BELGICA vs. HONORABLE EXECUTIVE for Prohibition seeking that the "Pork SECRETARY PAQUITO N. OCHOA JR, Barrel System" be declared et al, Respondents unconstitutional, and a writ of prohibition be issued permanently G.R. No. 208566 November 19, G.R. No. 208566 - Belgica, et al filed an 2013 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 under Rule 65 of the Rules of Court, all of discretion. Also, they pray that the Court which assail the constitutionality of the issue a TRO against respondents 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-blowers order be issued restraining President who declared that JLN Corporation (Janet Benigno Simeon S. Aquino III (President Lim Napoles) had swindled billions of Aquino) and Secretary Abad from pesos from the public coffers for "ghost releasing such funds to Members of projects" using dummy NGOs. Thus, Congress Criminal complaints were filed before the Office of the Ombudsman, charging five ISSUES: (5) lawmakers for Plunder, and three (3) 1. Whether or not the 2013 PDAF other lawmakers for Malversation, Direct Article and all other Congressional Pork Bribery, and Violation of the Anti-Graft Barrel Laws similar thereto are and Corrupt Practices Act. Also unconstitutional considering that they recommended to be charged in the violate the principles of/constitutional complaints are some of the lawmakers provisions on (a) separation of powers; chiefs -of-staff or representatives, the (b) non-delegability of legislative power; heads and other officials of three (3) (c) checks and balances; (d) implementing agencies, and the several accountability; (e) political dynasties; presidents of the NGOs set up by Napoles. and (f) local autonomy. Whistle-blowers alleged that" at 2. Whether or not the phrases (under least P900 Million from royalties in the Section 8 of PD 910,116 relating to the operation of the Malampaya gas project Malampaya Funds, and under Section 12 off Palawan province intended for of PD 1869, as amended by PD 1993, agrarian reform beneficiaries has gone relating to the Presidential Social Fund, into a dummy NGO. Several petitions are unconstitutional insofar as they were lodged before the Court similarly constitute undue delegations of seeking that the "Pork Barrel System" be legislative power. declared unconstitutional HELD: 1. Yes, the PDAF article is RESTORATION PURPOSES WHICH ARISE unconstitutional. The post-enactment FROM CALAMITIES. measures which govern the areas of project identification, fund release and (b) and to finance the restoration of fund realignment are not related to damaged or destroyed facilities due to functions of congressional oversight and, calamities, as may be directed and hence, allow legislators to intervene authorized by the Office of the President and/or assume duties that properly of the Philippines was declared belong to the sphere of budget execution. unconstitutional.IT GIVES THE This violates the principle of separation of PRESIDENT CARTE BLANCHE AUTHORITY powers. Congressrole must be confined TO USE THE SAME FUND FOR ANY to mere oversight that must be confined INFRASTRUCTURE PROJECT HE MAY SO to: (1) scrutiny and (2) investigation and DETERMINE AS A PRIORITY. VERILY, monitoring of the implementation of laws. THE LAW DOES NOT SUPPLY A Any action or step beyond that will DEFINITION OF PRIORITY undermine the separation of powers INFRASTRUCTURE DEVELOPMENT guaranteed by the constitution. PROJECTS AND HENCE, LEAVES THE PRESIDENT WITHOUT ANY GUIDELINE Thus, the court declares the 2013 pdaf TO CONSTRUE THE SAME. article as well as all other provisions of law which similarly allow legislators to wield any form of post-enactment MARIA CAROLINA ARAULLO VS authority in the implementation or BENIGNO AQUINO III enforcement of the budget, unrelated to GR No. 209287 congressional oversight, as violative of July 1, 2014 the separation of powers principle and thus unconstitutional. When President Benigno Aquino III took office, his administration noticed the sluggish growth of the economy. The 2. Yes. Sec 8 of PD 910- the phrase World Bank advised that the economy and for such other purposes as may be needed a stimulus plan. Budget Secretary hereafter directed by the President Florencio Butch Abad then came up with constitutes an undue delegation of a program called the Disbursement legislative power insofar as it does not lay Acceleration Program (DAP). down a sufficient standard to adequately The DAP was seen as a remedy to speed determine the limits of the Presidents up the funding of government projects. authority with respect to the purpose for DAP enables the Executive to realign which the Malampaya Funds may be funds from slow moving projects to used. It gives the President wide latitude priority projects instead of waiting for to use the Malampaya Funds for any other next years appropriation. So what purpose he may direct and, in effect, happens under the DAP was that if a allows him to unilaterally appropriate certain government project is being public funds beyond the purview of the undertaken slowly by a certain executive law. agency, the funds allotted therefor will be withdrawn by the Executive. Once Section 12 of PD 1869, as amended by PD withdrawn, these funds are declared as 1993- the phrases: savings by the Executive and said funds will then be reallotted to other priority (b) "to finance the priority infrastructure projects. The DAP program did work to development projects was declared stimulate the economy as economic constitutional. IT INDICATED PURPOSE growth was in fact reported and portion ADEQUATELY CURTAILS THE AUTHORITY of such growth was attributed to the DAP OF THE PRESIDENT TO SPEND THE (as noted by the Supreme Court). PRESIDENTIAL SOCIAL FUND ONLY FOR Other sources of the DAP include the II. Whether or not the DAP realignments unprogrammed funds from the General can be considered as impoundments by Appropriations Act (GAA). the executive. Unprogrammed funds are standby III. Whether or not the DAP appropriations made by Congress in the realignments/transfers are constitutional. GAA. IV. Whether or not the sourcing of Meanwhile, in September 2013, Senator unprogrammed funds to the DAP is Jinggoy Estrada made an expos claiming constitutional. that he, and other Senators, received V. Whether or not the Doctrine of Php50M from the President as an Operative Fact is applicable. incentive for voting in favor of the impeachment of then Chief Justice HELD: Renato Corona. Secretary Abad claimed I. No, the DAP did not violate Section that the money was taken from the DAP 29(1), Art. VI of the Constitution. DAP but was disbursed upon the request of the was merely a program by the Executive Senators. and is not a fund nor is it an This apparently opened a can of worms as appropriation. It is a program for it turns out that the DAP does not only prioritizing government spending. As realign funds within the Executive. It such, it did not violate the Constitutional turns out that some non-Executive provision cited in Section 29(1), Art. VI of projects were also funded; to name a the Constitution. In DAP no additional few: Php1.5B for the CPLA (Cordillera funds were withdrawn from the Treasury Peoples Liberation Army), Php1.8B for otherwise, an appropriation made by law the MNLF (Moro National Liberation would have been required. Funds, which Front), P700M for the Quezon Province, were already appropriated for by the P50-P100M for certain Senators each, GAA, were merely being realigned via the P10B for Relocation Projects, etc. DAP. This prompted Maria Carolina Araullo, II. No, there is no executive Chairperson of the Bagong Alyansang impoundment in the DAP. Impoundment Makabayan, and several other concerned of funds refers to the Presidents power to citizens to file various petitions with the refuse to spend appropriations or to Supreme Court questioning the validity of retain or deduct appropriations for the DAP. Among their contentions was: whatever reason. Impoundment is DAP is unconstitutional because it actually prohibited by the GAA unless violates the constitutional rule which there will be an unmanageable national provides that no money shall be paid out government budget deficit (which did not of the Treasury except in pursuance of an happen). Nevertheless, theres no appropriation made by law. impoundment in the case at bar because Secretary Abad argued that the DAP is whats involved in the DAP was the based on certain laws particularly the transfer of funds. GAA (savings and augmentation III. No, the transfers made through the provisions thereof), Sec. 25(5), Art. VI of DAP were unconstitutional. It is true that the Constitution (power of the President the President (and even the heads of the to augment), Secs. 38 and 49 of other branches of the government) are Executive Order 292 (power of the allowed by the Constitution to make President to suspend expenditures and realignment of funds, however, such authority to use savings, respectively). transfer or realignment should only be made within their respective offices. Issues: Thus, no cross-border I. Whether or not the DAP violates the transfers/augmentations may be allowed. principle no money shall be paid out of But under the DAP, this was violated the Treasury except in pursuance of an because funds appropriated by the GAA appropriation made by law (Sec. 29(1), for the Executive were being transferred Art. VI, Constitution). to the Legislative and other non- DAP, then it may cause more harm than Executive agencies. good. The DAP effects can no longer be Further, transfers within their respective undone. The beneficiaries of the DAP offices also contemplate realignment of cannot be asked to return what they funds to an existing project in the GAA. received especially so that they relied on Under the DAP, even though some the validity of the DAP. However, the projects were within the Executive, these Doctrine of Operative Fact may not be projects are non-existent insofar as the applicable to the authors, implementers, GAA is concerned because no funds were and proponents of the DAP if it is so found appropriated to them in the GAA. in the appropriate tribunals (civil, Although some of these projects may be criminal, or administrative) that they legitimate, they are still non-existent have not acted in good faith. under the GAA because they were not provided for by the GAA. As such, transfer Angara v. Electoral Commission, G.R. No. L- to such projects is unconstitutional and is 45081, July 15, 1936 without legal basis. On the issue of what are savings LAUREL, J.: These DAP transfers are not savings contrary to what was being declared by I. THE FACTS the Executive. Under the definition of Petitioner Jose Angara was proclaimed winner savings in the GAA, savings only occur, and took his oath of office as member of the among other instances, when there is an National Assembly of the Commonwealth excess in the funding of a certain project Government. On December 3, 1935, the once it is completed, finally discontinued, National Assembly passed a resolution or finally abandoned. The GAA does not confirming the election of those who have not refer to savings as funds withdrawn been subject of an election protest prior to the from a slow moving project. Thus, since adoption of the said resolution. the statutory definition of savings was not complied with under the DAP, there is no On December 8, 1935, however, private basis at all for the transfers. Further, respondent Pedro Ynsua filed an election savings should only be declared at the protest against the petitioner before the end of the fiscal year. But under the DAP, Electoral Commission of the National funds are already being withdrawn from Assembly. The following day, December 9, certain projects in the middle of the year 1935, the Electoral Commission adopted its and then being declared as savings by own resolution providing that it will not consider the Executive particularly by the DBM. any election protest that was not submitted on IV. No. Unprogrammed funds from the or before December 9, 1935. GAA cannot be used as money source for Citing among others the earlier resolution of the the DAP because under the law, such National Assembly, the petitioner sought the funds may only be used if there is a dismissal of respondents protest. The Electoral certification from the National Treasurer Commission however denied his motion. to the effect that the revenue collections have exceeded the revenue targets. In this case, no such certification was II. THE ISSUE secured before unprogrammed funds were used. Did the Electoral Commission act without or in V. Yes. The Doctrine of Operative Fact, excess of its jurisdiction in taking cognizance of which recognizes the legal effects of an the protest filed against the election of the act prior to it being declared as petitioner notwithstanding the previous unconstitutional by the Supreme Court, is confirmation of such election by resolution of applicable. The DAP has definitely helped the National Assembly? stimulate the economy. It has funded numerous projects. If the Executive is III. THE RULING ordered to reverse all actions under the [The Court DENIED the petition.] Cocofed vs Republic Case Digest GR 177857-58 Jan 24 2012 NO, the Electoral Commission did not act without or in excess of its jurisdiction in taking Facts: cognizance of the protest filed against the In 1971, RA 6260 created the Coconut election of the petitioner notwithstanding the Investment Company (CIC) to administer the previous confirmation of such election by Coconut Investment Fund, a fund to be sourced resolution of the National Assembly. from levy on the sale of copra. The copra seller was, or ought to be, issued COCOFUND The Electoral Commission acted within the receipts. The fund was placed at the disposition legitimate exercise of its constitutional of COCOFED, the national association of prerogative in assuming to take cognizance of coconut producers having the largest the protest filed by the respondent Ynsua membership. against the election of the petitioner Angara, When martial law started in 1972, several and that the earlier resolution of the National presidential decrees were issued to improve the Assembly cannot in any manner toll the time for coconut industry through the collection and use filing election protests against members of the of the coconut levy fund: National Assembly, nor prevent the filing of a PD 276 established the Coconut Consumers protest within such time as the rules of the Stabilization Fund (CCSF) and declared the Electoral Commission might prescribe. proceeds of the CCSF levy as trust fund, to be utilized to subsidize the sale of coconut-based The grant of power to the Electoral Commission products, thus stabilizing the price of edible oil. to judge all contests relating to the election, PD 582 created the Coconut Industry returns and qualifications of members of the Development Fund (CIDF) to finance the National Assembly, is intended to be as operation of a hybrid coconut seed farm. complete and unimpaired as if it had remained In 1973, PD 232 created the Philippine Coconut originally in the legislature. The express lodging Authority (PCA) to accelerate the growth and of that power in the Electoral Commission is an development of the coconut and palm oil implied denial of the exercise of that power by industry. the National Assembly. xxx. Then came P.D. No. 755 in July 1975, providing under its Section 1 the policy to provide readily [T]he creation of the Electoral Commission available credit facilities to the coconut farmers carried with it ex necesitate rei the power at preferential rates. Towards achieving this, regulative in character to limit the time with Section 2 of PD 755 authorized PCA to utilize which protests intrusted to its cognizance the CCSF and the CIDF collections to acquire a should be filed. [W]here a general power is commercial bank and deposit the CCSF levy conferred or duty enjoined, every particular collections in said bank, interest free, the power necessary for the exercise of the one or deposit withdrawable only when the bank has the performance of the other is also conferred. attained a certain level of sufficiency in its equity In the absence of any further constitutional capital. It also decreed that all levies PCA is provision relating to the procedure to be authorized to collect shall not be considered followed in filing protests before the Electoral as special and/or fiduciary funds or form Commission, therefore, the incidental power to part of the general funds of the government. promulgate such rules necessary for the proper Both P.D. Nos. 961 and 1468 also provide that exercise of its exclusive power to judge all the CCSF shall not be construed by any law as contests relating to the election, returns and a special and/or trust fund, the stated intention qualifications of members of the National being that actual ownership of the said fund Assembly, must be deemed by necessary shall pertain to coconut farmers in their implication to have been lodged also in the private capacities. Electoral Commission. 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 Even if the money is allocated for a special FUB shares. purpose and raised by special means, it is still The PCA appropriated, out of its own fund, an public in character. amount for the purchase of the said 72.2% Accordingly, the presidential issuances which equity. It later reimbursed itself from the authorized the PCA to distribute, for free, the coconut levy fund. shares of stock of the bank it acquired to the While the 64.98% (72.2 % 7.22%) portion of coconut farmers under such rules and the option shares ostensibly pertained to the regulations the PCA may promulgate is farmers, the corresponding stock certificates unconstitutional. supposedly representing the farmers equity It is unconstitutional because first, it have were in the name of and delivered to PCA. unduly delegated legislative power to the PCA, There were, however, shares forming part of and second, it allowed the use of the CCSF to the 64.98% portion, which ended up in the benefit directly private interest by the outright hands of non-farmers. The remaining 27.8% of and unconditional grant of absolute ownership the FUB capital stock were not covered by any of the FUB/UCPB shares paid for by PCA of the agreements. entirely with the CCSF to the undefined Through the years, a part of the coconut levy coconut farmers, which negated or funds went directly or indirectly to various circumvented the national policy or public projects and/or was converted into different purpose declared by P.D. No. 755. assets or investments. Of particular relevance Hence, the so-called Farmers shares do not to this was their use to acquire the FUB / UCPB, belong to the coconut farmers in their private and the acquisition by UCPB, through the CIIF capacities, but to the Government. The coconut and holding companies, of a large block of San levy funds are special public funds and any Miguel Corporation (SMC) shares. property purchased by means of the coconut Issue 1: W/N the mandate provided under PD levy funds should likewise be treated as public 755, 961 and 1468 that the CCSF shall not be funds or public property, subject to burdens and construed by any law as a special and/or trust restrictions attached by law to such property. ## 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 Tawang Multi-Purpose Cooperative provides that all money collected on any tax levied for a special purpose shall be treated vs. La Trinidad Water District [GR No. as a special fund and paid out for such purpose only, and if the purpose for which a 166471, March 22, 2011] 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 FACTS: Petitioner Tawang Multi-Purpose from forced exactions with the end-goal of Cooperative is a cooperative organized to developing the entire coconut industry. provide domestic water services in Therefore, the subsequent reclassification of Barangay Tawang, La Trinidad, Benguet the CCSF as a private fund to be owned by while respondent La Trinidad Water private individuals in their private capacities under P.D. Nos. 755, 961 and 1468 is District is a local water utility created unconstitutional. under Presidential Decree (PD) No. 198, Not only is it unconstitutional, but the mandate as amended. La Trinidad Water District is is contrary to the purpose or policy for which the authorized to supply water for domestic, coco levy fund was created. industrial and commercial purposes Issue 2: W/N the coco levy fund may be owned by the within the municipality of La Trinidad, coconut farmers in their private capacities Benguet. Tawang Multi-Purpose No. The coconut levy funds are in the nature of Cooperative filed with the National Water taxes and can only be used for public purpose. Resources Board an application for a They cannot be used to purchase shares of certificate of public convenience (CPC) to stocks to be given for free to private individuals. 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.