G.R. No. 78693 - Cielo vs. National Labor Relations Commission

On July 22, 2005, the Supreme Court granted the petition of the Civil Service Commission (CSC) declaring that the Department of Budget and Management (DBM) must automatically and regularly release to constitutional fiscal autonomous agencies (CFAG) their full appropriations.
DBM filed a Motion for Reconsideration contesting the Court’s interpretation of (a) Article VIII, Section 3 of the Constitution, (b) Sections 62–64 of the FY 2002 General Appropriations Act (R.A. No. 9162), and (c) this Court’s June 3, 1993 Resolution in A.M. No. 92-9-029-SC on judicial fiscal autonomy.

Article VIII, Section 3 (now Sec. 3 of Art. VIII) provides that “Appropriations for the Judiciary may not be reduced by the legislature below the amount appropriated for the previous year and, after approval, shall be automatically and regularly released.”
The 1993 Resolution in A.M. No. 92-9-029-SC directed that after Congressional approval, judicial appropriations “shall be automatically and regularly released subject to availability of funds.”

The term “fiscal autonomy” does not require preferential cash allocation, as evidenced by the 1986 Constitutional Commission debates (Commissioner Ople objected to automatic appropriation, not release; Commissioner Monsod secured automatic release after budget justification).
Under the budget process, the DBM prepares an Agency Budget Matrix (ABM), issues allotments and Notices of Cash Allocation (NCAs), and implements a “cash payment schedule” that proportionately reduces monthly releases across all agencies when revenues fall short.
Sections 62–64 of the FY 2002 GAA, and Congressman Andaya’s sponsorship speech, show that CFAG are not excepted from general impoundment or reduction during an “unmanageable deficit.”
The phrase “subject to availability of funds” in the 1993 Resolution permits DBM to schedule or delay releases when national revenues dip.
While acknowledging that CFAG cannot be subjected to a “no report, no release” policy, DBM insists on their continued obligation to submit financial reports.

The Constitution’s “automatic and regular release” differs from “automatic appropriation”; only Congress appropriates, DBM releases. Ople’s objection was to the former, Monsod’s proposal created the latter.
Legislative intent, gleaned from debates and the structure of Sections 62–64 (read together), clearly protects CFAG from reduction or impoundment even in a deficit.
A cash payment schedule that withholds or reduces CFAG funds is a policy choice, not a compelled response to revenue shortfalls, and thus violates the constitutional mandate.
The phrase “subject to availability of funds” in the 1993 Resolution acknowledges administrative scheduling but does not authorize partial or delayed releases that fall short of the full appropriation.
CFAG agencies may submit reports “for records purposes only”; reporting is permissive and cannot be a condition precedent to the release of their appropriations.

Whether “fiscal autonomy” under Article VIII, Section 3 encompasses a right to full, unconditional, and priority cash allocation beyond mere scheduling.
Whether DBM’s “cash payment schedule” may legally reduce or delay monthly releases to CFAG in the event of revenue shortfalls.
Whether Sections 62–64 of the FY 2002 GAA permit the DBM to impound, reduce, or condition CFAG appropriations during an “unmanageable deficit.”
Whether the 1993 Resolution in A.M. No. 92-9-029-SC’s “subject to availability of funds” clause authorizes DBM to withhold or partially release CFAG funds.
Whether CFAG agencies may be compelled to submit financial reports as a prerequisite to the release of their appropriations.