Philippine Constitution Association vs. Hon. Salvador Enriquez (and consolidated petitions)

Posted Aug 19, 1994

By Anonymous

12 min read

Case Title and Citation

Philippine Constitution Association, Exequiel B. Garcia and A. Gonzales, petitioners; Raul S. Roco, Neptali A. Gonzales, Edgardo J. Angara and other Senators, petitioners; Wigberto E. Tañada, Alberto G. Romulo and Freedom from Debt Coalition, petitioners; petitioners vs. Hon. Teofisto T. Guingona, Jr., Executive Secretary; Hon. Salvador Enriquez, Secretary, Department of Budget and Management; Hon. Vicente T. Tan/Caridad Valdehuesa, National Treasurer; Commission on Audit, respondents.
G.R. Nos. 113105, 113174, 113766, 113888, 1994-08-19
Supreme Court - En Banc
Ponente: Justice Camilo D. Quiason

Facts

House Bill No. 10900 (General Appropriation Bill of 1994) was passed by both Houses on December 17, 1993 and on December 30, 1993 was signed by the President as Republic Act No. 7663 (GAA of 1994). The President issued a Veto Message the same day identifying provisions vetoed and conditions imposed. No congressional override was attempted.
Petitioners included taxpayers, civil-society groups and multiple Senators who sought writs of prohibition, certiorari and mandamus challenging:
1. Presidential vetoes of special provisions in the GAA of 1994 (various items including debt service, AFP, DPWH, SUCs, CAFGU, COA, Ombudsman, CHR, Supreme Court).
2. Conditions imposed by the President on implementation of some appropriations and the asserted impoundment or administrative control over certain appropriations.
Relevant GAA features and figures:
- Article XLVII/XLVIII: Congress appropriated P86,323,438,000 for debt service; appropriated P37,780,450,000 for the Department of Education, Culture and Sports (figures cited in petitions).
- Article XLI established a Countrywide Development Fund (P2,977,000,000) with allocations described to Representatives, Senators and Vice-President and a mechanism for members of Congress to propose/identify projects.
- Special Provisions allowed members of Congress to realign operating expense allocations for individual members.
- Multiple special provisions dealt with use of income and creation of revolving funds for State Universities and Colleges and other agencies.
The Court invited two former Justices (Enrique M. Fernando, Irene Cortes) as amici curiae to submit memoranda.

Issues

Do members of the Senate (and by parity, members of the House) have standing to challenge presidential vetoes and conditions in the GAA?
Is the Countrywide Development Fund (Article XLI) unconstitutional as an encroachment on executive power?
Does the special provision allowing individual members of Congress to realign their operating expense allocations violate Section 25(5), Article VI of the Constitution?
Was the President’s veto of the Special Provision in the debt-service appropriation (including provisos that (a) the fund “shall be used for payment of principal and interest” and (b) “in no case shall this fund be used to pay for the liabilities of the Central Bank Board of Liquidators”) valid?
Was the President’s veto of the proviso making any payment in excess of the appropriation subject to presidential approval with congressional concurrence valid?
Were the vetoes of special provisions authorizing use of income and creation/operation of revolving funds for certain State Universities and Colleges valid?
Was the presidential veto of the DPWH special provision limiting contracted maintenance to a maximum of 30% of road maintenance funds valid?
Was the presidential veto of the AFP provision requiring strict compliance with the National Drug Policy formulary for AFP medicine purchases valid?
Were the vetoes of provisions requiring prior congressional approval or specific prohibitions on AFP modernization expenditures (i.e., legislative approval over military acquisitions) valid?
Was the veto of a provision authorizing the AFP Chief of Staff to use savings to augment AFP pension/gratuity funds valid?
Was the President’s decision to make implementation of a CAFGU deactivation/separation-pay provision subject to prior presidential approval (and related impoundment concerns) lawful?
Were the President’s imposition of conditions or directives (guidelines, prior executive approvals) on implementation of appropriations for the Supreme Court, COA, Ombudsman, CHR, DPWH overhead rates, and NHA allocations lawful?

Ruling

Yes - Members of Congress have standing to challenge presidential vetoes or conditions that infringe on institutional powers.
No - The Countrywide Development Fund and the congressional mechanism to propose/identify projects are not unconstitutional; proposals by members are recommendatory and implementation remains executive.
No - The realignment provision as structured (with approval by the Senate President/Speaker and subject to safeguards) does not violate Section 25(5).
No - The President’s item-veto of the provisos that the debt fund “shall be used for payment of principal and interest” and the prohibition on using the fund to pay Central Bank Board of Liquidators’ liabilities is invalid; those provisos are germane and inseparable from the debt-service appropriation.
Yes - The President validly vetoed the proviso making any payment in excess of the appropriation subject to presidential approval with congressional concurrence (that proviso sought to amend existing laws on automatic appropriation and was an inappropriate provision).
Yes - The vetoes of certain SUC provisions authorizing use of income and creation of revolving funds were lawful; agencies enjoying such privileges required prior statutory basis, and disparities reflected existing separate statutory authorizations.
No - The veto of the DPWH provision fixing a maximum of 30% contracting was unconstitutional; the provision was appropriate and inseparable from the appropriation item.
No - The veto of the AFP medicine formulary provision was unconstitutional; the requirement was appropriate and closely related to the appropriation.
Yes - Provisions that attempt to require prior congressional approval of executive acts (a legislative or congressional veto) or that impair contractual obligations were inappropriate and properly vetoed.
Yes - The veto of the provision authorizing the Chief of Staff to use AFP savings to augment pension/gratuity funds was valid because authorization to transfer appropriations is limited by Section 25(5) and to specific officials by law.
Yes - The President’s action conditioning implementation of CAFGU deactivation/separation-pay on prior executive approval was lawful; an appropriation act is not the proper vehicle to amend substantive laws on CAFGU deactivation and such policy decisions fall within executive prerogatives.
Yes - The President’s imposition of conditions that implementation be subject to executive guidelines or approvals (Supreme Court/COA/Ombudsman/CHR savings use; DPWH overhead implementation guidelines; NHA allocations subject to housing program and prior executive approval) was within the President’s duty to ensure faithful execution of the laws.

Reasoning / Ratio Decidendi

Standing (Issue 1): The Court relied on precedent recognizing institutional injury and derivative injury to individual legislators when executive acts impair congressional powers (citing Gonzales v. Macaraig, Coleman v. Miller, Kennedy v. Jones). A member of Congress has a personal and substantial interest when a presidential act intrudes on legislative domain.
Countrywide Development Fund (Issue 2): The power of appropriation rests with Congress; Congress may specify purposes and items in detail. The provision merely permits members to propose/identify projects; implementation and final qualification of projects remain executive functions. The proposals are recommendatory and do not effect an unlawful delegation.
Realignment (Issue 3): Section 16 (General Provisions) and the constitutionally authorized augmentation mechanism permit transfers only under conditions; the GAA provided procedural checks (approval by presiding officers) so the realignment does not contravene Section 25(5).
Item vs. Provision veto; Debt-service provisos (Issues 4–5): The Court applied its precedent in Gonzales v. Macaraig and principles from Henry v. Edwards: provisions in appropriation bills must relate specifically and be limited to particular appropriations. “Inappropriate provisions” (those attempting to repeal/amend other statutes or affecting funds beyond the appropriation) may be treated as items for veto purposes. The proviso making excess payments subject to presidential approval sought to alter the established statutory regime on automatic appropriation for debt service (Foreign Borrowing Act, P.D. No. 1177, E.O. No. 292) and was therefore properly vetoed; but provisos that are germane to the specific appropriation and do not attempt statutory amendment (e.g., stating purpose of debt-service funds, prohibiting their use for Central Bank Board of Liquidators’ liabilities) are inseparable and the President’s separate veto of those parts was void.
SUC revolving funds (Issue 6): The President relied on the One Fund Policy (Government Auditing Code, E.O. No. 292) and statutes authorizing revolving funds; unequal treatment reflected prior statutory exceptions, not arbitrary discrimination; some agencies had prior statutory authority for income retention.
DPWH contracting ratio (Issue 7): The 30% contracting limitation was directly related to the DPWH appropriation; it constituted an “appropriate provision” and could not be vetoed separately. The President’s policy preference (to allow up to 70% contracting) did not render the provision inappropriate as budgetary matter.
AFP medicine formulary (Issue 8): Requirement to comply with the National Drug Policy is an appropriate and germane condition tied to the AFP appropriation; veto was invalid.
Legislative veto and contractual impairment (Issue 9): Provisions attempting to require prior congressional approval of executive acquisitions or to prohibit expenditure on contracted items interfere with executive functions and may impair contractual obligations; such provisions are “inappropriate” and subject to valid presidential veto.
AFP pension savings (Issue 10): Transfers/augmentations of appropriations are constrained by Section 25(5) and Section 29(1); only specified officials and processes may authorize such transfers; appropriation provision authorizing the Chief of Staff to use savings violated that scheme.
CAFGU deactivation and presidential impoundment (Issue 11): The Court observed separation-of-powers limits on Congress using appropriation laws to amend substantive laws (P.D. No. 1597, R.A. No. 6758). The President, as Commander-in-Chief, may determine timing and sequence of deactivation related to peace-and-order considerations; the appropriation was not shown to deprive the President of discretion such that judicial relief was proper.
Conditions and guidelines (Issue 12): Under the Faithful Execution Clause (Art. VII, Sec. 17) and administrative authority to execute the law, the President may issue implementing guidelines to ensure lawful and coordinated execution of appropriations. Statements that implementation shall be “subject to guidelines to be issued by the President” are not, by themselves, unconstitutional restraints on institutional independence.

Statutes/cases cited or relied upon in reasoning include: Art. VI, Secs. 25 & 27; Art. XIV, Sec. 5(5); Foreign Borrowing Act (P.D. No. 1177); E.O. No. 292 (Administrative Code); P.D. No. 1445 (Government Auditing Code); Gonzales v. Macaraig, Teofisto Guingona, Jr. v. Carague (Guingona), Henry v. Edwards; Bolinao Electronics v. Valencia; and principles on item/provision veto and “inappropriate provisions.”

Doctrine / Legal Principle

A member of Congress has standing to challenge executive acts that intrude on legislative prerogatives.
Congress has plenary power of appropriation but may include only provisions that relate specifically and are limited to particular appropriations.
Provisions inappropriately attempting to amend or repeal other laws, impair contracts, or extend beyond the appropriation may be treated as items and are subject to item-veto.
The President’s item-veto power does not extend to appropriate provisions inseparable from the related appropriation item.
The President has authority under the Faithful Execution Clause to issue implementing guidelines and to ensure that appropriations are executed in accordance with law and existing statutes.
Appropriation acts are an improper vehicle for substantive changes to other statutes; such changes require separate legislation.

Disposition

The consolidated petitions are DISMISSED in large part.
Relief GRANTED (annulled presidential vetoes) as follows:
1. G.R. Nos. 113105 and 113174 insofar as petitioners sought annulment of the presidential veto of the special provision in the debt-service appropriation that (a) the fund “shall be used for payment of principal and interest of foreign and domestic indebtedness” and (b) prohibited use of the fund “to pay for the liabilities of the Central Bank Board of Liquidators.” Those vetoes are annulled.
2. G.R. No. 113888 insofar as petitioners sought annulment of:
  1. the President’s veto of the second paragraph of Special Provision No. 2 of the DPWH item (the 30% maximum contracting limitation) — annulled; and
  2. the President’s veto of Special Provision No. 12 requiring AFP purchases of medicines to comply with the Department of Health National Drug Policy formulary — annulled.
All other challenges and requests for provisional relief were denied/dismissed.

Concurring / Dissenting Opinions

PADILLA, J. — Concurring and dissenting: concurred with the ponencia except he dissented from reaffirmance of Gonzales v. Macaraig; he would not treat certain provision vetoes as within the President’s item-veto power and warned against expanding executive veto power over “provisions.”
VITUG, J. — Concurring: emphasized limits on individual members’ role in implementation (on Countrywide Development Fund/pork barrel) and underscored that Congress acts as an institution when exercising powers that bind it.

Significance / Notes

Clarifies senator/member standing: individual members of Congress may invoke judicial review when executive action impairs legislative powers.
Refines item/provision veto doctrine: distinguishes between “appropriate” provisions (inseparable from an appropriation item) and “inappropriate” provisions (those that attempt to amend statutes, impair contracts, or reach beyond the appropriation), the latter being subject to valid presidential veto.
Reaffirms that substantive policy changes or amendments to existing statutes must be enacted through separate legislation, not by riders or provisos in an appropriations act.
Confirms executive authority to issue administrative guidelines and to require implementation in conformity with existing law under the Faithful Execution Clause; the Court is deferential where presidential action relates to execution or national security.
Practical impact on budgeting: lawmakers drafting GAA provisions must ensure conditions are germane and not designed to amend existing laws or create legislative vetoes over executive administration; executives retain ability to set implementation guidelines and to challenge inappropriate riders.
The decision follows and relies on prior Supreme Court rulings (Gonzales v. Macaraig; Guingona v. Carague) treating the item-veto and the boundaries of appropriations law as core to separation-of-powers questions.

Separation of Powers Judicial Review

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