G.R. No. 94571 - Guingona, Jr. vs. Carague

The 1990 budget of the Philippines consisted of a total of ₱233.5 billion, made up of ₱98.4 billion in automatic appropriations (with ₱86.8 billion earmarked for debt service) and ₱155.3 billion appropriated under Republic Act No. 6831 (General Appropriations Act).
The Department of Education, Culture and Sports was allocated ₱27,017,813,000.00 within this budget.
The automatic appropriation for debt service was authorized by the following presidential decrees issued under former President Ferdinand Marcos:

P.D. No. 81, amending certain provisions of the Foreign Borrowing Act (Republic Act No. 4860).
P.D. No. 1177, revising the budget process to institutionalize budgetary innovations.
P.D. No. 1967, strengthening guarantee and payment positions concerning contingent liabilities and appropriating funds for the purpose.

Petitioners, Senators Teofisto T. Guingona, Jr. and Aquilino Q. Pimentel, Jr., questioned the constitutionality of the automatic appropriation for debt service within the 1990 budget.
They sought:

A declaration that P.D. No. 81, Section 31 of P.D. No. 1177, and P.D. No. 1967 are unconstitutional.
Injunctive relief to restrain disbursement of funds for debt service under the 1990 budget pursuant to those decrees.

Respondents argued that the petition raised a political question inappropriate for judicial resolution, as the issue related to repeal or amendment of laws falling within legislative and executive prerogatives.
They contended the Court should abstain, leaving the matter to the discretion and judgment of the political branches.

The Court found that Senators have legal standing to raise constitutional questions, and even taxpayers have personality to restrain unlawful public expenditures.
The Court held that the petition raised a justiciable controversy suitable for judicial determination under Section 1, Article VIII of the Constitution, which vests judicial power in the Supreme Court.

Petitioners argued the debt service appropriation contradicted Section 5, Article XIV of the Constitution, which mandates the highest budgetary priority to education, highlighting the disproportion between education (₱27 billion) and debt service (₱86 billion).
Petitioners claimed the presidential decrees authorizing automatic appropriations became functus officio after President Marcos’ ouster and the restoration of Congress under the 1987 Constitution.
They asserted such appropriations violated:

The requirement that all appropriations originate as bills approved by Congress and the President (Section 24, Article VI).
The constitutional mandate that no money shall be disbursed except pursuant to an appropriation made by law (Section 29, Article VI).
The prohibition against undue delegation of legislative power.

Government emphasized the need to honor enormous debts inherited from the previous administration, contending appropriations for debt service are vital for the country’s economic survival and credit standing.
It noted increases in education funding since 1985 and that the education department received the highest allocation among government departments in the 1990 budget.
The automatic appropriation decrees allow flexibility in managing debt servicing and avoid delays inherent in waiting for new laws annually.
The decrees remain operative as they are not inconsistent with the Constitution and have not been repealed or amended by Congress, pursuant to Section 3, Article XVIII of the 1987 Constitution.

Whether the appropriation of ₱86 billion for debt service in the 1990 budget violates Section 5, Article XIV of the Constitution, which mandates assigning the highest budgetary priority to education.

Whether P.D. No. 81, Section 31 of P.D. No. 1177, and P.D. No. 1967 remain operative under the 1987 Constitution, despite being presidential decrees issued during the Marcos administration.

Whether these presidential decrees violate Section 29(1), Article VI of the Constitution, which requires that no money shall be paid out of the Treasury except pursuant to an appropriation made by law, and Section 24, Article VI, which requires appropriations and public debt bills to originate exclusively in the House of Representatives and be approved by the President.

Whether the automatic appropriation laws involve an undue delegation of legislative power to the executive branch.