ASG Law

Tag: Item Veto Power

  • Navigating Lump-Sum Appropriations: Insights from the Supreme Court’s Belgica Ruling

    Understanding the Constitutionality of Lump-Sum Appropriations in the Philippine Budget

    G.R. No. 210503, October 08, 2019

    Imagine a scenario where the government allocates funds for various projects without specifying exact amounts for each. This practice, known as lump-sum appropriations, has been a contentious issue in Philippine governance. The Supreme Court’s decision in the case involving Greco Antonious Beda B. Belgica challenged the constitutionality of these appropriations within the 2014 General Appropriations Act (GAA). At the heart of the matter was whether such budgetary practices align with the principles of separation of powers and the non-delegability of legislative authority.

    Belgica argued that lump-sum discretionary funds in the 2014 GAA were unconstitutional, echoing concerns from a previous ruling that struck down similar funds in 2013. The central question was whether these appropriations violated the President’s item veto power and the legislative branch’s authority to appropriate funds.

    Legal Context: The Framework of Philippine Budgetary Law

    In the Philippines, the power of the purse is constitutionally vested in the Congress, which has the authority to appropriate funds through laws. The Constitution mandates that no money shall be paid out of the Treasury except in pursuance of an appropriation made by law. This principle is enshrined in Article VI, Section 29(1) of the 1987 Constitution, which states: “No money shall be paid out of the Treasury except in pursuance of an appropriation made by law.”

    The term “appropriation” refers to the legislative authorization directing payment out of government funds for specified conditions or purposes. Appropriations can be made in the form of line-items, where a specified amount is allocated for a singular purpose, or lump-sums, where a single amount is designated for multiple purposes. The distinction is crucial because it affects the President’s ability to exercise his item veto power, which allows him to veto specific items within an appropriation bill without rejecting the entire legislation.

    The 2013 Belgica case set a precedent by invalidating lump-sum appropriations that allowed post-enactment legislative involvement, deeming them a violation of the separation of powers. However, it also clarified that not all lump-sum appropriations are unconstitutional. The key is whether they allow the President to exercise his item veto power effectively and whether they adhere to the principles of non-delegability of legislative power.

    Case Breakdown: The Journey of Belgica’s Challenge

    Greco Antonious Beda B. Belgica filed a petition challenging the constitutionality of certain lump-sum appropriations in the 2014 GAA, including the Unprogrammed Fund, Contingent Fund, E-Government Fund, and Local Government Support Fund. His argument was rooted in the belief that these funds were similar to the pork barrel funds struck down in the 2013 case, which he claimed allowed for unconstitutional discretionary spending.

    The case’s journey began with the filing of the petition on January 13, 2014, shortly after the passage of the 2014 GAA. Belgica sought to prevent the use and disbursement of these funds pending the resolution of his petition. The Supreme Court, however, did not issue a status quo ante order as requested.

    The Court’s decision focused on whether these appropriations violated the doctrine of non-delegability of legislative power, the principle of separation of powers, and the President’s item veto power. The Court found that:

    • The Unprogrammed Fund, despite being a lump-sum appropriation, was constitutional because it specified the public purposes for which the funds could be used, with corresponding amounts listed in Annex “A” of the 2014 GAA.
    • The Contingent Fund was upheld as constitutional, as it was intended to cover unforeseen expenses and had been previously recognized as a valid appropriation in the 2013 Belgica case.
    • The E-Government Fund was deemed constitutional because its nature as a cross-agency fund required it to be subject to administrative determination, with clear guidelines in place.
    • The Local Government Support Fund was found to be constitutional, as it was allocated for specific maintenance and operating expenses, which were deemed sufficiently specific for the exercise of the President’s item veto power.

    The Court emphasized that the rule on singular correspondence, which requires an appropriation to have a specified singular amount for a specified singular purpose, was not violated by these funds. The decision highlighted that lump-sum appropriations are not unconstitutional per se, but rather, they must allow the President to exercise his item veto power and adhere to the principles of non-delegability and separation of powers.

    Justice Carpio’s separate opinion reiterated that lump-sum appropriations for multiple purposes do not negate the President’s item veto power if they have specified and singular purposes. Justice Bernabe’s concurring opinion added that a lump-sum appropriation can be valid if it funds multiple programs under one singular appropriation purpose.

    Practical Implications: Navigating Future Budgetary Practices

    The Supreme Court’s ruling in the Belgica case provides clarity on the use of lump-sum appropriations in the Philippine budget. It affirms that such appropriations can be constitutional if they adhere to the principles of singular correspondence and non-delegability, and allow the President to exercise his item veto power effectively.

    For future budgetary practices, this ruling suggests that the government should ensure that lump-sum appropriations are accompanied by clear guidelines and specific purposes, which can be subject to the President’s veto. This decision also underscores the importance of maintaining a balance between legislative authority and executive discretion in the budgetary process.

    Key Lessons:

    • Ensure that lump-sum appropriations are clearly defined with specific purposes and corresponding amounts to avoid constitutional challenges.
    • Maintain transparency in the budgetary process by providing detailed guidelines for the use of lump-sum funds.
    • Respect the separation of powers by ensuring that appropriations allow the President to exercise his item veto power effectively.

    Frequently Asked Questions

    What is a lump-sum appropriation?

    A lump-sum appropriation is a single amount of money designated for multiple purposes within the government budget.

    How does the Supreme Court’s ruling affect future budget legislation?

    The ruling clarifies that lump-sum appropriations can be constitutional if they adhere to the principles of singular correspondence and non-delegability, and allow the President to exercise his item veto power effectively.

    Can the President veto parts of a lump-sum appropriation?

    Yes, the President can veto parts of a lump-sum appropriation if the appropriation is structured in a way that allows for such a veto, typically by specifying amounts for different purposes within the fund.

    What are the key principles to consider when drafting appropriations?

    Key principles include ensuring that appropriations are specific enough to allow the President to exercise his item veto power, and that they do not violate the principles of non-delegability and separation of powers.

    How can government agencies ensure compliance with the Supreme Court’s ruling?

    Government agencies should ensure that lump-sum appropriations are accompanied by clear guidelines and specific purposes, and that they allow the President to exercise his item veto power effectively.

    What role does the separation of powers play in budget appropriations?

    The separation of powers ensures that the legislative branch has the authority to appropriate funds, while the executive branch has the power to implement the budget, including the ability to veto specific items.

    Can lump-sum appropriations be used for cross-agency funds?

    Yes, lump-sum appropriations can be used for cross-agency funds, as long as they are subject to clear guidelines and administrative determination.

    ASG Law specializes in constitutional and administrative law. Contact us or email hello@asglawpartners.com to schedule a consultation.

  • Ending Pork: Supreme Court Defines Limits on Congressional Power Over Budget

    In a landmark decision, the Supreme Court of the Philippines declared the Priority Development Assistance Fund (PDAF), also known as “pork barrel,” unconstitutional, setting new boundaries for the roles of the Executive and Legislative branches in budgeting. This ruling alters long-standing practices by limiting legislators’ influence on how public funds are spent, reinforcing the principle that lawmakers cannot execute or control the implementation of the budget after its enactment. This decision directly impacts how future budgets are crafted and implemented, aiming to prevent misuse of public funds and uphold the separation of powers, ensuring public resources are managed transparently and accountably.

    Striking Down Pork: The Battle for Constitutional Boundaries in Budgeting

    The case of Belgica v. Ochoa arose from consolidated petitions questioning the constitutionality of the Pork Barrel System, specifically the 2013 PDAF Article, Malampaya Funds, and the Presidential Social Fund. The petitioners argued that these systems violated key constitutional principles, including separation of powers, non-delegability of legislative power, and accountability. They sought to declare these funds unconstitutional and prevent further expenditures under them.

    The Supreme Court partly granted the petitions, declaring the 2013 PDAF Article and similar Congressional Pork Barrel Laws unconstitutional because they allowed legislators to wield post-enactment authority in budget execution, violating the separation of powers. The Court emphasized that the power of appropriation belongs to Congress as a body, not to individual legislators, and should be exercised through legislation, not through post-enactment measures. This decision overturned the Court’s previous stance in Philconsa v. Enriquez, which had allowed post-enactment legislator participation under the guise of recommendatory power.

    Moreover, the Court found that allowing legislators to identify projects post-enactment violated the principle of non-delegability of legislative power. By dictating how much from a lump-sum fund would go to a specific project, legislators were effectively exercising the power of appropriation, which is a legislative function. Such post-enactment authority was also seen as undermining local autonomy by allowing national officers to intervene in purely local matters, overriding the functions of Local Development Councils.

    The Court also addressed the constitutionality of phrases in Presidential Decree (PD) 910 and PD 1869, which pertained to the Malampaya Funds and the Presidential Social Fund, respectively. The phrase “and for such other purposes as may be hereafter directed by the President” in PD 910 was struck down for failing to provide a sufficient standard to limit the President’s authority in using the Malampaya Funds. Similarly, the phrase “to finance the priority infrastructure development projects” in PD 1869 was deemed unconstitutional for giving the President unchecked authority to determine which infrastructure projects to fund.

    In contrast, the Court deemed it legal that a portion of funds should be used “to finance the restoration of damaged or destroyed facilities due to calamities”, providing for more specific parameters for the President’s discretion. In the case, The funds were being used without any valid law allowing for their proper appropriation in violation of Section 29(1), Article VI of the 1987 Constitution which states that: “No money shall be paid out of the Treasury except in pursuance of an appropriation made by law.”

    The Court acknowledged that while it is was not taking on the task of determining how a proper budget would be formed but the discussion regarding whether the appropriation law must contain adequate legislative guidelines if the same law delegates rule-making authority to the Executive either for the purpose of (a) filling up the details of the law for its enforcement, known as supplementary rule-making, or (b) ascertaining facts to bring the law into actual operation, referred to as contingent rule-making.

    The Court also addressed the issues of public accountability and the President’s item-veto power in the context of Congressional Pork Barrel. Certain features of the PDAF system, such as post-enactment participation of legislators, were found to dilute congressional oversight and render legislators susceptible to taking undue advantage of their office. However, the Court refrained from ruling on issues related to political dynasties and the impairment of the power of impeachment, deeming them largely political in nature.

    In light of this, Chief Justice Sereno reminded that the Court did not strike down all appropriations but the appropriations that fall into the following catagories:

    (a) the entire 2013 PDAF Article; (b) all legal provisions of past and present Congressional Pork Barrel Laws, such as the previous PDAF and CDF Articles and the various Congressional Insertions, which authorize/d legislators – whether individually or collectively organized into committees – to intervene, assume or participate in any of the various post-enactment stages of the budget execution, such as but not limited to the areas of project identification, modification and revision of project identification, fund release and/or fund realignment, unrelated to the power of congressional oversight; (c) all legal provisions of past and present Congressional Pork Barrel Laws, such as the previous PDAF and CDF Articles and the various Congressional Insertions, which confer/red personal, lump-sum allocations to legislators from which they are able to fund specific projects which they themselves determine; (d) all informal practices of similar import and effect, which the Court similarly deems to be acts of grave abuse of discretion amounting to lack or excess of jurisdiction; and (e) the phrases (1) ?and for such other purposes as may be hereafter directed by the President” under Section 8 of Presidential Decree No. 910 and (2) “to finance the priority infrastructure development projects” under Section 12 of Presidential Decree No. 1869, as amended by Presidential Decree No. 1993, for both failing the sufficient standard test in violation of the principle of non-delegability of legislative power.

    The Court also tackled procedural issues, affirming that there was an actual and justiciable controversy, that petitioners had legal standing to sue, and that the issues were ripe for adjudication. The Court clarified that its prior rulings in Philconsa and LAMP did not bar the re-litigation of the constitutionality of the Pork Barrel System, as the present cases called for a broader constitutional scrutiny.

    This decision marks a significant moment in Philippine jurisprudence, setting clearer boundaries for the separation of powers and emphasizing the importance of accountability in public fund management. While this case directly concerned a specific law, it may also give more clarity on laws of its kind in the future.

    FAQs

    What was the key issue in this case? The key issue was whether the Pork Barrel System, particularly the 2013 PDAF, the Malampaya Funds, and the Presidential Social Fund, violated the principles of separation of powers and non-delegability of legislative power.
    What is the main holding of the Supreme Court in this case? The Supreme Court declared the 2013 PDAF Article and similar Congressional Pork Barrel Laws unconstitutional, as they allowed legislators to exercise post-enactment authority in budget execution and conferred personal, lump-sum allocations.
    Why did the Court find the PDAF unconstitutional? The Court found that the PDAF violated the separation of powers by allowing legislators to control budget implementation, breached non-delegability principles by giving legislators appropriation power, and impaired the President’s item-veto power.
    What was the Court’s ruling on the Malampaya Funds and Presidential Social Fund? The Court struck down specific phrases in laws governing these funds for lacking sufficient standards, resulting in an undue delegation of legislative power to the President, while deemed it legal that the funds should be used “to finance the restoration of damaged or destroyed facilities due to calamities”.
    Does this ruling affect projects already underway? The ruling is prospective, meaning it applies from the date of the decision forward. However, the disbursement of 2013 PDAF funds covered only by obligated SAROs, without corresponding NCAs issued, was permanently enjoined.
    What is the effect of this decision on local autonomy? The Court found that the Congressional Pork Barrel undermined local autonomy by allowing national officers to intervene in purely local matters, despite the existence of capable local institutions.
    What are the practical implications of this ruling? This ruling necessitates a shift towards line-item budgeting, reduces legislative involvement in budget execution, and emphasizes accountability and transparency in the use of public funds.
    Did the Supreme Court address the issue of political dynasties? The Court declined to rule on the issue of political dynasties, citing the lack of a standing law defining political dynasties for enforcement.
    What did the Court say about access to information related to PDAF? The Court denied petitioners’ request to be furnished with lists and reports related to PDAF, citing improper recourse and lack of proper substantiation, without prejudice to a separate mandamus case.

    The Supreme Court’s decision in Belgica v. Ochoa marks a pivotal moment in Philippine legal history, reinforcing the checks and balances essential to a functioning democracy. By curbing the post-enactment powers of legislators over budget execution, the Court aims to foster greater accountability and transparency in the management of public funds, setting the stage for a more constitutionally compliant budget process in the years to come.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: Belgica v. Ochoa, G.R. No. 208566, November 19, 2013