CONSTITUTIONAL LAW 1

Professor: Atty. Sedillo

GR No. 219683
Ponente: Bersamin, J
Dela Cruz vs. Ochoa Submitted by: Submitted on:
January 23, 2018
Petitioners: Respondents:
HON. JONATHAN A. DELA CRUZ and HON. GUSTA HON. PAQUITO N. OCHOA JR., in his capacity as the
VO S. TAMBUNTING, as MEMBERS OF THE HOUSE EXECUTIVE SECRETARY; HON. JOSEPH EMILIO A.
OF REPRESENTATIVES and as Taxpayers ABAYA, in his capacity as the SECRETARY OF THE
DEPARTMENT OF TRANSPORTATION AND
COMMUNICATIONS; HON. FLORENCIO B. ABAD, in
his capacity as the SECRETARY OF THE
DEPARTMENT OF BUDGET AND MANAGEMENT; and
HON. ROSALIA V. DE LEON, in her capacity as the
NATIONAL TREASURER

DOCTRINE OF THE CASE:

Petition for Certiorari and Prohibition

NATURE OF PETITION:

In this special civil action for certiorari and prohibition, the petitioners, as Members of the House of Representatives
and as taxpayers, assail the implementation of the Motor Vehicle License Plate Standardization Program (MVPSP) of
the Land Transportation Office (LTO)1 by using funds appropriated under Republic Act No. 10633 (General
Appropriations Act of 2014), hereinafter referred to as the 2014 GAA

RELEVANT LAWS:

Sections 46(1) and 47, Book V of the Administrative Code of 1987; Sections 85(1) and 86 of the Government Auditing
Code of the Philippines; DBM Circular Letter No. 2004-12 dated October 27, 2004; and the implementing rules of the
Government Procurement Reform Act. 10

(if pwede, paste here the law in question or used, only the relevant part)
FACTS:
1. The Department of Transportation and Communications (DOTC) is the primary policy, planning,
programming, coordinating, implementing, regulating, and administrative entity of the Executive
Branch of the government in the promotion, development and regulation of dependable and
coordinated networks of transportation and communications systems as well as in the fast, safe,
efficient, and reliable postal, transportation and communication services. One of its line agencies
is the Land Transportation Office (LTO) which is tasked, among others, to register motor vehicles
and regulate their operation.
2. In accordance with its mandate, the LTO is required to issue motor vehicle license plates which
serve to identify the registered vehicles as they ply the roads.
3. Recently, the LTO formulated the Motor Vehicle License Plate Standardization Program (MVPSP)
to supply the new license plates for both old and new vehicle registrants.
4. On February 25, 2013, the DOTC Bids and Awards Committee (BAC) issued BAC General Bid
Bulletin No. 002-2013 setting the Submission and Opening of Bids on March 25, 2013. On
February 28, 2013, the first Pre-Bid Conference was held at the offices of the BAC.
5. The Department of Transportation and Communication (DOTC)/Land Transportation Office
(LTO), through the General Appropriations Act, intends to apply the sum of Three Billion Eight
Hundred Fifty One Million Six Hundred Thousand One Hundred Pesos (Php 3,851,600, 100.00)
being the Approved Budget for the Contract (ABC)
6. As the only eligible bidders, their financial proposals were then opened to reveal that JKG-Power
Plates made the lowest offers. For Lot 1, JKG-Power Plates proposed to supply the MV License
 Plates for a total of ₱1 .98 Billion, while Industrias Samar't-Datatrial offered it at P2.03 Billion. On
the other hand, for Lot 2, JKG-Power Plates aimed to supply the MC License Plates for a total of
₱l.196 Billion, while Industrias Samar't-Datatrial's offer was at ₱l.275 Billion.
7. On July 22, 2013, the DOTC issued the Notice of Award to JKG-Power Plates.
8. Despite the notice of award, the contract signing of the project was not immediately undertaken.
On February 17, 2014, the DOTC issued the Notice to Proceed to JKG-Power Plates and
directed it to commence delivery of the items within seven (7) calendar days from the date of the
issuance of the said notice.
9. On February 21, 2014, the contract for MVPSP was finally signed.
10. On March 11, 2014, the Senate Committee on Public Services, pursuant to Resolution No. 31,
conducted an inquiry in aid of legislation on the reported delays in the release of motor vehicle
license plates, stickers and tags by the LTO. On April 4, 2014,
11. The Commission on Audit (COA) issued three Audit Observation Memoranda (AOM) to the LTO,
namely: AOM No. 14-013 dated September 2, 2014; AOM No. 14-014 dated November 17, 2014;
and AOM No. 15-004 dated March 5, 2015. The COA later on issued Notice of Suspension No.
15- 002-101-(14) dated April 10, 2015.
12. The COA ultimately issued Notice of Disallowance No. 2015-001-101-(l4) dated July 13, 2015
stating therein that it had disallowed the advance payment of P477,901,329.00 to JKG Power
Plates for the supply and delivery of motor vehicle plates on the ground that the transaction had
been irregular and illegal for being in violation of Sections 46(1) and 47, Book V of the
Administrative Code of 1987; Sections 85(1) and 86 of the Government Auditing Code of the
Philippines; DBM Circular Letter No. 2004-12 dated October 27, 2004; and the implementing
rules of the Government Procurement Reform Act.
13. On September 1, 2015, the petitioners instituted this special civil action.
14. To be clear, the petitioners herein do not seek the review of the COA's issuance of Notice of
Disallowance No. 2015001-101-(14). They only assail the constitutionality of the implementation
of the MVPSP using funds appropriated under the 2014 GAA

Issues Ruling
(1) Whether or not the use of the appropriation under 2014 GAA for the
implementation of the MVPSP was constitutional or did it involve an NO
unconstitutional transfer of funds?

RULING:

1. The implementation of thee MVPSP was properly funded under the appropriation for Motor
Vehicle Registration and Driver's Licensing Regulatory Services in the 2014 GAA; hence, no
unconstitutionally transfer of funds took place
2. The Court holds that the appropriation for motor vehicle registration naturally and logically
included plate-making inasmuch as plate-making was an integral component of the
registration process. Plate-making ensured that the LTO fulfilled its function to "aid law
enforcement and improve the motor vehicle registration database.
3. Although the Details of the FY 2014 Budget seemed to present a discrepancy from the main
text of the 2014 GAA given that the total allotment indicated for the MF02 was only
₱2,354,153,000, and a separate allocation of ₱1,527,556,000 appeared for Motor vehicle
registration system, the discrepancy can be easily clarified by referring to the 2014 NEP, and
the letter of respondent former DOTC Secretary Joseph Emilio Aguinaldo Abaya.
4. The proposed budget for the MF02 stated in the 2014 NEP, which was only
₱2,354,653,000.00, would be inadequate to fund the implementation of the MVPSP. Thus,
on September 1, 2013, respondent Secretary Abaya wrote to DBM Secretary Florencio B.
Abad to request the modification of the 2014 NEP by way of a realignment to increase the
MF02 budget by ₱2,489,600,100.00 for the LTO Plate Standardization Program.
5. That Congress approved the request for the ₱2,489,600,100.00 increase was indubitable.
 This is borne out by the fact that the final amount appropriated for MF02 under the 2014
GAA aggregated to ₱4,843,753,000.00 (i.e., ₱2,489,600, 100.00+₱2,354,153,000.00). We
can see that such final increased amount was almost exactly identical to the total appearing
in Details of the FY 2014 Budget. Indeed, the legislative intent to fund the MVPSP under the
2014 GAA was manifest.
6. Considering that Congress appropriated ₱4,843, 753,000.00 for the MF02 (inclusive of the
requested increase of ₱2,489,600,100.00) for the purpose of funding the LTO's MVPSP, the
inescapable conclusion is that the 2014 GAA itself contained the direct appropriation
necessary to implement the MVPSP. Under the circumstances, there was no unconstitutional
transfer of funds because no transfer of funds was made to augment the item Motor Vehicle
Registration and Driver's Licensing Regulatory Services to include the funding for the
MVPSP.

Disposition

WHEREFORE, the Court DISMISSES the petition for certiorari and prohibition; and DECLARES the
use of the appropriation under Motor Vehicle Registration and Driver's Licensing Regulatory
Services in the General Appropriations Act of 2014 for the implementation of the Motor Vehicle
License Plate Standardization Program of the Land Transportation Office of the Department of
Transportation as CONSTITUTIONAL. The TEMPORARY RESTRAINING ORDER issued by the
Court on June 14, 2016 is LIFTED. SO ORDERED.