Kathrina Selene Mayol-Sy

Taxation 1

GRECO BELGICA VS EXECUTIVE SECRETARY
G.R. NO. 208566

FACTS:

This case is consolidated with G.R. No. 208493 and G.R. No. 209251.
The Presidential Pork Barrel questioned by the petitioners include the Malampaya Fund and
the Presidential Social Fund. The Malampaya Fund was created as a special fund under Section 8,
Presidential Decree (PD) 910 by then-President Ferdinand Marcos to help intensify, strengthen, and
consolidate government efforts relating to the exploration, exploitation, and development of indigenous
energy resources vital to economic growth. The Presidential Social Fund was created under Section 12,
Title IV, PD 1869 (1983) or the Charter of the Philippine Amusement and Gaming Corporation (PAGCOR),
as amended by PD 1993 issued in 1985. The Presidential Social Fund has been described as a special
funding facility managed and administered by the Presidential Management Staff through which the
President provides direct assistance to priority programs and projects not funded under the regular
budget. It is sourced from the share of the government in the aggregate gross earnings of PAGCOR.
As for the Presidential Pork Barrel, whistle-blowers alleged that *a+t least P900 Million from
royalties in the operation of the Malampaya gas project intended for agrarian reform beneficiaries has
gone into a dummy *NGO+.

ISSUES:

I. Whether or not the congressional pork barrel system is constitutional.
II. Whether or not presidential pork barrel system is constitutional.

RULING:

I. No, the congressional pork barrel system is unconstitutional. It is unconstitutional because it
violates the following principles:

a. Separation of Powers.
Since the budgeting power lies in Congress. It regulates the release of funds (power of
the purse). The executive, on the other hand, implements the laws this includes the GAA to
which the PDAF is a part of. Only the executive may implement the law but under the pork
barrel system, whats happening was that, after the GAA, itself a law, was enacted, the
legislators themselves dictate as to which projects their PDAF funds should be allocated to a
clear act of implementing the law they enacted a violation of the principle of separation of
powers. This is also highlighted by the fact that in realigning the PDAF, the executive will still
have to get the concurrence of the legislator concerned.
b. Non-delegability of Legislative Power.
As a rule, the Constitution vests legislative power in Congress alone. That being,
legislative power cannot be delegated by Congress for it cannot delegate further that which was
delegated to it by the Constitution.
Exceptions to the rule are:
(i) delegated legislative power to local government units but this shall involve purely
local matters;
(ii) authority of the President to, by law, exercise powers necessary and proper to carry
out a declared national policy in times of war or other national emergency, or fix within
specified limits, and subject to such limitations and restrictions as Congress may impose, tariff
rates, import and export quotas, tonnage and wharfage dues, and other duties or imposts within
the framework of the national development program of the Government.
In this case, the PDAF articles which allow the individual legislator to identify the
projects to which his PDAF money should go to is a violation of the rule on non-delegability of
legislative power. The power to appropriate funds is solely lodged in Congress (in the two
houses comprising it) collectively and not lodged in the individual members. Further, nowhere in
the exceptions does it state that the Congress can delegate the power to the individual member
of Congress.
c. Principle of Checks and Balances.
One feature in the principle of checks and balances is the power of the president to veto
items in the GAA which he may deem to be inappropriate. But this power is already being
undermined because of the fact that once the GAA is approved, the legislator can now identify
the project to which he will appropriate his PDAF. Under such system, how can the president
veto the appropriation made by the legislator if the appropriation is made after the approval of
the GAA again, Congress cannot choose a mode of budgeting which effectively renders the
constitutionally-given power of the President useless.
d. Local Autonomy.
As a rule, the local governments have the power to manage their local affairs. Through
their Local Development Councils (LDCs), the LGUs can develop their own programs and policies
concerning their localities. But with the PDAF, particularly on the part of the members of the
House of Representatives, whats happening is that a congressman can either bypass or
duplicate a project by the LDC and later on claim it as his own. This is an instance where the
national government (note, a congressman is a national officer) meddles with the affairs of the
local government and this is contrary to the State policy embodied in the Constitution on local
autonomy. Its good if thats all that is happening under the pork barrel system but worse, the
PDAF becomes more of a personal fund on the part of legislators.

II. Yes, the presidential pork barrel is valid.
The main issue raised by Belgica et al against the presidential pork barrel is that it is
unconstitutional because it violates Section 29 (1), Article VI of the Constitution which provides:
No money shall be paid out of the Treasury except in pursuance of an appropriation made by
law.
Belgica et al emphasized that the presidential pork comes from the earnings of the
Malampaya and PAGCOR and not from any appropriation from a particular legislation.
The Supreme Court disagrees as it ruled that PD 910, which created the Malampaya
Fund, as well as PD 1869 (as amended by PD 1993), which amended PAGCORs charter, provided
for the appropriation, to wit:
(i) PD 910: Section 8 thereof provides that all fees, among others, collected from certain
energy-related ventures shall form part of a special fund (the Malampaya Fund) which shall be
used to further finance energy resource development and for other purposes which the
President may direct;
(ii) PD 1869, as amended: Section 12 thereof provides that a part of PAGCORs earnings
shall be allocated to a General Fund (the Presidential Social Fund) which shall be used in
government infrastructure projects.
These are sufficient laws which met the requirement of Section 29, Article VI of the Constitution.
The appropriation contemplated therein does not have to be a particular appropriation as it can
be a general appropriation as in the case of PD 910 and PD 1869.