Consti DAP

8/10/2019 Consti DAP

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Power of the Purse – Executive Impoundment

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 ecretary!lorencio "Butch# A$ad then came up with a program called the

%is$ursement Acceleration Program &%AP'.

The %AP was seen as a remedy to speed up the funding of

government pro(ects. %AP ena$les the )*ecutive to realign funds

from slow moving pro(ects to priority pro(ects instead of waiting

for ne*t year+s appropriation. o what happens under the %AP was

that if a certain government pro(ect is $eing undertaken slowly

$y a certain e*ecutive agency, the funds allotted therefor will

$e withdrawn $y the )*ecutive. nce withdrawn, these funds are

declared as "savings# $y the )*ecutive and said funds will then

$e reallotted to other priority pro(ects. The %AP program did

work to stimulate the economy as economic growth was in fact

reported and portion of such growth was attri$uted to the %AP &as

noted $y the upreme -ourt'.

ther sources of the %AP include the unprogrammed funds from the

eneral Appropriations Act &AA'. /nprogrammed funds are stand$y

appropriations made $y -ongress in the AA.

0eanwhile, in eptem$er 1234, enator 5inggoy )strada made an

e*pos6 claiming that he, and other enators, received Php720 from

the President as an incentive for voting in favor of theimpeachment of then -hief 5ustice 8enato -orona. ecretary A$ad

claimed that the money was taken from the %AP $ut was dis$ursed

upon the request of the enators.

This apparently opened a can of worms as it turns out that the

%AP does not only realign funds within the )*ecutive. It turns

out that some non9)*ecutive pro(ects were also funded: to name a

few; Php3.7B for the -P<A &-ordillera People+s <i$eration Army',

Php3.=B for the 0><! &0oro >ational <i$eration !ront', P?220 for

the @ueon Province, P729P3220 for certain enators each, P32B

for 8elocation Pro(ects, etc.

This prompted 0aria -arolina Araullo, -hairperson of the Bagong

Alyansang Makabayan, and several other concerned citiens to file

various petitions with the upreme -ourt questioning the validity

of the %AP. Among their contentions was;

%AP is unconstitutional $ecause it violates the constitutional

rule which provides that "no money shall be paid out of the

reasury except in pursuance of an appropriation made by law .#

ecretary A$ad argued that the %AP is $ased on certain lawsparticularly the AA &savings and augmentation provisions

thereof', ec. 17&7', Art. I of the -onstitution &power of the

President to augment', ecs. 4= and CD of )*ecutive rder 1D1

&power of the President to suspend e*penditures and authority to

use savings, respectively'.



Issues:

I. Whether or not the %AP violates the principle "no money shall

$e paid out of the Treasury e*cept in pursuance of an

appropriation made $y law# &ec. 1D&3', Art. I, -onstitution'.

II. Whether or not the %AP realignments can $e considered as

impoundments $y the e*ecutive.

III. Whether or not the %AP realignmentsEtransfers are

constitutional.

I. Whether or not the sourcing of unprogrammed funds to the %AP

is constitutional.

. Whether or not the %octrine of perative !act is applica$le.

HELD:

I. >o, the %AP did not violate ection 1D&3', Art. I of the

-onstitution. %AP was merely a program $y the )*ecutive and is

not a fund nor is it an appropriation. It is a program for

prioritiing government spending. As such, it did not violate the

-onstitutional provision cited in ection 1D&3', Art. I of the

-onstitution. In %AP no additional funds were withdrawn from the

Treasury otherwise, an appropriation made $y law would have $een

required. !unds, which were already appropriated for $y the AA,

were merely $eing realigned via the %AP.

II. >o, there is no e*ecutive impoundment in the %AP. Impoundment

of funds refers to the President+s power to refuse to spend

appropriations or to retain or deduct appropriations for whatever

reason. Impoundment is actually prohi$ited $y the AA unless

there will $e an unmanagea$le national government $udget deficit

&which did not happen'. >evertheless, there+s no impoundment in

the case at $ar $ecause what+s involved in the %AP was the

transfer of funds.

III. >o, the transfers made through the %AP were

unconstitutional. It is true that the President &and even theheads of the other $ranches of the government' are allowed $y the

-onstitution to make realignment of funds, however, such transfer

or realignment should only $e made "within their respective

offices#. Thus, no cross9$order transfersEaugmentations may $e

allowed. But under the %AP, this was violated $ecause funds

appropriated $y the AA for the )*ecutive were $eing transferred

to the <egislative and other non9)*ecutive agencies.

!urther, transfers "within their respective offices# also

contemplate realignment of funds to an e*isting pro(ect in the

AA. /nder the %AP, even though some pro(ects were within the)*ecutive, these pro(ects are non9e*istent insofar as the AA is

concerned $ecause no funds were appropriated to them in the AA.

Although some of these pro(ects may $e legitimate, they are still

non9e*istent under the AA $ecause they were not provided for $y

the AA. As such, transfer to such pro(ects is unconstitutional

and is without legal $asis.



!n the issue of what are "savings#

These %AP transfers are not "savings# contrary to what was $eing

declared $y the )*ecutive. /nder the definition of "savings# in

the AA, savings only occur, among other instances, when there is

an e*cess in the funding of a certain pro(ect once it is

completed, finally discontinued, or finally a$andoned. The AA

does not refer to "savings# as funds withdrawn from a slow moving

pro(ect. Thus, since the statutory definition of savings was not

complied with under the %AP, there is no $asis at all for the

transfers. !urther, savings should only $e declared at the end

of the fiscal year. But under the %AP, funds are already $eing

withdrawn from certain pro(ects in the middle of the year and

then $eing declared as "savings# $y the )*ecutive particularly $y

the %B0.

IV. >o. /nprogrammed funds from the AA cannot $e used as money

source for the %AP $ecause under the law, such funds may only $e

used if there is a certification from the >ational Treasurer to

the effect that the revenue collections have e*ceeded the revenue

targets. In this case, no such certification was secured $efore

unprogrammed funds were used.

V. Fes. The %octrine of perative !act, which recognies the

legal effects of an act prior to it $eing declared as

unconstitutional $y the upreme -ourt, is applica$le. The %AP has

definitely helped stimulate the economy. It has funded numerous

pro(ects. If the )*ecutive is ordered to reverse all actions

under the %AP, then it may cause more harm than good. The %APeffects can no longer $e undone. The $eneficiaries of the %AP

cannot $e asked to return what they received especially so that

they relied on the validity of the %AP. Gowever, the %octrine of

perative !act may not $e applica$le to the authors,

implementers, and proponents of the %AP if it is so found in the

appropriate tri$unals &civil, criminal, or administrative' that

they have not acted in good faith.

Consti DAP

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