts of
money to be spent for each PAP. The second principle is that the Executive, as the department of the Government tasked
to enforce the laws, is expected to faithfully execute the GAA and to spend the budget in accordance with the provisions
of the GAA.149 The Executive is expected to faithfully implement the PAPs for which Congress allocated funds, and to
limit the expenditures within the allocations, unless exigencies result to deficiencies for which augmentation is authorized,
subject to the conditions provided by law. The third principle is that in making the President’s power to augment
operative under the GAA, Congress recognizes the need for flexibility in budget execution. In so doing, Congress
diminishes its own power of the purse, for it delegates a fraction of its power to the Executive. But Congress does not
thereby allow the Executive to override its authority over the purse as to let the Executive exceed its delegated authority.
And the fourth principle is that savings should be actual. "Actual" denotes something that is real or substantial, or
something that exists presently in fact, as opposed to something that is merely theoretical, possible, potential or
hypothetical.150

The foregoing principles caution us to construe savings strictly against expanding the scope of the power to augment. It is
then indubitable that the power to augment was to be used only when the purpose for which the funds had been
allocated were already satisfied, or the need for such funds had ceased to exist, for only then could savings be properly
realized. This interpretation prevents the Executive from unduly transgressing Congress’ power of the purse.

The definition of "savings" in the GAAs, particularly for 2011, 2012 and 2013, reflected this interpretation and made it
operational, viz:

Savings refer to portions or balances of any programmed appropriation in this Act free from any obligation or
encumbrance which are: (i) still available after the completion or final discontinuance or abandonment of the work,
activity or purpose for which the appropriation is authorized; (ii) from appropriations balances arising from unpaid
compensation and related costs pertaining to vacant positions and leaves of absence without pay; and (iii) from
appropriations balances realized from the implementation of measures resulting in improved systems and efficiencies and
thus enabled agencies to meet and deliver the required or planned targets, programs and services approved in this Act at
a lesser cost.

The three instances listed in the GAAs’ aforequoted definition were a sure indication that savings could be generated only
upon the purpose of the appropriation being fulfilled, or upon the need for the appropriation being no longer existent.

The phrase "free from any obligation or encumbrance" in the definition of savings in the GAAs conveyed the notion that
the appropriation was at that stage when the appropriation was already obligated and the appropriation was already
released. This interpretation was reinforced by the enumeration of the three instances for savings to arise, which showed
that the appropriation referred to had reached the agency level. It could not be otherwise, considering that only when the
appropriation had reached the agency level could it be determined whether (a) the PAP for which the appropriation had
been authorized was completed, finally discontinued, or abandoned; or (b) there were vacant positions and leaves of
absence without pay; or (c) the required or planned targets, programs and services were realized at a lesser cost because
of the implementation of measures resulting in improved systems and efficiencies.

The DBM declares that part of the savings brought under the DAP came from "pooling of unreleased appropriations such
as unreleased Personnel Services appropriations which will lapse at the end of the year, unreleased appropriations of slow
moving projects and discontinued projects per Zero-Based Budgeting findings."

The declaration of the DBM by itself does not state the clear legal basis for the treatment of unreleased or unalloted
appropriations as savings.

The fact alone that the appropriations are unreleased or unalloted is a mere description of the status of the items as
unalloted or unreleased. They have not yet ripened into categories of items from which savings can be generated.
Appropriations have been considered "released" if there has already been an allotment or authorization to incur
obligations and disbursement authority. This means that the DBM has issued either an ABM (for those not needing
clearance), or a SARO (for those needing clearance), and consequently an NCA, NCAA or CDC, as the case may be.
Appropriations remain unreleased, for instance, because of noncompliance with documentary requirements (like the
Special Budget Request), or simply because of the unavailability of funds. But the appropriations do not actually reach the
agencies to which they were allocated under the GAAs, and have remained with the DBM technically speaking. Ergo,
unreleased appropriations refer to appropriations with allotments but without disbursement authority.

For us to consider unreleased appropriations as savings, unless these met the statutory definition of savings, would
seriously undercut the congressional power of the purse, because such appropriations had not even reached and been
used by the agency concerned vis-à-vis the PAPs for which Congress had allocated them. However, if an agency has
unfilled positions in its plantilla and did not receive an allotment and NCA for such vacancies, appropriations for such
positions, although unreleased, may already constitute savings for that agency under the second instance.

Unobligated allotments, on the other hand, were encompassed by the first part of the definition of "savings" in the GAA,
that is, as "portions or balances of any programmed appropriation in this Act free from any obligation or encumbrance."
But the first part of the definition was further qualified by the three enumerated instances of when savings would be
realized. As such, unobligated allotments could not be indiscriminately declared as savings without first determining
whether any of the three instances existed. This signified that the DBM’s withdrawal of unobligated allotments had
disregarded the definition of savings under the GAAs.

Justice Carpio has validly observed in his Separate Concurring Opinion that MOOE appropriations are deemed divided into
twelve monthly allocations within the fiscal year; hence, savings could be generated monthly from the excess or unused
MOOE appropriations other than the Mandatory Expenditures and Expenditures for Business-type Activities because of
the physical impossibility to obligate and spend such funds as MOOE for a period that already lapsed. Following this
observation, MOOE for future months are not savings and cannot be transferred.

The DBM’s Memorandum for the President dated June 25, 2012 (which became the basis of NBC No. 541) stated:

ON THE AUTHORITY TO WITHDRAW UNOBLIGATED ALLOTMENTS

5.0 The DBM, during the course of performance reviews conducted on the agencies’ operations, particularly on the
implementation of their projects/activities, including expenses incurred in undertaking the same, have been continuously
calling the attention of all National Government agencies (NGAs) with low levels of obligations as of end of the first
quarter to speedup the implementation of their programs and projects in the second quarter.

6.0 Said reminders were made in a series of consultation meetings with the concerned agencies and with call-up letters
sent.
7.0 Despite said reminders and the availability of funds at the department’s disposal, the level of financial performance of
some departments registered below program, with the targeted obligations/disbursements for the first semester still not
being met.

8.0 In order to maximize the use of the available allotment, all unobligated balances as of June 30, 2012, both for
continuing and current allotments shall be withdrawn and pooled to fund fast moving programs/projects.

9.0 It may be emphasized that the allotments to be withdrawn will be based on the list of slow moving projects to be
identified by the agencies and their catch up plans to be evaluated by the DBM.

It is apparent from the foregoing text that the withdrawal of unobligated allotments would be based on whether the
allotments pertained to slow-moving projects, or not. However, NBC No. 541 did not set in clear terms the criteria for the
withdrawal of unobligated allotments, viz:

3.1. These guidelines shall cover the withdrawal of unobligated allotments as of June 30, 2012 ofall national government
agencies (NGAs) charged against FY 2011 Continuing Appropriation (R.A. No. 10147) and FY 2012 Current Appropriation
(R.A. No. 10155), pertaining to:

3.1.1 Capital Outlays (CO);

3.1.2 Maintenance and Other Operating Expenses (MOOE) related to the implementation of programs and projects, as
well as capitalized MOOE; and

3.1.3 Personal Services corresponding to unutilized pension benefits declared as savings by the agencies concerned based
on their undated/validated list of pensioners.

A perusal of its various provisions reveals that NBC No. 541 targeted the "withdrawal of unobligated allotments of
agencies with low levels of obligations"151 "to fund priority and/or fast-moving programs/projects."152 But the fact that
the withdrawn allotments could be "[r]eissued for the original programs and projects of the agencies/OUs concerned,
from which the allotments were withdrawn"153 supported the conclusion that the PAPs had not yet been finally
discontinued or abandoned. Thus, the purpose for which the withdrawn funds had been appropriated was not yet
fulfilled, or did not yet cease to exist, rendering the declaration of the funds as savings impossible.

Worse, NBC No. 541 immediately considered for withdrawal all released allotments in 2011 charged against the 2011 GAA
that had remained unobligated based on the following considerations, to wit:

5.4.1 The departments/agencies’ approved priority programs and projects are assumed to be implementation-ready and
doable during the given fiscal year; and

5.4.2 The practice of having substantial carryover appropriations may imply that the agency has a slower-than-
programmed implementation capacity or agency tends to implement projects within a two-year timeframe.

Such withdrawals pursuant to NBC No. 541, the circular that affected the unobligated allotments for continuing and
current appropriations as of June 30, 2012, disregarded the 2-year period of availability of the appropriations for MOOE
and capital outlay extended under Section 65, General Provisions of the 2011 GAA, viz:

Section 65. Availability of Appropriations. — Appropriations for MOOE and capital outlays authorized in this Act shall be
available for release and obligation for the purpose specified, and under the same special provisions applicable thereto,
for a period extending to one fiscal year after the end of the year in which such items were appropriated: PROVIDED, That
appropriations for MOOE and capital outlays under R.A. No. 9970 shall be made available up to the end of FY 2011:
PROVIDED, FURTHER, That a report on these releases and obligations shall be submitted to the Senate Committee on
Finance and the House Committee on Appropriations.
and Section 63 General Provisions of the 2012 GAA, viz:

Section 63. Availability of Appropriations. — Appropriations for MOOE and capital outlays authorized in this Act shall be
available for release and obligation for the purpose specified, and under the same special provisions applicable thereto,
for a period extending to one fiscal year after the end of the year in which such items were appropriated: PROVIDED, That
a report on these releases and obligations shall be submitted to the Senate Committee on Finance and the House
Committee on Appropriations, either in printed form or by way of electronic document.154

Thus, another alleged area of constitutional infirmity was that the DAP and its relevant issuances shortened the period of
availability of the appropriations for MOOE and capital outlays.

Congress provided a one-year period of availability of the funds for all allotment classes in the 2013 GAA (R.A. No. 10352),
to wit:

Section 63. Availability of Appropriations.— All appropriations authorized in this Act shall be available for release and
obligation for the purposes specified, and under the same special provisions applicable thereto, until the end of FY 2013:
PROVIDED, That a report on these releases and obligations shall be submitted to the Senate Committee on Finance and
House Committee on Appropriations, either in printed form or by way of electronic document.

Yet, in his memorandum for the President dated May 20, 2013, Sec. Abad sought omnibus authority to consolidate savings
and unutilized balances to fund the DAP on a quarterly basis, viz:

7.0 If the level of financial performance of some department will register below program, even with the availability of
funds at their disposal, the targeted obligations/disbursements for each quarter will not be met. It is important to note
that these funds will lapse at the end of the fiscal year if these remain unobligated.

8.0 To maximize the use of the available allotment, all unobligated balances at the end of every quarter, both for
continuing and current allotments shall be withdrawn and pooled to fund fast moving programs/projects.

9.0 It may be emphasized that the allotments to be withdrawn will be based on the list of slow moving projects to be
identified by the agencies and their catch up plans to be evaluated by the DBM.

The validity period of the affected appropriations, already given the brief Lifes pan of one year, was further shortened to
only a quarter of a year under the DBM’s memorandum dated May 20, 2013.

The petitioners accuse the respondents of forcing the generation of savings in order to have a larger fund available for
discretionary spending. They aver that the respondents, by withdrawing unobligated allotments in the middle of the fiscal
year, in effect deprived funding for PAPs with existing appropriations under the GAAs.155

The respondents belie the accusation, insisting that the unobligated allotments were being withdrawn upon the instance
of the implementing agencies based on their own assessment that they could not obligate those allotments pursuant to
the President’s directive for them to spend their appropriations as quickly as they could in order to ramp up the
economy.156

We agree with the petitioners.

Contrary to the respondents’ insistence, the withdrawals were upon the initiative of the DBM itself. The text of NBC No.
541 bears this out, to wit:

5.2 For the purpose of determining the amount of unobligated allotments that shall be withdrawn, all
departments/agencies/operating units (OUs) shall submit to DBM not later than July 30, 2012, the following budget
accountability reports as of June 30, 2012;
• Statement of Allotments, Obligation and Balances (SAOB);

• Financial Report of Operations (FRO); and

• Physical Report of Operations.

5.3 In the absence of the June 30, 2012 reports cited under item 5.2 of this Circular, the agency’s latest report available
shall be used by DBM as basis for withdrawal of allotment. The DBM shall compute/approximate the agency’s obligation
level as of June 30 to derive its unobligated allotments as of same period. Example: If the March 31 SAOB or FRO reflects
actual obligations of P 800M then the June 30 obligation level shall approximate to ₱1,600 M (i.e., ₱800 M x 2 quarters).

The petitioners assert that no law had authorized the withdrawal and transfer of unobligated allotments and the pooling
of unreleased appropriations; and that the unbridled withdrawal of unobligated allotments and the retention of
appropriated funds were akin to the impoundment of appropriations that could be allowed only in case of "unmanageable
national government budget deficit" under the GAAs,157 thus violating the provisions of the GAAs of 2011, 2012 and 2013
prohibiting the retention or deduction of allotments.158

In contrast, the respondents emphasize that NBC No. 541 adopted a spending, not saving, policy as a last-ditch effort of
the Executive to push agencies into actually spending their appropriations; that such policy did not amount to an
impoundment scheme, because impoundment referred to the decision of the Executive to refuse to spend funds for
political or ideological reasons; and that the withdrawal of allotments under NBC No. 541 was made pursuant to Section
38, Chapter 5, Book VI of the Administrative Code, by which the President was granted the authority to suspend or
otherwise stop further expenditure of funds allotted to any agency whenever in his judgment the public interest so
required.

The assertions of the petitioners are upheld. The withdrawal and transfer of unobligated allotments and the pooling of
unreleased appropriations were invalid for being bereft of legal support. Nonetheless, such withdrawal of unobligated
allotments and the retention of appropriated funds cannot be considered as impoundment.

According to Philippine Constitution Association v. Enriquez:159 "Impoundment refers to a refusal by the President, for
whatever reason, to spend funds made available by Congress. It is the failure to spend or obligate budget authority of any
type." Impoundment under the GAA is understood to mean the retention or deduction of appropriations. The 2011 GAA
authorized impoundment only in case of unmanageable National Government budget deficit, to wit:

Section 66. Prohibition Against Impoundment of Appropriations. No appropriations authorized under this Act shall be
impounded through retention or deduction, unless in accordance with the rules and regulations to be issued by the DBM:
PROVIDED, That all the funds appropriated for the purposes, programs, projects and activities authorized under this Act,
except those covered under the Unprogrammed Fund, shall be released pursuant to Section 33 (3), Chapter 5, Book VI of
E.O. No. 292.

Section 67. Unmanageable National Government Budget Deficit. Retention or deduction of appropriations authorized in
this Act shall be effected only in cases where there is an unmanageable national government budget deficit.

Unmanageable national government budget deficit as used in this section shall be construed to mean that (i) the actual
national government budget deficit has exceeded the quarterly budget deficit targets consistent with the full-year target
deficit as indicated in the FY 2011 Budget of

Expenditures and Sources of Financing submitted by the President and approved by Congress pursuant to Section 22,
Article VII of the Constitution, or (ii) there are clear economic indications of an impending occurrence of such condition, as
determined by the Development Budget Coordinating Committee and approved by the President.

The 2012 and 2013 GAAs contained similar provisions.

The withdrawal of unobligated allotments under the DAP should not be regarded as impoundment because it entailed
only the transfer of funds, not the retention or deduction of appropriations.

Nor could Section 68 of the 2011 GAA (and the similar provisions of the 2012 and 2013 GAAs) be applicable. They
uniformly stated:

Section 68. Prohibition Against Retention/Deduction of Allotment. Fund releases from appropriations provided in this Act
shall be transmitted intact or in full to the office or agency concerned. No retention or deduction as reserves or overhead
shall be made, except as authorized by law, or upon direction of the President of the Philippines. The COA shall ensure
compliance with this provision to the extent that sub-allotments by agencies to their subordinate offices are in conformity
with the release documents issued by the DBM.

The provision obviously pertained to the retention or deduction of allotments upon their release from the DBM, which
was a different matter altogether. The Court should not expand the meaning of the provision by applying it to the
withdrawal of allotments.

The respondents rely on Section 38, Chapter 5, Book VI of the Administrative Code of 1987 to justify the withdrawal of
unobligated allotments. But the provision authorized only the suspension or stoppage of further expenditures, not the
withdrawal of unobligated allotments, to wit:

Section 38. Suspension of Expenditure of Appropriations.- Except as otherwise provided in the General Appropriations Act
and whenever in his judgment the public interest so requires, the President, upon notice to the head of office concerned,
is authorized to suspend or otherwise stop further expenditure of funds allotted for any agency, or any other expenditure
authorized in the General Appropriations Act, except for personal services appropriations used for permanent officials and
employees.

Moreover, the DBM did not suspend or stop further expenditures in accordance with Section 38, supra, but instead
transferred the funds to other PAPs.

It is relevant to remind at this juncture that the balances of appropriations that remained unexpended at the end of the
fiscal year were to be reverted to the General Fund.1âwphi1 This was the mandate of Section 28, Chapter IV, Book VI of
the Administrative Code, to wit:

Section 28. Reversion of Unexpended Balances of Appropriations, Continuing Appropriations.- Unexpended balances of
appropriations authorized in the General Appropriation Act shall revert to the unappropriated surplus of the General Fund
at the end of the fiscal year and shall not thereafter be available for expenditure except by subsequent legislative
enactment: Provided, that appropriations for capital outlays shall remain valid until fully spent or reverted: provided,
further, that continuing appropriations for current operating expenditures may be specifically recommended and
approved as such in support of projects whose effective implementation calls for multi-year expenditure commitments:
provided, finally, that the President may authorize the use of savings realized by an agency during given year to meet non-
recurring expenditures in a subsequent year.

The balances of continuing appropriations shall be reviewed as part of the annual budget preparation process and the
preparation process and the President may approve upon recommendation of the Secretary, the reversion of funds no
longer needed in connection with the activities funded by said continuing appropriations.

The Executive could not circumvent this provision by declaring unreleased appropriations and unobligated allotments as
savings prior to the end of the fiscal year.

b.3. Third Requisite – No funds from

savings could be transferred under
the DAP to augment deficient items
not provided in the GAA
The third requisite for a valid transfer of funds is that the purpose of the transfer should be "to augment an item in the
general appropriations law for the respective offices." The term "augment" means to enlarge or increase in size, amount,
or degree.160

The GAAs for 2011, 2012 and 2013 set as a condition for augmentation that the appropriation for the PAP item to be
augmented must be deficient, to wit: –

x x x Augmentation implies the existence in this Act of a program, activity, or project with an appropriation, which upon
implementation, or subsequent evaluation of needed resources, is determined to be deficient. In no case shall a non-
existent program, activity, or project, be funded by augmentation from savings or by the use of appropriations otherwise
authorized in this Act.

In other words, an appropriation for any PAP must first be determined to be deficient before it could be augmented from
savings. Note is taken of the fact that the 2013 GAA already made this quite clear, thus:

Section 52. Use of Savings. The President of the Philippines, the Senate President, the Speaker of the House of
Representatives, the Chief Justice of the Supreme Court, the Heads of Constitutional Commissions enjoying fiscal
autonomy, and the Ombudsman are hereby authorized to use savings in their respective appropriations to augment
actual deficiencies incurred for the current year in any item of their respective appropriations.

As of 2013, a total of ₱144.4 billion worth of PAPs were implemented through the DAP.161

Of this amount ₱82.5 billion were released in 2011 and ₱54.8 billion in 2012.162 Sec. Abad has reported that 9% of the
total DAP releases were applied to the PAPs identified by the legislators.163

The petitioners disagree, however, and insist that the DAP supported the following PAPs that had not been covered with
appropriations in the respective GAAs, namely:

(i) ₱1.5 billion for the Cordillera People’s Liberation Army;

(ii) ₱1.8 billion for the Moro National Liberation Front;

(iii) ₱700 million for assistance to Quezon Province;164

(iv) ₱50 million to ₱100 (million) each to certain senators;165

(v) ₱10 billion for the relocation of families living along dangerous zones under the National Housing Authority;

(vi) ₱10 billion and ₱20 billion equity infusion under the Bangko Sentral;

(vii) ₱5.4 billion landowners’ compensation under the Department of Agrarian Reform;

(viii) ₱8.6 billion for the ARMM comprehensive peace and development program;

(ix) ₱6.5 billion augmentation of LGU internal revenue allotments

(x) ₱5 billion for crucial projects like tourism road construction under the Department of Tourism and the Department of
Public Works and Highways;

(xi) ₱1.8 billion for the DAR-DPWH Tulay ng Pangulo;

(xii) ₱1.96 billion for the DOH-DPWH rehabilitation of regional health units; and
(xiii) ₱4 billion for the DepEd-PPP school infrastructure projects.166

In refutation, the OSG argues that a total of 116 DAP-financed PAPs were implemented, had appropriation covers, and
could properly be accounted for because the funds were released following and pursuant to the standard practices
adopted by the DBM.167 In support of its argument, the OSG has submitted seven evidence packets containing
memoranda, SAROs, and other pertinent documents relative to the implementation and fund transfers under the DAP.168

Upon careful review of the documents contained in the seven evidence packets, we conclude that the "savings" pooled
under the DAP were allocated to PAPs that were not covered by any appropriations in the pertinent GAAs.

For example, the SARO issued on December 22, 2011 for the highly vaunted Disaster Risk, Exposure, Assessment and
Mitigation (DREAM) project under the Department of Science and Technology (DOST) covered the amount of ₱1.6
Billion,169broken down as follows:

APPROPRIATION
CODEPARTICULARSAMOUNT
AUTHORIZEDA.03.a.01.aGeneration of new knowledge and technologies and research capability building in priority areas
identified as strategic to National Development
Personnel Services
Maintenance and Other Operating Expenses 
Capital Outlays

P 43,504,024
1,164,517,589
391,978,387
P 1,600,000,000

the pertinent provision of the 2011 GAA (R.A. No. 10147) showed that Congress had appropriated only ₱537,910,000 for
MOOE, but nothing for personnel services and capital outlays, to wit:

Personnel
ServicesMaintenance
and Other
Operating
ExpendituresCapital
OutlaysTOTALIII.Operationsa.Funding Assistance to Science
and Technology Activities177,406,0001,887,365,00049,090,0002,113,861,0001.Central Office1,554,238,000
1,554,238,000a. Generation of new
knowledge and
technologies and research
capability building in
priority areas identified as
strategic to National
Development
537,910,000
537,910,000

Aside from this transfer under the DAP to the DREAM project exceeding by almost 300% the appropriation by Congress
for the program Generation of new knowledge and technologies and research capability building in priority areas
identified as strategic to National Development, the Executive allotted funds for personnel services and capital outlays.
The Executive thereby substituted its will to that of Congress. Worse, the Executive had not earlier proposed any amount
for personnel services and capital outlays in the NEP that became the basis of the 2011 GAA.170

It is worth stressing in this connection that the failure of the GAAs to set aside any amounts for an expense category
sufficiently indicated that Congress purposely did not see fit to fund, much less implement, the PAP concerned. This
indication becomes clearer when even the President himself did not recommend in the NEP to fund the PAP. The
consequence was that any PAP requiring expenditure that did not receive any appropriation under the GAAs could only be
a new PAP, any funding for which would go beyond the authority laid down by Congress in enacting the GAAs. That
happened in some instances under the DAP.

In relation to the December 22, 2011 SARO issued to the Philippine Council for Industry, Energy and Emerging Technology
Research and Development (DOST-PCIEETRD)171 for Establishment of the Advanced Failure Analysis Laboratory, which
reads:

APPROPRIATION
CODEPARTICULARSAMOUNT
AUTHORIZEDA.02.a

Development, integration and coordination of the National Research System for Industry, Energy and Emerging
Technology and Related Fields
Capital Outlays

P 300,000,000

the appropriation code and the particulars appearing in the SARO did not correspond to the program specified in the GAA,
whose particulars were Research and Management Services(inclusive of the following activities: (1) Technological and
Economic Assessment for Industry, Energy and Utilities; (2) Dissemination of Science and Technology Information; and (3)
Management of PCIERD Information System for Industry, Energy and Utilities. Even assuming that Development,
integration and coordination of the National Research System for Industry, Energy and Emerging Technology and Related
Fields– the particulars stated in the SARO – could fall under the broad program description of Research and Management
Services– as appearing in the SARO, it would nonetheless remain a new activity by reason of its not being specifically
stated in the GAA. As such, the DBM, sans legislative authorization, could not validly fund and implement such PAP under
the DAP.

In defending the disbursements, however, the OSG contends that the Executive enjoyed sound discretion in implementing
the budget given the generality in the language and the broad policy objectives identified under the GAAs;172 and that
the President enjoyed unlimited authority to spend the initial appropriations under his authority to declare and utilize
savings,173and in keeping with his duty to faithfully execute the laws.

Although the OSG rightly contends that the Executive was authorized to spend in line with its mandate to faithfully
execute the laws (which included the GAAs), such authority did not translate to unfettered discretion that allowed the
President to substitute his own will for that of Congress. He was still required to remain faithful to the provisions of the
GAAs, given that his power to spend pursuant to the GAAs was but a delegation to him from Congress. Verily, the power
to spend the public wealth resided in Congress, not in the Executive.174 Moreover, leaving the spending power of the
Executive unrestricted would threaten to undo the principle of separation of powers.175

Congress acts as the guardian of the public treasury in faithful discharge of its power of the purse whenever it deliberates
and acts on the budget proposal submitted by the Executive.176 Its power of the purse is touted as the very foundation of
its institutional strength,177 and underpins "all other legislative decisions and regulating the balance of influence between
the legislative and executive branches of government."178 Such enormous power encompasses the capacity to generate
money for the Government, to appropriate public funds, and to spend the money.179 Pertinently, when it exercises its
power of the purse, Congress wields control by specifying the PAPs for which public money should be spent.
It is the President who proposes the budget but it is Congress that has the final say on matters of appropriations.180 For
this purpose, appropriation involves two governing principles, namely: (1) "a Principle of the Public Fisc, asserting that all
monies received from whatever source by any part of the government are public funds;" and (2) "a Principle of
Appropriations Control, prohibiting expenditure of any public money without legislative authorization."181 To conform
with the governing principles, the Executive cannot circumvent the prohibition by Congress of an expenditure for a PAP by
resorting to either public or private funds.182 Nor could the Executive transfer appropriated funds resulting in an increase
in the budget for one PAP, for by so doing the appropriation for another PAP is necessarily decreased. The terms of both
appropriations will thereby be violated.

b.4 Third Requisite – Cross-border

augmentations from savings were
prohibited by the Constitution

By providing that the President, the President of the Senate, the Speaker of the House of Representatives, the Chief
Justice of the Supreme Court, and the Heads of the Constitutional Commissions may be authorized to augment any item in
the GAA "for their respective offices," Section 25(5), supra, has delineated borders between their offices, such that funds
appropriated for one office are prohibited from crossing over to another office even in the guise of augmentation of a
deficient item or items. Thus, we call such transfers of funds cross-border transfers or cross-border augmentations.

To be sure, the phrase "respective offices" used in Section 25(5), supra, refers to the entire Executive, with respect to the
President; the Senate, with respect to the Senate President; the House of Representatives, with respect to the Speaker;
the Judiciary, with respect to the Chief Justice; the Constitutional Commissions, with respect to their respective
Chairpersons.

Did any cross-border transfers or augmentations transpire?

During the oral arguments on January 28, 2014, Sec. Abad admitted making some cross-border augmentations, to wit:

JUSTICE BERSAMIN:

Alright, the whole time that you have been Secretary of Department of Budget and Management, did the Executive
Department ever redirect any part of savings of the National Government under your control cross border to another
department?

SECRETARY ABAD:

Well, in the Memos that we submitted to you, such an instance, Your Honor

JUSTICE BERSAMIN:

Can you tell me two instances? I don’t recall having read your material.

SECRETARY ABAD:

Well, the first instance had to do with a request from the House of Representatives. They started building their e-library in
2010 and they had a budget for about 207 Million but they lack about 43 Million to complete its 250 Million requirements.
Prior to that, the COA, in an audit observation informed the Speaker that they had to continue with that construction
otherwise the whole building, as well as the equipments therein may suffer from serious deterioration. And at that time,
since the budget of the House of Representatives was not enough to complete 250 Million, they wrote to the President
requesting for an augmentation of that particular item, which was granted, Your Honor. The second instance in the
Memos is a request from the Commission on Audit. At the time they were pushing very strongly the good governance
programs of the government and therefore, part of that is a requirement to conduct audits as well as review financial
reports of many agencies. And in the performance of that function, the Commission on Audit needed information
technology equipment as well as hire consultants and litigators to help them with their audit work and for that they
requested funds from the Executive and the President saw that it was important for the Commission to be provided with
those IT equipments and litigators and consultants and the request was granted, Your Honor.

JUSTICE BERSAMIN:

These cross border examples, cross border augmentations were not supported by appropriations…

SECRETARY ABAD:

They were, we were augmenting existing items within their… (interrupted)

JUSTICE BERSAMIN:

No, appropriations before you augmented because this is a cross border and the tenor or text of the Constitution is quite
clear as far as I am concerned. It says here, "The power to augment may only be made to increase any item in the General
Appropriations Law for their respective offices." Did you not feel constricted by this provision?

SECRETARY ABAD:

Well, as the Constitution provides, the prohibition we felt was on the transfer of appropriations, Your Honor. What we
thought we did was to transfer savings which was needed by the Commission to address deficiency in an existing item in
both the Commission as well as in the House of Representatives; that’s how we saw…(interrupted)

JUSTICE BERSAMIN:

So your position as Secretary of Budget is that you could do that?

SECRETARY ABAD:

In an extreme instances because…(interrupted)

JUSTICE BERSAMIN:

No, no, in all instances, extreme or not extreme, you could do that, that’s your feeling.

SECRETARY ABAD:

Well, in that particular situation when the request was made by the Commission and the House of Representatives, we
felt that we needed to respond because we felt…(interrupted).183

The records show, indeed, that funds amounting to ₱143,700,000.00 and ₱250,000,000.00 were transferred under the
DAP respectively to the COA184 and the House of Representatives.185 Those transfers of funds, which constituted cross-
border augmentations for being from the Executive to the COA and the House of Representatives, are graphed as
follows:186

OFFICEPURPOSEDATE
RELEASEDAMOUNT
(In thousand pesos)Reserve
ImposedReleasesCommission on
AuditIT Infrastructure Program and hiring of additional litigation experts11/11/11 143,700Congress –
House of
RepresentativesCompletion of the construction of the Legislative Library and Archives Building/Congressional e-
library07/23/12207,034
(Savings of HOR)250,000

The respondents further stated in their memorandum that the President "made available" to the "Commission on
Elections the savings of his department upon [its] request for funds…"187 This was another instance of a cross-border
augmentation.

The respondents justified all the cross-border transfers thusly:

99. The Constitution does not prevent the President from transferring savings of his department to another department
upon the latter’s request, provided it is the recipient department that uses such funds to augment its own appropriation.
In such a case, the President merely gives the other department access to public funds but he cannot dictate how they
shall be applied by that department whose fiscal autonomy is guaranteed by the Constitution.188

In the oral arguments held on February 18, 2014, Justice Vicente V. Mendoza, representing Congress, announced a
different characterization of the cross-border transfers of funds as in the nature of "aid" instead of "augmentation," viz:

HONORABLE MENDOZA:

The cross-border transfers, if Your Honors please, is not an application of the DAP. What were these cross-border
transfers? They are transfers of savings as defined in the various General Appropriations Act. So, that makes it similar to
the DAP, the use of savings. There was a cross-border which appears to be in violation of Section 25, paragraph 5 of Article
VI, in the sense that the border was crossed. But never has it been claimed that the purpose was to augment a deficient
item in another department of the government or agency of the government. The cross-border transfers, if Your Honors
please, were in the nature of [aid] rather than augmentations. Here is a government entity separate and independent
from the Executive Department solely in need of public funds. The President is there 24 hours a day, 7 days a week. He’s
in charge of the whole operation although six or seven heads of government offices are given the power to augment. Only
the President stationed there and in effect in-charge and has the responsibility for the failure of any part of the
government. You have election, for one reason or another, the money is not enough to hold election. There would be
chaos if no money is given as an aid, not to augment, but as an aid to a department like COA. The President is responsible
in a way that the other heads, given the power to augment, are not. So, he cannot very well allow this, if Your Honor
please.189

JUSTICE LEONEN:

May I move to another point, maybe just briefly. I am curious that the position now, I think, of government is that some
transfers of savings is now considered to be, if I’m not mistaken, aid not augmentation. Am I correct in my hearing of your
argument?

HONORABLE MENDOZA:

That’s our submission, if Your Honor, please.

JUSTICE LEONEN:

May I know, Justice, where can we situate this in the text of the Constitution? Where do we actually derive the concepts
that transfers of appropriation from one branch to the other or what happened in DAP can be considered a said? What
particular text in the Constitution can we situate this?

HONORABLE MENDOZA:
There is no particular provision or statutory provision for that matter, if Your Honor please. It is drawn from the fact that
the Executive is the executive in-charge of the success of the government.

JUSTICE LEONEN:

So, the residual powers labelled in Marcos v. Manglapus would be the basis for this theory of the government?

HONORABLE MENDOZA:

Yes, if Your Honor, please.

JUSTICE LEONEN:

A while ago, Justice Carpio mentioned that the remedy is might be to go to Congress. That there are opportunities and
there have been opportunities of the President to actually go to Congress and ask for supplemental budgets?

HONORABLE MENDOZA:

If there is time to do that, I would say yes.

JUSTICE LEONEN:

So, the theory of aid rather than augmentation applies in extra-ordinary situation?

HONORABLE MENDOZA:

Very extra-ordinary situations.

JUSTICE LEONEN:

But Counsel, this would be new doctrine, in case?

HONORABLE MENDOZA:

Yes, if Your Honor please.190

Regardless of the variant characterizations of the cross-border transfers of funds, the plain text of Section 25(5), supra,
disallowing cross border transfers was disobeyed. Cross-border transfers, whether as augmentation, or as aid, were
prohibited under Section 25(5), supra.

4.
Sourcing the DAP from unprogrammed
funds despite the original revenue targets
not having been exceeded was invalid

Funding under the DAP were also sourced from unprogrammed funds provided in the GAAs for 2011, 2012,and 2013. The
respondents stress, however, that the unprogrammed funds were not brought under the DAP as savings, but as separate
sources of funds; and that, consequently, the release and use of unprogrammed funds were not subject to the restrictions
under Section 25(5), supra.

The documents contained in the Evidence Packets by the OSG have confirmed that the unprogrammed funds were
treated as separate sources of funds. Even so, the release and use of the unprogrammed funds were still subject to
restrictions, for, to start with, the GAAs precisely specified the instances when the unprogrammed funds could be
released and the purposes for which they could be used.

The petitioners point out that a condition for the release of the unprogrammed funds was that the revenue collections
must exceed revenue targets; and that the release of the unprogrammed funds was illegal because such condition was
not met.191

The respondents disagree, holding that the release and use of the unprogrammed funds under the DAP were in
accordance with the pertinent provisions of the GAAs. In particular, the DBM avers that the unprogrammed funds could
be availed of when any of the following three instances occur, to wit: (1) the revenue collections exceeded the original
revenue targets proposed in the BESFs submitted by the President to Congress; (2) new revenues were collected or
realized from sources not originally considered in the BESFs; or(3) newly-approved loans for foreign assisted projects were
secured, or when conditions were triggered for other sources of funds, such as perfected loan agreements for foreign-
assisted projects.192This view of the DBM was adopted by all the respondents in their Consolidated Comment.193

The BESFs for 2011, 2012 and 2013 uniformly defined "unprogrammed appropriations" as appropriations that provided
standby authority to incur additional agency obligations for priority PAPs when revenue collections exceeded targets, and
when additional foreign funds are generated.194 Contrary to the DBM’s averment that there were three instances when
unprogrammed funds could be released, the BESFs envisioned only two instances. The third mentioned by the DBM – the
collection of new revenues from sources not originally considered in the BESFs – was not included. This meant that the
collection of additional revenues from new sources did not warrant the release of the unprogrammed funds. Hence, even
if the revenues not considered in the BESFs were collected or generated, the basic condition that the revenue collections
should exceed the revenue targets must still be complied with in order to justify the release of the unprogrammed funds.

The view that there were only two instances when the unprogrammed funds could be released was bolstered by the
following texts of the Special Provisions of the 2011 and 2012 GAAs, to wit:

2011 GAA

1. Release of Fund. The amounts authorized herein shall be released only when the revenue collections exceed the
original revenue targets submitted by the President of the Philippines to Congress pursuant to Section 22, Article VII of the
Constitution, including savings generated from programmed appropriations for the year: PROVIDED, That collections
arising from sources not considered in the aforesaid original revenue targets may be used to cover releases from
appropriations in this Fund: PROVIDED, FURTHER, That in case of newly approved loans for foreign-assisted projects, the
existence of a perfected loan agreement for the purpose shall be sufficient basis for the issuance of a SARO covering the
loan proceeds: PROVIDED, FURTHERMORE, That if there are savings generated from the programmed appropriations for
the first two quarters of the year, the DBM may, subject to the approval of the President, release the pertinent
appropriations under the Unprogrammed Fund corresponding to only fifty percent (50%) of the said savings net of
revenue shortfall: PROVIDED, FINALLY, That the release of the balance of the total savings from programmed
appropriations for the year shall be subject to fiscal programming and approval of the President.

2012 GAA

1. Release of the Fund. The amounts authorized herein shall be released only when the revenue collections exceed the
original revenue targets submitted by the President of the Philippines to Congress pursuant to Section 22, Article VII of the
Constitution: PROVIDED, That collections arising from sources not considered in the aforesaid original revenue targets
may be used to cover releases from appropriations in this Fund: PROVIDED, FURTHER, That in case of newly approved
loans for foreign-assisted projects, the existence of a perfected loan agreement for the purpose shall be sufficient basis for
the issuance of a SARO covering the loan proceeds.

As can be noted, the provisos in both provisions to the effect that "collections arising from sources not considered in the
aforesaid original revenue targets may be used to cover releases from appropriations in this Fund" gave the authority to
use such additional revenues for appropriations funded from the unprogrammed funds. They did not at all waive
compliance with the basic requirement that revenue collections must still exceed the original revenue targets.

In contrast, the texts of the provisos with regard to additional revenues generated from newly-approved foreign loans
were clear to the effect that the perfected loan agreement would be in itself "sufficient basis" for the issuance of a SARO
to release the funds but only to the extent of the amount of the loan. In such instance, the revenue collections need not
exceed the revenue targets to warrant the release of the loan proceeds, and the mere perfection of the loan agreement
would suffice.

It can be inferred from the foregoing that under these provisions of the GAAs the additional revenues from sources not
considered in the BESFs must be taken into account in determining if the revenue collections exceeded the revenue
targets. The text of the relevant provision of the 2013 GAA, which was substantially similar to those of the GAAs for 2011
and 2012, already made this explicit, thus:

1. Release of the Fund. The amounts authorized herein shall be released only when the revenue collections exceed the
original revenue targets submitted by the President of the Philippines to Congress pursuant to Section 22, Article VII of the
Constitution, including collections arising from sources not considered in the aforesaid original revenue target, as certified
by the BTr: PROVIDED, That in case of newly approved loans for foreign-assisted projects, the existence of a perfected
loan agreement for the purpose shall be sufficient basis for the issuance of a SARO covering the loan proceeds.

Consequently, that there were additional revenues from sources not considered in the revenue target would not be
enough. The total revenue collections must still exceed the original revenue targets to justify the release of the
unprogrammed funds (other than those from newly-approved foreign loans).

The present controversy on the unprogrammed funds was rooted in the correct interpretation of the phrase "revenue
collections should exceed the original revenue targets." The petitioners take the phrase to mean that the total revenue
collections must exceed the total revenue target stated in the BESF, but the respondents understand the phrase to refer
only to the collections for each source of revenue as enumerated in the BESF, with the condition being deemed complied
with once the revenue collections from a particular source already exceeded the stated target.

The BESF provided for the following sources of revenue, with the corresponding revenue target stated for each source of
revenue, to wit:

TAX REVENUES

Taxes on Net Income and Profits

Taxes on Property
Taxes on Domestic Goods and Services

General Sales, Turnover or VAT

Selected Excises on Goods

Selected Taxes on Services

Taxes on the Use of Goods or Property or Permission to Perform Activities
Other Taxes
Taxes on International Trade and Transactions

NON-TAX REVENUES

Fees and Charges

BTR Income

Government Services
Interest on NG Deposits
Interest on Advances to Government Corporations
Income from Investments

Interest on Bond Holdings

Guarantee Fee
Gain on Foreign Exchange
NG Income Collected by BTr

Dividends on Stocks
NG Share from Airport Terminal Fee
NG Share from PAGCOR Income
NG Share from MIAA Profit

Privatization
Foreign Grants

Thus, when the Court required the respondents to submit a certification from the Bureau of Treasury (BTr) to the effect
that the revenue collections had exceeded the original revenue targets,195 they complied by submitting certifications
from the BTr and Department of Finance (DOF) pertaining to only one identified source of revenue – the dividends from
the shares of stock held by the Government in government-owned and controlled corporations.

To justify the release of the unprogrammed funds for 2011, the OSG presented the certification dated March 4, 2011
issued by DOF Undersecretary Gil S. Beltran, as follows:

This is to certify that under the Budget for Expenditures and Sources of Financing for 2011, the programmed income from
dividends from shares of stock in government-owned and controlled corporations is 5.5 billion.

This is to certify further that based on the records of the Bureau of Treasury, the National Government has recorded
dividend income amounting to ₱23.8 billion as of 31 January 2011.196

For 2012, the OSG submitted the certification dated April 26, 2012 issued by National Treasurer Roberto B. Tan, viz:

This is to certify that the actual dividend collections remitted to the National Government for the period January to March
2012 amounted to ₱19.419 billion compared to the full year program of ₱5.5 billion for 2012.197

And, finally, for 2013, the OSG presented the certification dated July 3, 2013 issued by National Treasurer Rosalia V. De
Leon, to wit:

This is to certify that the actual dividend collections remitted to the National Government for the period January to May
2013 amounted to ₱12.438 billion compared to the full year program of ₱10.0198 billion for 2013.

Moreover, the National Government accounted for the sale of the right to build and operate the NAIA expressway
amounting to ₱11.0 billion in June 2013.199

The certifications reflected that by collecting dividends amounting to ₱23.8 billion in 2011, ₱19.419 billion in 2012, and
₱12.438 billion in 2013 the BTr had exceeded only the ₱5.5 billion in target revenues in the form of dividends from stocks
in each of 2011 and 2012, and only the ₱10 billion in target revenues in the form of dividends from stocks in 2013.

However, the requirement that revenue collections exceed the original revenue targets was to be construed in light of the
purpose for which the unprogrammed funds were incorporated in the GAAs as standby appropriations to support
additional expenditures for certain priority PAPs should the revenue collections exceed the resource targets assumed in
the budget or when additional foreign project loan proceeds were realized. The unprogrammed funds were included in
the GAAs to provide ready cover so as not to delay the implementation of the PAPs should new or additional revenue
sources be realized during the year.200 Given the tenor of the certifications, the unprogrammed funds were thus not yet
supported by the corresponding resources.201

The revenue targets stated in the BESF were intended to address the funding requirements of the proposed programmed
appropriations. In contrast, the unprogrammed funds, as standby appropriations, were to be released only when there
were revenues in excess of what the programmed appropriations required. As such, the revenue targets should be
considered as a whole, not individually; otherwise, we would be dealing with artificial revenue surpluses. The requirement
that revenue collections must exceed revenue target should be understood to mean that the revenue collections must
exceed the total of the revenue targets stated in the BESF. Moreover, to release the unprogrammed funds simply because
there was an excess revenue as to one source of revenue would be an unsound fiscal management measure because it
would disregard the budget plan and foster budget deficits, in contravention of the Government’s surplus budget
policy.202

We cannot, therefore, subscribe to the respondents’ view.

5.
Equal protection, checks and balances,
and public accountability challenges

The DAP is further challenged as violative of the Equal Protection Clause, the system of checks and balances, and the
principle of public accountability.

With respect to the challenge against the DAP under the Equal Protection Clause,203 Luna argues that the
implementation of the DAP was "unfair as it [was] selective" because the funds released under the DAP was not made
available to all the legislators, with some of them refusing to avail themselves of the DAP funds, and others being unaware
of the availability of such funds. Thus, the DAP practised "undue favoritism" in favor of select legislators in contravention
of the Equal Protection Clause.

Similarly, COURAGE contends that the DAP violated the Equal Protection Clause because no reasonable classification was
used in distributing the funds under the DAP; and that the Senators who supposedly availed themselves of said funds
were differently treated as to the amounts they respectively received.

Anent the petitioners’ theory that the DAP violated the system of checks and balances, Luna submits that the grant of the
funds under the DAP to some legislators forced their silence about the issues and anomalies surrounding the DAP.
Meanwhile, Belgica stresses that the DAP, by allowing the legislators to identify PAPs, authorized them to take part in the
implementation and execution of the GAAs, a function that exclusively belonged to the Executive; that such situation
constituted undue and unjustified legislative encroachment in the functions of the Executive; and that the President
arrogated unto himself the power of appropriation vested in Congress because NBC No. 541 authorized the use of the
funds under the DAP for PAPs not considered in the 2012 budget.

Finally, the petitioners insist that the DAP was repugnant to the principle of public accountability enshrined in the
Constitution,204 because the legislators relinquished the power of appropriation to the Executive, and exhibited a
reluctance to inquire into the legality of the DAP.

The OSG counters the challenges, stating that the supposed discrimination in the release of funds under the DAP could be
raised only by the affected Members of Congress themselves, and if the challenge based on the violation of the Equal
Protection Clause was really against the constitutionality of the DAP, the arguments of the petitioners should be directed
to the entitlement of the legislators to the funds, not to the proposition that all of the legislators should have been given
such entitlement.
The challenge based on the contravention of the Equal Protection Clause, which focuses on the release of funds under the
DAP to legislators, lacks factual and legal basis. The allegations about Senators and Congressmen being unaware of the
existence and implementation of the DAP, and about some of them having refused to accept such funds were
unsupported with relevant data. Also, the claim that the Executive discriminated against some legislators on the ground
alone of their receiving less than the others could not of itself warrant a finding of contravention of the Equal Protection
Clause. The denial of equal protection of any law should be an issue to be raised only by parties who supposedly suffer it,
and, in these cases, such parties would be the few legislators claimed to have been discriminated against in the releases of
funds under the DAP. The reason for the requirement is that only such affected legislators could properly and fully bring
to the fore when and how the denial of equal protection occurred, and explain why there was a denial in their situation.
The requirement was not met here. Consequently, the Court was not put in the position to determine if there was a denial
of equal protection. To have the Court do so despite the inadequacy of the showing of factual and legal support would be
to compel it to speculate, and the outcome would not do justice to those for whose supposed benefit the claim of denial
of equal protection has been made.

The argument that the release of funds under the DAP effectively stayed the hands of the legislators from conducting
congressional inquiries into the legality and propriety of the DAP is speculative. That deficiency eliminated any need to
consider and resolve the argument, for it is fundamental that speculation would not support any proper judicial
determination of an issue simply because nothing concrete can thereby be gained. In order to sustain their constitutional
challenges against official acts of the Government, the petitioners must discharge the basic burden of proving that the
constitutional infirmities actually existed.205 Simply put, guesswork and speculation cannot overcome the presumption of
the constitutionality of the assailed executive act.

We do not need to discuss whether or not the DAP and its implementation through the various circulars and memoranda
of the DBM transgressed the system of checks and balances in place in our constitutional system. Our earlier expositions
on the DAP and its implementing issuances infringing the doctrine of separation of powers effectively addressed this
particular concern.

Anent the principle of public accountability being transgressed because the adoption and implementation of the DAP
constituted an assumption by the Executive of Congress’ power of appropriation, we have already held that the DAP and
its implementing issuances were policies and acts that the Executive could properly adopt and do in the execution of the
GAAs to the extent that they sought to implement strategies to ramp up or accelerate the economy of the country.

6.
Doctrine of operative fact was applicable

After declaring the DAP and its implementing issuances constitutionally infirm, we must now deal with the consequences
of the declaration.

Article 7 of the Civil Code provides:

Article 7. Laws are repealed only by subsequent ones, and their violation or non-observance shall not be excused by
disuse, or custom or practice to the contrary.

When the courts declared a law to be inconsistent with the Constitution, the former shall be void and the latter shall
govern.

Administrative or executive acts, orders and regulations shall be valid only when they are not contrary to the laws or the
Constitution.

A legislative or executive act that is declared void for being unconstitutional cannot give rise to any right or
obligation.206However, the generality of the rule makes us ponder whether rigidly applying the rule may at times be
impracticable or wasteful. Should we not recognize the need to except from the rigid application of the rule the instances
in which the void law or executive act produced an almost irreversible result?
The need is answered by the doctrine of operative fact. The doctrine, definitely not a novel one, has been exhaustively
explained in De Agbayani v. Philippine National Bank:207

The decision now on appeal reflects the orthodox view that an unconstitutional act, for that matter an executive order or
a municipal ordinance likewise suffering from that infirmity, cannot be the source of any legal rights or duties. Nor can it
justify any official act taken under it. Its repugnancy to the fundamental law once judicially declared results in its being to
all intents and purposes a mere scrap of paper. As the new Civil Code puts it: ‘When the courts declare a law to be
inconsistent with the Constitution, the former shall be void and the latter shall govern.’ Administrative or executive acts,
orders and regulations shall be valid only when they are not contrary to the laws of the Constitution. It is understandable
why it should be so, the Constitution being supreme and paramount. Any legislative or executive act contrary to its terms
cannot survive.

Such a view has support in logic and possesses the merit of simplicity. It may not however be sufficiently realistic. It does
not admit of doubt that prior to the declaration of nullity such challenged legislative or executive act must have been in
force and had to be complied with. This is so as until after the judiciary, in an appropriate case, declares its invalidity, it is
entitled to obedience and respect. Parties may have acted under it and may have changed their positions. What could be
more fitting than that in a subsequent litigation regard be had to what has been done while such legislative or executive
act was in operation and presumed to be valid in all respects. It is now accepted as a doctrine that prior to its being
nullified, its existence as a fact must be reckoned with. This is merely to reflect awareness that precisely because the
judiciary is the governmental organ which has the final say on whether or not a legislative or executive measure is valid, a
period of time may have elapsed before it can exercise the power of judicial review that may lead to a declaration of
nullity. It would be to deprive the law of its quality of fairness and justice then, if there be no recognition of what had
transpired prior to such adjudication.

In the language of an American Supreme Court decision: ‘The actual existence of a statute, prior to such a determination
[of unconstitutionality], is an operative fact and may have consequences which cannot justly be ignored. The past cannot
always be erased by a new judicial declaration. The effect of the subsequent ruling as to invalidity may have to be
considered in various aspects, with respect to particular relations, individual and corporate, and particular conduct,
private and official.’"

The doctrine of operative fact recognizes the existence of the law or executive act prior to the determination of its
unconstitutionality as an operative fact that produced consequences that cannot always be erased, ignored or
disregarded. In short, it nullifies the void law or executive act but sustains its effects. It provides an exception to the
general rule that a void or unconstitutional law produces no effect.208 But its use must be subjected to great scrutiny and
circumspection, and it cannot be invoked to validate an unconstitutional law or executive act, but is resorted to only as a
matter of equity and fair play.209 It applies only to cases where extraordinary circumstances exist, and only when the
extraordinary circumstances have met the stringent conditions that will permit its application.

We find the doctrine of operative fact applicable to the adoption and implementation of the DAP. Its application to the
DAP proceeds from equity and fair play. The consequences resulting from the DAP and its related issuances could not be
ignored or could no longer be undone.

To be clear, the doctrine of operative fact extends to a void or unconstitutional executive act. The term executive act is
broad enough to include any and all acts of the Executive, including those that are quasi legislative and quasi-judicial in
nature. The Court held so in Hacienda Luisita, Inc. v. Presidential Agrarian Reform Council:210

Nonetheless, the minority is of the persistent view that the applicability of the operative fact doctrine should be limited to
statutes and rules and regulations issued by the executive department that are accorded the same status as that of a
statute or those which are quasi-legislative in nature. Thus, the minority concludes that the phrase ‘executive act’ used in
the case of De Agbayani v. Philippine National Bank refers only to acts, orders, and rules and regulations that have the
force and effect of law. The minority also made mention of the Concurring Opinion of Justice Enrique Fernando in
Municipality of Malabang v. Benito, where it was supposedly made explicit that the operative fact doctrine applies to
executive acts, which are ultimately quasi-legislative in nature.

We disagree. For one, neither the De Agbayani case nor the Municipality of Malabang case elaborates what ‘executive act’
mean. Moreover, while orders, rules and regulations issued by the President or the executive branch have fixed
definitions and meaning in the Administrative Code and jurisprudence, the phrase ‘executive act’ does not have such
specific definition under existing laws. It should be noted that in the cases cited by the minority, nowhere can it be found
that the term ‘executive act’ is confined to the foregoing. Contrarily, the term ‘executive act’ is broad enough to
encompass decisions of administrative bodies and agencies under the executive department which are subsequently
revoked by the agency in question or nullified by the Court.

A case in point is the concurrent appointment of Magdangal B. Elma (Elma) as Chairman of the Presidential Commission
on Good Government (PCGG) and as Chief Presidential Legal Counsel (CPLC) which was declared unconstitutional by this
Court in Public Interest Center, Inc. v. Elma. In said case, this Court ruled that the concurrent appointment of Elma to
these offices is in violation of Section 7, par. 2, Article IX-B of the 1987 Constitution, since these are incompatible offices.
Notably, the appointment of Elma as Chairman of the PCGG and as CPLC is, without a question, an executive act. Prior to
the declaration of unconstitutionality of the said executive act, certain acts or transactions were made in good faith and in
reliance of the appointment of Elma which cannot just be set aside or invalidated by its subsequent invalidation.

In Tan v. Barrios, this Court, in applying the operative fact doctrine, held that despite the invalidity of the jurisdiction of
the military courts over civilians, certain operative facts must be acknowledged to have existed so as not to trample upon
the rights of the accused therein. Relevant thereto, in Olaguer v. Military Commission No. 34, it was ruled that ‘military
tribunals pertain to the Executive Department of the Government and are simply instrumentalities of the executive
power, provided by the legislature for the President as Commander-in-Chief to aid him in properly commanding the army
and navy and enforcing discipline therein, and utilized under his orders or those of his authorized military
representatives.’

Evidently, the operative fact doctrine is not confined to statutes and rules and regulations issued by the executive
department that are accorded the same status as that of a statute or those which are quasi-legislative in nature.

Even assuming that De Agbayani initially applied the operative fact doctrine only to executive issuances like orders and
rules and regulations, said principle can nonetheless be applied, by analogy, to decisions made by the President or the
agencies under the executive department. This doctrine, in the interest of justice and equity, can be applied liberally and
in a broad sense to encompass said decisions of the executive branch. In keeping with the demands of equity, the Court
can apply the operative fact doctrine to acts and consequences that resulted from the reliance not only on a law or
executive act which is quasi-legislative in nature but also on decisions or orders of the executive branch which were later
nullified. This Court is not unmindful that such acts and consequences must be recognized in the higher interest of justice,
equity and fairness.

Significantly, a decision made by the President or the administrative agencies has to be complied with because it has the
force and effect of law, springing from the powers of the President under the Constitution and existing laws. Prior to the
nullification or recall of said decision, it may have produced acts and consequences in conformity to and in reliance of said
decision, which must be respected. It is on this score that the operative fact doctrine should be applied to acts and
consequences that resulted from the implementation of the PARC Resolution approving the SDP of HLI. (Bold
underscoring supplied for emphasis)

In Commissioner of Internal Revenue v. San Roque Power Corporation,211 the Court likewise declared that "for the
operative fact doctrine to apply, there must be a ‘legislative or executive measure,’ meaning a law or executive issuance."
Thus, the Court opined there that the operative fact doctrine did not apply to a mere administrative practice of the
Bureau of Internal Revenue, viz:

Under Section 246, taxpayers may rely upon a rule or ruling issued by the Commissioner from the time the rule or ruling is
issued up to its reversal by the Commissioner or this Court. The reversal is not given retroactive effect. This, in essence, is
the doctrine of operative fact. There must, however, be a rule or ruling issued by the Commissioner that is relied upon by
the taxpayer in good faith. A mere administrative practice, not formalized into a rule or ruling, will not suffice because
such a mere administrative practice may not be uniformly and consistently applied. An administrative practice, if not
formalized as a rule or ruling, will not be known to the general public and can be availed of only by those with informal
contacts with the government agency.

It is clear from the foregoing that the adoption and the implementation of the DAP and its related issuances were
executive acts.1avvphi1 The DAP itself, as a policy, transcended a merely administrative practice especially after the
Executive, through the DBM, implemented it by issuing various memoranda and circulars. The pooling of savings pursuant
to the DAP from the allotments made available to the different agencies and departments was consistently applied
throughout the entire Executive. With the Executive, through the DBM, being in charge of the third phase of the budget
cycle – the budget execution phase, the President could legitimately adopt a policy like the DAP by virtue of his primary
responsibility as the Chief Executive of directing the national economy towards growth and development. This is simply
because savings could and should be determined only during the budget execution phase.

As already mentioned, the implementation of the DAP resulted into the use of savings pooled by the Executive to finance
the PAPs that were not covered in the GAA, or that did not have proper appropriation covers, as well as to augment items
pertaining to other departments of the Government in clear violation of the Constitution. To declare the implementation
of the DAP unconstitutional without recognizing that its prior implementation constituted an operative fact that produced
consequences in the real as well as juristic worlds of the Government and the Nation is to be impractical and unfair.
Unless the doctrine is held to apply, the Executive as the disburser and the offices under it and elsewhere as the recipients
could be required to undo everything that they had implemented in good faith under the DAP. That scenario would be
enormously burdensome for the Government. Equity alleviates such burden.

The other side of the coin is that it has been adequately shown as to be beyond debate that the implementation of the
DAP yielded undeniably positive results that enhanced the economic welfare of the country. To count the positive results
may be impossible, but the visible ones, like public infrastructure, could easily include roads, bridges, homes for the
homeless, hospitals, classrooms and the like. Not to apply the doctrine of operative fact to the DAP could literally cause
the physical undoing of such worthy results by destruction, and would result in most undesirable wastefulness.

Nonetheless, as Justice Brion has pointed out during the deliberations, the doctrine of operative fact does not always
apply, and is not always the consequence of every declaration of constitutional invalidity. It can be invoked only in
situations where the nullification of the effects of what used to be a valid law would result in inequity and
injustice;212 but where no such result would ensue, the general rule that an unconstitutional law is totally ineffective
should apply.

In that context, as Justice Brion has clarified, the doctrine of operative fact can apply only to the PAPs that can no longer
be undone, and whose beneficiaries relied in good faith on the validity of the DAP, but cannot apply to the authors,
proponents and implementors of the DAP, unless there are concrete findings of good faith in their favor by the proper
tribunals determining their criminal, civil, administrative and other liabilities.

WHEREFORE, the Court PARTIALLY GRANTS the petitions for certiorari and prohibition; and DECLARES the following acts
and practices under the Disbursement Acceleration Program, National Budget Circular No. 541 and related executive
issuances UNCONSTITUTIONAL for being in violation of Section 25(5), Article VI of the 1987 Constitution and the doctrine
of separation of powers, namely:

(a) The withdrawal of unobligated allotments from the implementing agencies, and the declaration of the withdrawn
unobligated allotments and unreleased appropriations as savings prior to the end of the fiscal year and without complying
with the statutory definition of savings contained in the General Appropriations Acts;

(b) The cross-border transfers of the savings of the Executive to augment the appropriations of other offices outside the
Executive; and
(c) The funding of projects, activities and programs that were not covered by any appropriation in the General
Appropriations Act.

The Court further DECLARES VOID the use of unprogrammed funds despite the absence of a certification by the National
Treasurer that the revenue collections exceeded the revenue targets for non-compliance with the conditions provided in
the relevant General Appropriations Acts.

SO ORDERED.

LUCAS P. BERSAMIN
Associate Justice
G.R. No. 220598

GLORIA MACAPAGALARROYO, Petitioner, 
vs.
PEOPLE OF THE PHILIPPINES AND THE SANDIGANBAYAN, (First Division), Respondents

RESOLUTION

BERSAMIN,, J.:

On July 19, 2016, the Court promulgated its decision, disposing:

WHEREFORE, the Court GRANTS the petitions for certiorari; ANNULS and SETS ASIDE the resolutions issued in Criminal Case
No. SB-12-CRM-0174 by the Sandiganbayan on April 6, 2015 and September 10, 2015; GRANTS the petitioners' respective
demurrers to evidence; DISMISSES Criminal Case No. SB-12-CRM-0174 as to the petitionersGLORIAMACAPAGAL-
ARROYO and BENIGNOAGUAS for insufficiency of evidence; ORDERS the immediate release from detention of said petitioners;
and MAKES no pronouncements on costs of suit.

SO ORDERED. 1

On August 3, 2016, the State, through the Office of the Ombudsman, has moved for the reconsideration of the decision,
submitting that:

I. THIS HONORABLE COURT'S GIVING DUE COURSE TO A CERTIORARI ACTION ASSAILING AN INTERLOCUTORY ORDER DENYING
DEMURRER TO EVIDENCE VIOLA TES RULE 119, SECTION 23 OF THE RULES OF COURT, WHICH PROVIDES THAT AN ORDER
DENYING THE DEMURRER TO EVIDENCE SHALL NOT BE REVIEWABLE BY APPEAL OR BY CERTIORARIBEFORE JUDGMENT.

II. THE HONORABLE COURT COMMITTED GRAVE ERRORS WHICH AMOUNT TO A VIOLATION OR DEPRIVATION OF THE STATE'S
FUNDAMENTAL RIGHT TO DUE PROCESS OF LAW.

A. THE DECISION REQUIRES ADDITIONAL ELEMENTS IN THE PROSECUTION OF PLUNDER, VIZ. IDENTIFICATION OF THE MAIN

PLUNDERER AND PERSONAL BENEFIT TO HIM/HER, BOTH OF WHICH ARE NOT PROVIDED IN THE TEXT OF REPUBLIC ACT (R.A.)
NO. 7080.

B. THE EVIDENCE PRESENTED BY THE PROSECUTION WAS NOT FULLY TAKEN INTO ACCOUNT, INCLUDING BUT NOT LIMITED TO
THE IRREGULARITIES IN THE CONFIDENTIAL/INTELLIGENCE FUND (CIF) DISBURSEMENT PROCESS, QUESTIONABLE PRACTICE
OF CO-MINGLING OF FUNDS AND AGUAS' REPORTS TO THE COMMISSION ON AUDIT (COA) THAT BULK OF THE
PHP365,997,915.00 WITHDRAWN FROM THE PHILIPPINE CHARITY SWEEPSTAKES OFFICE'S (PCSO) CIF WERE DIVERTED TO THE
ARROYO-HEADED OFFICE OF THE PRESIDENT.

C. ARROYO AND AGUAS, BY INDISPENSABLE COOPERATION, IN CONSPIRACY WITH THEIR COACCUSED IN SB-12-CRM-0174,
COMMITTED PLUNDER VIA· A COMPLEX ILLEGAL SCHEME WHICH DEFRAUDED PCSO IN HUNDREDS OF MILLIONS OF PESOS.

D. EVEN ASSUMING THAT THE ELEMENTS OF PLUNDER WERE NOT PROVEN BEYOND REASONABLE DOUBT, THE EVIDENCE
PRESENTED BY THE PEOPLE SHOWS, BEYOND REASONABLE DOUBT, THAT ARROYO, AGUAS AND THEIR COACCUSED IN SB-12-
CRM-0174 ARE GUILTY OF MALVERSATION.2

In contrast, the petitioners submit that the decision has effectively barred the consideration and granting of the motion for
reconsideration of the State because doing so would amount to the re-prosecution or revival of the charge against them
despite their acquittal, and would thereby violate the constitutional proscription against double jeopardy.

Petitioner Gloria M. Macapagal-Arroyo (Arroyo) points out that the State miserably failed to prove the corpus delicti of
plunder; that the Court correctly required the identification of the main plunderer as well as personal benefit on the part of the
raider of the public treasury to enable the successful prosecution of the crime of plunder; that the State did not prove the
conspiracy that justified her inclusion in the charge; that to sustain the case for malversation against her, in lieu of plunder,
would violate her right to be informed of the accusation against her because the information did not necessarily include the
crime of malversation; and that even if the information did so, the constitutional prohibition against double jeopardy already
barred the re-opening of the case for that purpose.

Petitioner Benigno B. Aguas echoes the contentions of Arroyo in urging the Com1 to deny the motion for reconsideration.

In reply, the State avers that the prohibition against double jeopardy does not apply because it was denied its day in court,
thereby rendering the decision void; that the Court should re-examine the facts and pieces of evidence in order to find the
petitioners guilty as charged; and that the allegations of the information sufficiently included all that was necessary to fully
inform the petitioners of the accusations against them.

Ruling of the Court

The Court DENIES the motion for reconsideration for its lack of merit.

To start with, the State argues' that the consolidated petitions for certiorari were improper remedies in light of Section 23,
Rule 119 of the Rules of Court expressly prohibiting the review of the denial of their demurrer prior to the judgment in the case
either by appeal or by certiorari; that the Court has thereby limited its own power, which should necessarily prevent the giving
of due course to the petitions for certiorari, as well as the undoing of the order denying the petitioners' demurrer to evidence;
that the proper remedy under the Rules of Court was for the petitioners to proceed to trial and to present their evidence-in-
chief thereat; and that even if there had been grave abuse of discretion attending the denial, the Court'scertiorari  powers
should be exercised only upon the petitioners' compliance with the stringent requirements of Rule 65, particularly with the
requirement that there be no plain, speedy or adequate remedy in the ordinary course of law, which they did not establish.

Section 23, Rule 119 of the Rules of Court, pertinently provides:

Section 23. Demurrer to evidence. – xxx

xxxx

The order denying the motion for leave of court to file demurrer to evidence or the demurrer itself shall not be reviewable by
appeal or by certiorari before judgment. (n)

The argument of the State, which is really a repetition of its earlier submission, was squarely resolved in the decision, as
follows:

The Court holds that it should take cognizance of the petitions for certiorari because the Sandiganbayan, as shall shortly be
demonstrated, gravely abused its discretion amounting to lack or excess of jurisdiction.

The special civil action for certiorari is generally not proper to assail such an interlocutory order issued by the trial court
because of the availability of another remedy in the ordinary course of law. Moreover, Section 23, Rule 119 of the Rules of
Court expressly provides that "the order denying the motion for leave of court to file demurrer to evidence or the demurrer
itself shall not be reviewable by appeal or by certiorari before judgment." It is not an insuperable obstacle to this action,
however, that the denial of the demurrers to evidence of the petitioners was an interlocutory order that did not terminate the
proceedings, and the proper recourse of the demurring accused was to go to trial, and that in case of their conviction they may
then appeal the conviction, and assign the denial as among the errors to be reviewed. Indeed, it is doctrinal that the situations
in which the writ of certiorari may issue should not be limited, because to do so -

x x x would be to destroy its comprehensiveness and usefulness. So wide is the discretion of the com1 that authority is not
wanting to show that certiorari is more discretionary than either prohibition or mandamus. In the exercise of
oursuperintending control over other courts, we are to be guided by all the circumstances of each particular case 'as the ends
of justice may require.' So it is that the writ will be granted where necessary to prevent a substantial wrong or to do substantial
justice.
The Constitution itself has imposed upon the Court and the other courts of justice the duty to correct errors of jurisdiction as a
result of capricious, arbitrary, whimsical and despotic exercise of discretion by expressly incorporating in Section 1 of Article
VIII the following provision:

Section 1. The judicial power shall be vested in one Supreme Court and in such lower courts as may be established by law.

Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally
demandable and enforceable, and to determine whether or not there has been a grave abuse of discretion amounting to lack
or excess of jurisdiction on the part of any branch or instrumentality of the Government. The exercise of this power to correct
grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the
Government cannot be thwarted by rules of procedure to the contrary or for the sake of the convenience of one side. This is
because the Court has the bounden constitutional duty to strike down grave abuse of discretion whenever andwherever it is
committed. Thus, notwithstanding the interlocutory character and effect of the denial of the demurrers to evidence, the
petitioners as the accused could avail themselves of the remedy of certiorari when the denial was tainted with grave abuse of
discretion. As we shall soon show, the Sandiganbayan as the trial court was guilty of grave abuse of discretion when it
capriciously denied the demurrers to evidence despite the absence of competent and sufficient evidence to sustain the
indictment for plunder, and despite the absence of the factual bases to expect a guilty verdict.3

We reiterate the foregoing resolution, and stress that the prohibition contained in Section 23, Rule 119 of the Rules of Courtis
not an insuperable obstacle to the review by the Court of the denial of the demurrer to evidence through certiorari. We have
had many rulings to that effect in the past. For instance, in Nicolas v. Sandiganbayan,the Court expressly ruled that the petition
for certiorari was the proper remedy to assail the denial of the demurrer to evidence that was tainted with grave abuse of
discretion or excess of jurisdiction, or oppressive exercise of judicial authority.

Secondly, the State submits that its right to due process was violated because the decision imposed additional elements for
plunder that neither ' Republic Act No. 7080 nor jurisprudence had theretofore required, i.e., the identification of the main
plunderer, and personal benefit on the part of the accused committing the predicate crime of raid on the public treasury. The
State complains that it was not given the opportunity to establish such additional elements; that the imposition of new
elements fu1iher amounted to judicial legislation in violation of the doctrine of separation of powers; that the Court nitpicked
on the different infirmities of the information despite the issue revolving only around the sufficiency of the evidence; and that
it established all the elements of plunder beyond reasonable doubt.

The State cites the plain meaning rule to highlight that the crime of plunder did not require personal benefit on the part of the
raider of the public treasury. It insists that the definition of raids on the public treasury, conformably with the plain meaning
rule, is the taking of public money through fraudulent or unlawful means, and such definition does not require enjoyment or
personal benefit on the part of plunderer or on the part of any of his co-conspirators for them to be convicted for plunder.

The submissions of the State are unfounded.

The requirements for the identification of the main plunderer and for personal benefit in the predicate act of raids on the
public treasury have been written in R.A. No. 7080 itself as well as embedded in pertinent jurisprudence. This we made clear in
the decision, as follows:

A perusal of the information suggests that what the Prosecution sought to show was an implied conspiracy to commit plunder
among all of the accused on the basis of their collective actions prior to, during and after the implied agreement. It is notable
that the Prosecution did not allege that the conspiracy among all of the accused was by express agreement, or was a wheel
conspiracy or a chain conspiracy.

This was another fatal flaw of the Prosecution.

In its present version, under which the petitioners were charged, Section 2 of Republic Act No. 7080 (Plunder Law) states:
Section 2. Definition of the Crime of Plunder: Penalties. - Any public officer who, by himself or in connivance with members of
his family, relatives by affinity or consanguinity, business associates, subordinates or other persons, amasses, accumulates or
acquires ill-gotten wealth through a combination or series of overt criminal acts as described in Section 1 (d) hereof in the
aggregate amount or total value of at least Fifty million pesos (₱50,000,000.00) shall be guilty of the crime of plunder and shall
be punished by reclusion perpetua to death. Any person who participated with the said public officer in the commission of an
offense contributing to the crime of plunder shall likewise be punished for such offense. In the imposition of penalties, the
degree of participation and the attendance of mitigating and extenuating circumstances, as provided by the Revised Penal
Code, shall be considered by the court. The court shall declare any and all ill-gotten wealth and their interests and other
incomes and assets including the properties and shares of stocks derived from the deposit or investment thereof forfeited in
favor of the State. [As Amended by Section 12, Republic Act No. 7659 (The Death Penalty Law)]

Section l(d) of Republic Act No. 7080 provides:

Section 1. Definition of terms. - As used in this Act, the term:

xxxx

d. "Ill-gotten wealth" means any asset, property, business enterprise or material possession of any person within the purview
of Section two (2) hereof, acquired by him directly or indirectly through dummies, nominees, agents, subordinates and/or
business associates by any combination or series of the following means or similar schemes:

1. Through misappropriation, conversion, misuse, or malversation of public funds or raids on the public treasury;

2. By receiving, directly or indirectly, any commission, gift, share, percentage, kickbacks or any/or entity in connection with any
government contract or project or by reason of the office or position of the public officer concerned;

3. By the illegal or fraudulent conveyance or disposition of assets belonging to the National Government or any of its
subdivisions, agencies or instrumentalities or government-owned or controlled corporations and their subsidiaries;

4. By obtaining, receiving or accepting directly or indirectly any shares of stock, equity or any other form of interest or
participation including the promise of future employment in any business enterprise or undertaking;

5. By establishing agricultural, industrial or commercial monopolies or other combinations and/or implementation of decrees
and orders intended to benefit particular persons or special interests; or

6. By taking undue advantage of official positi0n, authority, relationship, connection or influence to unjustly enrich himself or
themselves at the expense and to the damage and prejudice

The law on plunder requires that a particular public officer must be identified as the one who amassed, acquired or
accumulated ill-gotten wealth because it plainly states that plunder is committed by any public officer who, by himself or in
connivance with members of his family, relatives by affinity or consanguinity, business associates, subordinates or other
persons, amasses, accumulates or acquires ill-gotten wealth in the aggregate amount or total value of at least ₱50,000,000.00
through a combination or series of overt criminal acts as described in Section l(d) hereof. Surely, the law requires in the
criminal charge for plunder against several individuals that there must be a main plunderer and her co-conspirators, who may
be members of her family, relatives by affinity or consanguinity, business associates, subordim1tes or other persons. In other
words, the allegation of the wheel conspiracy or express conspiracy in the information was appropriate because the main
plunderer would then be identified in either manner. Of course, implied conspiracy could also identify the main plunderer, but
that fact must be properly alleged and duly proven by the Prosecution.

This interpretation is supported by Estrada v. Sandiganbayan, where the Court explained the nature of the conspiracy charge
and the necessity for the main plunderer for whose benefit the amassment, accumulation and acquisition was made, thus:

There is no denying the fact that the "plunder of an entire nation resulting in material damage to the national economy" is
made up of a complex and manifold network of crimes. In the crime of plunder, therefore, different parties may be united by a
common purpose. In the case at bar, the different accused and their different criminal acts have a commonality - to help the
former President amass, accumulate or acquire ill-gotten wealth. Sub-paragraphs (a) to (d) in the Amended Information alleged
the different participation of each accused in the conspiracy. The gravamen of the conspiracy charge, therefore, is not that
each accused agreed to receive protection money from illegal gambling, that each misappropriated a portion of the tobacco
excise tax, that each accused ordered the GSIS and SSS to purchase shares of Belle Corporation and receive commissions from
such sale, nor that each unjustly enriched himself from commissions, gifts and kickbacks; rather, it is that each of them, by
their individual acts, agreed to participate, directly or indirectly, in the amassing, accumulation and acquisition of ill-gotten
wealth of and/or for former President Estrada. 5 [bold underscoring supplied for emphasis]

Indeed, because plunder is a crime that only a public official can commit by amassing, accumulating, or acquiring ill-gotten
wealth in the aggregate amount or total value of at least ₱50,000,000.00, the identification in the information of such public
official as the main plunderer among the several individuals thus charged is logically necessary under the law itself. In
particular reference to Criminal Case No. SB-12-CRM-0174, the individuals charged therein - including the petitioners - were 10
public officials; hence, it was only proper to identify the main plunderer or plunderers among the 10 accused who herself or
himself had amassed, accumulated, or acquired ill-gotten wealth with the total value of at least ₱50,000,000.00.

The phrase raids on the public treasury as used in Section 1 (d) of R. A. No. 7080 is itself ambiguous. In order to ascertain the
objective meaning of the phrase, the act of raiding the public treasury cannot be divided into parts. This is to differentiate the
predicate act of raids on the public treasury from other offenses involving property, like robbery, theft, orestafa. Considering
that R.A. No. 7080 does not expressly define this predicate act, the Court has necessarily resorted to statutory construction. In
so doing, the Court did not adopt the State's submission that personal benefit on the part of the accused need not be alleged
and shown because doing so would have defeated the clear intent of the law itself,6 which was to punish the amassing,
accumulating, or acquiring of ill-gotten wealth in the aggregate amount or total value of at least ₱150,000,000.00 by any
combination or series of acts of misappropriation, conversion, misuse, or malversation of public funds or raids on the public
treasury.

As the decision has observed, the rules of statutory construction as well as the deliberations of Congress indicated the intent of
Congress to require personal benefit for the predicate act of raids on the public treasury, viz.:

The phrase raids on the public treasury is found in Section 1 (d) of R.A. No. 7080, which provides:

Section l .Definition of Terms. – xxx

xxxx

d) Ill-gotten wealth means any asset, prope1iy, business enterprise or material possession of any person within the purview of
Section Two (2) hereof, acquired by him directly or indirectly through dummies, nominees, agents, subordinates and/or
business associates by any combination or series of the following means or similar schemes:

1) Through misappropriation, conversion, misuse, or malversation of public funds or raids on the public treasury;

xxxx

To discern the proper import of the phrase raids on the public treasury, the key is to look at the accompanying
words:misappropriation, conversion, misuse or malversation of public funds. This process is conformable with the maxim of
statutory construction noscitur a sociis, by which the correct construction of a particular word or phrase that is ambiguous in
itself or is equally susceptible of various meanings may be made by considering the company of the words in which the word or
phrase is found or with which it is associated. Verily, a word or phrase in a statute is always used in association with other
words or phrases, and its meaning may, therefore, be modified or restricted by the latter.

To convert connotes the act of using or disposing of another's property as if it were one's own; to misappropriate means to
own, to take something for one's own benefit; misuse means "a good, substance, privilege, or right used improperly,
unforcsccably, or not as intended;" and malversation occurs when "any public officer who, by reason of the duties of his office,
is accountable for public funds or property, shall appropriate the same or shall take or misappropriate or shall consent,
through abandonment or negligence, shall permit any other person to take such public funds, or property, wholly or partially."
The common thread that binds all the four terms together is that the public officer used the property taken. Considering
that raids on the public treasury is in the company of the four other terms that require the use of the property taken, the
phrase raids on the public treasury similarly requires such use of the property taken. Accordingly, theSandiganbayan gravely
erred in contending that the mere accumulation and gathering constituted the forbidden act of raids on the public
treasury. Pursuant to the maxim of noscitur a sociis, raids on the public treasury requires the raider to use the property taken
impliedly for his personal benefit.7

The Prosecution asserts that the Senate deliberations removed personal benefit as a requirement for plunder. In not requiring
personal benefit, the Sandiganbayan quoted the following exchanges between Senator Enrile and Senator Tafiada,viz.:

Senator Enrile. The word here, Mr. President, "such public officer or person who conspired or knowingly benefited". One does
not have to conspire or rescheme. The only element needed is that he "knowingly benefited". A candidate for the Senate for
instance, who received a political contribution from a plunderer, knowing that the contributor is a plunderer and therefore, he
knowingly benefited from the plunder, would he also suffer the penalty, Mr. President, for life imprisonment?

Senator Tafiada. In the committee amendments, Mr. President, we have deleted these lines 1 to 4 and part of line 5, on page 3.
But, in a way, Mr. President, it is good that the Gentleman is bringing out these questions, I believe that under the examples he
has given, the Court will have to...

Senator Enrile. How about the wife, Mr. President, he may not agree with the plunderer to plunder the country but because
she is a dutiful wife or a faithful husband, she has to keep her or his vow of fidelity to the spouse. And, of course, she enjoys
the benefits out of the plunder. Would the Gentleman now impute to her or him the crime of plunder simply because she or
he knowingly benefited out of the fruits of the plunder and, therefore, he must suffer or he must suffer the penalty of life
imprisonment?

The President. That was stricken out already in the Committee amendment.

Senator Tañada. Yes, Mr. President. Lines 1 to 4 and part of line 5 were stricken out in the Committee amendment. But, as I
said, the examples of the Minority Floor Leader are still worth spreading the Record. And, I believe that in those examples, the
Court will have just to take into consideration all the other circumstances prevailing in the case and the evidence that will be
submitted.

The President. In any event, 'knowingly benefited' has already been stricken off."

The exchanges between Senator Enrile and Senator Tañada reveal, therefore, that what was removed from the coverage of the
bill and the final version that eventually became the law was a person who was not the main plunderer or a co-conspirator, but
one who personally benefited from the plunderers' action. The requirement of personal benefit on the part of the main
plunderer or his co-conspirators by virtue of their plunder was not removed.

As a result, not only did the Prosecution fail to show where the money went but, more importantly, that GMA and Aguas had
personally benefited from the same. Hence, the Prosecution did not prove the predicate act of raids on the public
treasurybeyond reasonable doubt. 8

Thirdly, the State contends that the Court did not appreciate the totality of its evidence, particularly the different irregularities
committed in the disbursement of the PCSO funds, i.e., the commingling of funds, the non-compliance with LOI No. 1282, and
the unilateral approval of the disbursements. Such totality, coupled with the fact of the petitioners' indispensable cooperation
in the pilfering of public funds, showed the existence of the conspiracy to commit plunder among all of the accused.

The contention lacks basis.

As can be readily seen from the decision, the Court expressly granted the petitioners' respective demurrers to evidence and
dismissed the plunder case against them for insufficiency of evidence because:
x x x the Sandiganbayan as the trial court was guilty of grave abuse of discretion when it capriciously denied the demurrers to
evidence despite the absence of competent and sufficient evidence to sustain the indictment for plunder, and despite the
absence of the factual bases to expect a guilty verdict. 9

Such disposition of the Court fully took into consideration all the evidence adduced against the petitioners. We need not
rehash our review of the evidence thus adduced, for it is enough simply to stress that the Prosecution failed to establish
thecorpus delicti of plunder - that any or all of the accused public officials, particularly petitioner Arroyo, had amassed,
accumulated, or acquired ill-gotten wealth in the aggregate amount or total value of at least ₱50,000,000.00.

Fourthly, in accenting certain inadequacies of the allegations of the information, the Court did not engage in purposeless
nitpicking, and did not digress from the primary task of determining the sufficiency of the evidence presented by the State
against the petitioners. What the Court thereby intended to achieve was to highlight what would have been relevant in
theproper prosecution of plunder and thus enable itself to discern and determine whether the evidence of guilt was sufficient
or not. In fact, the Court categorically clarified that in discussing the essential need for the identification of the main plunderer
it was not harping on the sufficiency of the information, but was only enabling itself to search for and to find the relevant proof
that unequivocally showed petitioner Arroyo as the "mastermind" - which was how the Sandiganbayan had characterized her
participation - in the context of the implied conspiracy alleged in the information. But the search came to naught, for the
information contained nothing that averred her commission of the overt act necessary to implicate her in the supposed
conspiracy to commit the crime of plunder. Indeed, the Court assiduously searched for but did not find the sufficient
incriminatory evidence against the petitioners. Hence, the Sandiganbayan capriciously and oppressively denied their
demurrers to evidence.

Fifthly, the State posits that it established at least a case for malversation against the petitioners.

Malversation is defined and punished under Article 217 of the Revised Penal Code, which reads thusly:

Article 217. Malversation of public funds or property; Presumption of malversation. - Any public officer who, by reason of the
duties of his office, is accountable for public funds or property, shall appropriate the same or shall take or misappropriate or
shall consent, through abandonment or negligence, shall permit any other person to take such public funds, or property,
wholly or partially, or shall otherwise be guilty of the misappropriation or malversation of such funds or property, shall suffer:

1. The penalty of prision correccional in its medium and maximum periods, if the amount involved in the misappropriation or
malversation does not exceed two hundred pesos.

2. The penalty of prision mayor in its minimum and medium periods, if the amount involved is more than two hundred pesos
but does not exceed six thousand pesos.

3. The penalty of prision mayor in its maximum period to reclusion temporal in its minimum period, if the amount involved is
more than six thousand pesos but is less than twelve thousand pesos.

4. The penalty of reclusion temporal, in its medium and maximum periods, if the amount involved is more than twelve
thousand pesos but is less than twenty-two thousand pesos. If the amount exceeds the latter, the penalty shall bereclusion
temporal in its maximum period to reclusion perpetua.

In all cases, persons guilty of malversation shall also suffer the penalty of perpetual special disqualification and a fine equal to
the amount of the funds malversed or equal to the total value of the property embezzled.

The failure of a public officer to have duly forthcoming any public funds or property with which he is chargeable, upon demand
by any duly authorized officer, shall be prima facie evidence that he has put such missing funds or property to personal use. (As
amended by RA 1060).

The elements of malversation are that: (a) the offender is an accountable public officer; (b) he/she is responsible for the
misappropriation of public funds or property through intent or negligence; and (c) he/she has custody of and received such
funds and property by reason of his/her office. 10
The information in Criminal Case No. SB-12-CRM-017411 avers:

The undersigned Assistant Ombudsman and Graft Investigation and Prosecution Officer III, Office of the Ombudsman, hereby
accuse GLORIA MACAPAGAL-ARROYO, ROSARIO C. URIARTE, SERGIO O. VALENCIA, MANUEL L. MORATO, JOSE R. TARUC V,
RAYMUNDO T. ROQUERO, MA. FATIMA AS. VALDES, BENIGNO B. AGUAS, REYNALDO A. VILLAR and NILDA B. PLARAS, of the
crime of PLUNDER, as defined by, and penalized under Section 2 of Republic Act (R.A.) No. 7080, as amended by R.A. No. 7659,
committed, as follows:

That during the period from January 2008 to June 2010 or sometime prior or subsequent thereto, in Quezon City, Philippines,
and within the jurisdiction of this Honorable Court, accused GLORIA MACAPAGAL-ARROYO, then the President of the
Philippines, ROSARIO C. URIARTE, then General Manager and Vice Chairman, SERGIO 0. VALENCIA, then Chairman of the Board
of Directors, MANUEL L. MORA TO, JOSE R. TARUC V, RAYMUNDO T. ROQUERO, MA. FATIMA AS. VALDES, then members of
the Board of Directors, BENIGNO B. AGUAS, then Budget and Accounts Manager, all of the Philippine Charity Sweepstakes
Office (PCSO), REYNALDO A. VILLAR, then Chairman, and NILDA B. PLARAS, then Head of Intelligence/Confidential Fund Fraud
Audit Unit, both of the Commission on Audit, all public officers committing the offense in relation to their respective offices
and taking undue advantage of their respective official positions, authority, relationships, connections or influence, conniving,
conspiring and confederating with one another, did then and there willfully, unlawfully and criminally 'amass,, accumulate
and/or acquire directly or indirectly, ill-gotten wealth in the aggregate amount or total value of THREE HUNDRED SIXTY FIVE
MILLION NINE HUNDRED NINETY SEVEN THOUSAND NINE HUNDRED FIFTEEN PESOS (PHP365,997,915.00), more or less,
through any or a combination or a series of overt or criminal acts, or similar schemes or means, described as follows:

(a) diverting in several instances, funds from the operating budget of PCSO to its Confidential/Intelligence Fund that could be
accessed and withdrawn at any time with minimal restrictions, and converting, misusing, and/or illegally conveying or
transferring the proceeds drawn from said fund in the aforementioned sum, also in several instances, to themselves, in the
guise of fictitious expenditures, for their personal gain and benefit;

(b) raiding the public treasury by withdrawing and receiving, in several instances, the above-mentioned amount from the
Confidential/Intelligence Fund from PCSO's accounts, and or unlawfully transferring or conveying the same into their
possession and control through irregularly issued disbursement vouchers and fictitious expenditures; and

(c) taking advantage of their respective official positions, authority, relationships, connections or influence, in several
instances, to unjustly enrich themselves in the aforementioned sum, at the expense of, and the damage and prejudice of the
Filipino people and the Republic of the Philippines.

CONTRARY TO LAW.

In thereby averring the predicate act of malversation, the State did not sufficiently allege the aforementioned essential
elements of malversation in the information. The omission from the information of factual details descriptive of the
aforementioned elements of malversation highlighted the insufficiency of the allegations. Consequently, the State's position is
entirely unfounded.

Lastly, the petitioners insist that the consideration and granting of the motion for reconsideration of the State can amount to a
violation of the constitutional prohibition against double jeopardy because their acquittal under the decision was a prior
jeopardy within the context of Section 21, Article III (Bill of Rights) of the 1987 Constitution, to wit:

Section 21. No person shall be twice put in jeopardy of punishment for the same offense. If an act is punished by a law and an
ordinance, conviction or acquittal under either shall constitute a bar to another prosecution for the same act.

The insistence of the petitioners is fully warranted. Indeed, the consideration and granting of the motion for reconsideration of
the State will amount to the violation of the constitutional guarantee against double jeopardy.

The Court's consequential dismissal of Criminal Case No. SB-12- CRM-0174 as to the petitioners for insufficiency of
evidence amounted to their acquittal of the crime of plunder charged against them. In People v. Tan, the Court shows why:
In People v. Sandiganbayan, this Com1 explained the general rule that the grant of a demurrer to evidence operates as an
acquittal and is, thus, final and unappealable, to wit:

The demurrer to evidence in criminal cases, such as the one at bar, is ''filed after tile prosecution had rested its case," and
when the same is granted, it calls "for an appreciation of the evidence adduced by the prosecution and its sufficiency to
warrant conviction beyond reasonable doubt, resulting in a dismissal of the case on the merits, tantamount to an acquittal of
the accused." Such dismissal of a criminal case by the grant of demurrer to evidence may not be appealed, for to do so would
be to place the accused in double jeopardy. The verdict being one of acquittal, the case ends there.
xxxx
The rule on double jeopardy, however, is not without exceptions. In People v. Laguio, Jr., this Court stated that the only
instance when double jeopardy will not attach is when the RTC acted with grave abuse of discretion, thus:

... The only instance when double ,jeopardy will not attach is when the trial court acted with grave abuse of discretion
amounting to lack or excess of jurisdiction, such as where the prosecution was denied the opportunity to present its case or
where the trial was a sham. However, while certiorari may be availed of to correct an erroneous acquittal, the petitioner in
such an extraordinary proceeding must clearly demonstrate that the trial court blatantly abused its authority to a point so
grave as to deprive it of its very power to dispense justice. 13

The constitutional prohibition against placing a person under double jeopardy for the same offense bars not only a new and
independent prosecution but also an appeal in the same action after jeopardy had attached. 14 As such,
every acquittalbecomes final immediately upon promulgation and cannot be recalled for correction or amendment. With the
acquittal being immediately final, granting the State's motion for reconsideration in this case would violate the Constitutional
prohibition against double jeopardy because it would effectively reopen the prosecution and subject the petitioners to a
second jeopardy despite their acquittal.

It is cogent to remind in this regard that the Constitutional prohibition against double jeopardy provides to the accused three
related protections, specifically: protection against a second prosecution for the same offense after acquittal; protection
against a second prosecution for the same offense after conviction; and protection against multiple punishments for the same
offense. The rationale for the three protections is expounded in United States v. Wilson: 

The interests underlying these three protections arc quite similar. When a defendant has been once convicted and punished
for a particular crime, principles of fairness and finality require that he not be subjected to the possibility of further
punishment by being again tried or sentenced for the same offense. Ex pa rte Lange, 18 Wall 163 (1874); In re Nielsen, 131 U.S.
176 (1889). When a defendant has been acquitted of an offense, the Clause guarantees that the State shall not be permitted to
make repeated attempts to convict him,

"thereby subjecting him to embarrassment, expense and ordeal, and compelling him to live in a continuing state of anxiety and
insecurity, as well as enhancing the possibility that, even though innocent, he may be found guilty."

Green v. United States, 355 U.S. 184, 187-188 (1957).

The policy of avoiding multiple trials has been regarded as so important that exceptions to the principle have been only
grudgingly allowed. Initially, a new trial was thought to be unavailable after appeal, whether requested by the prosecution or
the defendant. See United States v. Gibert, 25 F. Cas. 1287 (No. 15,204) (CCD Mass. 1834) (Story, J.). It was not until 1896 that
it was made clear that a defendant could seek a new trial after conviction, even though the Government enjoyed no similar
right. United States v. Ball, 163 U.S. 662. (Bold underscoring supplied for emphasis)

WHEREFORE, the Court DENIES the motion for reconsideration for lack of merit.

SO ORDERED.

LUCAS P. BERSAMIN
Associate Justice