SECTION 18 ARTICLE VI

Daza vs Singson
After the congressional elections of May 11, 1987, the House of Representatives proportionally
apportioned its twelve seats in the Commission on Appointments among the several political parties
represented in that chamber, including the Lakas ng Bansa, the PDP-Laban, the NP-Unido, the Liberal
Party, and the KBL, in accordance with Article VI, Section 18, of the Constitution. Petitioner Raul A. Daza
was among those chosen and was listed as a representative of the Liberal Party. On September 16,
1988, the Laban ng Demokratikong Pilipino was reorganized, resulting in a political realignment in the
House of Representatives. Twenty four members of the Liberal Party formally resigned from that party
and joined the LDP, thereby swelling its number to 159 and correspondingly reducing their former party to
only 17 members. On the basis of this development, the House of Representatives revised its
representation in the Commission on Appointments by withdrawing the seat occupied by the petitioner
and giving this to the newly-formed LDP. On December 5, 1988, the chamber elected a new set of
representatives consisting of the original members except the petitioner and including therein respondent
Luis C. Singson as the additional member from the LDP.
ISSUE & RULING:
Ruling first on the jurisdictional issue, we hold that, contrary to the respondent's assertion, the Court has
the competence to act on the matter at bar. Our finding is that what is before us is not a discretionary act
of the House of Representatives that may not be reviewed by us because it is political in nature. What is
involved here is the legality, not the wisdom, of the act of that chamber in removing the petitioner from the
Commission on Appointments.

Lastly, we resolve that issue in favor of the authority of the House of Representatives to change its
representation in the Commission on Appointments to reflect at any time the changes that may transpire
in the political alignments of its membership. It is understood that such changes must be permanent and
do not include the temporary alliances or factional divisions not involving severance of political loyalties or
formal disaffiliation and permanent shifts of allegiance from one political party to another. If the petitioner's
argument were to be pursued, the 157 members of the LDP in the House of Representatives would have
to be denied representation in the Commission on Appointments and, for that matter, also the Electoral
Tribunal. By the same token, the KBL, which the petitioner says is now "history only," should also be
written off. The independents also cannot be represented because they belong to no political party. That
would virtually leave the Liberal Party only with all of its seventeen members to claim all the twelve seats
of the House of Representatives in the Commission on Appointments and the six legislative seats in the
House Electoral Tribunal.

Coseteng vs Mitra
Whether the members of the House in the Commission on Appointments were chosen on the basis of
proportional representation from the political parties therein as provided in Section 18, Article VI of the
1987.
After deliberating on the petition and the comments of the respondents, we hold that the petition should
be dismissed, not because it raises a political question, which it does not, but because the revision of the
House representation in the Commission on Appointments is based on proportional representation of the
political parties therein as provided in Section 18, Article VI of the 1987 Constitution.
The composition of the House membership in the Commission on Appointments was based on
proportional representation of the political parties in the House. There are 160 members of the LDP in the
House. They represent 79% of the House membership (which may be rounded out to 80%). Eighty
percent (80%) of 12 members in the Commission on Appointments would equal 9.6 members, which may
be rounded out to ten (10) members from the LDP. The remaining two seats were apportioned to the LP
(respondent Lorna Verano-Yap) as the next largest party in the Coalesced Majority and the KBL
(respondent Roque Ablan) as the principal opposition party in the House. There is no doubt that this
apportionment of the House membership in the Commission on Appointments was done "on the basis of
proportional representation of the political parties therein." The other political parties or groups in the
House, such as petitioner's KAIBA (which is presumably a member also of the Coalesced Majority), are
bound by the majority's choices. Even if KAIBA were to be considered as an opposition party, its lone
member (petitioner Coseteng) represents only .4% or less than 1% of the House membership, hence, she
is not entitled to one of the 12 House seats in the Commission on Appointments. To be able to claim
proportional membership in the Commission on Appointments, a political party should represent at least
8.4% of the House membership, i.e., it should have been able to elect at least 17 congressmen or
congresswomen. The indorsements of the nine (9) congressmen and congresswomen in favor of the
petitioner's election to the Commission are inconsequential because they are not members of her party
and they signed identical indorsements in favor of her rival, respondent Congresswoman Verano-Yap.
There is no merit in the petitioner's contention that the House members in the Commission on
Appointments should have been nominated and elected by their respective political parties. The petition
itself shows that they were nominated by their respective floor leaders in the House. They were elected by
the House (not by their party) as provided in Section 18, Article VI of the Constitution. The validity of their
election to the Commission on Appointments - eleven (11) from the Coalesced Majority and one from the
minority - is unassailable.

Guingona vs Gonzales
On September 23, 1992, Senator Teofisto Guingona, Jr., in his behalf and in behalf of Lakas-National
Union of Christian Democrats (LAKAS-NUCD), filed a petition for the issuance of a writ of prohibition to
prohibit the respondent Senate President Neptali Gonzales, as ex-officio Chairman of the Commission on
Appointments, from recognizing the membership of Senators Alberto Romulo as the eighth senator
elected by the LDP, and Wigberto L. Tañada, as the lone member representing the LP-PDP-LABAN, in
the Commission on Appointments, on the ground that the proposed compromise of Senator Tolentino was
violative of the rule of proportional representation, and that it is the right of the minority political parties in
the Senate, consistent with the Constitution, to combine their fractional representation in the Commission
on Appointments to complete one seat therein, and to decide who, among the senators in their ranks,
shall be additionally nominated and elected thereto.
ISSUE AND RULING:
Whether the election of Senators Alberto Romulo and Wigberto E. Tañada as members of the
Commission on Appointments is in accordance with the provision of Section 18 of Article VI of the 1987
Constitution.
A literal interpretation of Section 18 of Article VI of the Constitution leads to no other manner of
application than as above. The problem is what to do with the fraction of .5 or 1/2 to which each of the
parties is entitled. The LDP majority in the Senate converted a fractional half membership into a whole
membership of one senator by adding one half or .5 to 7.5 to be able to elect Senator Romulo. In so doing
one other party’s fractional membership was correspondingly reduced leaving the latter’s representation
in the Commission on Appointments to less than their proportional representation in the Senate. This is
clearly a violation of Section 18 because it is no longer in compliance with its mandate that membership in
the Commission be based on the proportional representation of the political parties. The election of
Senator Romulo gave more representation to the LDP and reduced the representation of one political
party — either the LAKAS — NUCD or the NPC.
The cases of the two former senators mentioned cannot be invoked as a precedent in support of
incumbent Senator Tañada’s claim to a membership in the present Commission on Appointments. In the
time of his illustrious father, out of 24 elected senators in the upper chamber of Congress, 23 belonged to
the Nacionalista Party, while Senator Lorenzo Tañada, who belonged to the Citizens’ Party, was the lone
opposition. By force of circumstance, he became a member of the Commission on Appointments because
he alone represented the minority party. Had there been another senator belonging to a party other than
the Citizens’ Party, this problem of who should sit as the sole representative of the opposition party would
have arisen. In the case of Senator Ponce Enrile, there were two senators elected from the opposition
party, namely, he and Senator Estrada. Applying the rule of proportional representation mentioned earlier
(see formula), the opposition was entitled to one full member (not a fractional membership). Senator
Enrile was thus legally nominated and elected as the minority representative in the Senate. In the present
case, if there were a political party other than the present four political parties is the Senate. and We
follow Senator Tañada’s claim that he is entitled to full membership as lone representative of his party, We
would have the anomaly of having 13 senators, where the Constitution allows only twelve (12) in the
Commission on Appointments.

We find the respondents’ claim to membership in the Commission on Appointments by nomination and
election of the LDP majority in the Senate as not in accordance with Section 18 of Article VI of the 1987
Constitution and therefore violative of the same because it is not in compliance with the requirement that
twelve senators shall be elected on the basis of proportional representation of the political parties
represented therein. To disturb the resulting fractional membership of the political parties in the
Commission on Appointments by adding together two halves to make a whole is a breach of the rule on
proportional representation because it will give the LDP an added member in the Commission by utilizing
the fractional membership of the minority political party, who is deprived of half a representation.

The provision of Section 18 on proportional representation is mandatory in character and does not leave
any discretion to the majority party in the Senate to disobey or disregard the rule on proportional
representation; otherwise, the party with a majority representation in the Senate or the House of
Representatives can by sheer force of numbers impose its will on the hapless minority.

We lay down the following guidelines accordingly:

1) In the Senate, a political party or coalition must have at least two duly elected senators for every seat in
the Commission on Appointments.
2) Where there are more than two political parties represented in the Senate, a political party/coalition
with a single senator in the Senate cannot constitutionally claim a seat in the Commission.

We do not agree with respondents’ claim that it is mandatory to elect 12 Senators to the Commission on
Appointments. The Constitution does not contemplate that the Commission on Appointments must
necessarily include twelve (12) senators and twelve (12) members of the House of Representatives. What
the Constitution requires is that there be at least a majority of the entire membership. Under Section 18,
the Commission shall rule by majority vote of all the members and in Section 19, the Commission shall
meet only while Congress is in session, at the call of its Chairman or a majority of all its members "to
discharge such powers and functions herein conferred upon it." In the light of the foregoing and on the
basis of the applicable rules and jurisprudence on the matter before this Court, We declare the election of
Senator Alberto Romulo and Senator Wigberto Tañada as members of the Commission on Appointments
as null and void for being in violation of the rule on proportional representation under Section 18 of Article
VI of the 1987 Constitution of the Philippines

SECTION 21 ARTICLE VI
Bengzon vs Senate Blue Ribbon Committe
 Petitioners and Ricardo Lopa were subpoenaed by the Committee to appear before it and testify on
"what they know" regarding the "sale of thirty-six (36) corporations belonging to Benjamin "Kokoy"
Romualdez." At the hearing held on 23 May 1989, Ricardo Lopa declined to testify on the ground that his
testimony may "unduly prejudice" the defendants in Civil Case No. 0035 before the Sandiganbayan.
Petitioner Jose F.S. Bengzon, Jr. likewise refused to testify involing his constitutional right to due process,
and averring that the publicity generated by respondents Committee's inquiry could adversely affect his
rights as well as those of the other petitioners who are his co-defendants in Civil Case No. 0035 before
the Sandiganbayan.

Coming to the specific issues raised in this case, petitioners contend that (1) the Senate Blue Ribbon
Committee's inquiry has no valid legislative purpose, i.e., it is not done in aid of legislation; (2) the sale or
disposition of hte Romualdez corporations is a "purely private transaction" which is beyond the power of
the Senate Blue Ribbon Committee to inquire into; and (3) the inquiry violates their right to due process.

RULING:
The power of both houses of Congress to conduct inquiries in aid of legislation is not, therefore, absolute
or unlimited. Its exercise is circumscribed by the afore-quoted provision of the Constitution. Thus, as
provided therein, the investigation must be "in aid of legislation in accordance with its duly published rules
of procedure" and that "the rights of persons appearing in or affected by such inquiries shall be
respected." It follows then that the rights of persons under the Bill of Rights must be respected, including
the right to due process and the right not to be compelled to testify against one's self. Under Sec. 4 of the
aforementioned Rules of Procedure Governing Inquiries in Aid of Legislation, the Senate may refer to any
committee or committees any speech or resolution filed by any Senator which in tis judgment requires an
appropriate inquiry in aid of legislation. In order therefore to ascertain the character or nature of an
inquiry, resort must be had to the speech or resolution under which such an inquiry is proposed to be
made. Verily, the speech of Senator Enrile contained no suggestion of contemplated legislation; he merely
called upon the Senate to look into a possible violation of Sec. 5 of RA No. 3019, otherwise known as
"The Anti-Graft and Corrupt Practices Act." I other words, the purpose of the inquiry to be conducted by
respondent Blue Ribbon commitee was to find out whether or not the relatives of President Aquino,
particularly Mr. ricardo Lopa, had violated the law in connection with the alleged sale of the 36 or 39
corporations belonging to Benjamin "Kokoy" Romualdez to the Lopaa Group. There appears to be,
therefore, no intended legislation involved. It appeals, therefore, that the contemplated inquiry by
respondent Committee is not really "in aid of legislation" becuase it is not related to a purpose within the
jurisdiction of Congress, since the aim of the investigation is to find out whether or not the ralatives of the
President or Mr. Ricardo Lopa had violated Section 5 RA No. 3019, the "Anti-Graft and Corrupt Practices
Act", a matter that appears more within the province of the courts rather than of the legislature.

Standard Chartered Bank vs Senate Committee on Banks

Petitioners claim that since the issue of whether or not SCB-Philippines illegally sold unregistered foreign
securities is already preempted by the courts that took cognizance of the foregoing cases, the
respondent, by this investigation, would encroach upon the judicial powers vested solely in these courts.
The argument is misplaced. Bengzon does not apply squarely to petitioners’ case. The unmistakable
objective of the investigation, as set forth in the said resolution, exposes the error in petitioners’ allegation
that the inquiry, as initiated in a privilege speech by the very same Senator Enrile, was simply "to
denounce the illegal practice committed by a foreign bank in selling unregistered foreign securities x x x."
This fallacy is made more glaring when we consider that, at the conclusion of his privilege speech,
Senator Enrile urged the Senate "to immediately conduct an inquiry, in aid of legislation, so as to prevent
the occurrence of a similar fraudulent activity in the future."

Indeed, the mere filing of a criminal or an administrative complaint before a court or a quasi-judicial body
should not automatically bar the conduct of legislative investigation. Otherwise, it would be extremely
easy to subvert any intended inquiry by Congress through the convenient ploy of instituting a criminal or
an administrative complaint. Surely, the exercise of sovereign legislative authority, of which the power of
legislative inquiry is an essential component, cannot be made subordinate to a criminal or an
administrative investigation.

The principle that Congress or any of its bodies has the power to punish recalcitrant witnesses is founded
upon reason and policy. Said power must be considered implied or incidental to the exercise of legislative
power. How could a legislative body obtain the knowledge and information on which to base intended
legislation if it cannot require and compel the disclosure of such knowledge and information, if it is
impotent to punish a defiance of its power and authority? When the framers of the Constitution adopted
the principle of separation of powers, making each branch supreme within the realm of its respective
authority, it must have intended each department’s authority to be full and complete, independently of
each other’s authority or power. And how could the authority and power become complete if for every act
of refusal, every act of defiance, every act of contumacy against it, the legislative body must resort to the
judicial department for the appropriate remedy, because it is impotent by itself to punish or deal therewith,
with affronts committed against its authority or dignity. Furthermore, it is axiomatic that the power of
legislative investigation includes the power to compel the attendance of witnesses. Corollary to the power
to compel the attendance of witnesses is the power to ensure that said witnesses would be available to
testify in the legislative investigation. In the case at bench, considering that most of the officers of
SCB-Philippines are not Filipino nationals who may easily evade the compulsive character of
respondent’s summons by leaving the country, it was reasonable for the respondent to request the
assistance of the Bureau of Immigration and Deportation to prevent said witnesses from evading the
inquiry and defeating its purpose.

With respect to the right of privacy which petitioners claim respondent has violated, suffice it to state that
privacy is not an absolute right. While it is true that Section 21, Article VI of the Constitution, guarantees
respect for the rights of persons affected by the legislative investigation, not every invocation of the right
to privacy should be allowed to thwart a legitimate congressional inquiry. As regards the issue of
self-incrimination, the petitioners, officers of SCB-Philippines, are not being indicted as accused in a
criminal proceeding. They were summoned by respondent merely as resource persons, or as witnesses,
in a legislative inquiry.

Arnault vs Nazareno
The special committee of the Senate created by the above resolution called and examined various
witnesses, among the most important of whom was the herein petitioner, Jean L. Arnault. An intriguing
question which the committee sought to resolve was that involved in the apparent unnecessariness and
irregularity of the Government's paying to Burt the total sum of P1,500,000 for his alleged interest of only
P20,000 in the two estates, which he seemed to have forfeited anyway long before October, 1949. The
committee sought to determine who were responsible for and who benefited from the transaction at the
expense of the Government. That Jean L. Arnault, now at the bar of the Senate, be arraigned for
contempt consisting of contumacious acts committed by him during the investigation conducted by the
Special Committee created by Senate Resolution No. 8 to probe the Tambobong and Buenavista estates
deal of October 21, 1949, and that the President of the Senate propounded to him the following
interrogatories:
ISSUE:
For the first time this Court is called upon to define the power of either House of Congress to punish a
person not a member for contempt

RULING & PRINCIPLES:

In the present case the jurisdiction of the Senate, thru the Special Committee created by it, to investigate
the Buenavista and Tambobong Estates deal is not challenged by the petitioner; and we entertain no
doubt as to the Senate's authority to do so and as to the validity of Resolution No. 8 hereinabove quoted.
The transaction involved a questionable and allegedly unnecessary and irregular expenditure of no less
than P5,000,000 of public funds, of which Congress is the constitutional guardian. It also involved
government agencies created by Congress to regulate or even abolish. As a result of the yet uncompleted
investigation, the investigating committee has recommended and the Senate approved three bills (1)
prohibiting the Secretary of Justice or any other department head from discharging functions and
exercising powers other than those attached to his own office, without ]previous congressional
authorization; (2) prohibiting brothers and near relatives of any President of the Philippines from
intervening directly or indirectly and in whatever capacity in transactions in which the Government is a
party, more particularly where the decision lies in the hands of executive or administrative officers who are
appointees of the President; and (3) providing that purchases of the Rural Progress Administration of big
landed estates at a price of P100,000 or more, shall not become effective without previous congressional
confirmation.

First He contends that the Senate has no power to punish him for contempt for refusing to reveal the
name of the person to whom he gave the P440,000, because such information is immaterial to, and will
not serve, any intended or purported legislation and his refusal to answer the question has not
embarrassed, obstructed, or impeded the legislative process.
Once an inquiry is admitted or established to be within the jurisdiction of a legislative body to make, we
think the investigating committee has the power to require a witness to answer any question pertinent to
that inquiry, subject of course to his constitutional right against self-incrimination. So we are of the opinion
that where the alleged immateriality of the information sought by the legislative body from a witness is
relied upon to contest its jurisdiction, the court is in duty bound to pass upon the contention. The fact that
the legislative body has jurisdiction or the power to make the inquiry would not preclude judicial
intervention to correct a clear abuse of discretion in the exercise of that power. Applying the criterion laid
down in the last two preceding paragraphs to the resolution of the issue under consideration, we find that
the question for the refusal to answer which the petitioner was held in contempt by the Senate is pertinent
to the matter under inquiry. In fact, this is not and cannot be disputed. Senate Resolution No. 8, the
validity of which is not challenged by the petitioner, requires the Special Committee, among other things,
to determine the parties responsible for the Buenavista and Tambobong estates deal, and it is obvious
that the name of the person to whom the witness gave the P440,000 involved in said deal is pertinent to
that determination — it is in fact the very thing sought to be determined. The contention is not that the
question is impertinent to the subject of the inquiry but that it has no relation or materiality to any
proposed legislation. We have already indicated that it is not necessary for the legislative body to show
that every question propounded to a witness is material to any proposed or possible legislation; what is
required is that is that it be pertinent to the matter under inquiry. It is said that the Senate has already
approved the three bills recommended by the Committee as a result of the uncompleted investigation and
that there is no need for it to know the name of the person to whom the witness gave the P440,000. But
aside from the fact that those bills have not yet been approved by the lower house and by the President
and that they may be withdrawn or modified if after the inquiry is completed they should be found
unnecessary or inadequate, there is nothing to prevent the Congress from approving other measures it
may deem necessary after completing the investigation. We are not called upon, nor is it within our
province, to determine or imagine what those measures may be. And our inability to do so is no reason
for overruling the question propounded by the Senate to the witness.

Second. It is next contended for the petitioner that the Senate lacks authority to commit him for contempt
for a term beyond its period of legislative session, which ended on May 18, 1950.
We find no sound reason to limit the power of the legislative body to punish for contempt to the end of
every session and not to the end of the last session terminating the existence of that body. The very
reason for the exercise of the power to punish for contempt is to enable the legislative body to perform its
constitutional function without impediment or obstruction. Legislative functions may be and in practice are
performed during recess by duly constituted committees charged with the duty of performing
investigations or conducting hearing relative to any proposed legislation. To deny to such committees the
power of inquiry with process to enforce it would be to defeat the very purpose for which that the power is
recognized in the legislative body as an essential and appropriate auxiliary to is legislative function. It is
but logical to say that the power of self-preservation is coexistent with the life to be preserved.

But the resolution of commitment here in question was adopted by the Senate, which is a continuing body
and which does not cease exist upon the periodical dissolution of the Congress or of the House of
Representatives. There is no limit as to time to the Senate's power to punish for contempt in cases where
that power may constitutionally be exerted as in the present case.
We find no sound reason to limit the power of the legislative body to punish for contempt to the end of
every session and not to the end of the last session terminating the existence of that body. The very
reason for the exercise of the power to punish for contempt is to enable the legislative body to perform its
constitutional function without impediment or obstruction. Legislative functions may be and in practice are
performed during recess by duly constituted committees charged with the duty of performing
investigations or conducting hearing relative to any proposed legislation. To deny to such committees the
power of inquiry with process to enforce it would be to defeat the very purpose for which that the power is
recognized in the legislative body as an essential and appropriate auxiliary to is legislative function. It is
but logical to say that the power of self-preservation is coexistent with the life to be preserved.

But the resolution of commitment here in question was adopted by the Senate, which is a continuing body
and which does not cease exist upon the periodical dissolution of the Congress or of the House of
Representatives. There is no limit as to time to the Senate's power to punish for contempt in cases where
that power may constitutionally be exerted as in the present case.

Balag vs Senate
On September 19, 2017, SR No. 504, was filed by Senator Juan Miguel Zubiri (Senator Zubiri)5
condemning the death of Horacio III and directing the appropriate Senate Committee to conduct an
investigation, in aid of legislation, to hold those responsible accountable.
Petitioner chiefly argues that the legislative inquiry conducted by respondent committees was not in aid of
legislation; rather, it was in aid of prosecution.
Petitioner also asserts that he properly invoked his right against self� incrimination as the questions
propounded by Senator Poe regarding the officers, particularly the presidency of the AJ Fraternity, were
incriminating because the answer thereto involves an element of the crime of hazing.
Finally, petitioner prays for the issuance of TRO and/or writ of preliminary injunction because the Senate
illegally enforced and executed SR No. 504 and the Contempt Order, which caused him grave and
irreparable injury as he was deprived of his liberty without due process of law.
RULING:
The contempt order issued against petitioner simply stated that he would be arrested and detained until
such time that he gives his true testimony, or otherwise purges himself of the contempt. It does not
provide any definite and concrete period of detention. Neither does the Senate Rules specify a precise
period of detention when a person is cited in contempt.
Notably, Arnault gave a distinction between the Senate and the House of Representatives' power of
contempt. In the former, since it is a continuing body, there is no time limit in the exercise of its power to
punish for contempt; on the other hand, the House of Representatives, as it is not a continuing body, has
a limit in the exercise of its power to punish for contempt, which is on the final adjournment of its last
session.
Senate is a continuing institution. However, in the conduct of its day-to-day business, the Senate of each
Congress acts separately and independently of the Senate of the Congress before it. Due to the
termination of the business of the Senate during the expiration of one (1) Congress, all pending matters
and proceedings, such as unpassed bills and even legislative investigations, of the Senate are considered
terminated upon the expiration of that Congress and it is merely optional on the Senate of the succeeding
Congress to take up such unfinished matters, not in the same status, but as if presented for the first time.
The Court finds that there is a genuine necessity to place a limitation on the period of imprisonment that
may be imposed by the Senate pursuant to its inherent power of contempt during inquiries in aid of
legislation. Section 21, Article VI of the Constitution states that Congress, in conducting inquiries in aid of
legislation, must respect the rights of persons appearing in or affected therein. Under Arnault, however, a
witness or resource speaker cited in contempt by the Senate may be detained indefinitely due to its
characteristic as a continuing body. The said witness may be detained for a day, a month, a year, or even
for a lifetime depending on the desire of the perpetual Senate. Certainly, in that case, the rights of
persons appearing before or affected by the legislative inquiry are in jeopardy. The constitutional right to
liberty that every citizen enjoys certainly cannot be respected when they are detained for an indefinite
period of time without due process of law.

As discussed in Lopez, Congress' power of contempt rests solely upon the right of self-preservation and
does not extend to the infliction of punishment as such. It is a means to an end and not the end itself.
Even arguendo that detention under the legislative's inherent power of contempt is not entirely punitive in
character because it may be used by Congress only to secure information from a recalcitrant witness or to
remove an obstruction, it is still a restriction to the liberty of the said witness. It is when the restrictions
during detention are arbitrary and purposeless that courts will infer intent to punish. Courts will also infer
intent to punish even if the restriction seems to be related rationally to the alternative purpose if the
restriction appears excessive in relation to that purpose. An indefinite and unspecified period of detention
will amount to excessive restriction and will certainly violate any person's right to liberty.

The Court finds that the period of imprisonment under the inherent power of contempt by the
Senate during inquiries in aid of legislation should only last until the termination of the legislative
inquiry under which the said power is invoked. Accordingly, as long as there is a legitimate legislative
inquiry, then the inherent power of contempt by the Senate may be properly exercised. Conversely, once
the said legislative inquiry concludes, the exercise of the inherent power of contempt ceases and there is
no more genuine necessity to penalize the detained witness.

Senate vs Ermita
Whether E.O. 464 contravenes the power of inquiry vested in Congress;
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, and in its very title, a
discussion of executive privilege is crucial for determining the constitutionality of E.O. 464. Schwartz
defines executive privilege as "the power of the Government to withhold information from the public, the
courts, and the Congress." 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."
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.

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.
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." 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 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.

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. 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 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.

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.
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.

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.

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.

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.

Gundani vs Senga
Petitioners seek the annulment of a directive from President Gloria Macapagal-Arroyo enjoining them and
other military officers from testifying before Congress without the President’s consent. Petitioners also
pray for injunctive relief against a pending preliminary investigation against them, in preparation for
possible court-martial proceedings, initiated within the military justice system in connection with
petitioners’ violation of the aforementioned directive. The hearing was scheduled after topics concerning
the conduct of the 2004 elections emerged in the public eye, particularly allegations of massive cheating
and the surfacing of copies of an audio excerpt purportedly of a phone conversation between President
Gloria Macapagal Arroyo and an official of the Commission on Elections (COMELEC) widely reputed as
then COMELEC Commissioner Virgilio Garcillano.

ISSUE:
may the President prevent a member of the armed forces from testifying before a legislative inquiry?

RULING:
We hold that the President has constitutional authority to do so, by virtue of her power as
commander-in-chief, and that as a consequence a military officer who defies such injunction is liable
under military justice. At the same time, we also hold that any chamber of Congress which seeks the
appearance before it of a military officer against the consent of the President has adequate remedies
under law to compel such attendance. Any military official whom Congress summons to testify before it
may be compelled to do so by the President. If the President is not so inclined, the President may be
commanded by judicial order to compel the attendance of the military officer. Final judicial orders have the
force of the law of the land which the President has the duty to faithfully execute.
As earlier noted, we ruled in Senate that the President may not issue a blanket requirement of prior
consent on executive officials summoned by the legislature to attend a congressional hearing. In doing
so, the Court recognized the considerable limitations on executive privilege, and affirmed that the
privilege must be formally invoked on specified grounds. However, the ability of the President to
prevent military officers from testifying before Congress does not turn on executive privilege, but
on the Chief Executive’s power as commander-in-chief to control the actions and speech of
members of the armed forces. The President’s prerogatives as commander-in-chief are not
hampered by the same limitations as in executive privilege.

And if emphasis be needed, if the courts so rule, the duty falls on the shoulders of the President, as
commander-in-chief, to authorize the appearance of the military officers before Congress. Even if the
President has earlier disagreed with the notion of officers appearing before the legislature to testify, the
Chief Executive is nonetheless obliged to comply with the final orders of the courts.

In re Petition for Issuance of Writ of Habeas Corpus of Camilo L. Sabio

Two decades ago, on February 28, 1986, former President Corazon C. Aquino installed her regime by
issuing Executive Order (E.O.) No. 1, creating the Presidential Commission on Good Government
(PCGG). She entrusted upon this Commission the herculean task of recovering the ill-gotten wealth
accumulated by the deposed President Ferdinand E. Marcos, his family, relatives, subordinates and close
associates. Section 4 (b) of E.O. No. 1 provides that: "No member or staff of the Commission shall be
required to testify or produce evidence in any judicial, legislative or administrative proceeding concerning
matters within its official cognizance."

ISSUE:
Today, the constitutionality of Section 4(b) is being questioned on the ground that it tramples upon the
Senate's power to conduct legislative inquiry under Article VI, Section 21 of the 1987 Constitution

RULING:
Considering these jurisprudential instructions, we find Section 4(b) directly repugnant with Article VI,
Section 21. Section 4(b) exempts the PCGG members and staff from the Congress' power of inquiry. This
cannot be countenanced. Nowhere in the Constitution is any provision granting such exemption. The
Congress' power of inquiry, being broad, encompasses everything that concerns the administration of
existing laws as well as proposed or possibly needed statutes. It even extends "to government agencies
created by Congress and officers whose positions are within the power of Congress to regulate or even
abolish." PCGG belongs to this class.

Neri vs Senate Committee on Accountability of Public Officers and Investigations

The communications are covered by executive privilege
The revocation of EO 464 (advised executive officials and employees to follow and abide by the
Constitution, existing laws and jurisprudence, including, among others, the case of Senate v. Ermita when
they are invited to legislative inquiries in aid of legislation.), does not in any way diminish the concept of
executive privilege. This is because this concept has Constitutional underpinnings. The claim of executive
privilege is highly recognized in cases where the subject of inquiry relates to a power textually committed
by the Constitution to the President, such as the area of military and foreign relations. Under our
Constitution, the President is the repository of the commander-in-chief, appointing, pardoning, and
diplomatic powers. Consistent with the doctrine of separation of powers, the information relating to these
powers may enjoy greater confidentiality than others.
Several jurisprudence cited provide the elements of presidential communications privilege:
1) The protected communication must relate to a “quintessential and non-delegable presidential power.”
2) The communication must be authored or “solicited and received” by a close advisor of the President or
the President himself. The judicial test is that an advisor must be in “operational proximity” with the
President.
3) The presidential communications privilege remains a qualified privilege that may be overcome by a
showing of adequate need, such that the information sought “likely contains important evidence” and by
the unavailability of the information elsewhere by an appropriate investigating authority

In the case at bar, Executive Secretary Ermita premised his claim of executive privilege on the ground
that the communications elicited by the three (3) questions “fall under conversation and correspondence
between the President and public officials” necessary in “her executive and policy decision-making
process” and, that “the information sought to be disclosed might impair our diplomatic as well as
economic relations with the People’s Republic of China.” Simply put, the bases are presidential
communications privilege and executive privilege on matters relating to diplomacy or foreign relations.
Using the above elements, we are convinced that, indeed, the communications elicited by the three (3)
questions are covered by the presidential communications privilege. First, the communications relate to a
“quintessential and non-delegable power” of the President, i.e. the power to enter into an executive
agreement with other countries. This authority of the President to enter into executive agreements without
the concurrence of the Legislature has traditionally been recognized in Philippine jurisprudence. Second,
the communications are “received” by a close advisor of the President. Under the “operational proximity”
test, petitioner can be considered a close advisor, being a member of President Arroyo’s cabinet. And
third, there is no adequate showing of a compelling need that would justify the limitation of the privilege
and of the unavailability of the information elsewhere by an appropriate investigating authority.

Respondent Committees further contend that the grant of petitioner’s claim of executive privilege violates
the constitutional provisions on the right of the people to information on matters of public concern. We
might have agreed with such contention if petitioner did not appear before them at all. But petitioner made
himself available to them during the September 26 hearing, where he was questioned for eleven (11)
hours. Not only that, he expressly manifested his willingness to answer more questions from the
Senators, with the exception only of those covered by his claim of executive privilege. The right to public
information, like any other right, is subject to limitation. Section 7 of Article III provides: The right of the
people to information on matters of public concern shall be recognized. Access to official records, and to
documents, and papers pertaining to official acts, transactions, or decisions, as well as to government
research data used as basis for policy development, shall be afforded the citizen, subject to such
limitations as may be provided by law.

Respondent Committees argue that the Senate does not have to publish its Rules because the same was
published in 1995 and in 2006. Further, they claim that the Senate is a continuing body; thus, it is not
required to republish the Rules, unless the same is repealed or amended.
Undeniably from the foregoing, all pending matters and proceedings, i.e. unpassed bills and even
legislative investigations, of the Senate of a particular Congress are considered terminated upon the
expiration of that Congress and it is merely optional on the Senate of the succeeding Congress to take up
such unfinished matters, not in the same status, but as if presented for the first time. The logic and
practicality of such a rule is readily apparent considering that the Senate of the succeeding Congress
(which will typically have a different composition as that of the previous Congress) should not be bound
by the acts and deliberations of the Senate of which they had no part. If the Senate is a continuing body
even with respect to the conduct of its business, then pending matters will not be deemed terminated with
the expiration of one Congress but will, as a matter of course, continue into the next Congress with the
same status.

However, it is evident that the Senate has determined that its main rules are intended to be valid from the
date of their adoption until they are amended or repealed. Such language is conspicuously absent from
the Rules. The Rules simply state "(t)hese Rules shall take effect seven (7) days after publication in two
(2) newspapers of general circulation." The latter does not explicitly provide for the continued effectivity of
such rules until they are amended or repealed. In view of the difference in the language of the two sets of
Senate rules, it cannot be presumed that the Rules (on legislative inquiries) would continue into the next
Congress. The Senate of the next Congress may easily adopt different rules for its legislative inquiries
which come within the rule on unfinished business.

The language of Section 21, Article VI of the Constitution requiring that the inquiry be conducted in
accordance with the duly published rules of procedure is categorical. It is incumbent upon the Senate to
publish the rules for its legislative inquiries in each Congress or otherwise make the published rules
clearly state that the same shall be effective in subsequent Congresses or until they are amended or
repealed to sufficiently put public on notice.

If it was the intention of the Senate for its present rules on legislative inquiries to be effective even in the
next Congress, it could have easily adopted the same language it had used in its main rules regarding
effectivity.

Lest the Court be misconstrued, it should likewise be stressed that not all orders issued or proceedings
conducted pursuant to the subject Rules are null and void. Only those that result in violation of the rights
of witnesses should be considered null and void, considering that the rationale for the publication is to
protect the rights of witnesses as expressed in Section 21, Article VI of the Constitution. Sans such
violation, orders and proceedings are considered valid and effective.

The phrase "duly published rules of procedure" requires the Senate of every Congress to publish its rules
of procedure governing inquiries in aid of legislation because every Senate is distinct from the one before
it or after it. Since Senatorial elections are held every three (3) years for one-half of the Senate’s
membership, the composition of the Senate also changes by the end of each term. Each Senate may
thus enact a different set of rules as it may deem fit. Not having published its Rules of Procedure, the
subject hearings in aid of legislation conducted by the 14th Senate, are therefore, procedurally infirm.

Garcillano vs House of Representatives

Section 21, Article VI of the 1987 Constitution explicitly provides that "[t]he 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 requisite of publication of the rules is intended
to satisfy the basic requirements of due process. Publication is indeed imperative, for it will be the height
of injustice to punish or otherwise burden a citizen for the transgression of a law or rule of which he had
no notice whatsoever, not even a constructive one. What constitutes publication is set forth in Article 2 of
the Civil Code, which provides that "[l]aws shall take effect after 15 days following the completion of their
publication either in the Official Gazette, or in a newspaper of general circulation in the Philippines."

The respondents in G.R. No. 179275 admit in their pleadings and even on oral argument that the Senate
Rules of Procedure Governing Inquiries in Aid of Legislation had been published in newspapers of
general circulation only in 1995 and in 2006. With respect to the present Senate of the 14th Congress,
however, of which the term of half of its members commenced on June 30, 2007, no effort was
undertaken for the publication of these rules when they first opened their session.

The absence of any amendment to the rules cannot justify the Senate’s defiance of the clear and
unambiguous language of Section 21, Article VI of the Constitution. The organic law instructs, without
more, that the Senate or its committees may conduct inquiries in aid of legislation only in accordance with
duly published rules of procedure, and does not make any distinction whether or not these rules have
undergone amendments or revision. The constitutional mandate to publish the said rules prevails over
any custom, practice or tradition followed by the Senate.

The language of Section 21, Article VI of the Constitution requiring that the inquiry be conducted in
accordance with the duly published rules of procedure is categorical. It is incumbent upon the Senate to
publish the rules for its legislative inquiries in each Congress or otherwise make the published rules
clearly state that the same shall be effective in subsequent Congresses or until they are amended or
repealed to sufficiently put public on notice.

SECTION 24
Tolentino vs Secretary of Finance
Does Republic Act No. 7716 violate Art. VI, § 24 of the Constitution?
Petitioners' contention is that Republic Act No. 7716 did not "originate exclusively" in the House of
Representatives as required by Art. V1, § 24 of the Constitution, because it is in fact the result of the
consolidation of two distinct bills, H. No. 11197 and S. No. 1630.
This argument will not bear analysis. To begin with, it is not the law but the revenue bill which is
required by the Constitution to "originate exclusively" in the House of Representatives. It is
important to emphasize this, because a bill originating in the House may undergo such extensive changes
in the Senate that the result may be a rewriting of the whole. The possibility of a third version by the
conference committee will be discussed later. At this point, what is important to note is that, as a result of
the Senate action, a distinct bill may be produced. To insist that a revenue statute and not only the bill
which initiated the legislative process culminating in the enactment of the law must substantially be the
same as the House bill would be to deny the Senate's power not only to "concur with amendments" but
also to "propose amendments." It would be to violate the coequality of legislative power of the two houses
of Congress and in fact make the House superior to the Senate.
Indeed, what the Constitution simply means is that the initiative for filing revenue, tariff, or tax bills, bills
authorizing an increase of the public debt, private bills and bills of local application must come from the
House of Representatives on the theory that, elected as they are from the districts, the members of the
House can be expected to be more sensitive to the local needs and problems. Nor does the Constitution
prohibit the filing in the Senate of a substitute bill in anticipation of its receipt of the bill from the House, so
long as action by the Senate as a body is withheld pending receipt of the House bill. The Court cannot,
therefore, understand the alarm expressed over the fact that on March 1, 1993, eight months before the
House passed H. No. 11197, S. No. 1129 had been filed in the Senate. After all it does not appear that the
Senate ever considered it. It was only after the Senate had received H. No. 11197 on November 23, 1993
that the process of legislation in respect of it began with the referral to the Senate Committee on Ways
and Means of H. No. 11197 and the submission by the Committee on February 7, 1994 of S. No. 1630.
For that matter, if the question were simply the priority in the time of filing of bills, the fact is that it was in
the House that a bill (H. No. 253) to amend the VAT law was first filed on July 22, 1992. Several other bills
had been filed in the House before S. No. 1129 was filed in the Senate, and H. No. 11197 was only a
substitute of those earlier bills.

Does it violate Art. VI, § 26(2) of the Constitution?

We now pass to the next argument of petitioners that S. No. 1630 did not pass three readings on
separate days as required by the Constitution[8] because the second and third readings were done on the
same day, March 24, 1994. But this was because on February 24, 1994[9] and again on March 22, 1994,
the President had certified S. No. 1630 as urgent. The presidential certification dispensed with the
requirement not only of printing but also that of reading the bill on separate days. The phrase "except
when the President certifies to the necessity of its immediate enactment, etc." in. Art. VI, §26(2) qualifies
the two stated conditions before a bill can become a law: (i) the bill has passed three readings on
separate days and (ii) it has been printed in its final form and distributed three days before it is finally
approved.

In other words, the "unless" clause must be read in relation to the "except" clause, because the two are
really coordinate clauses of the same sentence. To construe the "except" clause as simply dispensing
with the second requirement in the "unless" clause (i.e., printing and distribution three days before final
approval) would not only violate the rules of grammar. It would also negate the very premise of the
"except" clause: the necessity of securing the immediate enactment of a bill which is certified in order to
meet a public calamity or emergency. For if it is only the printing that is dispensed with by presidential
certification, the time saved would be so negligible as to be of any use in insuring immediate enactment. It
may well be doubted whether doing away with the necessity of printing and distributing copies of the bill
three days before the third reading would insure speedy enactment of a law in the face of an emergency
requiring the calling of a special election for President and Vice-President. Under the Constitution such a
law is required to be made within seven days of the convening of Congress in emergency session.
Indeed, this Court recently held that it is within the power of a conference committee to include in its
report an entirely new provision that is not found either in the House bill or in the Senate bill. If the
committee can propose an amendment consisting of one or two provisions, there is no reason why it
cannot propose several provisions, collectively considered as an "amendment in the nature of a
substitute," so long as such amendment is germane to the subject of the bills before the committee. After
all, its report was not final but needed the approval of both houses of Congress to become valid as an act
of the legislative department. The charge that in this case the Conference Committee acted as a third
legislative chamber is thus without any basis.

Art. VI, § 26(2) must, therefore, be construed as referring only to bills introduced for the first time in either
house of Congress, not to the conference committee report. For if the purpose of requiring three readings
is to give members of Congress time to study bills, it cannot be gainsaid that H. No. 11197 was passed in
the House after three readings; that in the Senate it was considered on first reading and then referred to a
committee of that body; that although the Senate committee did not report out the House bill, it submitted
a version (S. No. 1630) which it had prepared by "taking into consideration" the House bill; that for its part
the Conference Committee consolidated the two bills and prepared a compromise version; that the
Conference Committee Report was thereafter approved by the House and the Senate, presumably after
appropriate study by their members. We cannot say that, as a matter of fact, the members of Congress
were not fully informed of the provisions of the bill. The allegation that the Conference Committee usurped
the legislative power of Congress is, in our view, without warrant in fact and in law.

Fifth. An additional attack on the formal validity of Republic Act No. 7716 is made by the Philippine
Airlines, Inc., petitioner in G.R. No. 11582, namely, that it violates Art. VI, § 26(1) which provides that
"Every bill passed by Congress shall embrace only one subject which shall be expressed in the title
thereof." It is contended that neither H. No. 11197 nor S. No. 1630 provided for removal of exemption of
PAL transactions from the payment of the VAT and that this was made only in the Conference Committee
bill which became Republic Act No. 7716 without reflecting this fact in its title. The effect of the
amendment is to remove the exemption granted to PAL, as far as the VAT is concerned.

The question is whether this amendment of § 103 of the NIRC is fairly embraced in the title of Republic
Act No. 7716, although no mention is made therein of P.D. No. 1590 as among those which the statute
amends. We think it is, since the title states that the purpose of the statute is to expand the VAT system,
and one way of doing this is to widen its base by withdrawing some of the exemptions granted before. To
insist that P.D. No. 1590 be mentioned in the title of the law, in addition to § 103 of the NIRC, in which it is
specifically referred to, would be to insist that the title of a bill should be a complete index of its content.

The constitutional requirement that every bill passed by Congress shall embrace only one subject which
shall be expressed in its title is intended to prevent surprise upon the members of Congress and to inform
the people of pending legislation so that, if they wish to, they can be heard regarding it. If, in the case at
bar, petitioner did not know before that its exemption had been withdrawn, it is not because of any defect
in the title but perhaps for the same reason other statutes, although published, pass unnoticed until some
event somehow calls attention to their existence. Indeed, the title of Republic Act No. 7716 is not any
more general than the title of PAL's own franchise under P.D. No. 1590, and yet no mention is made of its
tax exemption.

Alvarez vs Guingona
Indeed, in this Petition for Prohibition with prayer for Temporary Restraining Order and Preliminary
Prohibitory Injunction, petitioners assail the validity of Republic Act No. 7720, entitled, "An Act Converting
the Municipality of Santiago, Isabela into an Independent Component City to be known as the City of
Santiago," mainly because the Act allegedly did not originate exclusively in the House of Representatives
as mandated by Section 24, Article VI of the 1987 Constitution.

Whether or not, considering that the Senate passed SB No. 1243, its own version of HB No. 8817,
Republic Act No. 7720 can be said to have originated in the House of Representatives.
Although a bill of local application like HB No. 8817 should, by constitutional prescription, originate
exclusively in the House of Representatives, the claim of petitioners that Republic Act No. 7720 did not
originate exclusively in the House of Representatives because a bill of the same import, SB No. 1243,
was passed in the Senate, is untenable because it cannot be denied that HB No. 8817 was filed in the
House of Representatives first before SB No. 1243 was filed in the Senate. Petitioners themselves cannot
disavow their own admission that HB No. 8817 was filed on April 18, 1993 while SB No. 1243 was filed on
May 19, 1993. The filing of HB No. 8817 was thus precursive not only of the said Act in question but also
of SB No. 1243. Thus, HB No. 8817, was the bill that initiated the legislative process that culminated in
the enactment of Republic Act No. 7720. No violation of Section 24, Article VI, of the 1987 Constitution is
perceptible under the circumstances attending the instant controversy.

Furthermore, petitioners themselves acknowledge that HB No. 8817 was already approved on Third
Reading and duly transmitted to the Senate when the Senate Committee on Local Government
conducted its public hearing on HB No. 8817. HB No. 8817 was approved on the Third Reading on
December 17, 1993 and transmitted to the Senate on January 28, 1994; a little less than a month
thereafter, or on February 23, 1994, the Senate Committee on Local Government conducted public
hearings on SB No. 1243. Clearly, the Senate held in abeyance any action on SB No. 1243 until it
received HB No. 8817, already approved on the Third Reading, from the House of Representatives. The
filing in the Senate of a substitute bill in anticipation of its receipt of the bill from the House, does not
contravene the constitutional requirement that a bill of local application should originate in the House of
Representatives, for as long as the Senate does not act thereupon until it receives the House bill.

SECTION 25
Lawyers Against Monopoly and Poverty vs Secretary of DBM
Special Provision

1. Use and Release of the Fund. The amount herein appropriated shall be used to fund priority programs
and projects or to fund the required counterpart for foreign-assisted programs and projects: PROVIDED,
That such amount shall be released directly to the implementing agency or Local Government Unit
concerned: PROVIDED, FURTHER, That the allocations authorized herein may be realigned to any
expense class, if deemed necessary: PROVIDED FURTHERMORE, That a maximum of ten percent
(10%) of the authorized allocations by district may be used for procurement of rice and other basic
commodities which shall be purchased from the National Food Authority.

According to LAMP, the above provision is silent and, therefore, prohibits an automatic or direct allocation
of lump sums to individual senators and congressmen for the funding of projects. It does not empower
individual Members of Congress to propose, select and identify programs and projects to be funded out of
PDAF. "In previous GAAs, said allocation and identification of projects were the main features of the ‘pork
barrel’ system technically known as Countrywide Development Fund (CDF). Nothing of the sort is now
seen in the present law (R.A. No. 9206 of CY 2004). In its memorandum, LAMP insists that "[t]he silence
in the law of direct or even indirect participation by members of Congress betrays a deliberate intent on
the part of the Executive and the Congress to scrap and do away with the ‘pork barrel’ system." In other
words, "[t]he omission of the PDAF provision to specify sums as ‘allocations’ to individual Members of
Congress is a ‘casus omissus’ signifying an omission intentionally made by Congress that this Court is
forbidden to supply." Hence, LAMP is of the conclusion that "the pork barrel has become legally defunct
under the present state of GAA 2004."

LAMP further decries the supposed flaws in the implementation of the provision, namely: 1) the DBM
illegally made and directly released budgetary allocations out of PDAF in favor of individual Members of
Congress; and 2) the latter do not possess the power to propose, select and identify which projects are to
be actually funded by PDAF.
In allowing the direct allocation and release of PDAF funds to the Members of Congress based on their
own list of proposed projects, did the implementation of the PDAF provision under the GAA of 2004
violate the Constitution or the laws?
The Court rules in the negative.
The petition is miserably wanting in this regard. LAMP would have the Court declare the
unconstitutionality of the PDAF’s enforcement based on the absence of express provision in the GAA
allocating PDAF funds to the Members of Congress and the latter’s encroachment on executive power in
proposing and selecting projects to be funded by PDAF. Regrettably, these allegations lack substantiation.
No convincing proof was presented showing that, indeed, there were direct releases of funds to the
Members of Congress, who actually spend them according to their sole discretion. Not even a
documentation of the disbursement of funds by the DBM in favor of the Members of Congress was
presented by the petitioner to convince the Court to probe into the truth of their claims. Devoid of any
pertinent evidentiary support that illegal misuse of PDAF in the form of kickbacks has become a common
exercise of unscrupulous Members of Congress, the Court cannot indulge the petitioner’s request for
rejection of a law which is outwardly legal and capable of lawful enforcement. In a case like this, the
Court’s hands are tied in deference to the presumption of constitutionality lest the Court commits
unpardonable judicial legislation. The Court is not endowed with the power of clairvoyance to divine from
scanty allegations in pleadings where justice and truth lie.29 Again, newspaper or electronic reports
showing the appalling effects of PDAF cannot be appreciated by the Court, "not because of any issue as
to their truth, accuracy, or impartiality, but for the simple reason that facts must be established in
accordance with the rules of evidence."

The process was explained in this wise, in Guingona v. Carague:

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 wisdom
formulates 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.
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.
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.
Under the Constitution, the power of appropriation is vested in the Legislature, subject to the
requirement that appropriation bills originate exclusively in the House of Representatives with the
option of the Senate to propose or concur with amendments. While the budgetary process
commences from the proposal submitted by the President to Congress, it is the latter which
concludes the exercise by crafting an appropriation act it may deem beneficial to the nation,
based on its own judgment, wisdom and purposes. Like any other piece of legislation, the
appropriation act may then be susceptible to objection from the branch tasked to implement it, by
way of a Presidential veto. Thereafter, budget execution comes under the domain of the Executive
branch which deals with the operational aspects of the cycle including the allocation and release
of funds earmarked for various projects. Simply put, from the regulation of fund releases, the
implementation of payment schedules and up to the actual spending of the funds specified in the
law, the Executive takes the wheel. "The DBM lays down the guidelines for the disbursement of
the fund. The Members of Congress are then requested by the President to recommend projects
and programs which may be funded from the PDAF. The list submitted by the Members of
Congress is endorsed by the Speaker of the House of Representatives to the DBM, which reviews
and determines whether such list of projects submitted are consistent with the guidelines and the
priorities set by the Executive." This demonstrates the power given to the President to execute
appropriation laws and therefore, to exercise the spending per se of the budget.

As applied to this case, the petition is seriously wanting in establishing that individual Members of
Congress receive and thereafter spend funds out of PDAF. Although the possibility of this unscrupulous
practice cannot be entirely discounted, surmises and conjectures are not sufficient bases for the Court to
strike down the practice for being offensive to the Constitution. Moreover, the authority granted the
Members of Congress to propose and select projects was already upheld in Philconsa. This remains as
valid case law. The Court sees no need to review or reverse the standing pronouncements in the said
case. So long as there is no showing of a direct participation of legislators in the actual spending of the
budget, the constitutional boundaries between the Executive and the Legislative in the budgetary process
remain intact.

Garcia vs Mata
Respondents contend that the said provision has no relevance or pertinence whatsoever to the budget in
question or to any appropriation item contained therein, and is therefore proscribed by Art. VI, Sec. 19,
par. 24 of the 1935 Constitution of the Philippines, which reads:
No provision or enactment shall be embraced in the general appropriation bill unless it relates specifically
to some particular appropriation therein; and any such provision or enactment shall be limited in its
operation to such appropriation.

A perusal of the challenged provision of R.A. 1600 fails to disclose its relevance or relation to any
appropriation item therein, or to the Appropriation Act as a whole. From the very first clause of paragraph
11 itself, which reads,
After the approval of this Act, and when there is no emergency, no reserve officer of the Armed Forces of
the Philippines may be called to a tour of active duty for more than two years during any period of five
consecutive years:
the incongruity and irrelevancy are already evident. While R.A. 1600 appropriated money for the
operation of the Government for the fiscal year 1956-1957, the said paragraph 11 refers to the
fundamental government policy matters of the calling to active duty and the reversion to inactive status of
reserve officers in the AFP. The incongruity and irrelevancy continue throughout the entire paragraph.
In the language of the respondents-appellees, "it was indeed a non-appropriation item inserted in an
appropriation measure in violation of the constitutional inhibition against "riders" to the general
appropriation act." It was indeed a new and completely unrelated provision attached to the Appropriation
Act.

Demetria vs Alba
The conflict between paragraph 1 of Section 44 of Presidential Decree No. 1177 and Section 16[5], Article
VIII of the 1973 Constitution is readily perceivable from a mere cursory reading thereof. Said paragraph 1
of Section 44 provides:
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.

On the other hand, the constitutional provision under consideration reads as follows:
Sec. 16[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 prohibition to transfer an appropriation for one item to another was explicit and categorical under the
1973 Constitution. However, to afford the heads of the different branches of the government and those of
the constitutional commissions considerable flexibility in the use of public funds and resources, the
constitution allowed the enactment of a law authorizing the transfer of funds for the purpose of
augmenting an item from savings in another item in the appropriation of the government branch or
constitutional body concerned. The leeway granted was thus limited. The purpose and conditions for
which funds may be transferred were specified, i.e. transfer may be allowed for the purpose of
augmenting an item and such transfer may be made only if there are savings from another item in the
appropriation of the government branch or constitutional body.

Paragraph 1 of Section 44 of P.D. No. 1177 unduly over extends the privilege granted under said Section
16[5]. 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.

Hence, the conditions on the release of money from the treasury [Sec. 18(1)]; the restrictions on the use
of public funds for public purpose [Sec. 18(2)]; the prohibition to transfer an appropriation for an item to
another [See. 16(5) and the requirement of specifications [Sec. 16(2)], among others, were all safeguards
designed to forestall abuses in the expenditure of public funds. Paragraph 1 of Section 44 puts all these
safeguards to naught. For, as correctly observed by petitioners, in view of the unlimited authority
bestowed upon the President, "... Pres. Decree No. 1177 opens the floodgates for the enactment of
unfunded appropriations, results in uncontrolled executive expenditures, diffuses accountability for
budgetary performance and entrenches the pork barrel system as the ruling party may well expand [sic]
public money not on the basis of development priorities but on political and personal expediency." 5 The
contention of public respondents that paragraph 1 of Section 44 of P.D. 1177 was enacted pursuant to
Section 16(5) of Article VIII of the 1973 Constitution must perforce fall flat on its face.

Philconsa vs Enriquez
House Bill No. 10900, the General Appropriation Bill of 1994 (GAB of 1994), was passed and approved
by both houses of Congress on December 17, 1993. As passed, it imposed conditions and limitations on
certain items of appropriations in the proposed budget previously submitted by the President. It also
authorized members of Congress to propose and identify projects in the "pork barrels" allotted to them
and to realign their respective operating budgets.

Petitioners claim that the power given to the members of Congress to propose and identify the projects
and activities to be funded by the Countrywide Development Fund is an encroachment by the legislature
on executive power, since said power in an appropriation act in implementation of a law.
Under the Constitution, the spending power called by James Madison as "the power of the purse,"
belongs to Congress, subject only to the veto power of the President. The President may propose the
budget, but still the final say on the matter of appropriations is lodged in the Congress. The power of
appropriation carries with it the power to specify the project or activity to be funded under the
appropriation law. It can be as detailed and as broad as Congress wants it to be. The Countrywide
Development Fund is explicit that it shall be used "for infrastructure, purchase of ambulances and
computers and other priority projects and activities and credit facilities to qualified beneficiaries . . ." It was
Congress itself that determined the purposes for the appropriation. Executive function under the
Countrywide Development Fund involves implementation of the priority projects specified in the law.
The authority given to the members of Congress is only to propose and identify projects to be
implemented by the President. Under Article XLI of the GAA of 1994, the President must perforce
examine whether the proposals submitted by the members of Congress fall within the specific items of
expenditures for which the Fund was set up, and if qualified, he next determines whether they are in line
with other projects planned for the locality. Thereafter, if the proposed projects qualify for funding under
the Funds, it is the President who shall implement them. In short, the proposals and identifications made
by the members of Congress are merely recommendatory.

The appropriation for operating expenditures for each House is further divided into expenditures for
salaries, personal services, other compensation benefits, maintenance expenses and other operating
expenses. In turn, each member of Congress is allotted for his own operating expenditure a proportionate
share of the appropriation for the House to which he belongs. If he does not spend for one items of
expense, the provision in question allows him to transfer his allocation in said item to another item of
expense. Petitioners assail the special provision allowing a member of Congress to realign his allocation
for operational expenses to any other expense category (Rollo, pp. 82-92), claiming that this practice is
prohibited by Section 25(5), Article VI of the Constitution.
The proviso of said Article of the Constitution grants the President of the Senate and the Speaker of the
House of Representatives the power to augment items in an appropriation act for their respective offices
from savings in other items of their appropriations, whenever there is a law authorizing such
augmentation. The special provision on realignment of the operating expenses of members of Congress
is authorized by Section 16 of the General Provisions of the GAA of 1994, which provides:
Expenditure Components. Except by act of the Congress of the Philippines, no change or modification
shall be made in the expenditure items authorized in this Act and other appropriation laws unless in cases
of augmentations from savings in appropriations as authorized under Section 25(5) of Article VI of the
Constitution
Petitioners argue that the Senate President and the Speaker of the House of Representatives, but not the
individual members of Congress are the ones authorized to realign the savings as appropriated.
Under the Special Provisions applicable to the Congress of the Philippines, the members of Congress
only determine the necessity of the realignment of the savings in the allotments for their operating
expenses. They are in the best position to do so because they are the ones who know whether there are
savings available in some items and whether there are deficiencies in other items of their operating
expenses that need augmentation. However, it is the Senate President and the Speaker of the House of
Representatives, as the case may be, who shall approve the realignment. Before giving their stamp of
approval, these two officials will have to see to it that:
(1) The funds to be realigned or transferred are actually savings in the items of expenditures from which
the same are to be taken; and
(2) The transfer or realignment is for the purposes of augmenting the items of expenditure to which said
transfer or realignment is to be made.

In the appropriation for the Department of Public Works and Highways, the President vetoed the second
paragraph of Special Provision No. 2, specifying the 30% maximum ration of works to be contracted for
the maintenance of national roads and bridges.
The second paragraph of Special Provision No. 2 brings to fore the divergence in policy of Congress and
the President. While Congress expressly laid down the condition that only 30% of the total appropriation
for road maintenance should be contracted out, the President, on the basis of a comprehensive study,
believed that contracting out road maintenance projects at an option of 70% would be more efficient,
economical and practical. The Special Provision in question is not an inappropriate provision which can
be the subject of a veto. It is not alien to the appropriation for road maintenance, and on the other hand, it
specified how the said item shall be expended - 70% by administrative and 30% by contract. The 1987
Constitution allows the addition by Congress of special provisions, conditions to items in an expenditure
bill, which cannot be vetoed separately from the items to which they relate so long as they are
"appropriate" in the budgetary sense (Art. VII, Sec. 25[2]). The Solicitor General was hard put in justifying
the veto of this special provision. He merely argued that the provision is a complete turnabout from an
entrenched practice of the government to maximize contract maintenance (Rollo, G.R. No. 113888, pp.
85-86). That is not a ground to veto a provision separate from the item to which it refers. The veto of the
second paragraph of Special Provision No. 2 of the item for the DPWH is therefore unconstitutional.

In the appropriation for the AFP Pension and Gratuity Fund, the President vetoed the new provision
authorizing the Chief of Staff to use savings in the AFP to augment pension and gratuity funds. According
to the President, the grant of retirement and separation benefits should be covered by direct
appropriations specifically approved for the purpose pursuant to Section 29(1) of Article VI of the
Constitution. Moreover, he stated that the authority to use savings is lodged in the officials enumerated in
Section 25(5) of Article VI of the Constitution. Petitioners claim that the Special Provision on AFP Pension
and Gratuity Fund is a condition or limitation which is so intertwined with the item of appropriation that it
could not be separated therefrom.
The Special Provision, which allows the Chief of Staff to use savings to augment the pension fund for the
AFP being managed by the AFP Retirement and Separation Benefits System is violative of Sections 25(5)
and 29(1) of the Article VI of the Constitution. Under Section 25(5), no law shall be passed authorizing
any transfer of appropriations, and under Section 29(1), no money shall be paid out of the Treasury
except in pursuance of an appropriation made by law. While Section 25(5) allows as an exception the
realignment of savings to augment items in the general appropriations law for the executive branch, such
right must and can be exercised only by the President pursuant to a specific law.
While the Solicitor General did not question the locus standi of petitioners in G.R. No. 113105, he claimed
that the remedy of the Senators in the other petitions is political (i.e., to override the vetoes) in effect
saying that they do not have the requisite legal standing to bring the suits.
We rule that a member of the Senate, and of the House of Representatives for that matter, has the legal
standing to question the validity of a presidential veto or a condition imposed on an item in an
appropriation bill. Where the veto is claimed to have been made without or in excess of the authority
vested on the President by the Constitution, the issue of an impermissible intrusion of the Executive into
the domain of the Legislature arises. This is, then, the clearest case of the Senate as a whole or individual
Senators as such having a substantial interest in the question at issue. It could likewise be said that there
was the requisite injury to their rights as Senators. It would then be futile to raise any locus standi issue.
Any intrusion into the domain appertaining to the Senate is to be resisted. Similarly, if the situation were
reversed, and it is the Executive Branch that could allege a transgression, its officials could likewise file
the corresponding action. What cannot be denied is that a Senator has standing to maintain inviolate the
prerogatives, powers and privileges vested by the Constitution in his office. It is true that the Constitution
provides a mechanism for overriding a veto (Art. VI, Sec. 27 [1]). Said remedy, however, is available only
when the presidential veto is based on policy or political considerations but not when the veto is claimed
to be ultra vires. In the latter case, it becomes the duty of the Court to draw the dividing line where the
exercise of executive power ends and the bounds of legislative jurisdiction begin.

Petitioners claim that the President cannot veto the Special Provision on the appropriation for debt service
without vetoing the entire amount of P86,323,438.00 for said purpose (Rollo, G.R. No. 113105, pp. 93-98;
Rollo, G.R. No. 113174, pp. 16-18). The Solicitor General counterposed that the Special Provision did not
relate to the item of appropriation for debt service and could therefore be the subject of an item veto
(Rollo, G.R. No. 113105, pp. 54-60; Rollo, G.R. No. 113174, pp. 72-82).
The veto power, while exercisable by the President, is actually a part of the legislative process
(Memorandum of Justice Irene Cortes as Amicus Curiae, pp. 3-7). That is why it is found in Article VI on
the Legislative Department rather than in Article VII on the Executive Department in the Constitution.
There is, therefore, sound basis to indulge in the presumption of validity of a veto. The burden shifts on
those questioning the validity thereof to show that its use is a violation of the Constitution. Under his
general veto power, the President has to veto the entire bill, not merely parts thereof (1987 Constitution,
Art. VI, Sec. 27[1]). The exception to the general veto power is the power given to the President to veto
any particular item or items in a general appropriations bill (1987 Constitution, Art. VI, Sec. 27[2]). In so
doing, the President must veto the entire item. As the Constitution is explicit that the provision which
Congress can include in an appropriations bill must "relate specifically to some particular appropriation
therein" and "be limited in its operation to the appropriation to which it relates," it follows that any provision
which does not relate to any particular item, or which extends in its operation beyond an item of
appropriation, is considered "an inappropriate provision" which can be vetoed separately from an item.
Also to be included in the category of "inappropriate provisions" are unconstitutional provisions and
provisions which are intended to amend other laws, because clearly these kind of laws have no place in
an appropriations bill. These are matters of general legislation more appropriately dealt with in separate
enactments. Former Justice Irene Cortes, as Amicus Curiae, commented that Congress cannot by law
establish conditions for and regulate the exercise of powers of the President given by the Constitution for
that would be an unconstitutional intrusion into executive prerogative. The legislature cannot by location
of a bill give it immunity from executive veto. Nor can it circumvent the Governor's veto power over
substantive legislation by artfully drafting general law measures so that they appear to be true conditions
or limitations on an item of appropriation. Otherwise, the legislature would be permitted to impair the
constitutional responsibilities and functions of a co-equal branch of government in contravention of the
separation of powers doctrine
Belgica vs Ochoa
Court defines the Pork Barrel System as the collective body of rules and practices that govern the manner
by which lump-sum, discretionary funds, primarily intended for local projects, are utilized through the
respective participations of the Legislative and Executive branches of government, including its members.
The Pork Barrel System involves two (2) kinds of lump-sum discretionary funds:

First, there is the Congressional Pork Barrel which is herein defined as a kind of lump-sum, discretionary
fund wherein legislators, either individually or collectively organized into committees, are able to
effectively control certain aspects of the fund’s utilization through various post-enactment measures
and/or practices. In particular, petitioners consider the PDAF, as it appears under the 2013 GAA, as
Congressional Pork Barrel since it is, inter alia, a post-enactment measure that allows individual
legislators to wield a collective power; and
Second, there is the Presidential Pork Barrel which is herein defined as a kind of lump-sum, discretionary
fund which allows the President to determine the manner of its utilization. For reasons earlier stated, the
Court shall delimit the use of such term to refer only to the Malampaya Funds and the Presidential Social
Fund.

Item-Veto Power.
A prime example of a constitutional check and balance would be the President’s power to veto an item
written into an appropriation, revenue or tariff bill submitted to him by Congress for approval through a
process known as "bill presentment.” The President‘s item-veto power is found in Section 27(2), Article VI
of the 1987 Constitution. The presentment of appropriation, revenue or tariff bills to the President, wherein
he may exercise his power of item-veto, forms part of the "single, finely wrought and exhaustively
considered, procedures” for law-passage as specified under the Constitution. As stated in Abakada, the
final step in the law-making process is the "submission [of the bill] to the President for approval. Once
approved, it takes effect as law after the required publication.” Elaborating on the President‘s item-veto
power and its relevance as a check on the legislature, the Court, in Bengzon, explained that: The former
Organic Act and the present Constitution of the Philippines make the Chief Executive an integral part of
the law-making power. His disapproval of a bill, commonly known as a veto, is essentially a legislative act.
The questions presented to the mind of the Chief Executive are precisely the same as those the
legislature must determine in passing a bill, except that his will be a broader point of view.

The Constitution is a limitation upon the power of the legislative department of the government, but in this
respect it is a grant of power to the executive department. The Legislature has the affirmative power to
enact laws; the Chief Executive has the negative power by the constitutional exercise of which he may
defeat the will of the Legislature. It follows that the Chief Executive must find his authority in the
Constitution. But in exercising that authority he may not be confined to rules of strict construction or
hampered by the unwise interference of the judiciary. The courts will indulge every intendment in favor of
the constitutionality of a veto [in the same manner] as they will presume the constitutionality of an act as
originally passed by the Legislature.

For the President to exercise his item-veto power, it necessarily follows that there exists a proper
“item” which may be the object of the veto. An item, as defined in the field of appropriations,
pertains to "the particulars, the details, the distinct and severable parts of the appropriation or of
the bill.” An item of an appropriation bill obviously means an item which, in itself, is a specific
appropriation of money, not some general provision of law which happens to be put into an appropriation
bill. On this premise, it may be concluded that an appropriation bill, to ensure that the President may be
able to exercise his power of item veto, must contain "specific appropriations of money” and not only
"general provisions” which provide for parameters of appropriation. Further, it is significant to point out
that an item of appropriation must be an item characterized by singular correspondence – meaning an
allocation of a specified singular amount for a specified singular purpose, otherwise known as a
"line-item.” This treatment not only allows the item to be consistent with its definition as a "specific
appropriation of money” but also ensures that the President may discernibly veto the same. Based on the
foregoing formulation, the existing Calamity Fund, Contingent Fund and the Intelligence Fund, being
appropriations which state a specified amount for a specific purpose, would then be considered as
"line-item” appropriations which are rightfully subject to item veto. Likewise, it must be observed that an
appropriation may be validly apportioned into component percentages or values; however, it is crucial that
each percentage or value must be allocated for its own corresponding purpose for such component to be
considered as a proper line-item. Moreover, as Justice Carpio correctly pointed out, a valid appropriation
may even have several related purposes that are by accounting and budgeting practice considered as
one purpose, e.g., MOOE (maintenance and other operating expenses), in which case the related
purposes shall be deemed sufficiently specific for the exercise of the President‘s item veto power. Finally,
special purpose funds and discretionary funds would equally square with the constitutional mechanism of
item-veto for as long as they follow the rule on singular correspondence as herein discussed. Anent
special purpose funds, it must be added that Section 25(4), Article VI of the 1987 Constitution requires
that the "'special appropriations bill shall specify the purpose for which it is intended, and shall be
supported by funds actually available as certified by the National Treasurer, or to be raised by a
corresponding revenue proposal therein.” Meanwhile, with respect to discretionary funds, Section 25(6),
Article VI of the 1987 Constitution requires that said funds "shall be disbursed only for public purposes to
be supported by appropriate vouchers and subject to such guidelines as may be prescribed by law.”

In contrast, what beckons constitutional infirmity are appropriations which merely provide for a singular
lump-sum amount to be tapped as a source of funding for multiple purposes. Since such appropriation
type necessitates the further determination of both the actual amount to be expended and the actual
purpose of the appropriation which must still be chosen from the multiple purposes stated in the law, it
cannot be said that the appropriation law already indicates a "specific appropriation of money” and hence,
without a proper line-item which the President may veto. As a practical result, the President would then be
faced with the predicament of either vetoing the entire appropriation if he finds some of its purposes
wasteful or undesirable, or approving the entire appropriation so as not to hinder some of its legitimate
purposes. Finally, it may not be amiss to state that such arrangement also raises non-delegability issues
considering that the implementing authority would still have to determine, again, both the actual amount to
be expended and the actual purpose of the appropriation. Since the foregoing determinations constitute
the integral aspects of the power to appropriate, the implementing authority would, in effect, be exercising
legislative prerogatives in violation of the principle of non-delegability.
(PORK BARREL SYSTEM)
In these cases, petitioners claim that "[i]n the current x x x system where the PDAF is a lump-sum
appropriation, the legislator‘s identification of the projects after the passage of the GAA denies the
President the chance to veto that item later on.” Accordingly, they submit that the "item veto power of the
President mandates that appropriations bills adopt line-item budgeting” and that "Congress cannot
choose a mode of budgeting [which] effectively renders the constitutionally-given power of the President
useless.”
The Court agrees with petitioners. Under the 2013 PDAF Article, the amount of P24.79 Billion only
appears as a collective allocation limit since the said amount would be further divided among individual
legislators who would then receive personal lump-sum allocations and could, after the GAA is passed,
effectively appropriate PDAF funds based on their own discretion. As these intermediate appropriations
are made by legislators only after the GAA is passed and hence, outside of the law, it necessarily means
that the actual items of PDAF appropriation would not have been written into the General Appropriations
Bill and thus effectuated without veto consideration. This kind of lump-sum/post-enactment legislative
identification budgeting system fosters the creation of a "budget within a budget” which subverts the
prescribed procedure of presentment and consequently impairs the President‘s power of item veto. As
petitioners aptly point out, the above- described system forces the President to decide between (a)
accepting the entire P24.79 Billion PDAF allocation without knowing the specific projects of the
legislators, which may or may not be consistent with his national agenda and (b) rejecting the whole
PDAF to the detriment of all other legislators with legitimate projects. Moreover, even without its
post-enactment legislative identification feature, the 2013 PDAF Article would remain constitutionally
flawed since it would then operate as a prohibited form of lump-sum appropriation as
above-characterized. In particular, the lump-sum amount of P24.79 Billion would be treated as a mere
funding source allotted for multiple purposes of spending, i.e., scholarships, medical missions, assistance
to indigents, preservation of historical materials, construction of roads, flood control, etc. This setup
connotes that the appropriation law leaves the actual amounts and purposes of the appropriation for
further determination and, therefore, does not readily indicate a discernible item which may be subject to
the President‘s power of item veto. Hence, in view of the reasons above-stated, the Court finds the 2013
PDAF Article, as well as all Congressional Pork Barrel Laws of similar operation, to be unconstitutional.
That such budgeting system provides for a greater degree of flexibility to account for future contingencies
cannot be an excuse to defeat what the Constitution requires. Clearly, the first and essential truth of the
matter is that unconstitutional means do not justify even commendable ends.

(PRESIDENTIAL PORK BARREL)

Validity of Appropriation.
Petitioners preliminarily assail Section 8 of PD 910 and Section 12 of PD1869 (now, amended by PD
1993), which respectively provide for the Malampaya Funds and the Presidential Social Fund, as invalid
appropriations laws since they do not have the "primary and specific” purpose of authorizing the release
of public funds from the National Treasury. Petitioners submit that Section 8 of PD 910 is not an
appropriation law since the "primary and specific” purpose of PD 910 is the creation of an Energy
Development Board and Section 8 thereof only created a Special Fund incidental thereto. In similar
regard, petitioners argue that Section 12 of PD 1869 is neither a valid appropriations law since the
allocation of the Presidential Social Fund is merely incidental to the "primary and specific” purpose of PD
1869 which is the amendment of the Franchise and Powers of PAGCOR. In view of the foregoing,
petitioners suppose that such funds are 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 disagrees.
"An appropriation made by law” under the contemplation of Section 29(1), Article VI of the 1987
Constitution exists when a provision of law (a) sets apart a determinate or determinable amount of money
and (b) allocates the same for a particular public purpose. These two minimum designations of amount
and purpose stem from the very definition of the word "appropriation,” which means "to allot, assign, set
apart or apply to a particular use or purpose,” and hence, if written into the law, demonstrate that the
legislative intent to appropriate exists. As the Constitution "does not provide or prescribe 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,‘“ an appropriation law may – according to Philconsa – be "detailed and as
broad as Congress wants it to be” for as long as the intent to appropriate may be gleaned from the same.
[T]here 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

Thus, based on the foregoing, the Court cannot sustain the argument that the appropriation must be the
"primary and specific” purpose of the law in order for a valid appropriation law to exist. To reiterate, if a
legal provision designates a determinate or determinable amount of money and allocates the same for a
particular public purpose, then the legislative intent to appropriate becomes apparent and, hence, already
sufficient to satisfy the requirement of an "appropriation made by law” under contemplation of the
Constitution.

In this relation, it is apropos to note that the 2013 PDAF Article cannot be properly deemed as a legal
appropriation under the said constitutional provision precisely because, as earlier stated, it contains post-
enactment measures which effectively create a system of intermediate appropriations. These
intermediate appropriations are the actual appropriations meant for enforcement and since they are made
by individual legislators after the GAA is passed, they occur outside the law. As such, the Court observes
that the real appropriation made under the 2013 PDAF Article is not the P24.79 Billion allocated for the
entire PDAF, but rather the post-enactment determinations made by the individual legislators which are, to
repeat, occurrences outside of the law. Irrefragably, the 2013 PDAF Article does not constitute an
"appropriation made by law” since it, in its truest sense, only authorizes individual legislators to
appropriate in violation of the non-delegability principle as afore-discussed.

Syjuco vs Abad
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, 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) 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.

Philippine Budget Cycle

First Phase: Budget Preparation
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 re-prioritization. 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.69Current operating expenditures are the purchases of goods and services in current
consumption the benefit of which does not extend beyond the fiscal year. 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); (2) social services or social
development expenditures (i.e., government outlay on education, public health and medicare, labor and
welfare and others); (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); (4) national defense expenditures (i.e., sub-divided into national security expenditures and
expenditures for the maintenance of peace and order); and (5) public debt.

Public expenditures may further be classified according to the nature of funds, i.e., general fund, special
fund or bond fund. On the other hand, public revenues complement public expenditures and cover all
income or receipts of the government treasury used to support government expenditures.

Second Phase: Budget Legislation

The Budget Legislation Phase covers the period commencing from the time Congress receives the
President’s Budget, which is inclusive of the NEP and 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).

The GAB is 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.

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.

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. The President reviews the GAB, and prepares the Veto Message where budget items are
subjected to direct veto, 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.

Third Phase: Budget Execution

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), or,
individually, by SARO.
Armed with either the ABM or the SARO, agencies become authorized to incur obligations 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), 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 wehich disbursements
chargeable against the National Treasury are coursed through the government servicing banks.

Fourth Phase: Accountability

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).

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
DAP was not an appropriation measure; hence, no appropriation law was required to adopt or to
implement it
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.” “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.’”

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. 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.

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.
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;
● GAAs of 2011 and 2012 lacked valid provisions to authorize transfers of funds under the DAP;
hence, transfers under the DAP were unconstitutional
● 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.
● 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.
(2) The funds to be transferred are savings generated from the appropriations for their respective
offices;
● There were no savings from which funds could be sourced for the DAP
● 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. 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.
● The Executive could not circumvent this provision by declaring unreleased appropriations and
unobligated allotments as savings prior to the end of the fiscal year.
(3) The purpose of the transfer is to augment an item in the general appropriations law for their
respective offices.
● No funds from savings could be transferred under the DAP to augment deficient items not
provided in the GAA
● It is the President who proposes the budget but it is Congress that has the final say on matters of
appropriations. 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.” 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. 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.
● 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.
● During the oral arguments on January 28, 2014, Sec. Abad admitted making some cross-border
augmentations. The records show, indeed, that funds amounting to P143,700,000.00 and
P250,000,000.00 were transferred under the DAP respectively to the COA and the House of
Representatives. Those transfers of funds, which constituted cross-border augmentations for
being from the Executive to the COA and the House of Representatives

SECTION 26
Philconsa vs Gimenez
Challenges on RA3836:
1. The provision for the retirement of the members and certain officers of Congress is not expressed in
the title of the bill, in violation of section 21 (1) of Article VI of the Constitution.
Ruling of the court as to this contention:
It is the contention of petitioner that the said title of Republic Act 3836 gives no inkling or notice
whatsoever to the public regarding the retirement gratuities and commutable vacation and sick leave
privileges to members of Congress. It is claimed that petitioner learned of this law for the first time only
when Jose Velasco, disbursing officer of the House, testified on January 30, 1964, before Justice
Labrador, in connection with the hearing of the case, and he revealed that in 1963, Congress enacted the
retirement law for its members. In fact the Appropriation Act for the fiscal year 1964-65, Republic Act No.
4164.
It is to be observed that under Republic Act 3836, amending the first paragraph of section 12, subsection
(c) of Commonwealth Act 186, as amended by Republic Acts Nos. 660 and. 3096, the retirement benefits
are granted to members of the Government Service Insurance System, who have rendered at least
twenty years of service regardless of age. This paragraph is related and germane to the subject of
Commonwealth Act No. 186.

On the other hand, the succeeding paragraph of Republic Act 3836 refers to members of Congress and to
elective officers thereof who are not members of the Government Service Insurance System. To provide
retirement benefits, therefore, for these officials, would relate to subject matter which is not germane to
Commonwealth Act No. 186. In other words, this portion of the amendment (re retirement benefits for
Members of Congress and elected officers, such as the Secretary and Sergeants-at-arms for each
House) is not related in any manner to the subject of Commonwealth Act 186 establishing the
Government Service Insurance System and which provides for both retirement and insurance benefits to
its members.

Parenthetically, it may be added that the purpose of the requirement that the subject of an Act should be
expressed in its title is fully explained by Cooley, thus: (1) to prevent surprise or fraud upon the
Legislature; and (2) to fairly apprise the people, through such publication of legislation that are being
considered, in order that they may have the opportunity of being heard thereon by petition or otherwise, if
they shall so desire.

The Constitutional requirement with respect to titles of statutes as sufficient to reflect their contents is
satisfied if all parts of a law relate to the subject expressed in its title, and it is not necessary that the title
be a complete index of the content. In the light of the history and analysis of Republic Act 3836, We
conclude that the title of said Republic Act 3836 is void as it is not germane to the subject matter and is a
violation of the aforementioned paragraph 1, section 21, Article VI of the Constitution.

Tio vs Videogram Regulatory Board

This petition was filed on September 1, 1986 by petitioner on his own behalf and purportedly on behalf of
other videogram operators adversely affected. It assails the constitutionality of Presidential Decree No.
1987 entitled "An Act Creating the Videogram Regulatory Board" with broad powers to regulate and
supervise the videogram industry (hereinafter briefly referred to as the BOARD).
RULING:
The Constitutional requirement that "every bill shall embrace only one subject which shall be expressed in
the title thereof" is sufficiently complied with if the title be comprehensive enough to include the general
purpose which a statute seeks to achieve. It is not necessary that the title express each and every end
that the statute wishes to accomplish. The requirement is satisfied if all the parts of the statute are related,
and are germane to the subject matter expressed in the title, or as long as they are not inconsistent with
or foreign to the general subject and title. An act having a single general subject, indicated in the title, may
contain any number of provisions, no matter how diverse they may be, so long as they are not
inconsistent with or foreign to the general subject, and may be considered in furtherance of such subject
by providing for the method and means of carrying out the general object." The rule also is that the
constitutional requirement as to the title of a bill should not be so narrowly construed as to cripple or
impede the power of legislation. It should be given practical rather than technical construction.

Tested by the foregoing criteria, petitioner's contention that the tax provision of the DECREE is a rider is
without merit. That section reads, inter alia:
Section 10. Tax on Sale, Lease or Disposition of Videograms. — Notwithstanding any provision of law to
the contrary, the province shall collect a tax of thirty percent (30%) of the purchase price or rental rate, as
the case may be, for every sale, lease or disposition of a videogram containing a reproduction of any
motion picture or audiovisual program. Fifty percent (50%) of the proceeds of the tax collected shall
accrue to the province, and the other fifty percent (50%) shall acrrue to the municipality where the tax is
collected; PROVIDED, That in Metropolitan Manila, the tax shall be shared equally by the
City/Municipality and the Metropolitan Manila Commission.

The foregoing provision is allied and germane to, and is reasonably necessary for the accomplishment of,
the general object of the DECREE, which is the regulation of the video industry through the Videogram
Regulatory Board as expressed in its title. The tax provision is not inconsistent with, nor foreign to that
general subject and title. As a tool for regulation it is simply one of the regulatory and control mechanisms
scattered throughout the DECREE. The express purpose of the DECREE to include taxation of the video
industry in order to regulate and rationalize the heretofore uncontrolled distribution of videograms is
evident from Preambles 2 and 5, supra. Those preambles explain the motives of the lawmaker in
presenting the measure. The title of the DECREE, which is the creation of the Videogram Regulatory
Board, is comprehensive enough to include the purposes expressed in its Preamble and reasonably
covers all its provisions. It is unnecessary to express all those objectives in the title or that the latter be an
index to the body of the DECREE.

Philippine Judges Association vs Prado

The petition assails the constitutionality of R.A. No. 7354 on the grounds that: (1) its title embraces more
than one subject and does not express its purposes; (2) it did not pass the required readings in both
Houses of Congress and printed copies of the bill in its final form were not distributed among the
members before its passage

We consider first the objection based on Article VI, Sec. 26(l), of the Constitution providing that "Every bill
passed by the Congress shall embrace only one subject which shall be expressed in the title thereof."
The purposes of this rule are: (1) to prevent hodge-podge or "log-rolling" legislation; (2) to
prevent surprise or fraud upon the legislature by means of provisions in bills of which the title
gives no intimation, and which might therefore be overlooked and carelessly and unintentionally
adopted; and (3) to fairly apprise the people, through such publication of legislative proceedings
as is usually made, of the subject of legislation that is being considered, in order that they may
have opportunity of being heard thereon, by petition or otherwise, if they shall so desire. The
petitioners' contention is untenable. We do not agree that the title of the challenged act violates the
Constitution. The title of the bill is not required to be an index to the body of the act, or to be as
comprehensive as to cover every single detail of the measure. It has been held that if the title fairly
indicates the general subject, and reasonably covers all the provisions of the act, and is not calculated to
mislead the legislature or the people, there is sufficient compliance with the constitutional requirement. To
require every end and means necessary for the accomplishment of the general objectives of the statute to
be expressed in its title would not only be unreasonable but would actually render legislation impossible.

The petitioners maintain that the second paragraph of Sec. 35 covering the repeal of the franking privilege
from the petitioners and this Court under E.O. 207, PD 1882 and PD 26 was not included in the original
version of Senate Bill No. 720 or House Bill No. 4200. As this paragraph appeared only in the Conference
Committee Report, its addition, violates Article VI, Sec. 26(2) of the Constitution
It is a matter of record that the conference Committee Report on the bill in question was returned to and
duly approved by both the Senate and the House of Representatives. Thereafter, the bill was enrolled
with its certification by Senate President Neptali A. Gonzales and Speaker Ramon V. Mitra of the House
of Representatives as having been duly passed by both Houses of Congress. It was then presented to
and approved by President Corazon C. Aquino on April 3, 1992. Under the doctrine of separation powers,
the Court may not inquire beyond the certification of the approval of a bill from the presiding officers of
Congress. Applying these principles, we shall decline to look into the petitioners' charges that an
amendment was made upon the last reading of the bill that eventually became R.A. No. 7354 and that
copies thereof in its final form were not distributed among the members of each House. Both the enrolled
bill and the legislative journals certify that the measure was duly enacted i.e., in accordance with Article
VI, Sec. 26(2) of the Constitution. We are bound by such official assurances from a coordinate
department of the government, to which we owe, at the very least, a becoming courtesy.

Tan vs Del Rosario

Petitioner contends that the title of House Bill No. 34314, progenitor of Republic Act No. 7496, is a
misnomer or, at least, deficient for being merely entitled, "Simplified Net Income Taxation Scheme for the
Self-Employed and Professionals Engaged in the Practice of their Profession" (Petition in G.R. No.
109289).
On the basis of the above language of the law, it would be difficult to accept petitioner's view that the
amendatory law should be considered as having now adopted a gross income, instead of as having still
retained the net income, taxation scheme. The allowance for deductible items, it is true, may have
significantly been reduced by the questioned law in comparison with that which has prevailed prior to the
amendment; limiting, however, allowable deductions from gross income is neither discordant with, nor
opposed to, the net income tax concept. The fact of the matter is still that various deductions, which are
by no means inconsequential, continue to be well provided under the new law. Article VI, Section 26(1), of
the Constitution has been envisioned so as (a) to prevent log-rolling legislation intended to unite the
members of the legislature who favor any one of unrelated subjects in support of the whole act, (b) to
avoid surprises or even fraud upon the legislature, and (c) to fairly apprise the people, through such
publications of its proceedings as are usually made, of the subjects of legislation. The above objectives of
the fundamental law appear to us to have been sufficiently met. Anything else would be to require a
virtual compendium of the law which could not have been the intendment of the constitutional mandate.

Tobias vs Abalos
Petitioner's first objection to the aforequoted provision of R.A. No. 7675 is that it contravenes the "one
subject-one bill" rule, as enunciated in Article VI, Section 26(1) of the Constitution. Petitioners allege that
the inclusion of the assailed Section 49 in the subject law resulted in the latter embracing two principal
subjects, namely: (1) the conversion of Mandaluyong into a highly urbanized city; and (2) the division of
the congressional district of San Juan/Mandaluyong into two separate districts. Petitioners contend that
the second aforestated subject is not germane to the subject matter of R.A. No. 7675 since the said law
treats of the conversion of Mandaluyong into a highly urbanized city, as expressed in the title of the law.
Therefore, since Section 49 treats of a subject distinct from that stated in the title of the law, the "one
subject-one bill" rule has not been complied with.
Contrary to petitioners' assertion, the creation of a separate congressional district for Mandaluyong is not
a subject separate and distinct from the subject of its conversion into a highly urbanized city but is a
natural and logical consequence of its conversion into a highly urbanized city. Verily, the title of R.A. No.
7675, "An Act Converting the Municipality of Mandaluyong Into a Highly Urbanized City of Mandaluyong"
necessarily includes and contemplates the subject treated under Section 49 regarding the creation of a
separate congressional district for Mandaluyong. Moreover, a liberal construction of the "one title-one
subject" rule has been invariably adopted by this court so as not to cripple or impede legislation. Thus, in
Sumulong v. Comelec (73 Phil. 288 [1941]), we ruled that the constitutional requirement as now
expressed in Article VI, Section 26(1) "should be given a practical rather than a technical construction. It
should be sufficient compliance with such requirement if the title expresses the general subject and all the
provisions are germane to that general subject."
The liberal construction of the "one title-one subject" rule had been further elucidated in Lidasan v.
Comelec (21 SCRA 496 [1967]), to wit:
Of course, the Constitution does not require Congress to employ in the title of an enactment, language of
such precision as to mirror, fully index or catalogue all the contents and the minute details therein. It
suffices if the title should serve the purpose of the constitutional demand that it inform the legislators, the
persons interested in the subject of the bill and the public, of the nature, scope and consequences of the
proposed law and its operation"

ABAKADA Guro Party List vs Ermita

Violation of Art. VI Sec. 24 & 26
R.A. No. 9337 Does Not Violate Article VI, Section 26(2) of the Constitution on the "No-Amendment Rule"
Petitioners’ argument that the practice where a bicameral conference committee is allowed to add or
delete provisions in the House bill and the Senate bill after these had passed three readings is in effect a
circumvention of the "no amendment rule" (Sec. 26 (2), Art. VI of the 1987 Constitution), fails to convince
the Court to deviate from its ruling in the Tolentino case that:
Nor is there any reason for requiring that the Committee’s Report in these cases must have undergone
three readings in each of the two houses. If that be the case, there would be no end to negotiation since
each house may seek modification of the compromise bill.

Art. VI. § 26 (2) must, therefore, be construed as referring only to bills introduced for the first time
in either house of Congress, not to the conference committee report. The Court reiterates here
that the "no-amendment rule" refers only to the procedure to be followed by each house of
Congress with regard to bills initiated in each of said respective houses, before said bill is
transmitted to the other house for its concurrence or amendment. Verily, to construe said
provision in a way as to proscribe any further changes to a bill after one house has voted on it
would lead to absurdity as this would mean that the other house of Congress would be deprived
of its constitutional power to amend or introduce changes to said bill. Thus, Art. VI, Sec. 26 (2) of
the Constitution cannot be taken to mean that the introduction by the Bicameral Conference
Committee of amendments and modifications to disagreeing provisions in bills that have been
acted upon by both houses of Congress is prohibited.

SECTION 27
Gonzales vs Macaraig
On 29 December 1988, the President signed the Bill into law, and declared the same to have become
Rep. Act No. 6688. In the process, seven (7) Special Provisions and Section 55, a "General Provision,"
were vetoed. In essence, petitioners’ cause is anchored on the following grounds: (1) the President’s
line-veto power as regards appropriation bills is limited to item/s and does not cover provision/s; therefore,
she exceeded her authority when she vetoed Section 55 (FY ‘89) and Section 16 (FY ‘90) which are
provisions; (2) when the President objects to a provision of an appropriation bill, she cannot exercise the
item-veto power but should veto the entire bill; (3) the item-veto power does not carry with it the power to
strike out conditions or restrictions for that would be legislation, in violation of the doctrine of separation of
powers; and (4) the power of augmentation in Article VI, Section 25 [5] of the 1987 Constitution, has to be
provided for by law and, therefore, Congress is also vested with the prerogative to impose restrictions on
the exercise of that power. Petitioners contend that Section 55 (FY ‘89) and Section 16 (FY ‘90) are
provisions and not items and are, therefore, outside the scope of the item-veto power of the President.
Whether or not the President exceeded the item-veto power accorded by the Constitution. Or differently
put, has the President the power to veto "provisions" of an Appropriations Bill?
Paragraph (1) refers to the general veto power of the President and if exercised would result in the
veto of the entire bill, as a general rule. Paragraph (2) is what is referred to as the item-veto power
or the line-veto power. It allows the exercise of the veto over a particular item or items in an
appropriation, revenue, or tariff bill. As specified, the President may not veto less than all of an
item of an Appropriations Bill. In other words, the power given the executive to disapprove any
item or items in an Appropriations Bill does not grant the authority to veto a part of an item and to
approve the remaining portion of the same item.

It is our considered opinion that, notwithstanding the elimination in Article VI, Section 27 (2) of the 1987
Constitution of any reference to the veto of a provision, the extent of the President’s veto power as
previously defined by the 1935 Constitution has not changed. This is because the eliminated proviso
merely pronounces the basic principle that a distinct and severable part of a bill may be the subject of a
separate veto. The restrictive interpretation urged by petitioners that the President may not veto a
provision without vetoing the entire bill not only disregards the basic principle that a distinct and severable
part of a bill may be the subject of a separate veto but also overlooks the Constitutional mandate that any
provision in the general appropriations bill shall relate specifically to some particular appropriation therein
and that any such provision shall be limited in its operation to the appropriation to which it relates (1987
Constitution, Article VI, Section 25 [2]). In other words, in the true sense of the term, a provision in an
Appropriations Bill is limited in its operation to some particular appropriation to which it relates, and does
not relate to the entire bill.

"Just as the President may not use his item-veto to usurp constitutional powers conferred on the
legislature, neither can the legislature deprive the Governor of the constitutional powers conferred on him
as chief executive officer of the state by including in a general appropriation bill matters more properly
enacted in separate legislation. The Governor’s constitutional power to veto bills of general legislation . . .
cannot be abridged by the careful placement of such measures in a general appropriation bill, thereby
forcing the Governor to choose between approving unacceptable substantive legislation or vetoing ‘items’
of expenditure essential to the operation of government. The legislature cannot by location of a bill give it
immunity from executive veto. Nor can it circumvent the Governor’s veto power over substantive
legislation by artfully drafting general law measures so that they appear to be true conditions or limitations
on an item of appropriation. Otherwise, the legislature would be permitted to impair the constitutional
responsibilities and functions of a co-equal branch of government in contravention of the separation of
powers doctrine . . . We are no more willing to allow the legislature to use its appropriation power to
infringe on the Governor’s constitutional right to veto matters of substantive legislation than we are to
allow the Governor to encroach on the constitutional powers of the legislature. In order to avoid this result,
we hold that, when the legislature inserts inappropriate provisions in a general appropriation bill, such
provisions must be treated as ‘items’ for purposes of the Governor’s item veto power over general
appropriation bills.

Petitioners maintain, however, that Congress is free to impose conditions in an Appropriations Bill and
where conditions are attached, the veto power does not carry with it the power to strike them out. In other
words, their theory is that Section 55 (FY ‘89) and Section 16 (FY ‘90) are such conditions/restrictions and
thus beyond the veto power.
There can be no denying that inherent in the power of appropriation is the power to specify how money
shall be spent; and that in addition to distinct "items" of appropriation, the Legislature may include in
Appropriation Bills qualifications, conditions, limitations or restrictions on expenditure of funds. Settled
also is the rule that the Executive is not allowed to veto a condition or proviso of an appropriation while
allowing the appropriation itself to stand (Fairfield v. Foster, supra, at 320). That was also the ruling in
Bolinao, supra, which held that the veto of a condition in an Appropriations Bill which did not include a
veto of the items to which the condition related was deemed invalid and without effect whatsoever.
However, for the rule to apply, restrictions should be such in the real sense of the term, not some matters
which are more properly dealt with in a separate legislation (Henry v. Edwards, La, 346, So 2d 153).
Restrictions or conditions in an Appropriations Bill must exhibit a connection with money items in a
budgetary sense in the schedule of expenditures. Again, the test is appropriateness.Considering that the
vetoed provisions are not, in the budgetary sense of the term, conditions or restrictions, the case of
Bolinao Electronics Corporation v. Valencia (supra), invoked by petitioners, becomes inapplicable. In that
case, a public works bill contained an item appropriating a certain sum for assistance to television
stations, subject to the condition that the amount would not be available to places where there were
commercial television stations. Then President Macapagal approved the appropriation but vetoed the
condition. When challenged before this Court, it was held that the veto was ineffectual and that the
approval of the item carried with it the approval of the condition attached to it. In contrast with the case at
bar, there is no condition, in the budgetary sense of the term, attached to an appropriation or item in the
appropriation bill which was struck out. For obviously, Sections 55 (FY ‘89) and 16 (FY ‘90) partake more
of a curtailment on the power to augment from savings; in other words, "a general provision of law, which
happens to be put in an appropriation bill"

If, indeed, the legislature believed that the exercise of the veto powers by the executive were
unconstitutional, the remedy laid down by the Constitution is crystal clear. A Presidential veto may be
overriden by the votes of two-thirds of members of Congress (1987 Constitution, Article VI, Section 27[1],
supra). But Congress made no attempt to override the Presidential veto. Petitioners’ argument that the
veto is ineffectual so that there is "nothing to override" (citing Bolinao) has lost force and effect with the
executive veto having been herein upheld.

Bengzon vs Drilon
The issue in this petition is the constitutionality of the veto by the President of certain provisions in the
General Appropriations Act for the Fiscal Year 1992 relating to the payment of the adjusted pensions of
retired Justices of the Supreme Court and the Court of Appeals. On January 15, 1992, the President
vetoed the underlined portions of Section 1 and the entire Section 4 the Special Provisions for the
Supreme Court of the Philippines and the Lower Courts (General Appropriations Act, FY 1992, page
1071) and the underlined portions of Section 1 and the entire Section 2, of the Special Provisions for the
Court of Appeals (page 1079) and the underlined portions of Section 1.3 of Article XLV of the Special
Provisions of the General Fund Adjustments (page 1164, General Appropriations Act, FY 1992). The
reason given for the veto of said provisions is that "the resolution of this Honorable Court in Administrative
Matter No. 91-8-225-CA pursuant to which the foregoing appropriations for the payment of the retired
Justices of the Supreme Court and the Court of Appeals have been enacted effectively nullified the veto
of the President on House Bill No. 16297, the bill which provided for the automatic increase in the
retirement pensions of the Justices of the Supreme Court and the Court of Appeals and chairmen of the
Constitutional Commissions by re-enacting Republic Act No. 1797 and Republic Act No. 3595. The
President's veto of the aforesaid provisions was further justified by reiterating the earlier reasons for
vetoing House Bill No. 16297: "they would erode the very foundation of our collective effort to adhere
faithfully to and enforce strictly the policy and standardization of compensation. We should not permit the
grant of distinct privileges to select group of officials whose retirement pensions under existing laws
already enjoy preferential treatment over those of the vast majority of our civil servants."
Constitutionality of the veto by the President
The OSG is correct when it states that the Executive must veto a bill in its entirety or not at all. He
or she cannot act like an editor crossing out specific lines, provisions, or paragraphs in a bill that
he or she dislikes. In the exercise of the veto power, it is generally all or nothing. However, when it
comes to appropriation, revenue or tariff bills, the Administration needs the money to run the
machinery of government and it can not veto the entire bill even if it may contain objectionable
features. The President is, therefore, compelled to approve into law the entire bill, including its
undesirable parts. It is for this reason that the Constitution has wisely provided the "item veto
power" to avoid inexpedient riders being attached to an indispensable appropriation or revenue
measure.

The Constitution provides that only a particular item or items may be vetoed. The power to disapprove
any item or items in an appropriate bill does not grant the authority to veto a part of an item and to
approve the remaining portion of the same item. The terms item and provision in budgetary legislation
and practice are concededly different. An item in a bill refers to the particulars, the details, the distinct and
severable parts . . . of the bill (Bengzon, supra, at 916.) It is an indivisible sum of money dedicated to a
stated purpose (Commonwealth v. Dodson, 11 S.E. 2d 120, 124, 125, etc., 176 Va. 281) The United
States Supreme Court, in the case of Bengzon v. Secretary of Justice (299 U.S. 410, 414, 57 Ct. 252, 81
L. Ed, 312) declared "that an "tem" of an appropriation bill obviously means an item which in itself is a
specific appropriation of money, not some general provision of law, which happens to be put into an
appropriation bill."

The general fund adjustment is an item which appropriates P500,000,000.00 to enable the Government to
meet certain unavoidable obligations which may have been inadequately funded by the specific items for
the different branches, departments, bureaus, agencies, and offices of the government.

The President did not veto this item. What were vetoed were methods or systems placed by Congress to
insure that permanent and continuing obligations to certain officials would be paid when they fell due.

An examination of the entire sections and the underlined portions of the law which were vetoed will readily
show that portions of the item have been chopped up into vetoed and unvetoed parts. Less than all of an
item has been vetoed. Moreover, the vetoed portions are not items. They are provisions.

Thus, the augmentation of specific appropriations found inadequate to pay retirement payments, by
transferring savings from other items of appropriation is a provision and not an item. It gives power to the
Chief Justice to transfer funds from one item to another. There is no specific appropriation of money
involved.

In the same manner, the provision which states that in compliance with decisions of the Supreme Court
and the Commission on Audit, funds still undetermined in amount may be drawn from the general fund
adjustment is not an item. It is the "general fund adjustment" itself which is the item. This was not
touched. It was not vetoed.

More ironic is the fact that misinformation led the Executive to believe that the items in the 1992
Appropriations Act were being vetoed when, in fact, the veto struck something else.

What were really vetoed are:

(1) Republic Act No. 1797 enacted as early as June 21, 1957; and
(2) The Resolution of the Supreme Court dated November 28, 1991 in Administrative Matter No.
91-8-225-CA.
From the foregoing discussion, it can be seen that when the President vetoed certain provisions of the
1992 General Appropriations Act, she was actually vetoing Republic Act No. 1797 which, of course, is
beyond her power to accomplish.

In the case at bar, the veto of these specific provisions in the General Appropriations Act is tantamount to
dictating to the Judiciary how its funds should be utilized, which is clearly repugnant to fiscal autonomy.
The freedom of the Chief Justice to make adjustments in the utilization of the funds appropriated for the
expenditures of the judiciary, including the use of any savings from any particular item to cover deficits or
shortages in other items of the Judiciary is withheld. Pursuant to the Constitutional mandate, the Judiciary
must enjoy freedom in the disposition of the funds allocated to it in the appropriations law. It knows its
priorities just as it is aware of the fiscal restraints. The Chief Justice must be given a free hand on how to
augment appropriations where augmentation is needed.

SECTION 28
Kapatiran ng mga Naglilingkod sa Pamahalaan ng Pilipinas vs Tan
These four (4) petitions which have been consolidated because of the similarity of the main issues
involved therein, seek to nullify Executive Order No. 273 (EO 273, for short), issued by the President of
the Philippines on 25 July 1987, to take effect on 1 January 1988, and which amended certain sections of
the National Internal Revenue Code and adopted the value-added tax (VAT, for short), for being
unconstitutional in that its enactment is not allegedly within the powers of the President; that the VAT is
oppressive, discriminatory, regressive, and violates the due process and equal protection clauses and
other provisions of the 1987 Constitution.

Petitioners claim that EO 273 is oppressive, discriminatory, unjust and regressive, in violation of the
provisions of Art. VI, sec. 28(1) of the 1987 Constitution
The contention is without merit. As the Court sees it, EO 273 satisfies all the requirements of a valid tax.
The petitioners’ assertions in this regard are not supported by facts and circumstances to warrant their
conclusions. They have failed to adequately show that the VAT is oppressive, discriminatory or unjust.
Petitioners merely rely upon newspaper articles which are actually hearsay and have no evidentiary
value. To justify the nullification of a law, there must be a clear and unequivocal breach of the
Constitution, not a doubtful and argumentative implication. The Court takes note that EO 273 has been in
effect for more than five (5) months now, so that the fears expressed by the petitioners that the adoption
of the VAT will trigger skyrocketing of prices of basic commodities and services, as well as mass actions
and demonstrations against the VAT should by now be evident. The fact that nothing of the sort has
happened shows that the fears and apprehensions of the petitioners appear to be more imagined than
real. It would seem that the VAT is not as bad as we are made to believe.

Lung Center vs Quezon City

The petitioner avers that it is a charitable institution within the context of Section 28(3), Article VI of the
1987 Constitution. It asserts that its character as a charitable institution is not altered by the fact that it
admits paying patients and renders medical services to them, leases portions of the land to private
parties, and rents out portions of the hospital to private medical practitioners from which it derives income
to be used for operational expenses. The petitioner points out that for the years 1995 to 1999, 100% of its
out-patients were charity patients and of the hospital’s 282-bed capacity, 60% thereof, or 170 beds, is
allotted to charity patients. It asserts that the fact that it receives subsidies from the government attests to
its character as a charitable institution. It contends that the "exclusivity" required in the Constitution does
not necessarily mean "solely." Hence, even if a portion of its real estate is leased out to private individuals
from whom it derives income, it does not lose its character as a charitable institution, and its exemption
from the payment of real estate taxes on its real property.

In their comment on the petition, the respondents aver that the petitioner is not a charitable entity. The
petitioner’s real property is not exempt from the payment of real estate taxes under P.D. No. 1823 and
even under the 1987 Constitution because it failed to prove that it is a charitable institution and that the
said property is actually, directly and exclusively used for charitable purposes.

RULING:
We hold that the petitioner is a charitable institution within the context of the 1973 and 1987 Constitutions.
To determine whether an enterprise is a charitable institution/entity or not, the elements which should be
considered include the statute creating the enterprise, its corporate purposes, its constitution and by-laws,
the methods of administration, the nature of the actual work performed, the character of the services
rendered, the indefiniteness of the beneficiaries, and the use and occupation of the properties.

In the legal sense, a charity may be fully defined as a gift, to be applied consistently with existing laws, for
the benefit of an indefinite number of persons, either by bringing their minds and hearts under the
influence of education or religion, by assisting them to establish themselves in life or otherwise lessening
the burden of government. It may be applied to almost anything that tend to promote the well-doing and
well-being of social man. It embraces the improvement and promotion of the happiness of man. The word
"charitable" is not restricted to relief of the poor or sick. The test of a charity and a charitable organization
are in law the same. The test whether an enterprise is charitable or not is whether it exists to carry out a
purpose reorganized in law as charitable or whether it is maintained for gain, profit, or private advantage.

Under P.D. No. 1823, the petitioner is a non-profit and non-stock corporation which, subject to the
provisions of the decree, is to be administered by the Office of the President of the Philippines with the
Ministry of Health and the Ministry of Human Settlements. It was organized for the welfare and benefit of
the Filipino people principally to help combat the high incidence of lung and pulmonary diseases in the
Philippines.

As a general principle, a charitable institution does not lose its character as such and its
exemption from taxes simply because it derives income from paying patients, whether out-patient,
or confined in the hospital, or receives subsidies from the government, so long as the money
received is devoted or used altogether to the charitable object which it is intended to achieve; and
no money inures to the private benefit of the persons managing or operating the institution.

Under P.D. No. 1823, the petitioner is entitled to receive donations. The petitioner does not lose its
character as a charitable institution simply because the gift or donation is in the form of subsidies granted
by the government. In this case, the petitioner adduced substantial evidence that it spent its income,
including the subsidies from the government for 1991 and 1992 for its patients and for the operation of the
hospital. It even incurred a net loss in 1991 and 1992 from its operations.

Even as we find that the petitioner is a charitable institution, we hold, anent the second issue, that those
portions of its real property that are leased to private entities are not exempt from real property
taxes as these are not actually, directly and exclusively used for charitable purposes.

The settled rule in this jurisdiction is that laws granting exemption from tax are construed strictissimi juris
against the taxpayer and liberally in favor of the taxing power. Section 2 of Presidential Decree No. 1823,
relied upon by the petitioner, specifically provides that the petitioner shall enjoy the tax exemptions and
privileges. It is plain as day that under the decree, the petitioner does not enjoy any property tax
exemption privileges for its real properties as well as the building constructed thereon. If the intentions
were otherwise, the same should have been among the enumeration of tax exempt privileges under
Section 2.

Section 28(3), Article VI of the 1987 Philippine Constitution provides, thus:

(3) Charitable institutions, churches and parsonages or convents appurtenant thereto, mosques,
non-profit cemeteries, and all lands, buildings, and improvements, actually, directly and exclusively used
for religious, charitable or educational purposes shall be exempt from taxation.

The tax exemption under this constitutional provision covers property taxes only. As Chief Justice
Hilario G. Davide, Jr., then a member of the 1986 Constitutional Commission, explained: ". . . what is
exempted is not the institution itself . . .; those exempted from real estate taxes are lands,
buildings and improvements actually, directly and exclusively used for religious, charitable or
educational purposes."

Under the 1973 and 1987 Constitutions and Rep. Act No. 7160 in order to be entitled to the exemption,
the petitioner is burdened to prove, by clear and unequivocal proof, that (a) it is a charitable institution;
and (b) its real properties are ACTUALLY, DIRECTLY and EXCLUSIVELY used for charitable purposes.
"Exclusive" is defined as possessed and enjoyed to the exclusion of others; debarred from participation or
enjoyment; and "exclusively" is defined, "in a manner to exclude; as enjoying a privilege exclusively." If
real property is used for one or more commercial purposes, it is not exclusively used for the exempted
purposes but is subject to taxation. The words "dominant use" or "principal use" cannot be substituted for
the words "used exclusively" without doing violence to the Constitutions and the law. Solely is
synonymous with exclusively.

What is meant by actual, direct and exclusive use of the property for charitable purposes is the direct and
immediate and actual application of the property itself to the purposes for which the charitable institution
is organized. It is not the use of the income from the real property that is determinative of whether the
property is used for tax-exempt purposes.

The petitioner failed to discharge its burden to prove that the entirety of its real property is actually,
directly and exclusively used for charitable purposes. While portions of the hospital are used for the
treatment of patients and the dispensation of medical services to them, whether paying or non-paying,
other portions thereof are being leased to private individuals for their clinics and a canteen. Further, a
portion of the land is being leased to a private individual for her business enterprise under the business
name "Elliptical Orchids and Garden Center." Indeed, the petitioner’s evidence shows that it collected
₱1,136,483. as rentals in 1991 and ₱1,679,999.28 for 1992 from the said lessees.

Province of Abra vs Hernando

Respondent Judge would not have erred so grievously had he merely compared the provisions of the
present Constitution with that appearing in the 1935 Charter on the tax exemption of "lands, buildings,
and improvements." There is a marked difference. Under the 1935 Constitution: "Cemeteries, churches,
and parsonages or convents appurtenant thereto, and all lands, buildings, and improvements used
exclusively for religious, charitable, or educational purposes shall be exempt from taxation." The present
Constitution added "charitable institutions, mosques, and non-profit cemeteries" and required that for the
exemption of ":lands, buildings, and improvements," they should not only be "exclusively" but also
"actually and "directly" used for religious or charitable purposes. The Constitution is worded differently.
The change should not be ignored. It must be duly taken into consideration. Reliance on past decisions
would have sufficed were the words "actually" as well as "directly" not added. There must be proof
therefore of the actual and direct use of the lands, buildings, and improvements for religious or charitable
purposes to be exempt from taxation.

Abra Valley College vs Aquino

Aside from the Stipulation of Facts, the trial court among others, found the following: (a) that the school is
recognized by the government and is offering Primary, High School and College Courses, and has a
school population of more than one thousand students all in all; (b) that it is located right in the heart of
the town of Bangued, a few meters from the plaza and about 120 meters from the Court of First Instance
building; (c) that the elementary pupils are housed in a two-storey building across the street; (d) that the
high school and college students are housed in the main building; (e) that the Director with his family is in
the second floor of the main building; and (f) that the annual gross income of the school reaches more
than one hundred thousand pesos. From all the foregoing, the only issue left for the Court to determine
and as agreed by the parties, is whether or not the lot and building in question are used exclusively for
educational purposes.

RULING;
It must be stressed however, that while this Court allows a more liberal and non-restrictive interpretation
of the phrase "exclusively used for educational purposes" as provided for in Article VI, Section 22,
paragraph 3 of the 1935 Philippine Constitution, reasonable emphasis has always been made that
exemption extends to facilities which are incidental to and reasonably necessary for the
accomplishment of the main purposes. Otherwise stated, the use of the school building or lot for
commercial purposes is neither contemplated by law, nor by jurisprudence. Thus, while the use of the
second floor of the main building in the case at bar for residential purposes of the Director and his family,
may find justification under the concept of incidental use, which is complimentary to the main or primary
purpose—educational, the lease of the first floor thereof to the Northern Marketing Corporation cannot by
any stretch of the imagination be considered incidental to the purpose of education.

SECTION 29
Pascual vs Secretary of Public Works
Acting upon said motions to dismiss, the lower court rendered the aforementioned decision, dated
October 29, 1953, holding that, since public interest is involved in this case, the Provincial Governor of
Rizal and the provincial fiscal thereof who represents him therein, "have the requisite personalities" to
question the constitutionality of the disputed item of Republic Act No. 920; that "the legislature is without
power appropriate public revenues for anything but a public purpose", that the instructions and
improvement of the feeder roads in question, if such roads where private property, would not be a public
purpose.

RULING:
It is a general rule that the legislature is without power to appropriate public revenue for anything but a
public purpose. . . . It is the essential character of the direct object of the expenditure which must
determine its validity as justifying a tax, and not the magnitude of the interest to be affected nor the
degree to which the general advantage of the community, and thus the public welfare, may be ultimately
benefited by their promotion. Incidental to the public or to the state, which results from the promotion of
private interest and the prosperity of private enterprises or business, does not justify their aid by the use
public money. Generally, under the express or implied provisions of the constitution, public funds may be
used only for public purpose. The right of the legislature to appropriate funds is correlative with its right to
tax, and, under constitutional provisions against taxation except for public purposes and prohibiting the
collection of a tax for one purpose and the devotion thereof to another purpose, no appropriation of state
funds can be made for other than for a public purpose. The relation between the people of the Philippines
and its taxpayers, on the other hand, and the Republic of the Philippines, on the other, is not identical to
that obtaining between the people and taxpayers of the U.S. and its Federal Government. It is closer, from
a domestic viewpoint, to that existing between the people and taxpayers of each state and the
government thereof, except that the authority of the Republic of the Philippines over the people of the
Philippines is more fully direct than that of the states of the Union, insofar as the simple and unitary type
of our national government is not subject to limitations analogous to those imposed by the Federal
Constitution upon the states of the Union, and those imposed upon the Federal Government in the
interest of the Union. For this reason, the rule recognizing the right of taxpayers to assail the
constitutionality of a legislation appropriating local or state public funds — which has been upheld by the
Federal Supreme Court (Crampton vs. Zabriskie, 101 U.S. 601) — has greater application in the
Philippines than that adopted with respect to acts of Congress of the United States appropriating federal
funds.

Indeed, in the Province of Tayabas vs. Perez (56 Phil., 257), involving the expropriation of a land by the
Province of Tayabas, two (2) taxpayers thereof were allowed to intervene for the purpose of contesting
the price being paid to the owner thereof, as unduly exorbitant. It is true that in Custodio vs. President of
the Senate (42 Off. Gaz., 1243), a taxpayer and employee of the Government was not permitted to
question the constitutionality of an appropriation for backpay of members of Congress. However, in
Rodriguez vs. Treasurer of the Philippines and Barredo vs. Commission on Elections (84 Phil., 368; 45
Off. Gaz., 4411), we entertained the action of taxpayers impugning the validity of certain appropriations of
public funds, and invalidated the same. Moreover, the reason that impelled this Court to take such
position in said two (2) cases — the importance of the issues therein raised — is present in the case at
bar. Again, like the petitioners in the Rodriguez and Barredo cases, petitioner herein is not merely a
taxpayer. The Province of Rizal, which he represents officially as its Provincial Governor, is our most
populated political subdivision, and, the taxpayers therein bear a substantial portion of the burden of
taxation, in the Philippines.

Hence, it is our considered opinion that the circumstances surrounding this case sufficiently justify
petitioners action in contesting the appropriation and donation in question; that this action should not have
been dismissed by the lower court; and that the writ of preliminary injunction should have been
maintained.

Aglipay vs Ruiz
The more important question raised refers to the alleged violation of the Constitution by the respondent in
issuing and selling postage stamps commemorative of the Thirty-third International Eucharistic Congress.
It is alleged that this action of the respondent is violative of the provisions of section 23, subsection 3,
Article VI, of the Constitution of the Philippines, which provides as follows:
No public money or property shall ever be appropriated, applied, or used, directly or indirectly, for the use,
benefit, or support of any sect, church, denomination, secretarian, institution, or system of religion, or for
the use, benefit, or support of any priest, preacher, minister, or other religious teacher or dignitary as
such, except when such priest, preacher, minister, or dignitary is assigned to the armed forces or to any
penal institution, orphanage, or leprosarium.

RULING:
Act No. 4052 contemplates no religious purpose in view. What it gives the Director of Posts is the
discretionary power to determine when the issuance of special postage stamps would be "advantageous
to the Government." Of course, the phrase "advantageous to the Government" does not authorize the
violation of the Constitution. It does not authorize the appropriation, use or application of public money or
property for the use, benefit or support of a particular sect or church. In the present case, however, the
issuance of the postage stamps in question by the Director of Posts and the Secretary of Public Works
and Communications was not inspired by any sectarian denomination. The stamps were not issue and
sold for the benefit of the Roman Catholic Church. Nor were money derived from the sale of the stamps
given to that church. On the contrary, it appears from the latter of the Director of Posts of June 5, 1936,
incorporated on page 2 of the petitioner's complaint, that the only purpose in issuing and selling the
stamps was "to advertise the Philippines and attract more tourist to this country." The officials concerned
merely, took advantage of an event considered of international importance "to give publicity to the
Philippines and its people" (Letter of the Undersecretary of Public Works and Communications to the
President of the Philippines, June 9, 1936; p. 3, petitioner's complaint). It is significant to note that the
stamps as actually designed and printed (Exhibit 2), instead of showing a Catholic Church chalice as
originally planned, contains a map of the Philippines and the location of the City of Manila, and an
inscription as follows: "Seat XXXIII International Eucharistic Congress, Feb. 3-7,1937." What is
emphasized is not the Eucharistic Congress itself but Manila, the capital of the Philippines, as the seat of
that congress. It is obvious that while the issuance and sale of the stamps in question may be said to be
inseparably linked with an event of a religious character, the resulting propaganda, if any, received by the
Roman Catholic Church, was not the aim and purpose of the Government. We are of the opinion that the
Government should not be embarassed in its activities simply because of incidental results, more or less
religious in character, if the purpose had in view is one which could legitimately be undertaken by
appropriate legislation. The main purpose should not be frustrated by its subordinate to mere incidental
results not contemplated.

Guingona vs Carague
The petition seeks the declaration of the unconstitutionality of P.D. No. 81, Section 31 of P.D. No. 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.
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(1). 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."

Osmeña vs Orbos
It will be recalled that on October 10, 1984, President Ferdinand Marcos issued P.D. 1956 creating a
Special Account in the General Fund, designated as the Oil Price Stabilization Fund (OPSF). The OPSF
was designed to reimburse oil companies for cost increases in crude oil and imported petroleum products
resulting from exchange rate adjustments and from increases in the world market prices of crude oil.
Subsequently, the OPSF was reclassified into a "trust liability account," in virtue of E.O. 1024, and
ordered released from the National Treasury to the Ministry of Energy. The same Executive Order also
authorized the investment of the fund in government securities, with the earnings from such placements
accruing to the fund.

The petition further avers that the creation of the trust fund violates § 29(3), Article VI of the Constitution.
The petitioner argues that "the monies collected pursuant to . . P.D. 1956, as amended, must be treated
as a 'SPECIAL FUND,' not as a 'trust account' or a 'trust fund,' and that "if a special tax is collected for a
specific purpose, the revenue generated therefrom shall 'be treated as a special fund' to be used only for
the purpose indicated, and not channeled to another government objective." Petitioner further points out
that since "a 'special fund' consists of monies collected through the taxing power of a State, such
amounts belong to the State, although the use thereof is limited to the special purpose/objective for which
it was created."

RULING:
It thus appears that the challenge posed by the petitioner is premised primarily on the view that the
powers granted to the ERB under P.D. 1956, as amended, partake of the nature of the taxation power of
the State. The Solicitor General observes that the "argument rests on the assumption that the OPSF is a
form of revenue measure drawing from a special tax to be expended for a special purpose." The
petitioner's perceptions are, in the Court's view, not quite correct. Hence, it seems clear that while the
funds collected may be referred to as taxes, they are exacted in the exercise of the police power of the
State. Moreover, that the OPSF is a special fund is plain from the special treatment given it by E.O. 137. It
is segregated from the general fund; and while it is placed in what the law refers to as a "trust liability
account," the fund nonetheless remains subject to the scrutiny and review of the COA. The Court is
satisfied that these measures comply with the constitutional description of a "special fund." Indeed, the
practice is not without precedent.

With regard to the alleged undue delegation of legislative power, the Court finds that the provision
conferring the authority upon the ERB to impose additional amounts on petroleum products provides a
sufficient standard by which the authority must be exercised. In addition to the general policy of the law to
protect the local consumer by stabilizing and subsidizing domestic pump rates, § 8(c) of P.D. 1956
expressly authorizes the ERB to impose additional amounts to augment the resources of the Fund.

What petitioner would wish is the fixing of some definite, quantitative restriction, or "a specific limit on how
much to tax." The Court is cited to this requirement by the petitioner on the premise that what is involved
here is the power of taxation; but as already discussed, this is not the case. What is here involved is not
so much the power of taxation as police power. Although the provision authorizing the ERB to impose
additional amounts could be construed to refer to the power of taxation, it cannot be overlooked that the
overriding consideration is to enable the delegate to act with expediency in carrying out the objectives of
the law which are embraced by the police power of the State.

SECTION 30
First Lepanto Ceramics, Inc. vs CA
On February 24, 1993, petitioner filed a "Motion to Dismiss Petition and to Lift Restraining Order" on the
ground that respondent court has no appellate jurisdiction over BOI Case No. 92-005, the same being
exclusively vested with the Supreme Court pursuant to Article 82 of the Omnibus Investments Code of
1987.
Petitioner argues that the Judiciary Reorganization Act of 1980 or Batas Pambansa Bilang 129 and
Circular 1-91, "Prescribing the Rules Governing Appeals to the Court of Appeals from a Final Order or
Decision of the Court of Tax Appeals and Quasi-Judicial Agencies" cannot be the basis of Mariwasa's
appeal to respondent court because the procedure for appeal laid down therein runs contrary to Article 82
of E.O. 226, which provides that appeals from decisions or orders of the BOI shall be filed directly with
this Court

RULING:
Under this contextual backdrop, this Court, pursuant to its Constitutional power under Section 5(5), Article
VIII of the 1987 Constitution to promulgate rules concerning pleading, practice and procedure in all courts,
and by way of implementation of B.P. 129, issued Circular 1-91 prescribing the rules governing appeals to
the Court of Appeals from final orders or decisions of the Court of Tax Appeals and quasi-judicial
agencies to eliminate unnecessary contradictions and confusing rules of procedure. Contrary to
petitioner's contention, although a circular is not strictly a statute or law, it has, however, the force and
effect of law according to settled jurisprudence. The argument that Article 82 of E.O. 226 cannot be validly
repealed by Circular 1-91 because the former grants a substantive right which, under the Constitution
cannot be modified, diminished or increased by this Court in the exercise of its rule-making powers is not
entirely defensible as it seems. Respondent correctly argued that Article 82 of E.O. 226 grants the right of
appeal from decisions or final orders of the BOI and in granting such right, it also provided where and in
what manner such appeal can be brought. These latter portions simply deal with procedural aspects
which this Court has the power to regulate by virtue of its constitutional rule-making powers. Clearly,
Circular 1-91 effectively repealed or superseded Article 82 of E.O. 226 insofar as the manner and method
of enforcing the right to appeal from decisions of the BOI are concerned. Appeals from decisions of the
BOI, which by statute was previously allowed to be filed directly with the Supreme Court, should now be
brought to the Court of Appeals.

Diaz vs CA
On 6 July 1992, petitioners filed a petition for review on certiorari before this Court assailing the decision
of ERB on the ground of lack of jurisdiction and/or grave abuse of discretion amounting to lack of
jurisdiction.
In our resolution of 8 September 1992, we referred the case for proper disposition to the Court of Appeals
which subsequently dismissed the petition on the ground that (1) the filing of the petition for review with
the Supreme Court was a wrong mode of appeal, and (2) the petition did not comply with the provisions of
Supreme Court Circular 1-88 in that (a) it did not state the date when the petitioners received notice of the
ERB decision, (b) it did not state the date when the petitioners filed a motion for reconsideration, and (c) it
inconsistently alleged different dates when petitioners supposedly received the denial of their motion by
ERB.

RULING:
The predecessor of the Energy Regulatory Board was the Board of Energy created under P.D. No. 1206.
Thereunder, appeals from the decisions of the Board of Energy were appealable to the Office of the
President. However, under the Interim Rules Implementing the Judiciary Reorganization Act of 1980, final
decisions, orders, awards or resolutions of the Board of Energy were made appealable to the
Intermediate Appellate Court (Sec. 9).
On 2 February 1987, the New Constitution took effect. Sec. 30, Art. VI, thereof provides: "No law shall be
passed increasing the appellate jurisdiction of the Supreme Court as provided in this Constitution without
its advice and concurrence."

On 8 May 1987, the President promulgated E.O. No. 172 creating the Energy Regulatory Board to
replace the Board of Energy. Under Sec. 10 thereof, "[a] party adversely affected by a decision, order or
ruling of the Board . . . may file a petition to be known as petition for review with the Supreme Court." On
27 February 1991, the Supreme Court promulgated Circular No.
1-91, par. (1) of which specifically provides that the proper mode of appeal from any quasi-judicial agency,
including ERB, is by way of a petition for review with the Court of Appeals. It is very patent that since Sec.
10 of E.O. No. 172 was enacted without the advice and concurrence of this Court, this provision never
became effective, with the result that it cannot be deemed to have amended the Judiciary Reorganization
Act of 1980. Consequently, the authority of the Court of Appeals to decide cases from the Board of
Energy, now ERB, remains.

Prior to Circular No. 1-91, the Supreme Court promulgated Circular No. 2-90 dated 9 March 1990, Item
No. 4 of which states that "[a]n appeal taken to either the Supreme Court or the Court of Appeals by the
wrong or inappropriate mode shall be dismissed".

Paragraph (d) of said Circular No. 2-90 also provides that "[n]o transfer of appeals erroneously taken to
the Supreme Court or to the Court of Appeals to whichever of these Tribunals has appropriate appellate
jurisdiction will be allowed; continued ignorance or willful disregard of the law on appeals will not be
tolerated."

Consequently, the Court of Appeals was correct when it held -

Contrary to petitioners' stand, the Supreme Court's Resolution dated September 8, 1992, referring "this
case to the Court of Appeals for further disposition" was not a directive for this court to disregard the
above circulars and precedents. Rather the said SC resolution could mean only that this court should
dispose of the subject petition in conformity with, and not in violation of, those circulars and precedents
(Rollo, p. 26).

Both Circulars Nos. 1-88 and 2-90 were duly published in newspapers of general circulation in the
Philippines. Hence, lawyers are expected to keep themselves abreast with the decisions of this Court and
with its Circulars and other issuances relating to procedure or affecting their duties and responsibilities as
officers of the court (Teehankee, Jr. v. Hon. Madayag, G.R. No. 102717, 12 December 1992).

SC Circular No. 1-88, which took effect on 1 January 1989, was not adopted and approved by this Court
for childish, flimsy or petty reasons, nor for pure love of technicalities, but to compel the strict observance
of the Revised Rules of Court in order that proceedings before this Court may not be needlessly delayed

SECTION 32
Subic Bay Metropolitan Authority vs COMELEC
In April 1993, the Sangguniang Bayan of Morong, Bataan passed Pambayang Kapasyahan Bilang 10,
Serye 1993, expressing therein its absolute concurrence, as required by said Sec. 12 of RA 7227, to join
the Subic Special Economic Zone. On September 5, 1993, the Sangguniang Bayan of Morong submitted
Pambayang Kapasyahan Bilang 10, Serye 1993 to the Office of the President. On May 24, 1993,
respondents Garcia, Calimbas and their companions filed a petition with the Sangguniang Bayan of
Morong to annul Pambayang Kapasyahan Blg. 10, Serye 1993.
On July 6, 1993, respondent Commission En Banc in Comelec Resolution No. 93-1623 denied the
petition for local initiative by herein private respondents on the ground that the subject thereof was merely
a resolution (pambayang kapasyahan) and not an ordinance. On July 13, 1993, public respondent
Comelec En Banc (thru Comelec Resolution no. 93-1676) further directed its Provincial Election
Supervisor to hold action on the authentication of signatures being solicited by private respondents. On
June 18, 19956, respondent Comelec issued Resolution No. 2845, adopting therein a "Calendar of
Activities for local referendum on certain municipal ordinance passed by the Sangguniang Bayan of
Morong, Bataan", and which indicated, among others, the scheduled Referendum Day (July 27, 1996,
Saturday). On June 27, 1996, the Comelec promulgated the assailed Resolution No. 2848 providing for
"the rules and guidelines to govern the conduct of the referendum proposing to annul or repeal
Kapasyahan Blg. 10, Serye 1993 of the Sangguniang Bayan of Morong, Bataan".

Whether the respondent Comelec committed grave abuse of discretion in promulgating and implementing
its Resolution No. 2848 which "govern(s) the conduct of the referendum proposing to annul or repeal
Pambayang Kapasyahan Blg. 10, Serye 1993 of the Sangguniang Bayan of Morong, Bataan;" and
Whether the questioned local initiative covers a subject within the powers of the people of Morong to
enact; i.e., whether such initiative "seeks the amendment of a national law."

RULING:
Respondent Garcia contends that this Court had already ruled with finality in Enrique T. Garcia, et al. vs.
Commission on Elections, et al.8 on "the very issue raised in (the) petition: whether or not there can be an
initiative by the people of Morong, Bataan on the subject proposition — the very same proposition, it
bears emphasizing, the submission of which to the people of Morong, Bataan is now sought to be
enjoined by petitioner . . .".

We disagree. The only issue resolved in the earlier Garcia case is whether a municipal resolution as
contra-distinguished from an ordinance may be the proper subject of an initiative and/or referendum. We
quote from our said Decision:
In light of this legal backdrop, the essential issue to be resolved in the case at bench is whether
Pambayang Kapasyahan Blg. 10, serye 1993 of the Sangguniang Bayan of Morong, Bataan is the proper
subject of an initiative. Respondents take the negative stance as they contend that under the Local
Government Code of 1991 only an ordinance can be the subject of initiative. They rely on Section 120,
Chapter 2, Title XI, Book I of the Local Government Code of 1991 which provides: "Local Initiative
Defined. — Local initiative is the legal process whereby the registered voters of a local government until
may directly propose, enact, or amend any ordinance."

We reject respondents' narrow and literal reading of the above provision for it will collide with the
Constitution and will subvert the intent of the lawmakers in enacting the provisions of the Local
Government of 1991 on initiative and referendum.

The Constitution clearly includes not only ordinance but resolutions as appropriate subjects of a local
initiative. Section 32 of Article VI provides in luminous language: "The Congress shall, as early as
possible, provide for a system of initiative and referendum, and the exceptions therefrom, whereby the
people can directly propose and enact laws or approve or reject any act or law or part thereof passed by
the Congress, or local legislative body . . .". An act includes a resolution. Black defines an act as "an
expression of will or purpose . . . it may denote something done . . . as a legislature, including not merely
physical acts, but also decrees, edicts, laws, judgments, resolves, awards, and determinations . . .". It is
basic that a law should be construed in harmony with and not in violation of the Constitution. In line with
this postulate, we held in In Re Guarina that "if there is doubt or uncertainty as to the meaning of the
legislative, if the words or provisions are obscure, or if the enactment is fairly susceptible of two or more
constructions, that interpretation will be adopted which will avoid the effect of unconstitutionality, even
though it may be necessary, for this purpose, to disregard the more usual or apparent import of the
language used."

In the present case, petitioner is not contesting the propriety of a municipal resolution as the form by
which these two new constitutional prerogatives of the people may be validly exercised. What is at issue
here is whether Pambayang Kapasyahan Blg. 10, Serye 1993, as worded, is sufficient in form and
substance for submission to the people for their approval; in fine, whether the Comelec acted properly
and juridically in promulgating and implementing Resolution No. 2848.

The main issue in this case may be re-stated thus: Did respondent Comelec commit grave abuse of
discretion in promulgating and implementing Resolution No. 2848?

We answer the question in the affirmative.

To begin with, the process started by private respondents was an INITIATIVE but respondent Comelec
made preparations for a REFERENDUM only. In fact, in the body of the Resolution as reproduced in the
footnote below, the word "referendum" is repeated at least 27 times, but "initiative" is not mentioned at all.
The Comelec labeled the exercise as a "Referendum"; the counting of votes was entrusted to a
"Referendum Committee"; the documents were called "referendum returns"; the canvassers,
"Referendum Board of Canvassers" and the ballots themselves bore the description "referendum". To
repeat, not once was the word "initiative" used in said body of Resolution No. 2848. And yet, this exercise
is unquestionably an INITIATIVE.

There are statutory and conceptual demarcations between a referendum and an initiative. In enacting the
"Initiative and Referendum Act,12 Congress differentiated one term from the other, thus:
(a) "Initiative" is the power of the people to propose amendments to the Constitution or to propose and
enact legislations through an election called for the purpose.

There are three (3) systems of initiative, namely:

a.1. Initiative on the Constitution which refers to a petition proposing amendments to the Constitution;
a.2. Initiative on statutes which refers to a petition proposing to enact a national legislation; and
a.3. Initiative on local legislation which refers to a petition proposing to enact a regional, provincial, city,
municipal, or barangay law, resolution or ordinance.
(b) "Indirect initiative" is exercise of initiative by the people through a proposition sent to Congress or the
local legislative body for action.
(c) "Referendum" is the power of the electorate to approve or reject a legislation through an election
called for the purpose. It may be of two classes, namely:
c.1. Referendum on statutes which refers to a petition to approve or reject an act or law, or part thereof,
passed by Congress; and
c.2 Referendum on local law which refers to a petition to approve or reject a law, resolution or ordinance
enacted by regional assemblies and local legislative bodies.

Prescinding from these definitions, we gather that initiative is resorted to (or initiated) by the people
directly either because the law-making body fails or refuses to enact the law, ordinance, resolution or act
that they desire or because they want to amend or modify one already existing. Under Sec. 13 of R.A.
6735, the local legislative body is given the opportunity to enact the proposal. If it refuses/neglects to do
so within thirty (30) days from its presentation, the proponents through their duly-authorized and
registered representatives may invoke their power of initiative, giving notice thereof to the local legislative
body concerned. Should the proponents be able to collect the number of signed conformities within the
period granted by said statute, the Commission on Elections "shall then set a date for the initiative (not
referendum) at which the proposition shall be submitted to the registered voters in the local government
unit concerned . . .".

On the other hand, in a local referendum, the law-making body submits to the registered voters of its
territorial jurisdiction, for approval or rejection, any ordinance or resolution which is duly enacted or
approved by such law-making authority. Said referendum shall be conducted also under the control and
direction of the Commission on Elections. In other words, while initiative is entirely the work of the
electorate, referendum is begun and consented to by the law-making body. Initiative is a process of
law-making by the people themselves without the participation and against the wishes of their elected
representatives, while referendum consists merely of the electorate approving or rejecting what has been
drawn up or enacted by a legislative body. Hence, the process and the voting in an initiative are
understandably more complex than in a referendum where expectedly the voters will simply write either
"Yes" of "No" in the ballot.

From the above differentiation, it follows that there is need for the Comelec to supervise an initiative more
closely, its authority thereon extending not only to the counting and canvassing of votes but also to seeing
to it that the matter or act submitted to the people is in the proper form and language so it may be easily
understood and voted upon by the electorate. This is especially true where the proposed legislation is
lengthy and complicated, and should thus be broken down into several autonomous parts, each such part
to be voted upon separately. Care must also be exercised that "(n)o petition embracing more than one
subject shall be submitted to the electorate," although "two or more propositions may be submitted in an
initiative". It should be noted that under Sec. 13 (c) of RA 6735, the "Secretary of Local Government or his
designated representative shall extend assistance in the formulation of the proposition."

In initiative and referendum, the Comelec exercises administration and supervision of the process itself,
akin to its powers over the conduct of elections. These law-making powers belong to the people, hence
the respondent Commission cannot control or change the substance or the content of legislation. In the
exercise of its authority, it may (in fact it should have done so already) issue relevant and adequate
guidelines and rules for the orderly exercise of these "people-power" features of our Constitution.