G.R. No.

208566 November 19, 2013

G.R. No. 208493 SJS filed a Petition BELGICA vs. HONORABLE
for Prohibition seeking that the "Pork EXECUTIVE SECRETARY PAQUITO N.
Barrel System" be declared OCHOA JR, et al, Respondents
unconstitutional, and a writ of
prohibition be issued permanently G.R. No. 208566 November
G.R. No. 208566 - Belgica, et al filed 19, 2013
an Urgent Petition For Certiorari and GRECO ANTONIOUS BEDA B. BELGICA
Prohibition With Prayer For The JOSE M. VILLEGAS JR. JOSE L.
Immediate Issuance of Temporary GONZALEZ REUBEN M. ABANTE and
Restraining Order and/or Writ of QUINTIN PAREDES SAN
Preliminary Injunction seeking that the DIEGO, Petitioners,
annual "Pork Barrel System," presently vs.
embodied in the provisions of the GAA of HONORABLE EXECUTIVE SECRETARY
2013 which provided for the 2013 PDAF, PAQUITO N. OCHOA JR, et al,
and the Executives lump-sum, Respondents
discretionary funds, such as the PERLAS-BERNABE, J.:
Malampaya Funds and the Presidential
Social Fund, be declared unconstitutional NATURE:
and null and void for being acts These are consolidated petitions taken
constituting grave abuse of discretion. under Rule 65 of the Rules of Court, all
Also, they pray that the Court issue a of which assail the constitutionality of
TRO against respondents the Pork Barrel System.

UDK-14951 A Petition filed seeking FACTS:

that the PDAF be declared The NBI Investigation was spawned by
unconstitutional, and a cease and desist sworn affidavits of six (6) whistle-
order be issued restraining President blowers who declared that JLN
Benigno Simeon S. Aquino III (President Corporation (Janet Lim Napoles) had
Aquino) and Secretary Abad from swindled billions of pesos from the public
releasing such funds to Members of coffers for "ghost projects" using dummy
Congress NGOs. Thus, Criminal complaints were
filed before the Office of the
ISSUES: Ombudsman, charging five (5)
1. Whether or not the 2013 PDAF lawmakers for Plunder, and three (3)
Article and all other Congressional Pork other lawmakers for Malversation, Direct
Barrel Laws similar thereto are Bribery, and Violation of the Anti-Graft
unconstitutional considering that they and Corrupt Practices Act. Also
violate the principles of/constitutional recommended to be charged in the
provisions on (a) separation of powers; complaints are some of the lawmakers
(b) non-delegability of legislative power; chiefs -of-staff or representatives, the
(c) checks and balances; (d) heads and other officials of three (3)
accountability; (e) political dynasties; implementing agencies, and the several
and (f) local autonomy. presidents of the NGOs set up by
2. Whether or not the phrases Napoles.
(under Section 8 of PD 910,116 relating to Whistle-blowers alleged that" at
the Malampaya Funds, and under least P900 Million from royalties in the
Section 12 of PD 1869, as amended by operation of the Malampaya gas project
PD 1993, relating to the Presidential off Palawan province intended for
Social Fund, are unconstitutional insofar agrarian reform beneficiaries has gone
as they constitute undue delegations of into a dummy NGO. Several petitions
legislative power. were lodged before the Court similarly
seeking that the "Pork Barrel System" be
HELD: declared unconstitutional
PRESIDENTIAL SOCIAL FUND ONLY FOR
RESTORATION PURPOSES WHICH ARISE
FROM CALAMITIES.
(b) and to finance the restoration of
damaged or destroyed facilities due to
calamities, as may be directed and
authorized by the Office of the President
of the Philippines was declared
unconstitutional.IT GIVES THE
PRESIDENT CARTE BLANCHE
AUTHORITY TO USE THE SAME FUND
FOR ANY INFRASTRUCTURE PROJECT HE
MAY SO DETERMINE AS A PRIORITY.
VERILY, THE LAW DOES NOT SUPPLY A
DEFINITION OF PRIORITY
INFRASTRUCTURE DEVELOPMENT
PROJECTS AND HENCE, LEAVES THE
PRESIDENT WITHOUT ANY GUIDELINE
TO CONSTRUE THE SAME.
MARIA CAROLINA ARAULLO VS
BENIGNO AQUINO III
GR No. 209287
July 1, 2014
When President Benigno Aquino III took
office, his administration noticed the
sluggish growth of the economy. The
World Bank advised that the economy
needed a stimulus plan. Budget
Secretary Florencio Butch Abad then
came up with a program called the
Disbursement Acceleration Program
(DAP).
The DAP was seen as a remedy to speed
up the funding of government projects.
DAP enables the Executive to realign
funds from slow moving projects to
priority projects instead of waiting for
next years appropriation. So what
happens under the DAP was that if a
certain government project is being
undertaken slowly by a certain executive
agency, the funds allotted therefor will
be withdrawn by the Executive. Once
withdrawn, these funds are declared as
savings by the Executive and said
funds will then be reallotted to other
priority projects. The DAP program did
work to stimulate the economy as
economic growth was in fact reported
and portion of such growth was
1. Yes, the PDAF article is
unconstitutional. The post-enactment
measures which govern the areas of
project identification, fund release and
fund realignment are not related to
functions of congressional oversight and,
hence, allow legislators to intervene
and/or assume duties that properly
belong to the sphere of budget
execution. This violates the principle of
separation of powers. Congressrole
must be confined to mere oversight that
must be confined to: (1) scrutiny and
(2) investigation and monitoring of the
implementation of laws. Any action or
step beyond that will undermine the
separation of powers guaranteed by the
constitution.
Thus, the court declares the 2013 pdaf
article as well as all other provisions of
law which similarly allow legislators to
wield any form of post-enactment
authority in the implementation or
enforcement of the budget, unrelated to
congressional oversight, as violative of
the separation of powers principle and
thus unconstitutional.
2. Yes. Sec 8 of PD 910- the phrase
and for such other purposes as may be
hereafter directed by the President
constitutes an undue delegation of
legislative power insofar as it does not
lay down a sufficient standard to
adequately determine the limits of the
Presidents authority with respect to the
purpose for which the Malampaya Funds
may be used. It gives the President wide
latitude to use the Malampaya Funds for
any other purpose he may direct and, in
effect, allows him to unilaterally
appropriate public funds beyond the
purview of the law.
Section 12 of PD 1869, as amended by
PD 1993- the phrases:
(b) "to finance the priority infrastructure
development projects was declared
constitutional. IT INDICATED PURPOSE
ADEQUATELY CURTAILS THE AUTHORITY
OF THE PRESIDENT TO SPEND THE
the Treasury except in pursuance of an
appropriation made by law (Sec. 29(1),
Art. VI, Constitution).
II. Whether or not the DAP realignments
can be considered as impoundments by
the executive.
III. Whether or not the DAP
realignments/transfers are
constitutional.
IV. Whether or not the sourcing of
unprogrammed funds to the DAP is
constitutional.
V. Whether or not the Doctrine of
Operative Fact is applicable.
HELD:
I. No, the DAP did not violate Section
29(1), Art. VI of the Constitution. DAP
was merely a program by the Executive
and is not a fund nor is it an
appropriation. It is a program for
prioritizing government spending. As
such, it did not violate the Constitutional
provision cited in Section 29(1), Art. VI
of the Constitution. In DAP no additional
funds were withdrawn from the Treasury
otherwise, an appropriation made by law
would have been required. Funds, which
were already appropriated for by the
GAA, were merely being realigned via
the DAP.
II. No, there is no executive
impoundment in the DAP. Impoundment
of funds refers to the Presidents power
to refuse to spend appropriations or to
retain or deduct appropriations for
whatever reason. Impoundment is
actually prohibited by the GAA unless
there will be an unmanageable national
government budget deficit (which did
not happen). Nevertheless, theres no
impoundment in the case at bar because
whats involved in the DAP was the
transfer of funds.
III. No, the transfers made through the
DAP were unconstitutional. It is true that
the President (and even the heads of the
other branches of the government) are
allowed by the Constitution to make
realignment of funds, however, such
transfer or realignment should only be
made within their respective offices.
Thus, no cross-border
transfers/augmentations may be
attributed to the DAP (as noted by the
Supreme Court).
Other sources of the DAP include the
unprogrammed funds from the General
Appropriations Act (GAA).
Unprogrammed funds are standby
appropriations made by Congress in the
GAA.
Meanwhile, in September 2013, Senator
Jinggoy Estrada made an expos
claiming that he, and other Senators,
received Php50M from the President as
an incentive for voting in favor of the
impeachment of then Chief Justice
Renato Corona. Secretary Abad claimed
that the money was taken from the DAP
but was disbursed upon the request of
the Senators.
This apparently opened a can of worms
as it turns out that the DAP does not
only realign funds within the Executive.
It turns out that some non-Executive
projects were also funded; to name a
few: Php1.5B for the CPLA (Cordillera
Peoples Liberation Army), Php1.8B for
the MNLF (Moro National Liberation
Front), P700M for the Quezon Province,
P50-P100M for certain Senators each,
P10B for Relocation Projects, etc.
This prompted Maria Carolina Araullo,
Chairperson of the Bagong Alyansang
Makabayan, and several other concerned
citizens to file various petitions with the
Supreme Court questioning the validity
of the DAP. Among their contentions
was:
DAP is unconstitutional because it
violates the constitutional rule which
provides that no money shall be paid
out of the Treasury except in pursuance
of an appropriation made by law.
Secretary Abad argued that the DAP is
based on certain laws particularly the
GAA (savings and augmentation
provisions thereof), Sec. 25(5), Art. VI
of the Constitution (power of the
President to augment), Secs. 38 and 49
of Executive Order 292 (power of the
President to suspend expenditures and
authority to use savings, respectively).
Issues:
I. Whether or not the DAP violates the
principle no money shall be paid out of
unconstitutional by the Supreme Court,
is applicable. The DAP has definitely
helped stimulate the economy. It has
funded numerous projects. If the
Executive is ordered to reverse all
actions under the DAP, then it may
cause more harm than good. The DAP
effects can no longer be undone. The
beneficiaries of the DAP cannot be asked
to return what they received especially
so that they relied on the validity of the
DAP. However, the Doctrine of Operative
Fact may not be applicable to the
authors, implementers, and proponents
of the DAP if it is so found in the
appropriate tribunals (civil, criminal, or
administrative) that they have not acted
in good faith.
Angara v. Electoral Commission, G.R.
No. L-45081, July 15, 1936
LAUREL, J.:
I. THE FACTS
Petitioner Jose Angara was
proclaimed winner and took his oath
of office as member of the National
Assembly of the Commonwealth
Government. On December 3, 1935,
the National Assembly passed a
resolution confirming the election of
those who have not been subject of
an election protest prior to the
adoption of the said resolution.
On December 8, 1935, however,
private respondent Pedro Ynsua filed
an election protest against the
petitioner before the Electoral
Commission of the National
Assembly. The following day,
December 9, 1935, the Electoral
Commission adopted its own
resolution providing that it will not
consider any election protest that
was not submitted on or before
December 9, 1935.
allowed. But under the DAP, this was
violated because funds appropriated by
the GAA for the Executive were being
transferred to the Legislative and other
non-Executive agencies.
Further, transfers within their
respective offices also contemplate
realignment of funds to an existing
project in the GAA. Under the DAP, even
though some projects were within the
Executive, these projects are non-
existent insofar as the GAA is concerned
because no funds were appropriated to
them in the GAA. Although some of
these projects may be legitimate, they
are still non-existent under the GAA
because they were not provided for by
the GAA. As such, transfer to such
projects is unconstitutional and is
without legal basis.
On the issue of what are savings
These DAP transfers are not savings
contrary to what was being declared by
the Executive. Under the definition of
savings in the GAA, savings only occur,
among other instances, when there is an
excess in the funding of a certain project
once it is completed, finally
discontinued, or finally abandoned. The
GAA does not refer to savings as funds
withdrawn from a slow moving project.
Thus, since the statutory definition of
savings was not complied with under the
DAP, there is no basis at all for the
transfers. Further, savings should only
be declared at the end of the fiscal year.
But under the DAP, funds are already
being withdrawn from certain projects in
the middle of the year and then being
declared as savings by the Executive
particularly by the DBM.
IV. No. Unprogrammed funds from the
GAA cannot be used as money source for
the DAP because under the law, such
funds may only be used if there is a
certification from the National Treasurer
to the effect that the revenue collections
have exceeded the revenue targets. In
this case, no such certification was
secured before unprogrammed funds
were used.
V. Yes. The Doctrine of Operative Fact,
which recognizes the legal effects of an
act prior to it being declared as
relating to the election, returns and Citing among others the earlier
qualifications of members of the resolution of the National Assembly,
National Assembly, is intended to be the petitioner sought the dismissal of
as complete and unimpaired as if it respondents protest. The Electoral
had remained originally in the Commission however denied his
legislature. The express lodging of motion.
that power in the Electoral
Commission is an implied denial of
the exercise of that power by the II. THE ISSUE
National Assembly. xxx.
Did the Electoral Commission act
[T]he creation of the Electoral without or in excess of its jurisdiction
Commission carried with it ex in taking cognizance of the protest
necesitate rei the power regulative in filed against the election of the
character to limit the time with which petitioner notwithstanding the
protests intrusted to its cognizance previous confirmation of such
should be filed. [W]here a general election by resolution of the National
power is conferred or duty enjoined, Assembly?
every particular power necessary for
the exercise of the one or the III. THE RULING
performance of the other is also
conferred. In the absence of any [The Court DENIED the petition.]
further constitutional provision
relating to the procedure to be NO, the Electoral Commission did not
followed in filing protests before the act without or in excess of its
Electoral Commission, therefore, the jurisdiction in taking cognizance of
incidental power to promulgate such the protest filed against the election
rules necessary for the proper of the petitioner notwithstanding the
exercise of its exclusive power to previous confirmation of such
judge all contests relating to the election by resolution of the National
election, returns and qualifications of Assembly.
members of the National Assembly,
must be deemed by necessary The Electoral Commission acted
implication to have been lodged also within the legitimate exercise of its
in the Electoral Commission. constitutional prerogative in
assuming to take cognizance of the
protest filed by the respondent Ynsua
against the election of the petitioner
Angara, and that the earlier
resolution of the National Assembly
cannot in any manner toll the time for
filing election protests against
Cocofed vs Republic members of the National Assembly,
Case Digest GR 177857-58 Jan 24 nor prevent the filing of a protest
2012 within such time as the rules of the
Electoral Commission might
Facts: prescribe.
In 1971, RA 6260 created the Coconut
Investment Company (CIC) to The grant of power to the Electoral
administer the Coconut Investment Commission to judge all contests
construed by any law as a special
and/or trust fund, the stated intention
being that actual ownership of the
said fund shall pertain to coconut
farmers in their private capacities.
Shortly before the issuance of PD 755
however, PCA had already bought
from Peping Cojuangco 72.2% of the
outstanding capital stock of FUB /
UCPB. In that contract, it was also
stipulated that Danding Cojuanco
shall receive equity in FUB amounting
to 10%, or 7.22 % of the 72.2%, as
consideration for PCAs buy-out of
what Danding Conjuanco claim as his
exclusive and personal option to buy
the FUB shares.
The PCA appropriated, out of its own
fund, an amount for the purchase of
the said 72.2% equity. It later
reimbursed itself from the coconut
levy fund.
While the 64.98% (72.2 % 7.22%)
portion of the option shares
ostensibly pertained to the farmers,
the corresponding stock certificates
supposedly representing the farmers
equity were in the name of and
delivered to PCA. There were,
however, shares forming part of the
64.98% portion, which ended up in
the hands of non-farmers. The
remaining 27.8% of the FUB capital
stock were not covered by any of the
agreements.
Through the years, a part of the
coconut levy funds went directly or
indirectly to various projects and/or
was converted into different assets
or investments. Of particular
relevance to this was their use to
acquire the FUB / UCPB, and the
acquisition by UCPB, through the CIIF
and holding companies, of a large
block of San Miguel Corporation
(SMC) shares.
Issue 1: W/N the mandate provided
under PD 755, 961 and 1468 that the
CCSF shall not be construed by any
Fund, a fund to be sourced from levy
on the sale of copra. The copra seller
was, or ought to be, issued
COCOFUND receipts. The fund was
placed at the disposition of
COCOFED, the national association of
coconut producers having the largest
membership.
When martial law started in 1972,
several presidential decrees were
issued to improve the coconut
industry through the collection and
use of the coconut levy fund:
PD 276 established the Coconut
Consumers Stabilization Fund (CCSF)
and declared the proceeds of the
CCSF levy as trust fund, to be utilized
to subsidize the sale of coconut-
based products, thus stabilizing the
price of edible oil.
PD 582 created the Coconut Industry
Development Fund (CIDF) to finance
the operation of a hybrid coconut
seed farm.
In 1973, PD 232 created the
Philippine Coconut Authority (PCA) to
accelerate the growth and
development of the coconut and palm
oil industry.
Then came P.D. No. 755 in July 1975,
providing under its Section 1 the
policy to provide readily available
credit facilities to the coconut
farmers at preferential rates. Towards
achieving this, Section 2 of PD 755
authorized PCA to utilize the CCSF
and the CIDF collections to acquire a
commercial bank and deposit the
CCSF levy collections in said bank,
interest free, the deposit
withdrawable only when the bank has
attained a certain level of sufficiency
in its equity capital. It also decreed
that all levies PCA is authorized to
collect shall not be considered as
special and/or fiduciary funds or form
part of the general funds of the
government.
Both P.D. Nos. 961 and 1468 also
provide that the CCSF shall not be
It is unconstitutional because first, it
have unduly delegated legislative
power to the PCA, and second, it
allowed the use of the CCSF to
benefit directly private interest by
the outright and unconditional grant
of absolute ownership of the
FUB/UCPB shares paid for by PCA
entirely with the CCSF to the
undefined coconut farmers, which
negated or circumvented the national
policy or public purpose declared by
P.D. No. 755.
Hence, the so-called Farmers shares
do not belong to the coconut farmers
in their private capacities, but to the
Government. The coconut levy funds
are special public funds and any
property purchased by means of the
coconut levy funds should likewise be
treated as public funds or public
property, subject to burdens and
restrictions attached by law to such
property. ##
Tawang Multi-Purpose Cooperative
vs. La Trinidad Water District [GR
No. 166471, March 22, 2011]
FACTS: Petitioner Tawang Multi-Purpose
Cooperative is a cooperative organized
to provide domestic water services in
Barangay Tawang, La Trinidad, Benguet
while respondent La Trinidad Water
District is a local water utility created
under Presidential Decree (PD) No. 198,
as amended. La Trinidad Water District
is authorized to supply water for
domestic, industrial and commercial
purposes within the municipality of La
Trinidad, Benguet. Tawang Multi-Purpose
Cooperative filed with the National Water
Resources Board an application for a
certificate of public convenience (CPC) to
law as a special and/or trust fund is
valid
No. The coconut levy funds can only
be used for the special purpose and
the balance thereof should revert
back to the general fund.
Article VI, Section 29 (3) of the
Constitution provides that 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, and 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.
Here, the CCSF were sourced from
forced exactions with the end-goal of
developing the entire coconut
industry. Therefore, the subsequent
reclassification of the CCSF as a
private fund to be owned by private
individuals in their private capacities
under P.D. Nos. 755, 961 and 1468 is
unconstitutional.
Not only is it unconstitutional, but the
mandate is contrary to the purpose or
policy for which the coco levy fund
was created.
Issue 2:
W/N the coco levy fund may be owned
by the coconut farmers in their
private capacities
No. The coconut levy funds are in the
nature of taxes and can only be used
for public purpose. They cannot be
used to purchase shares of stocks to
be given for free to private
individuals. Even if the money is
allocated for a special purpose and
raised by special means, it is still
public in character.
Accordingly, the presidential
issuances which authorized the PCA
to distribute, for free, the shares of
stock of the bank it acquired to the
coconut farmers under such rules and
regulations the PCA may promulgate
is unconstitutional.
operate and maintain a waterworks
system in Barangay Tawang. La Trinidad
Water District opposed Tawang Multi-
Purpoe Cooperative's application and
claimed that, under Section 47 of PD No.
198, as amended, its franchise is
exclusive.

ISSUE: Whether or not a public utility

franchise may be exclusive in character

RULING: No. The 1935, 1973, and 1987

Constitution expressly and clearly
prohibit thecreation of franchise that are
exclusive in character. The President,
Congress and the Court cannot create
indirectly franchises that are exclusive in
character by allowing the Board of
Directors of a water district and the
Local Water Utilities Administration to
create franchises that are exclusive in
character. Section 47 of PD No. 198, as
amended, allows the Board of Directors
of La Trinidad Water District and Local
Water Utilities Administration to create
franchises that are xclusive in character.
Clearly, Section 47 is patently
unconstitutional.