Case Summary (G.R. No. 189774)
Key Dates and Applicable Law
Decision Date: April 22, 1991
Applicable Constitution: 1987 Philippine Constitution
Relevant statutes and decrees questioned: Presidential Decrees (P.D.) Nos. 81, 1177 (Section 31), and 1967; Republic Act (R.A.) No. 4860, and R.A. 245 (as amended)
Nature of the Case
The petitioners challenged the constitutionality of an automatic appropriation amounting to P86.8 billion designated for debt service within the 1990 national budget totaling P233.5 billion. This automatic appropriation was mandated through several presidential decrees issued during the Marcos regime. Petitioners argued these decrees had become invalid or inoperative following the abolition of Marcos’ one-man legislature and the adoption of the 1987 Constitution, which restored legislative powers exclusively to the Philippine Congress.
Petitioners’ Arguments
- Constitutional Violation of Budgetary Priority: Petitioners relied on Section 5, Article XIV of the 1987 Constitution, which mandates the State to assign the highest budgetary priority to education. They emphasized that the 1990 budget allocated only P27 billion to education, substantially less than the P86.8 billion appropriated automatically for debt service, which they claimed violated the constitutional mandate.
- Invalidity of Presidential Decrees: Since presidential decrees were issued during martial law under President Marcos, petitioners asserted these became functus officio with the restoration of Congress’ legislative powers under the new Constitution. They contended new legislation was necessary to authorize automatic appropriations, which Congress had not enacted.
- Non-compliance with Article VI, Sections 24 and 29(1) of the Constitution: Petitioners argued that appropriations must originate from Congress and be approved by the President, and no money shall be paid from the Treasury without an appropriation made by law. Thus, the automatic appropriation amount was indefinite and constituted an unlawful delegation of legislative power to the Executive.
Respondents’ Arguments
Respondents contended the matter raised a political question better addressed by the legislative body and the Executive, not the courts. They insisted the presidential decrees remained operative under the transitional provisions of the 1987 Constitution, specifically Section 3, Article XVIII, which provides that existing laws and decrees not inconsistent with the Constitution shall remain effective until amended or repealed by Congress. They also argued the automatic appropriation was designed to ensure timely servicing of national debt, which was a matter of national interest and economic survival.
Justiciability and Political Question Doctrine
The Court found a justiciable controversy meriting judicial determination, distinguishing the case from purely political questions. It cited prior decisions affirming its jurisdiction to resolve constitutional disputes involving separation of powers and budgetary authority.
Analysis on Budgetary Priority to Education
While recognizing the constitutional mandate to prioritize education as the highest budget item, the Court interpreted that Congress retains discretion to also appropriate funds required to meet national obligations, including enormous foreign and domestic debts inherited from prior administrations. The Court noted the education budget under the General Appropriations Act was the single largest departmental allocation, thereby confirming compliance with the constitutional mandate despite the larger automatic appropriation for debt service.
Operativeness of Questioned Presidential Decrees
The Court held that the presidential decrees authorizing automatic appropriations for debt service remain operative as they are not inconsistent with the 1987 Constitution and have neither been amended nor repealed by Congress. The transitional provision in Section 3, Article XVIII preserved their continuing effect. The decrees were interpreted as enabling the government to respond flexibly and promptly to debt obligations without awaiting separate appropriation laws for each payment, essential for maintaining the country's credit standing.
Compliance with Legislative Appropriation Requirements
The Court rejected the petitioners’ contention that the decrees violated Sections 24 and 29(1) of Article VI, ruling the term "law" includes existing laws such as the presidential decrees that constitute standing appropriations unless repealed. The constitutional provisions requiring bills to originate from the House and be approved by Congress address new appropriations, not continuing authorizations already existing in the legal framework. The Court further distinguished the Philippine Constitution from foreign precedents requiring a fixed, exact amount for appropriations.
Undue Delegation of Legislative Power
Applying jurisprudence, the Court observed that while the legislature cannot delegate the power to make laws, it can vest the Executive with discretion to execute laws under clearly established standards. The presidential decrees were found to be complete and sufficiently definite in their essential terms—they specify the purpose of appropriation, i.e., servicing principal and interest on debts, with amounts determinable as they become due. The Executive’s role is limited to implementing this legislative framework, not creating new policy or law.
Government Budget Process Explanation
The Court elaborated on the four phases of government budgeting: preparation (led by the Executive), legislative authorization (Congress enacts appropriation laws), execution (administrative release and payment of funds), and accountability (post-expenditure evaluation). It stressed that debt service appropriations under the questioned decrees are separate from the General Appropriations Act and enjoy standing authorization, thus do not require annual appropriation bills by Congress.
Conclusion of the Court
The Court dismissed the petition, ruling the automatic
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Case Syllabus (G.R. No. 189774)
Background and Nature of the Case
- This case is one of first impression addressing the constitutionality of the automatic appropriation for debt service included in the 1990 Philippine national budget.
- The 1990 budget totaled P233.5 billion, composed of P98.4 billion in automatic appropriations (with P86.8 billion earmarked for debt service) and P155.3 billion under the General Appropriations Act (Republic Act No. 6831).
- Education's budget allocation was P27,017,813,000.00, significantly less than the debt service amount.
- The automatic appropriations for debt service were authorized by three presidential decrees issued under the Marcos administration:
- P.D. No. 81 (Amending certain provisions of RA 4860 relating to foreign borrowing),
- P.D. No. 1177 (Revising the budget process to institutionalize budgetary innovations), and
- P.D. No. 1967 (Strengthening the guarantee and payment positions regarding contingent liabilities on loans).
- Petitioners, both Senators, claimed standing to question the constitutionality of these decrees and sought to prohibit disbursement for debt service under the 1990 budget based on them.
- Respondents argued the issue concerns a political question inappropriate for judicial review and defended the appropriations as necessary for national interest and debt management.
Justiciability of the Case and the Controversy Presented
- The Supreme Court held the controversy to be justiciable, referencing prior rulings affirming the Court's duty to resolve actual controversies raising constitutional questions—even if involving political elements.
- The key legal questions presented were:
- Whether the P86 billion appropriation for debt service violates Section 5, Article XIV of the Constitution, mandating the highest budgetary priority for education.
- Whether P.D. Nos. 81, 1177, and 1967 remain operative under the 1987 Constitution.
- Whether these decrees violate Section 29(1), Article VI of the Constitution, which prohibits treasury disbursements except pursuant to appropriation made by law.
On the Alleged Violation of the Budgetary Priority for Education
- Petitioners argued Section 5, Article XIV’s mandate for the highest budgetary priority for education was violated because debt servicing appropriations exceeded education's allocation (P86 billion vs. P27 billion).
- The Court acknowledged the constitutional intent to attract and retain teaching talent through adequate remuneration.
- However, it emphasized Congress’s discretion to balance competing national interests, noting that since 1985, education funding tripled and teacher compensation doubled.
- The Department of Education, Culture and Sports received the largest departmental budget, indicating compliance with the constitutional mandate.
- The Court held that the higher debt service appropriation does not per se violate the constitutional priority given to education, especially considering the need to honor national debt for economic survival and honor.
On the Operativeness and Constitutionality of the Presidential Decrees
- Petitioners contended the automatic appropriations under the decrees became functus officio after Marcos’s ouster, requiring new legislation by Congress to remain operable.
- They argued these decrees violate Section 3, Article XVIII’s transitory provision since they allegedly conflict with Sections 24 and 29, Article VI—the requirements that appropriations be enacted by law approved by Congress and the President.
- The Court ruled these presidential decrees remain operative insofar as they are not inconsistent with the Constitution, referencing the transitory clause preserving existing laws