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CASE DIGEST

Spouses Constantino v. Cuisia


[G.R. No. 106064, 13 October 2005]
Tingga
FACTS
Petition for certiorari, prohibition and mandamus of the Philippine Comprehensive Program for 1992.Petitioners are
members of the non-government organization, Freedom from DebtCoalition,
which advocates a pro-people and just Philippine debt policy. They question the Financing Program started by then
President Corazon Aquino, characterized as a multi
-option financing package, wherein the President entered into three restructuring agreements with foreign creditor
governments. Petitioners stress that unlike other powers which may be validly delegated by the President, the power to
incur foreign debts is expressly reserved by the Constitution in the person of the President.

ISSUES

1. WON the President can borrow to meet

ARTICLES/LAWS INVOLVED
SECTION 20. The President may contract or guarantee
foreign loans on behalf of the Republic of the Philippines
with the prior concurrence of the Monetary Board, and
subject to such limitations as may be provided by law. The
Monetary Board shall, within thirty days from the end of
every quarter of the calendar year, submit to the Congress
a complete report of its decisions on applications for loans
to be contracted or guaranteed by the Government or
government-owned and controlled corporations which
would have the effect of increasing the foreign debt, and
containing other matters as may be provided by law.
HELD

publice expenditures in the form of bonds


2. WON the President can delegate the power to
incur foreign debts to other executive
agencies.

1st issue: The Scope of Section 20, Article VII


Petioner: buyback and bond-conversion schemes do not constitute the loan contract or guarantee contemplated in the
Constitution
Court: The language of the Constitution is simple and clear as it is broad. It allows the President to contract and
guarantee foreign loans. It makes no prohibition on the issuance of certain kinds of loans or distinctions as to which
kinds of debt instruments are more onerous than others. This Court may not ascribe to the Constitution meanings and
restrictions that would unduly burden the powers of the President. The plain, clear and unambiguous language of the
Constitution should be construed in a sense that will allow the full exercise of the power provided therein. It would be
the worst kind of judicial legislation if the courts were to misconstrue and change the meaning of the organic act.
The only restriction that the Constitution provides, aside from the prior concurrence of the Monetary Board, is
that the loans must be subject to limitations provided by law. In this regard, we note that Republic Act (R.A.) No. 245 as
amended by Pres. Decree (P.D.) No. 142, s. 1973, entitled An Act Authorizing the Secretary of Finance to Borrow to
Meet Public Expenditures Authorized by Law, and for Other Purposes, allows foreign loans to be contracted in the
form of, inter alia, bonds. Thus:

Sec. 1. In order to meet public expenditures authorized by law or to provide for the purchase,
redemption, or refunding of any obligations, either direct or guaranteed of the Philippine Government,
the Secretary of Finance, with the approval of the President of the Philippines, after
consultation with the Monetary Board, is authorized to borrow from time to time on the
credit of the Republic of the Philippines such sum or sums as in his judgment may be
necessary, and to issue therefor evidences of indebtedness of the Philippine
Government."
Such evidences of indebtedness may be of the following types:

....
c. Treasury bonds, notes, securities or other evidences of indebtedness having maturities of
one year or more but not exceeding twenty-five years from the date of issue. (Emphasis
supplied.)
Under the foregoing provisions, sovereign bonds may be issued not only to supplement government
expenditures but also to provide for the purchase, redemption, or refunding, of any obligation, either direct or
guaranteed, of the Philippine Government.
Buy-Back Scheme
-It is true that in the balance of power between the three branches of government, it is Congress that manages
the countrys coffers by virtue of its taxing and spending powers. However, the law-making authority has
promulgated a law ordaining an automatic appropriations provision for debt servicing by virtue of which the
President is empowered to execute debt payments without the need for further appropriations. Regarding these
legislative enactments, this Court has held.
- It is true that in the balance of power between the three branches of government, it is Congress that manages
the countrys coffers by virtue of its taxing and spending powers. However, the law-making authority has
promulgated a law ordaining an automatic appropriations provision for debt servicing by virtue of which the
President is empowered to execute debt payments without the need for further appropriations. Regarding these
legislative enactments, this Court has held,
2nd issue delegation of power
Ratio/Doctrineon Delegation of power
Based on the Doctrine of Qualified Political Agency. Each head of thedepartment is and must be, the Presidents
alter ego in the matters of that department where the President is required by law to exercise authority.

Third Issue: Grave Abuse of Discretion and Violation of Constitutional Policies


Assuming the accuracy of the foregoing for the nonce, despite the watered-down parameters of petitioners
computations, we can make no conclusion other than that respondents efforts were geared towards debt-relief with
marked positive results and towards achieving the constitutional policies which petitioners so hastily declare as having
been violated by respondents. We recognize that as with other schemes dependent on volatile market and economic
structures, the contracts entered into by respondents may possibly have a net outflow and therefore negative result.
However, even petitioners call this latter event the worst-case scenario. Plans are seldom foolproof. To ask the Court to
strike down debt-relief contracts, which, according to independent third party evaluations using historically-suggested
rates would result in substantial debt-relief, based merely on the possibility of petitioners worst-case scenario
projection, hardly seems reasonable.
Conclusion
That the means employed to achieve the goal of debt-relief do not sit well with petitioners is beyond the power of this
Court to remedy. The exercise of the power of judicial review is merely to check not supplant the Executive, or to simply
ascertain whether he has gone beyond the constitutional limits of his jurisdiction but not to exercise the power vested in
him or to determine the wisdom of his act. In cases where the main purpose is to nullify governmental acts whether as
unconstitutional or done with grave abuse of discretion, there is a strong presumption in favor of the validity of the
assailed acts. The heavy onus is in on petitioners to overcome the presumption of regularity.
DISMISSED.