Guingona Vs Carague
Guingona Vs Carague
Guingona Vs Carague
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This is a case of first impression whereby petitioners question the constitutionality of the automatic
appropriation for debt service in the 1990 budget.
As alleged in the petition, the facts are as follows:
The 1990 budget consists of P98.4 Billion in automatic appropriation (with P86.8 Billion for debt
service) and P155.3 Billion appropriated under Republic Act No. 6831, otherwise known as the
General Appropriations Act, or a total of P233.5 Billion, 1 while the appropriations for the Department of
Education, Culture and Sports amount to P27,017,813,000.00. 2
The said automatic appropriation for debt service is authorized by P.D. No. 81, entitled "Amending
Certain Provisions of Republic Act Numbered Four Thousand Eight Hundred Sixty, as Amended (Re:
Foreign Borrowing Act)," by P.D. No. 1177, entitled "Revising the Budget Process in Order to
Institutionalize the Budgetary Innovations of the New Society," and by P.D. No. 1967, entitled "An Act
Strenghthening the Guarantee and Payment Positions of the Republic of the Philippines on Its
Contingent Liabilities Arising out of Relent and Guaranteed Loan by Appropriating Funds For The
Purpose.
There can be no question that petitioners as Senators of the Republic of the Philippines may bring
this suit where a constitutional issue is raised. 3 Indeed, even a taxpayer has personality to restrain
unlawful expenditure of public funds.
The petitioner seek the declaration of the unconstitutionality of P.D. No. 81, Sections 31 of P.D. 1177,
and P.D. No. 1967. The petition also seeks to restrain the disbursement for debt service under the
1990 budget pursuant to said decrees.
Respondents contend that the petition involves a pure political question which is the repeal or
amendment of said laws addressed to the judgment, wisdom and patriotism of the legislative body
and not this Court.
In Gonzales, 5 the main issue was the unconstitutionality of the presidential veto of certain provision
particularly Section 16 of the General Appropriations Act of 1990, R.A. No. 6831. This Court, in disposing
of the issue, stated
The political question doctrine neither interposes an obstacle to judicial determination
of the rival claims. The jurisdiction to delimit constitutional boundaries has been given
to this Court. It cannot abdicate that obligation mandated by the 1987 Constitution,
although said provision by no means does away with the applicability of the principle
in appropriate cases.
Sec. 1. The judicial power shad be vested in one Supreme Court and
in such lower courts as may 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.
With the Senate maintaining that the President's veto is unconstitutional and that
charge being controverted, there is an actual case or justiciable controversy between
the Upper House of Congress and the executive department that may be taken
cognizance of by this Court.
The questions raised in the instant petition are
They assert that there must be definiteness, certainty and exactness in an appropriation, 11 otherwise
it is an undue delegation of legislative power to the President who determines in advance the amount
appropriated for the debt service. 12
The Court is not persuaded.
Section 3, Article XVIII of the Constitution recognizes that "All existing laws, decrees, executive
orders, proclamations, letters of instructions and other executive issuances not inconsistent with the
Constitution shall remain operative until amended, repealed or revoked."
This transitory provision of the Constitution has precisely been adopted by its framers to preserve
the social order so that legislation by the then President Marcos may be recognized. Such laws are
to remain in force and effect unless they are inconsistent with the Constitution or, are otherwise
amended, repealed or revoked.
An examination of the aforecited presidential decrees show the clear intent that the amounts needed
to cover the payment of the principal and interest on all foreign loans, including those guaranteed by
the national government, should be made available when they shall become due precisely without
the necessity of periodic enactments of separate laws appropriating funds therefor, since both the
periods and necessities are incapable of determination in advance.
The automatic appropriation provides the flexibility for the effective execution of debt management
policies. Its political wisdom has been convincingly discussed by the Solicitor General as he argues
appropriating public money are reduced to mere "bills" that must again go through the legislative
million The only reasonable interpretation of said provisions of the Constitution which refer to "bills"
is that they mean appropriation measures still to be passed by Congress. If the intention of the
framers thereof were otherwise they should have expressed their decision in a more direct or
express manner.
Well-known is the rule that repeal or amendment by implication is frowned upon. Equally
fundamental is the principle that construction of the Constitution and law is generally applied
prospectively and not retrospectively unless it is so clearly stated.
On the third issue that there is undue delegation of legislative power, in Edu vs. Ericta, 14 this Court
had this to say
What cannot be delegated is the authority under the Constitution to make laws and
to alter and repeal them; the test is the completeness of the statute in all its terms
and provisions when it leaves the hands of the legislature. To determine whether or
not there is an undue delegation of legislative power, the inequity must be directed to
the scope and definiteness of the measure enacted. The legislature does not
abdicate its function when it describes what job must be done, who is to do it, and
what is the scope of his authority. For a complex economy, that may indeed be the
only way in which legislative process can go forward . . .
To avoid the taint of unlawful delegation there must be a standard, which implies at
the very least that the legislature itself determines matters of principle and lays down
fundamental policy . . .
The standard may be either express or implied . . . from the policy and purpose of
the act considered as whole . . .
In People vs. Vera, 15 this Court said "the true distinction is between the delegation of power to make the
law, which necessarily involves discretion as to what the law shall be, and conferring authority or
discretion as to its execution, to be exercised under and in pursuance of the law. The first cannot be done;
to the latter no valid objection can be made."
Ideally, the law must be complete in all its essential terms and conditions when it leaves the
legislature so that there will be nothing left for the delegate to do when it reaches him except enforce
it. If there are gaps in the law that will prevent its enforcement unless they are first filled, the delegate
will then have been given the opportunity to step in the shoes of the legislature and exercise a
discretion essentially legislative in order to repair the omissions. This is invalid delegation. 16
The Court finds that in this case the questioned laws are complete in all their essential terms and
conditions and sufficient standards are indicated therein.
The legislative intention in R.A. No. 4860, as amended, Section 31 of P.D. No. 1177 and P.D. No.
1967 is that the amount needed should be automatically set aside in order to enable the Republic of
the Philippines to pay the principal, interest, taxes and other normal banking charges on the loans,
credits or indebtedness incurred as guaranteed by it when they shall become due without the need
to enact a separate law appropriating funds therefor as the need arises. The purpose of these laws
is to enable the government to make prompt payment and/or advances for all loans to protect and
maintain the credit standing of the country.
Although the subject presidential decrees do not state specific amounts to be paid, necessitated by
the very nature of the problem being addressed, the amounts nevertheless are made certain by the
legislative parameters provided in the decrees. The Executive is not of unlimited discretion as to the
amounts to be disbursed for debt servicing. The mandate is to pay only the principal, interest, taxes
and other normal banking charges on the loans, credits or indebtedness, or on the bonds,
debentures or security or other evidences of indebtedness sold in international markets incurred by
virtue of the law, as and when they shall become due. No uncertainty arises in executive
implementation as the limit will be the exact amounts as shown by the books of the Treasury.
The Government budgetary process has been graphically described to consist of four major phases
as aptly discussed by the Solicitor General:
The Government budgeting process consists of four major phases:
1. Budget preparation. The first step is essentially tasked upon the Executive Branch
and covers the estimation of government revenues, the determination of budgetary
priorities and activities within the constraints imposed by available revenues and
by borrowing limits, and the translation of desired priorities and activities into
expenditure levels.
Budget preparation starts with the budget call issued by the Department of Budget
and Management. Each agency is required to submit agency budget estimates in line
with the requirements consistent with the general ceilings set by the Development
Budget Coordinating Council (DBCC).
With regard to debt servicing, the DBCC staff, based on the macro-economic
projections of interest rates (e.g. LIBOR rate) and estimated sources of domestic and
foreign financing, estimates debt service levels. Upon issuance of budget call, the
Bureau of Treasury computes for the interest and principal payments for the year for
all direct national government borrowings and other liabilities assumed by the same.
2. Legislative authorization. At this stage, Congress enters the picture and
deliberates or acts on the budget proposals of the President, and Congress in the
exercise of its own judgment and wisdomformulates an appropriation act precisely
following the process established by the Constitution, which specifies that no money
may be paid from the Treasury except in accordance with an appropriation made by
law.
Debt service is not included in the General Appropriation Act, since authorization
therefor already exists under RA No. 4860 and 245, as amended and PD 1967.
Precisely in the fight of this subsisting authorization as embodied in said Republic
Acts and PD for debt service, Congress does not concern itself with details for
implementation by the Executive, but largely with annual levels and approval thereof
upon due deliberations as part of the whole obligation program for the year. Upon
such approval, Congress has spoken and cannot be said to have delegated its
wisdom to the Executive, on whose part lies the implementation or execution of the
legislative wisdom.
3. Budget Execution. Tasked on the Executive, the third phase of the budget process
covers the various operational aspects of budgeting. The establishment of obligation
authority ceilings, the evaluation of work and financial plans for individual activities,
the continuing review of government fiscal position, the regulation of funds releases,
the implementation of cash payment schedules, and other related activities comprise
this phase of the budget cycle.
Release from the debt service fired is triggered by a request of the Bureau of the
Treasury for allotments from the Department of Budget and Management, one
quarter in advance of payment schedule, to ensure prompt payments. The Bureau of
Treasury, upon receiving official billings from the creditors, remits payments to
creditors through the Central Bank or to the Sinking Fund established for government
security issues (Annex F).
4. Budget accountability. The fourth phase refers to the evaluation of actual
performance and initially approved work targets, obligations incurred, personnel hired
and work accomplished are compared with the targets set at the time the agency
budgets were approved.
There being no undue delegation of legislative power as clearly above shown,
petitioners insist nevertheless that subject presidential decrees constitute undue
delegation of legislative power to the executive on the alleged ground that the
appropriations therein are not exact, certain or definite,invoking in support therefor
the Constitution of Nebraska, the constitution under which the case of State v.
Moore, 69 NW 974, cited by petitioners, was decided. Unlike the Constitution of
Nebraska, however, our Constitution does not require a definite, certain, exact
or "specific appropriation made by law." Section 29, Article VI of our 1987
Constitution omits any of these words and simply states:
Section 29(l). No money shall be paid out of the treasury except in
pursuance of an appropriation made by law.
More significantly, there is no provision in our Constitution that provides or prescribes
any particular form of words or religious recitals in which an authorization or
appropriation by Congress shall be made, except that it be "made by law," such as
precisely the authorization or appropriation under the questioned presidential
decrees. In other words, in terms of time horizons, an appropriation may be made
impliedly (as by past but subsisting legislations) as well as expressly for the current
fiscal year (as by enactment of laws by the present Congress), just as said
appropriation may be made in general as well as in specific terms. The
Congressional authorization may be embodied in annual laws, such as a general
appropriations act or in special provisions of laws of general or special application
which appropriate public funds for specific public purposes, such as the questioned
decrees. An appropriation measure is sufficient if the legislative intention clearly and
certainly appears from the language employed (In re Continuing Appropriations, 32 P.
272), whether in the past or in the present. 17
Thus, in accordance with Section 22, Article VII of the 1987 Constitution, President Corazon C.
Aquino submitted to Congress the Budget of Expenditures and Sources of Financing for the Fiscal
Year 1990. The proposed 1990 expenditure program covering the estimated obligation that will be
incurred by the national government during the fiscal year amounts to P233.5 Billion. Of the
proposed budget, P86.8 is set aside for debt servicing as follows:
National Government Debt
Service Expenditures, 1990
(in million pesos)
Domestic Foreign Total
RA 245, as RA 4860
amended as amended,
PD 1967
Interest
Payments P36,861 P18,570 P55,431
Principal
Amortization 16,310 15,077 31,387
Total P53,171 P33,647 P86,818 18
as authorized under P.D. 1967 and R.A. 4860 and 245, as amended.
The Court, therefor, finds that R.A. No. 4860, as amended by P.D. No. 81, Section 31 of P.D. 1177
and P.D. No. 1967 constitute lawful authorizations or appropriations, unless they are repealed or
otherwise amended by Congress. The Executive was thus merely complying with the duty to
implement the same.
There can be no question as to the patriotism and good motive of petitioners in filing this petition.
Unfortunately, the petition must fail on the constitutional and legal issues raised. As to whether or not
the country should honor its international debt, more especially the enormous amount that had been
incurred by the past administration, which appears to be the ultimate objective of the petition, is not
an issue that is presented or proposed to be addressed by the Court. Indeed, it is more of a political
decision for Congress and the Executive to determine in the exercise of their wisdom and sound
discretion.
WHEREFORE, the petition is DISMISSED, without pronouncement as to costs.
SO ORDERED.