Case Summary (G.R. No. 209287)
Petitioners
Groups and individuals claiming (a) no actual case or controversy, (b) lack of standing, and (c) violations of separation of powers, the “power of the purse,” and equal protection by the DAP and NBC 541.
Respondents
Executive officials defending DAP as a lawful fiscal instrument to accelerate government spending, contending savings and unprogrammed funds were properly defined and applied under the Administrative Code and annual GAAs.
Key Dates
– Decision below: July 1, 2014
– Resolution on motions: February 3, 2015
– Constitution in force: 1987 Philippine Constitution
Applicable Law
– Constitution, Article VI, Sections 24–26 (power of the purse; item‐veto; savings and augmentation), Section 29(1) (appropriation requirement)
– Administrative Code of 1987, Book VI, Chapters 2 and 5 (suspension of expenditures; use of savings)
– General Appropriations Acts (GAAs) 2011–2014 (definitions of savings, special provisions for unprogrammed funds and augmentation)
– Doctrine of Operative Fact and void‐ab initio principle
Issues Presented
- Justiciability: existence of actual case or controversy; standing of petitioners.
- Definition and lawful generation of savings.
- Presidential power to withdraw unobligated allotments and to augment.
- Validity of cross‐border transfers of savings.
- Lawful use of unprogrammed funds without exceeding revenue targets.
- Application of the Doctrine of Operative Fact to DAP‐funded projects and implementors.
Ruling on Jurisdiction and Justiciability
– The Court has exclusive judicial review power to settle actual controversies and to determine grave abuse of discretion by the Executive under Article VIII, Section 1.
– Petitioners sufficiently alleged injury from DAP implementation (taxpayer and citizen concerns regarding budget execution), thus satisfying standing and case‐or‐controversy requirements.
Definition and Use of Savings
– Savings must be strictly construed:
a. Unobligated balances after final completion, discontinuance, or abandonment of the appropriated purpose;
b. Balances from vacant positions;
c. Balances from efficiencies under collective agreements.
– Withdrawal of unobligated allotments yields savings only if the project is finally discontinued; indiscriminate withdrawals without establishing final discontinuance violate both the GAAs and Section 25(5), Article VI of the Constitution.
Augmentation and Appropriation Items
– The President may augment appropriation items for his department from savings under Section 25(5), Article VI.
– An “item” is the singular, indivisible appropriation for a specific purpose (a PAP), not merely an expense category (PS, MOOE, CO).
– Expense categories within an existing item may be funded by augmentation if the PAP is deficient and requisites are met.
Cross-Border Transfers
– Section 25(5), Article VI prohibits any transfer of appropriations across branches; savings transfers must be within the same constitutional department or body.
– Administrative Code Section 39 (cross‐border augmentations) is void to the extent it conflicts with the constitutional limitation on transfers.
Use of Unprogrammed Funds
– Unprogrammed Funds may be released only upon satisfaction of conditions in the GAAs.
– GAAs 2011–2013 require releases when actual revenue collections exceed the original revenue targets submitted in the President’s Budget of Expenditures and Sources of Financing (BESF).
– Collections from sources not originally targeted (e.g., foreign-assisted loans, windfall income) may fund unprogrammed releases under provisos.
– Releases may occur within the fiscal year based on aggregate or source‐specific revenue surpluses, subject to quarterly monitoring and reportorial requirements to Congress.
Doctrine of Operative Fact
– Unc
Case Syllabus (G.R. No. 209287)
Background and Consolidation
- Multiple petitions under Rule 65 challenged the Disbursement Acceleration Program (DAP) and related issuances.
- DAP was a policy tool of the Executive to accelerate spending on priority programs and projects.
- Related petitions joined cases G.R. No. 209287, 209135, 209136, 209155, 209164, 209260, 209442, 209517, 209569.
- Core question: Did DAP and National Budget Circular No. 541 violate the Constitution’s prohibitions on transfer of appropriations and the executive’s augmentation powers?
Petitioners’ Allegations
- Executive acted with grave abuse of discretion in implementing DAP.
- Funds came from “savings” and “unprogrammed funds” improperly declared.
- Cross-border transfers from Executive savings to other branches, including legislature and commissions.
- Some DAP-funded programs had no appropriation items under the annual General Appropriations Acts (GAAs).
- Unprogrammed Fund releases occurred without showing that revenue collections had exceeded original revenue targets.
Respondents’ Motions for Reconsideration
- Procedural: No actual case or controversy; petitioners lacked standing; case mischaracterized and constitutionalized.
- Substantive: Executive properly interpreted “savings”; unobligated allotments and unreleased appropriations constituted savings; President may transfer savings pursuant to Administrative Code and GAAs; revenue-target test for Unprogrammed Funds only requires each source to exceed its target; operative-fact doctrine misapplied.
Court’s Dispositive Ruling
- Partially grants respondents’ motion for reconsideration to clarify certain points.
- Denies petitioners’ motion for partial reconsideration.
- Declares as unconstitutional and void:
• Withdrawal of unobligated allotments and declaration of savings without complying with statutory definition under GAAs.
• Cross-border transfers of savings by the Executive to augment other branches.
• Release and use of Unprogrammed Funds without certification that revenue collections exceeded targets.
Judicial Review and Constitutional Supremacy
- Power of judicia