Dianarose D.

Evangelista JD-1

ALTERNATIVE CENTER FOR ORGANIZATIONAL REFORMS AND

DEVELOPMENT, INC. (ACORD) vs ZAMORA
G.R. No. 144256
June 8, 2005
Carpio-Morales, J.:
STATEMENT OF THE CASE:
On August 22, 2000, a number of non-governmental organizations (NGOs) and people's
organizations, along with three barangay officials filed with this Court the petition at bar,
for Certiorari, Prohibition and Mandamus With Application for Temporary Restraining Order,
against respondents then Executive Secretary Ronaldo Zamora, then Secretary of the Department
of Budget and Management Benjamin Diokno, then National Treasurer Leonor Magtolis-
Briones, and the Commission on Audit, challenging the constitutionality of above-quoted
provision of XXXVII (ALLOCATIONS TO LOCAL GOVERNMENT UNITS) referred to by
petitioners as Section 1, XXXVII (A), and LIV (UNPROGRAMMED FUND) Special
Provisions 1 and 4 of the GAA (the GAA provisions).

STATEMENT OF FACTS:
Pres. Estrada submitted the National Expenditures Program for Fiscal Year 2000 pursuant
to Section 22, Article VII of the Constitution. The President proposed an Internal Revenue
Allotment (IRA) in the amount of ₱121,778,000,000. The President approved House Bill No.
8374 and this Bill became Republic Act No. 8760, “An Act Appropriating Funds for the
Operation of the Government of the Republic of the Philippines from January One to
December Thirty-One, Two Thousand, and For Other Purposes”. The act was known as
General Appropriations Act (GAA) for the Year 2000. It provides under the heading
“Allocations to Local Government” that the IRA for local government units shall amount to
P111,778,000,000.

In another part of the GAA, under the heading “Unprogrammed Fund,” it is provided that
an amount of ₱10,000,000,000 (P10 Billion), apart from the P111,778,000,000 mentioned, shall
be used to fund the IRA which shall be released only when the revenue collections exceed the
original revenue targets submitted by the President of the Philippines to Congress based on
a quarterly assessment to be conducted by certain committees. Thus, the Petition for
Certiorari, Prohibition and Mandamus with Application for Temporary Restraining Order filed
against respondents.

Petitioners contends that such provisions (Section 1, XXXVII (A) and LIV, Special
Provisions a and 4) under GAA are null and void for being unconstitutional as they violated the
autonomy of local governments by unlawfully reducing by P10 Billion the IRA due to the local
governments and withholding the release of such amount by placing it under “Unprogrammed
Funds.” This violated the constitutional mandate in Art. X Sec. 6 that the local government units’
just share in the national taxes shall be automatically released to them. It also violates the local
government code, specifically Sections 18, 284 and 286.

Respondents counter argue that constitutional provision is addressed not to the legislature
but to the executive, hence, the same does not prevent the legislature from imposing conditions
upon the release of the IRA. Respondents infer that the constitutional provision merely prevents
the executive branch of the government from “unilaterally” withholding the IRA but not the
legislature from authorizing the executive branch to withhold the same.

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 ISSUES:
(1)Whether the petition contains proper verifications and certifications against forum-
shopping,
(2) Whether petitioners have the requisite standing to file this suit, and
(3) Whether the questioned provisions violate the constitutional injunction that the just
share of local governments in the national taxes or the IRA shall be automatically released.

RULING:
(1) YES, the petition contains proper verifications and certifications against forum
shopping.

Respondents alleged that the petition is improperly executed; They merely state that the
allegations of the Petition are “true of our knowledge and belief” instead of “true and correct of
our personal knowledge or based on authentic records” as required under Rule 7, Sec. 4, Rules of
Court. The same verifications were signed by persons who were not authorized by the
incorporated cause oriented groups which they claim to represent, hence, the Petition should be
treated as an unsigned pleading.

The COURT states that the statement “to the best of my knowledge are true and correct”
referring to the allegations in the petition does not mean mere “knowledge, information and
belief.” It constitutes substantial compliance with the requirement of section 6 of Rule 7
(Madrigal vs. Rodas).

Petty technicality deserves scant consideration where the question at issue is one purely of
law and there is no need of delving into the veracity of the allegations in the petition, which are
not disputed at all by respondents. Imperfections of form and technicalities of procedure are to
be disregarded except where substantial rights would otherwise be prejudiced. (Decano v. Edu)

Indeed, only duly authorized natural persons may execute verifications in behalf of juridical
entities such as petitioners NGOs and people’s organizations. As this Court held in Santos v. CA,
“In fact, physical actions, e.g., signing and delivery of documents, may be performed on behalf
of the corporate entity only by specifically authorized individuals.”

Nonetheless, the present petition cannot be treated as an unsigned pleading. For even if
the rule that representatives of corporate entities must present the requisite authorization were to
be strictly applied, there would remain among the multigrouppetitioners the individuals who
validly executed verifications in their own names, namely, petitioners Adelino C. Lavador,
Punong Barangay Isabel Mendez, and Punong Barangay Carolina Romanos.

Shipside Inc v. CA: While the requirement of the certificate of nonforum shopping is
mandatory, nonetheless the requirements must not be interpreted too literally and thus defeat the
objective of preventing the undesirable practice of forumshopping. Lastly, technical rules of
procedure should be used to promote, not frustrate justice.

(2) YES petitioners have the requisite standing to file this suit.

Respondents’ states that it is the LGUs—each having a separate juridical entity—which

stand to be injured. Petitioners have no cause of action against them as they claim to have no
responsibility with respect to the mandate of the GAA provisions, proffer that the committees
mentioned in the GAA provisions, namely, the Development Budget Coordinating Committee,
Committee on Finance of the Senate, and Committee on Appropriations of the House of
Representatives, should instead have been impleaded.

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 The court ruled that the subsequent intervention of the provinces of Batangas and Nueva
Ecija which have adopted the arguments of petitioners, made the question of standing academic.

The GAA provisions being challenged were not to be implemented solely by the
committees specifically mentioned therein, for they being in the nature of appropriations
provisions, they were also to be implemented by the executive branch, particularly the DBM and
the National Treasurer.

The task of the committees related merely to the conduct of the quarterly assessment
required in the provisions, and not in the actual release of the IRA which is the duty of the
executive. Since the present controversy centers on the proper manner of releasing the IRA,
the impleaded respondents are the proper parties to this suit.

In earlier petitions likewise involving the constitutionality of provisions of previous

GAAs which this Court granted, the therein respondent officials were the same as those in the
present case (e.g., Guingona v. Carague and PHILCONSA v. Enriquez)

(3) YES, the questioned provisions violate the constitutional injunction that the just
share of local governments in the national taxes or the IRA shall be
automatically released.

Article X, Section 6 of the Constitution provides:

SECTION 6. Local government units shall have a just share, as determined by law, in the
national taxes which shall be automatically released to them.

Petitioners contend that the GAA violated this constitutional mandate when it made the
release of IRA contingent on whether revenue collections could meet the revenue targets
originally submitted by the President, rather than making the release automatic.

Respondents alleged that the above constitutional provision is addressed not to the
legislature but to the executive, hence, the same does not prevent the legislature from imposing
conditions upon the release of the IRA.

They cite the exchange between Commissioner Davide and Commissioner Nolledo in the
deliberations of the ConCom on Sec. 6, Art. X
o Davide and Nolledo held different views with regard to the proper wording of the
constitutional provision, they shared a common assumption that the entity which
would execute the automatic release of internal revenue was the executive
department.
o Davide referred to the national government as the entity that collects and remits
internal revenue. Similarly, Nolledo alluded to the Budget Officer, who is clearly
under the executive branch.

Art X, Sec. 6 merely prevents the executive branch of the government from “unilaterally”
withholding the IRA, but not the legislature from authorizing the executive branch to withhold
the same. In the words of respondents, “This essentially means that the President or any member
of the Executive Department cannot unilaterally, i.e., without the backing of statute, withhold the
release of the IRA.”

The court ruled that as the Constitution lays upon the executive the duty to automatically
release the just share of local governments in the national taxes, so it enjoins the legislature not
to pass laws that might prevent the executive from performing this duty. To hold that the
executive branch may disregard constitutional provisions which define its duties, provided
it has the backing of statute, is virtually to make the Constitution amendable by statute—a
proposition which is patently absurd.

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 If indeed the framers intended to allow the enactment of statutes making the release of
IRA conditional instead of automatic, then Article X, Section 6 of the Constitution would have
been worded differently. Instead of reading “Local government units shall have a just share, as
determined by law, in the national taxes which shall be automatically released to them,” it would
have read as follows, so the intervenor Province of Batangas posits:
o “Local government units shall have a just share, as determined by law, in the national
taxes which shall be [automatically] released to them as provided by law,” or,
o “Local government units shall have a just share in the national taxes which shall be
[automatically] released to them as provided by law,” or
o “Local government units shall have a just share, as determined by law, in the national
taxes which shall be automatically released to them subject to exceptions Congress
may provide.”

Since, under Article X, Section 6 of the Constitution, only the just share of local
governments is qualified by the words “as determined by law,” and not the release thereof, the
plain implication is that Congress is not authorized by the Constitution to hinder or impede
the automatic release of the IRA.

Article X, Section 6 of the Constitution did bind the legislative just as much as the
executive branch was presumed in the ruling of this Court in the case of The Province of
Batangas v. Romulo which is analogous in many respects to the one at bar.
o In Batangas, the petitioner therein challenged the constitutionality of certain provisos
of the GAAs for FY 1999, 2000, and 2001 which set up the Local Government
Service Equalization Fund (LGSEF). The LGSEF was a portion of the IRA which
was to be released only upon a finding of the Oversight Committee on Devolution
that the LGU concerned had complied with the guidelines issued by said committee.
This Court measured the challenged legislative acts against Article X, Section 6 and
declared them unconstitutional—a ruling which presupposes that the legislature, like
the executive, is mandated by said constitutional provision to ensure that the just
share of local governments in the national taxes are automatically released.

Respondents states that following statutory provisions (Section 70 of the Philippine

National Police Reform and Reorganization Act of 1998, Section 531(e) of the LGC, and Section
10 of Republic Act 7924 (1995), Rule XXXII, Article 383(c) of the IRR of the LGC) provide that
the legislature authorized the executive branch to withhold the IRA in certain circumstances.
Thus, the automatic release requirement in the Constitution constrains only the executive branch
and not the legislature.

The court says that while statutes and implementing rules are entitled to great weight in
constitutional construction as indicators of contemporaneous interpretation, such interpretation is
not necessarily binding or conclusive on the courts.

Doctrine of contemporaneous construction is more restricted as applied to the

interpretation of constitutional provisions than when applied to statutory provisions,” and that
“except as to matters committed by the constitution itself to the discretion of some other
department, contemporaneous or practical construction is not necessarily binding upon the
courts, even in a doubtful case.” [Tañada v. Cuenco]

The validity of the legislative acts assailed in the present case should, therefore, be
assessed in light of Article X, Section 6 of the Constitution.

Province of Batangas v. Romulo: When parsed, it would be readily seen that this
provision mandates that (1) the LGUs shall have a “just share” in the national taxes; (2) the “just
share” shall be determined by law; and (3) the “just share” shall be automatically released to
the LGUs.
o Webster’s Third New International Dictionary defines “automatic” as “involuntary
either wholly or to a major extent so that any activity of the will is largely negligible;

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 of a reflex nature; without volition; mechanical; like or suggestive of an automaton.”
Further, the word “automatically” is defined as “in an automatic manner: without
thought or conscious intention.” Being “automatic,” thus, connotes something
mechanical, spontaneous and perfunctory. x x x”
While “automatic release” implies that the just share of the local governments determined
by law should be released to them as a matter of course, the GAA provisions, on the other hand,
withhold its release pending an event which is not even certain of occurring. To rule that the term
“automatic release” contemplates such conditional release would be to strip the term “automatic”
of all meaning.

Additionally, to interpret the term automatic release in such a broad manner would be
inconsistent with the ruling in Pimentel v. Aguirre. In the said case, the executive withheld the
release of the IRA pending an assessment very similar to the one provided in the GAA. This
Court ruled that such withholding contravened the constitutional mandate of an automatic
release.

There is no substantial difference between the withholding of IRA involved in Pimentel

and that in the present case, except that here it is the legislature, not the executive, which has
authorized the withholding of the IRA. The distinction notwithstanding, the ruling in Pimentel
remains applicable. As explained above, Article X, Section 6 of the Constitution—the same
provision relied upon in Pimentel—enjoins both the legislative and executive branches of
government. Hence, as in Pimentel, under the same constitutional provision, the legislative is
barred from withholding the release of the IRA.

In light of Sec. 284 of the LGC (See Notes), the only possible exception to mandatory
automatic release of the IRA is, as held in Batangas, is “if the national internal revenue
collections for the current fiscal year is less than 40% of the collections of the preceding third
fiscal year, in which case what should be automatically released shall be a proportionate amount
of the collections for the current fiscal year. The adjustment may even be made on a quarterly
basis depending on the actual collections of national internal revenue taxes for the quarter of the
current fiscal year.”

A final word. This Court recognizes that the passage of the GAA provisions by Congress
was motivated by the laudable intent to “lower the budget deficit in line with prudent fiscal
management.” The pronouncement in Pimentel, however, must be echoed: “[T]he rule of law
requires that even the best intentions must be carried out within the parameters of the
Constitution and the law. Verily, laudable purposes must be carried out by legal methods.”

DOCTRINE:
Article X, Section 6 of the Constitution enjoins both the legislative and executive
branches of government. It mandates that (1) the LGUs shall have a “just share” in the
national taxes; (2) the “just share” shall be determined by law; and (3) the “just share”
shall be automatically released to the LGUs.

As the Constitution lays upon the executive the duty to automatically release the just
share of local governments in the national taxes, so it enjoins the legislature not to pass laws that
might prevent the executive from performing this duty. To hold that the executive branch may
disregard constitutional provisions which define its duties, provided it has the backing of statute,
is virtually to make the Constitution amendable by statute—a proposition which is patently
absurd.

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