REPUBLIC OF THE PHILIPPINES
SUPREME COURT
MANILA
EN BANC
GRECO ANTONIOUS BEDA B. BELGICA, et al.,
- versus -
Petitioners,
G.R. No. 209442
(Consolidated with G.R. No. 209287 and others)
PRESIDENT BENIGNO SIMEON C. AQUINO III, et al.,
Respondents. x ------------------------------------------------------- x
MOTION FOR PARTIAL RECONSIDERATION
Traffic lights are mere suggestions
Especially when there are no collisions
But if you are caught for the violation
Plead color blindness for exemption
Petitioners, by counsel, respectfully move for partial reconsideration of the
Decision of the Honorable Court dated 1 July 2014 (a copy of which was received by
Petitioners on 4 July 2014) insofar as the Honorable Court:
Failed to declare as UNCONSTITUTIONAL and ILLEGAL all moneys under the Disbursement Acceleration Program (DAP) used for alleged augmentation of appropriation items that DID NOT HAVE
ACTUAL DEFICIENCIES.
Preliminary Matters
It does not help good fiscal management for the Honorable Court to treat the budgetary process as mere suggestions and not a set of rules governing the conduct of budgetary officials. And good faith as a defense by sophisticated and knowledgeable officials with access to the whole legal arsenal of the government is a step back from the ideals of justice and democracy under the Constitution.
1

Budget Process Not Merely Descriptive but Mandated By Law
The Decision of the Honorable Court on the substantive issues start with a discussion on the Budget System of the Philippines characterized as “descriptive, not normative” by Justice Leonen. The Honorable Court’s description and such characterization by Justice Leonen, it is respectfully submitted, do not reflect the legal significance of the process described and serve to mislead the public that the budget process has no legal basis and not ordained by law.
It is unfortunate that the Honorable Court cited authors and government internet sites but not the applicable law. While the Decision cited some provisions of
Presidential Decree No. 1177, it did not, in its entire discussion on the budget process, cite even a single provision of the Administrative Code of 1987.
As early as 1991, the four phases of the budget process enumerated in the
Decision was cited approvingly by the Honorable Court in the case of Guingona vs.
Carague 1 , as follows:
The Government budgetary process has been graphically described to consist of four major phases as aptly discussed by the
Solicitor General:
The Government budgeting process consists of four major phases:
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.
1 G.R. No. 94571; 22 April 1991.
2

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 wisdomformulates 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.
Debt service is not included in the General
Appropriation Act, since authorization therefor already exists under RA No. 4860 and 245, as amended and PD 1967.
Precisely in the fight of this subsisting authorization as embodied in said Republic Acts and PD for debt service,
Congress does not concern itself with details for implementation by the Executive, but largely with annual levels and approval thereof upon due deliberations as part of the whole obligation program for the year. Upon such approval, Congress has spoken and cannot be said to have delegated its wisdom to the Executive, on whose part lies the implementation or execution of the legislative wisdom.
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.
Release from the debt service fired is triggered by a request of the Bureau of the Treasury for allotments from the
Department of Budget and Management, one quarter in advance of payment schedule, to ensure prompt payments. The
Bureau of Treasury, upon receiving official billings from the creditors, remits payments to creditors through the Central
Bank or to the Sinking Fund established for government security issues (Annex F).
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.
There being no undue delegation of legislative power as clearly above shown, petitioners insist nevertheless that subject presidential decrees constitute undue delegation of legislative power to the executive on the alleged ground that the
3

appropriations therein are not exact, certain or definite,invoking in support therefor the Constitution of Nebraska, the constitution under which the case of State v. Moore, 69 NW
974, cited by petitioners, was decided. 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(l). 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.
17
While the abovementioned case referred to the second phase of the budget process as legislative authorization, the Decision refers to it as Budget Legislation which pertains to one and same thing, that is, the enactment by Congress of the general appropriations act based on the budget submitted by the President.
2
Like the Decision in this case, however, the Guingona vs. Carague case, while attributing the summation of the budgetary process to the Solicitor General, failed to recognize the legal basis therefor.
2 Section 22, Article VII, 1987 Constitution.
4

Constitution Requires the Form, Content, and Manner of Budget Preparation be
In accordance with Law
Section 15 (1), Article VI of the 1987 Constitution requires that the “form, content, and manner of preparation of the budget shall be prescribed by law.”
Pursuant to and in accordance with the said provision, the Administrative Code of
1987 provided for an entire book of provisions devoted solely on the “form, content, and manner of preparation of the budget.”
Book VI of the Administrative Code of 1987 is all about National Government
Budgeting. It has for its chapters, the following:
Chapter 1 – General Provisions
Chapter 2 – Budget Policy and Approach
Chapter 3 – Budget Preparation
Chapter 4 – Budget Authorization
Chapter 5 – Budget Execution
Chapter 6 – Budget Accountability
Chapter 7 – Expenditure of Appropriated Funds
Thus, and with due respect, to characterize the budget process as merely
“descriptive, not normative” and to propose a different “treatment of departments and offices granted fiscal autonomy” is to demean the legal significance thereof as if the process described is merely directory and not mandatory.
President Does Not have Free Rein on
Fiscal Planning and Budget Execution
This mischaracterization of the budget process sets the stage for the erroneous appreciation of the DAP as a “fiscal plan” or a “product of “plain executive policymaking” to stimulate the economy by way of accelerated spending.” 3 Under the DAP and the policy of “accelerated spending”, the keyword is “accelerated” and presupposes a faster disbursement of public funds. However, the unarticulated object of the acceleration in spending is entirely different from the appropriations contained in the budget as the 116 list of Projects show and as the very provisions of National
Budget Circular 541 provide. Instead of accelerating the implementation of these projects covered by appropriations in the budget and thus accelerating the spending in those projects, the government chose instead to defund said projects and used the money to fund projects not otherwise covered by congressional appropriations in the budget.
With that scheme, the principal question that must be asked is not whether the money was wasted or pocketed by government officials or private individuals.
What must be asked is what such a move caused to the carefully crafted budget of the government in relation to its development goals. Spending per se is, after all, not the
3 Decision, p. 35.
5

purpose of the enactment of the budget. The budget is designed as a means for government to realize the goals of development it sought to achieve as articulated in its short, medium and long-term development plans.
It must be emphasized that the budget as proposed and enacted is “formulated as an instrument for the attainment as part of national development goals and as part of the planning-programming-budgeting continuum.” 4 It is required to be “prepared as an integral part-of a ‘long-term budget picture’ specifically in relation to the longterm economic and physical framework plans of government, multi-year requirements of approved programs and projects, organizational and personnel development strategies, and other commitments entered into or otherwise assumed by government.” 5
The process starts with the submission of the request for budget estimates/proposal which include various items providing the rationale, background and linkages with development goals/plans 6 ; it is prepared “taking into full and careful consideration the opportunities and requirements specific to the various regions of the country” and shall originate from regional offices of the government agencies 7 ; it is then “evaluated using a zero-base approach and on the basis of (1) relationship with the approved development plan, (2) agency capability as demonstrated by past performance, (3) complemented role with related activities of other agencies, and (4) other similar criteria” 8 ; and submitted for “prior approval of the Head of the Department concerned or by the Chairman or Chief Executive
Officer of a Cabinet level body” before submission to the President and Congress.
9
The President, and in no small measure, Congress spend considerable time and government resources in the evaluation, assessment and approval of the budget for any given fiscal year.
With respect to budget execution, the basic rule is that “All money appropriated for functions, activities, projects and programs shall be available solely for the specific purposes for which these are appropriated.” 10
The President, though, is given authority to “realign” allotments (not funds) – the “authority to modify or amend any allotment previously issued” – and this can only be exercised in case the “probable receipts from taxes or other sources of any fund will be less than anticipated and that as a consequence the amount available for the remainder of the term of the appropriations or for any allotment period will be less than the amount estimated or allotted therefor.” 11 This, in one provision of the
Administrative Code of 1987, is the subject of the long disquisition of Justice Leonen
4 Section 4, Book VI, Administrative Code of 1987.
5 Ibid., Section 7.
6 Ibid., Section 14.
7 Ibid., Section 15.
8 Ibid., Section 16.
9 Ibid., Section 22.
10 Section 32.
11 Section 33 (6).
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on the subject of realignments.
12 But then again, as with the Honorable Court’s
Decision, the good justice failed to cite the applicable provision of the law and relied instead on the pronouncements of the executive and on constitutional provisions by implication.
DAP’s Disregard of the Budget Process
Wasted Government Time and Resources and Damaged Developmental Goals
It is under such a framework that the “success” of the DAP as evaluated by the
Honorable Court should be viewed. When the DAP disregarded the appropriations under the relevant laws by the withdrawal of unobligated allotments for projects duly approved by the government agencies, the President and Congress, the President disregarded such well-tailored planning-programming-budgeting and approval process. The President wasted not just the time of government personnel involved in the proposal, formulation and approval of the budget but likewise wasted the financial resources spent for the conduct of such elaborate approval process required by law. On this very point alone, it cannot be said that the DAP has not done any damage to the government.
More importantly, when the President, through the DAP, withdrew the unobligated allotments earmarked for the appropriations items approved by
Congress, the President deprived the recipients or beneficiaries of such appropriations items to the extent of the withdrawn unobligated allotments, if not the entire appropriations themselves.
Thus, in the Memorandum to the President dated 12 October 2011 13 , the P30
Billion in “Unreleased Personnel Services” constitutes a corresponding deprivation of the public of government services by government personnel who could otherwise have provided the required service if they were only hired by the government. In this case, to be true to its nomenclature, the Disbursement Acceleration Program should have required the concerned government agencies to fast track the hiring of personnel so as to meet the requirements of public service. To the extent that the proposed hiring was not done, to such extent is the damage caused to the public. And it is damage worth P30 Billion. This figure is just a portion of the total funds taken from Unreleased Personnel Services disclosed by the government in its Consolidated
Comment filed with the Honorable Court. The amount for “2012, of the total
P59,882,977,000 in augmentations, P42,426,362,000 came from appropriation balances from Personnel Services.” 14
To give a more concrete picture of the effect of such deprivation of government service to the public, a simple comparison of the P42.4 Billion unreleased budget for personnel services under the given example is almost equivalent to the combined/total 2013 budget for personnel services, capital outlay
12 See Concurring Opinion, pp. 7-12.
13 See Decision, pp. 37-40.
14 Par. 38.
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and maintenance and other operating expenses of all the other departments of the government, to wit:
1. Congress
2. Judiciary
3. Commission on Elections - P8.2 Billion;
4. Civil Service Commission - P935 Million;
5. Commission on Audit
6. Office of the Ombudsman -
7. CHR
TOTAL
----------------------------
-
-
-
-
-
P10 Billion;
P17 Billion;
P7.6 Billion;
P1 Billion;
P298 Million;
____________
P45.0 Billion
Imagine if the foregoing departments and constitutional commissions were not funded – the effect on the services of the government could be anything but horrendous. The extent of lost opportunity or more accurately, the deprivation of public service because of the present administration’s failure to employ P42
BILLION for personnel services is incalculable. How this affects the development goals that the government set for itself is quite unclear.
With respect to the second item in the memorandum where P482 Million came from “Unreleased appropriations (slow moving projects and programs for discontinuance),” there were certainly corresponding projects totaling the same amount that were not implemented. To such an extent, it can be said that the public was deprived of the projects otherwise provided for by law. Again, if accelerated spending is the aim of the fiscal policy, the required action is to prompt the agencies concerned to expedite in accordance with law, the procurement for such project and not use the money for altogether different projects.
Overall, the concept of DAP as a stimulus package does not simply hold water. This is so because in public finance, a stimulus package requires congressional enactment over and above the regular budget of the government. It requires
Congressional approval and cannot be done solely by the executive considering that
“No money shall be paid out of the Treasury except in pursuance of an appropriation made by law.” 15 This is because there was nothing in DAP that authorized the use of money over and above the appropriations authorized under the relevant General
Appropriations Acts (GAA). To the extent that “unobligated allotments” for certain projects, activities or programs (PAP) were withdrawn under cover of savings, it is only to such an extent that the country was benefitted, if at all, by the DAP. It is a case of transferring money from one pocket to the other, from one appropriation item to other “new projects” – in either case, there was no increase of the money from the original amount.
In other words, if only the present administration stuck to the implementation of the GAAs, the same total amount stated in the budget would have been expended and all the elaborate and complicated planning, budgeting and approval process
15 Section 29 (1), Article Vi, 1987 Constitution.
8

would not have been put to naught and government would have ensured that spending was in line with approved long-term development goals.
With all due respect, Justice Leonen’s invocation of the President’s power of control over the executive department to justify what he suggests as “realignments” or “savings” due to final discontinuance can just as well be applied for accelerating the implementation of the PAPs as provided for in the relevant GAAs. The reasoning seems to be that with respect to the implementation of the “slow-moving projects”, the President can use another hat aside from his exclusive control of the executive department to justify final discontinuance or withdrawal of unobligated allotments, but claim credit for fast tracking DAP PAPs funded by the withdrawn allotments. It is like saying that if the President’s right hand is lazy, wounded or what have you and cannot therefore fire a pistol, he is justified in using his left hand to fire an automatic rifle forgetting that in both cases, he is the only actor.
There is simply no amount of ratiocination based on the President’s power of control of the executive department that can justify taking funds from slow-moving projects and using the same to fund his pet projects, especially considering that the original projects were products of carefully crafted joint executive and legislative efforts while the DAP projects were not even provided for under the general appropriations law.
Transfer of Appropriations versus
Transfer of Funds
This brings the matter to the seeming confusion over terminologies, specifically the use of the phrase “transfer of funds” as a term equivalent to the concept of “transfer of appropriations.” 16 terms are not the same.
Petitioners respectfully submit that the two
The term “appropriation” has been defined by law as referring “to an authorization made by law or other legislative enactment, directing payment out of
17 government funds under specified conditions or for specified purposes.” definition is substantially the same as those cited 18
Decision as follows:
… 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 government expenditure, or to some individual purchase or expense.” As pointed out in Gonzales v. Raquiza: ‘“In a
Such
by the Honorable Court in its
16
17
Decision, pp. 49-55.
Section 2 (1), Chapter 1, Book VI, Administrative Code of 1987.
18 As is the case with the budgetary process, it is disturbing that the Honorable Court failed to cite the relevant provision of the law and presented the definition in the dictionary and in case law when it is the law that requires or demands compliance, not court decisions. The primacy of the law is paramount and the role of case law is secondary, used only as an aid in the understanding of the law.
9

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.’”
When there is an appropriation or appropriations law, it does not mean that there exist automatically, actual government funds to back it. In fact, upon enactment of an appropriations law such as the GAAs (unless it is a case of a special appropriations with existing funding), the money to fund the appropriations still have to be sourced from the revenues of the government. The concept of appropriation is therefore separate from that of funds consisting of the money that pays for the appropriation.
What the Constitution prohibits is the transfer of appropriations and not the mere transfer of funds and this is clear from Section 25 (5), Article VI of the 1987
Constitution which reads:
5) No law shall be passed authorizing any transfer of
appropriations; however, 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 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. (Emphasis supplied)
On the other hand, there are few constitutional provisions that deal with or entail the transfer of fund but not transfer of appropriations. These are:
Section 29. (1) No money shall be paid out of the
Treasury except in pursuance of an appropriation made by law. xxx
(3) All money collected on any tax levied for a special purpose shall be treated as a special fund and paid out for such purpose only. If the purpose for which a special fund was created has been fulfilled or abandoned, the balance, if any, shall be transferred to
the general funds of the Government. (Emphasis supplied)
From the foregoing provisions, it is clear that transfer of funds, per se – as in paying money out from the Treasury to cover for an appropriation or simply the release of funds, or transferring a special fund to the General fund after the fulfillment or abandonment of the purpose of the special fund – are allowed.
Aside from the foregoing provisions of the Constitution, the Administrative
Code of 1987 provide for the reversion of funds or unexpended balances of
10

appropriations and continuing appropriations 19 as well as provisions on the expenditure of funds or fund release.
20
What then constitutes transfer of appropriations? Or more accurately, when and how does a transfer of appropriation take place? In the determination of this issue, the exposition by the Honorable Court of the budget execution stage would be of invaluable help, to wit:
c.3. 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.
19
20
Section 28.
Section 34.
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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.
Given the foregoing process in the allotment, obligation and releases of appropriation, what is the reasonable interpretation of when there merely a transfer of funds and when there is a transfer of appropriation? What interpretation will give effect to the prohibition against transfer of appropriation but will not unduly stifle the President’s power and discretion on realignment of allotment and transfer of funds?
It is respectfully submitted that the overriding qualification is the purpose of the movement being sought and its effect on the appropriation item under the GAA.
A transfer of appropriations takes place anywhere between the passage of the GAA and before the actual release of cash to pay for the expenditure subject of the appropriation item with the appropriated funds being taken out and used for purposes other than the one specified in the appropriation item. The resultant effect is the actual de-funding of the appropriation item regardless of whether the move qualifies as a declaration of savings.
On the other hand, a realignment of allotment happens only from the approval of the Allotment Release Program (ARP) and upto the release of the Special
Appropriation Release Order (SARO) but before a Notice of Cash Allocation (NCA) is issued. A transfer of funds may cover the whole spectrum when there is actual movement of funds from the Treasury to the respective accounts of the government agencies as when a release of cash or an NCA is issued, or from the special accounts to the general fund when the purpose of the special fund was already accomplished, or from the accounts of government agencies to the general fund in case of reversion of balances.
12

Applied to the DAP, the withdrawal of unobligated allotments has for its purpose the financing of projects other than those subject of the appropriation items thereby resulting in the actual de-funding of the items subject of the appropriations.
This is a clear case of transfer of appropriations. It is not merely a case of realignment of allotments as there is an actual de-funding of the original appropriation item and the money is used for purposes other than the one identified in the appropriations law.
Justice Leonen put this concept from the perspective of the recipient of the transferred funds in relation to the concept of augmentation as a permissible transfer of appropriation, to wit:
Any expenditure beyond the maximum amount provided for the item in the appropriations act is an augmentation of that item. It amounts to a transfer of appropriation. This is generally prohibited except for instances when “upon implementation or subsequent evaluation of needed resources, [the appropriation for a program, activity or project existing in the General Appropriations Act] is determined to be deficient.” In which case, all the conditions provided in Article VI, Section 25 (5) of the Constitution must first be met.
While Petitioners do not agree fully with the sweeping statement that “Any expenditure beyond the maximum amount provided for in the item in the appropriations act is an augmentation of that item,” the quoted passage nonetheless shows one example, but not the only instance, of a transfer of appropriations. This is because a transfer of appropriations is not principally defined by its effects on its recipient but on the consequence of de-funding the original appropriation subject thereof and there is always the possibility, as in the DAP, that the money taken out from the original appropriation is used for purposes that have no appropriation cover.
Unconstitutional and Illegal Augmentations
Given the foregoing clarification on the concepts of transfer of appropriations, realignment of allotments and transfer of funds, we can now focus on the one and only instance of permissible transfer of appropriations, that is, augmentation of appropriations.
Any discussion of augmentation with the use of savings in the sense used in the
Constitution should start with Section 29 (1), Article VI of the Constitution on when public money can be paid out of the Treasury. The provision reads:
Section 29. (1) No money shall be paid out of the Treasury except in pursuance of an appropriation made by law.
Thus, the basic rule is that money can only be paid out of the Treasury when there is an “appropriation made by law.”
13

However, the Constitution laid out limitations on the power of Congress to enact appropriations laws. One such limitation is with respect to the maximum amount that it can allot for a particular appropriation. The Constitution prohibits
Congress from increasing the appropriations recommended by the President in his budget submissions. Section 25 (1), Article VI of the Constitution states:
Section 25. (1) The Congress may not increase the
appropriations recommended by the President for the operation of the Government as specified in the budget. The form, content, and manner of preparation of the budget shall be prescribed by law. (Emphasis supplied)
Given the foregoing limitation, it is thus the President who sets the
maximum amount that may be appropriated for any item in the budget. Such initial determination by the President is an expression of his department’s good faith assessment that the PAP subject of the appropriation would require that amount of money for its successful implementation. However, it is Congress that finally
decides, subject to the maximum amount recommended by the President, how
much of government’s money should be spent for the PAP for the subject fiscal year.
It is under such context that the President’s power to augment by the use of savings should be viewed. The constitutional provision states:
Section 25. (5) No law shall be passed authorizing any
transfer of appropriations; however, 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, 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. (Emphasis supplied)
In implementation of Sections 29 (1) in relation to the first sentence of
Section 25 (5) of Article VI of the Constitution, the Administrative Code of 1987 laid down a restrictive rule on the use of public funds thus:
Section 32. Use of Appropriated Funds. – All moneys appropriated for functions, activities, projects and programs shall be available solely for the specific purposes for which these are
appropriated. (Emphasis supplied)
Thus, the general rule is that transfer of appropriations is prohibited since a transfer of appropriation necessarily involves the use of the money appropriated for purposes other than what is specified in the appropriation item involved.
The only exception allowed under Section 25 (5), Article VI of the
Constitution that nevertheless requires an enabling law, is augmentation with the use
14

of savings from the same department of the government. It is worthy to note that the said constitutional provision did not define augmentation.
Pursuant thereto, the enabling law promulgated is Section 39 of Book VI of the Administrative Code of 1987 which states:
Section 39. Authority to Use Savings in Appropriations to Cover
Deficits. – Except as otherwise provided in the General
Appropriations Act, any savings in the regular appropriations authorized in the General Appropriations Act for programs and projects of any department, office or agency, may, with the approval of the President, be used to cover a deficit in any other item of
the regular appropriations; provided, that the creation of new positions or increase of salaries shall not be allowed to be funded from budgetary savings except when specifically authorized by law; provided, further, that whenever authorized positions are transferred from one program or project to another within the same department, office or agency, the corresponding amounts appropriated for personal services are also deemed transferred, without, however increasing the total outlay for personal services of the department, office or agency concerned. (Emphasis supplied)
A closer examination of the provision, however, reveals that, aside from being subject to the provisions of relevant general appropriations acts, it did not hew closely to Section 25 (5), Article VI of the Constitution in that it gave the President power to declare savings from appropriation involving any department of the government (including, presumably, Congress and the constitutional commission) and to use the same “to cover a deficit in any other item in the regular appropriations.” Thus, it is covered by the constitutional prohibition that “no law shall be passed authorizing any transfer of appropriations” unless its interpretation is limited to the executive department. The President, based on the said provision alone and without consideration of the relevant constitutional provisions, cannot claim validity of his actions by relying mainly on the said provision for he has likewise sworn to uphold and defend the Constitution and not merely to execute the laws.
Being the head of state, the President is the first among Filipinos, tasked with the observance of the provisions of the Constitution.
It has to be emphasized at this point that Section 39 requires that savings may only be used “to cover a deficit” in an appropriation. Although the provision did not define what constitutes a “deficit,” there is no controversy as regards its ordinary signification. Black’s Law Dictionary 21 defines deficit as follows:
Deficit. An excess of expenditures over revenues. Excess of liabilities and debts over income and assets. A negative balance in the earnings and profits account. Financial loss in operation of business.
Something wanting, generally in the accounts of one intrusted with
21 Sixth Edition, @1990 at p. 422.
15

money, or in the money received by him. The term is broad enough to cover defalcation, misappropriation, shrinkage, or costs, and, in its popular meaning, signifies deficiency from any cause.
In accounting, opposite of surplus on the balance sheet. May represent accumulated losses. A negative balance in the earnings and profits account.
More importantly, however, the applicable general appropriations acts in this case defined what constitutes augmentation. By the very terms of Section 39 Book VI of the Administrative Code of 1987, the provision was rendered inoperative by the enactment of the GAAs with provisions on augmentation with the use of savings. The
GAAs for 2011, 2012 and 2013 all provide the following permissible transfers of appropriation, to wit:
A. General Provisions on the Use of Savings, R.A. 10147 (GAA FY
2011)
Sec. 59. Use of Savings. The President of the Philippines, the Senate
President, the Speaker of the House of Representatives, the Chief Justice of the Supreme Court, the Heads of Constitutional Commissions enjoying fiscal autonomy, and the Ombudsman are hereby authorized to augment any item in this Act from savings in other items of their respective appropriations.
Sec. 60. Meaning of Savings and Augmentation. Savings refer to portions or balances of any programmed appropriation in this Act free from any obligation or encumbrance which are: (i) still available after the completion or final discontinuance or abandonment of the work, activity or purpose for which the appropriation is authorized; (ii) from appropriations balances arising from unpaid compensation and related costs pertaining to vacant positions and leaves of absence without pay; and (iii) from appropriations balances realized from the implementation of measures resulting in improved systems and efficiencies and thus enabled agencies to meet and deliver the required or planned targets, programs and services approved in this Act at a lesser cost.
Augmentation implies the existence in this Act of a program, activity, or project with an appropriation, which upon implementation, or subsequent evaluation of needed resources, is determined to be deficient. In no case shall a non-existent program, activity, or project, be funded by augmentation from savings or by the use of appropriations otherwise authorized in this
Act.
Sec. 61. Priority in the Use of Savings. In the use of savings, priority shall be given to the augmentation of the amounts set aside for compensation, year-end bonus and cash gift, retirement gratuity, terminal leave benefits, old-age pension of veterans and other personnel benefits authorized by law, and those expenditure items authorized in agency special provisions, in
Section 16 and in other sections of the General Provisions of this Act.
B. General Provisions on the Use of Savings, RA 10155 (FY2012 GAA)
Sec. 53. Use of Savings. The President of the Philippines, the Senate
President, the Speaker of the House of Representatives, the Chief Justice of the Supreme Court, the Heads of Constitutional Commissions enjoying fiscal autonomy, and the Ombudsman are hereby authorized to augment any item in this Act from savings in other items of their respective appropriations.
Sec. 54. Meaning of Savings and Augmentation. Savings refer to portions or balances of any programmed appropriation in this Act free from any
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obligation or encumbrance which are: (i) still available after the completion or final discontinuance or abandonment of the work, activity or purpose for which the appropriation is authorized; (ii) from appropriations balances arising from unpaid compensation and related costs pertaining to vacant positions and leaves of absence without pay; and (iii) from appropriations balances realized from the implementation of measures resulting in improved systems and efficiencies and thus enabled agencies to meet and deliver the required or planned targets, programs and services approved in this Act at a lesser cost.
Augmentation implies the existence in this Act of a program, activity, or project with an appropriation, which upon implementation or subsequent evaluation of needed resources, is determined to be deficient. In no case shall a non-existent program, activity, or project, be funded by augmentation from savings or by the use of appropriations otherwise authorized in this
Act.
Sec. 55. Priority in the Use of Savings. In the use of savings, priority shall be given to the augmentation of the amounts set aside for compensation, year-end bonus and cash gift, retirement gratuity, terminal leave benefits, old-age pension of veterans and other personnel benefits authorized by law, and those expenditure items authorized in agency special provisions and in other sections of the General Provisions of this Act.
C. General Provisions on the Use of Savings, RA 10352 (FY2013 GAA)
Sec. 52. Use of Savings. The President of the Philippines, the Senate
President, the Speaker of the House of Representatives, the Chief Justice of the Supreme Court, the Heads of Constitutional Commissions enjoying fiscal autonomy and the Ombudsman are hereby authorized to use savings in the their respective appropriations to augment actual deficiencies incurred for the current year in any item of their respective appropriations.
Sec. 53. Meaning of Savings and Augmentation. Savings refer to portions or balances of any programmed appropriation in this Act free from any obligation or encumbrance which are: (i) still available after the completion or final discontinuance or abandonment of the work, activity or purpose for which the appropriation is authorized; (ii) from appropriations balances arising from unpaid compensation and related costs pertaining to vacant positions and leaves of absence without pay; and (iii) from appropriations balances realized from the implementation of measures resulting in improved systems and efficiencies and thus enabled agencies to meet and deliver the required or planned targets, programs and services approved in this Act at a lesser cost.
Augmentation implies the existence in this Act of a program, activity, or project with an appropriation, which upon implementation or subsequent evaluation of needed resources, is determined to be deficient. In no case shall a non-existent program, activity, or project, be funded by augmentation from savings or by the use of appropriations otherwise authorized in this
Act.
Sec. 56. Priority in the Use of Savings. In the use of savings, priority shall be given to the augmentation of the amounts set aside for compensation, year-end bonus and cash gift, retirement gratuity, terminal leave benefits, old-age pension of veterans and other personnel benefits authorized by law, and those expenditure items authorized in agency special provisions and in other sections of the General Provisions of this Act.
Augmentation, therefore, has a clear legal meaning under the statutes and presupposes a deficiency in an existing appropriation before an augmentation can be made. More specifically, the law uses the term “deficient” determined after
“implementation or subsequent evaluation of needed resources.”
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Under the context where the President determines and sets the maximum amount of money for any given appropriation item, coupled with the prohibition against Congress increasing the appropriation amount recommended by the
President, there exists a clear constitutional policy against expenditure of public money over and beyond that recommended by the President.
To allow otherwise would be to sanction fiscal irresponsibility on the part of the President. To do so would mean giving the President more money for a project that he failed to properly assess and evaluate how much it would cost to implement.
To allow him to use more money than he initially determined would be required for a certain project would be to disregard the process of budgeting required to be observed under the law.
More importantly, allowing such a prerogative on the part of the President would defeat entirely the concept of checks and balances in the preparation and enactment of the budget. The Congress’ limited power to decrease or delete any appropriation item would be put to naught by the President’s power to augment by latching on an existing appropriation cover however tenuous its terms may be on the pretext that it is deficient.
Applied to the legislative department, the judiciary and other constitutional commissions especially those with “fiscal autonomy” whose budgets are released to them in full, the concept of deficiency in appropriation would be a near impossibility and augmentation can only mean giving money over and above the amounts appropriated under the law.
Put another way, considering that appropriations for these offices are fully funded, any savings generated would fund no deficiency and its expenditure would be over and above that provided by law.
A good illustration of this point would be in case of a hypothetical reconstruction of the Supreme Court’s building with an appropriation of say, P2 Billion for 2015. In the event the Honorable Court saves about P200 Million from the total cost of the building, the savings of P200 Million would be over and above all the other appropriations for the entire judiciary considering its “fiscal autonomy.” And with a loose definition of “deficiency,” “deficient” or “deficit” in relation to the term augmentation proposed as “Any expenditure beyond the maximum amount provided for the item in the appropriation act,” 22 any expenditure of such savings to other appropriation items would be more than the maximum amount recommended by the
President in his budget submissions to Congress.
The glaring effect of such statutory and constitutional interpretation in such an example would be best illustrated for the next succeeding fiscal year (2016) wherein the President and Congress would then be prohibited, by virtue of fiscal autonomy, from decreasing the budget of the Judiciary. What then would be the character of the
22 Leonen, Dissenting Opinion, p. 7.
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P2 Billion once appropriated for the SC building after its construction is already completed? Would it be considered savings available for augmentation of other items in the budget of the judiciary which are already fully funded? Would it mean that from thereon, the Judiciary would have an additional P2 Billion that it can treat as its own version of the DAP?
As regards the DAP “augmentations,” examples that really challenge one’s understanding of the concept of deficiency have already been cited by Petitioners as follows:
35. To illustrate, Respondents’ Table to has for its first item the
DREAM Project of the Department of Science and Technology under the 2011 budget (R.A. No. 10147) with an augmentation of One
Billion Six Hundred Million Pesos (P1,600,000,000.00).
23 A check with Republic Act No. 10147 disclosed that the project referred to by
Respondents had only a total appropriation of Five Hundred Thirty
Seven Million, Nine Hundred Ten Thousand Pesos (P537,910,000.00) under the category of Maintenance and Other Operating Expenses
(MOOE). How could a P537,910,000.00 appropriation be augmented by almost three times such amount, that is, P1.6 Billion for a total expenditure of P2.137 Billion?
36. The same thing is true with respect to the second item wherein the total appropriation under R.A. No. 10147, p. 711, under
Section A.II.a is P8,003,000.00 comprising of P5,975,000.00 for
Personal Services and P2,028,000.00 for MOOE. Yet, this was
“augmented by P300 Million, an amount more than twenty six (26) times the original appropriation.
37. Item 3 of Respondents’ Table 2 pertains to the
Repair/Rehabilitation of the PNP Crime Laboratory under R.A. No.
10147, p. 502 under Section A.III.a.1.a on “Conduct of operation and other related confidential activities against dissidents, subversives, lawless elements and organized crime syndicates and campaign against kidnapping, trafficking of women and minors, smuggling, carnapping, gunrunning, illegal fishing and trafficking of illegal drugs.” Clearly, the activity to be funded is a operational activity and not a capital outlay.
However, the “augmentation” expense of P3,255,837,000.00 is one for capital outlay for the “Repair/Rehabilitation of the PNP Crime
Laboratory.” What is worse is that out of the P48,152,488,000.00 total appropriation for the item under Sec. A.III.a.1.a,
P47,476,814,000.00 was for Personal Services while only
P675,674,000.00 was for MOOE. There is no appropriation for capital outlay. Thus, there existed no appropriation that Respondent could latch on to for this particular “augmentation.”
23 Consolidated Comment, par. 33.
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38. Item No. 4 has an “augmentation” of P2,516,167,000.00 for a P2 Billion original appropriation under Republic Act No. 10352.
39. For Item No. 5, the original appropriation under R.A. No.
10147 was only for Personal Services and MOOE and nothing for capital outlay. However, judging from the description of the project augmented which is “(PAF) On-Base Housing Facilities and
Communication Equipment,” the expenditure is of the nature of a capital outlay.
24
From the foregoing, there is an imperative need for a definitive ruling from the Honorable Court on what constitutes augmentation of deficient appropriation items as required by law and not just the mere existence of appropriation cover that can be “augmented.”
It has been proposed that the DAP expenditure by the President may be justified under Section 49 of Book VI of the Administrative Code of 1987. The provision reads in part thus:
Section 49. Authority to Use Savings for Certain Purposes. – Savings in the appropriations provided in the General Appropriations Act may be used for the settlement of the following obligations
incurred during a current fiscal year or previous fiscal years as may be approved by the Secretary in accordance with rules and procedures as may be approved by the President: xxx
(9) Priority activities that will promote the economic wellbeing of the entire, including food production, agrarian reform, energy development, disaster relief, and rehabilitation;
(10) Repair, improvement and renovation of government buildings and infrastructure and other capital assets damaged by natural calamities; xxx (Emphasis supplied)
Suffice it to state the very same provision requires that the obligations being funded from savings be “incurred during a current fiscal year or previous fiscal years.”
Hence, it can only refer to PAPs with existing appropriation covers and to those unpaid obligations of the previous years, especially contingent obligations that became due and demandable only during the current fiscal year as borne by the enumeration in the cited provision.
Given the foregoing discussion, it is respectfully submitted that augmentations can only be made to cover deficient appropriation items up to the extent of the maximum recommendation of the President for the PAPs subject of the augmentation.
24 See Petitioners’ Reply.
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PRAYER
Premises considered, Petitioners respectfully move for a Partial
Reconsideration of its Decision dated 1 July 2014 and to declare as
UNCONSTITUTIONAL and ILLEGAL expenditures from the Disbursement
Acceleration Program (DAP) used to augment appropriation items over ans above the maximum amount recommended by the President for the programs, activities and projects (PAPs) in the budget submitted by him to Congress or otherwise not deemed deficient.
Petitioners also pray for other just and equitable relief under the premises.
Makati City, 21 July 2014.
ROQUE & BUTUYAN LAW OFFICES
Counsel for the Petitioners
Antel Corporate Center
Unit 1904, 19 th Floor
121 Valero Street, Salcedo Village
Makati City 1227
Email: mail@roquebutuyan.com
Tel. Nos. 887-4445; 887-3894
Fax No. 887-3893
By:
H. HARRY L. ROQUE, JR
Roll No. 36976
PTR No. 4264493/30 Jan 2014/Makati
IBP Lifetime No. 01749/PPLM
MCLE Exemption No. IV-000513/15 Feb 2013
JOEL RUIZ BUTUYAN
Roll No. 36911
PTR No. 4264495 /30 Jan 2014 – Makati
IBP Lifetime No. 01742/Quezon City
MCLE Comp. No. IV-0011417/Jan 11, 2013
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ROGER R. RAYEL
Roll No. 44106
PTR No. 9308264/3 Feb 2014/Quezon City
IBP Lifetime No. 02159/Quezon City
MCLE Comp. No. IV-017519/19 Apr 2013
EXPLANATION
The foregoing pleading was served and filed by registered mail due to time, distance and manpower constraints.
ROGER R. RAYEL
Copy furnished:
OFFICE OF THE SOLICITOR GENERAL
134 Amorsolo Street, Legaspi Village
Makati City
ATTY. VICENTE V. MENDOZA
3 Aster Street, Fairview
Quezon City
AUGUSTO L. SYJUCO
No. 4 Rodriguez St., Sta. Barbara
Iloilo City
ATTY. WANDA M. TALOSIG
No. 321 FEMII Bldg., (Annex )
A. Soriano, Jr. Ave.
Intramuros, Manila
ATTY. MANUELITO LUNA
No. 412 FEMII Bldg., (Annex )
A. Soriano, Jr. Ave.
Intramuros, Manila
ATTYS. PARSIFAL FORTUN & MARIA
ROMINA M. DALAGAN
137 CRM Avenue cor. CRM Marina
BF Homes Almanza, Las Pinas City
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ATTY. MANUEL LAZARO
Chatham House Bldg., Valero cor. Rufino Sts.
Salcedo Village, Makati City
ATTYS. FROILAN BACUNGAN, ET AL.
2 ND Floor, Philtrust Building
Remedios cor. M.H. Del Pilar Streets
Malate, Manila
ATTY. PACIFICO A. AGABIN
26 th Floor, Pacific Star Building
Gil Puyat cor. Makati Avenue
Makati City
ATTYS. JOVENCIO H. EVANGELISTA, ET AL.
No. 45 K-7 th
Quezon City
St., Brgy. West Kamias
ATTYS. REMIGIO D. SALADERO, ET AL.
Pro-Labor Assistance Center
No. 33-B E. Rodriguez Sr. Avenue
Quezon City
DAP Belgica Partial Reconsideration/
23