Political Law Constitutional Law Separation of Powers Fund Realignment Constitutionality of

the Disbursement Acceleration Program

Power of the Purse Eecuti!e "mpoundment
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$eing undertaken slowly $y a certain e*ecutive agency, the funds allotted therefor will $e withdrawn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 ,nce withdrawn, these funds are declared as "savings# $y the )*ecutive and said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 the
impeachment 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 @ueAon Province, P729P3220 for certain enators each, P32B for
8elocation Pro(ects, etc.
This prompted 0aria -arolina Araullo, -hairperson of the #agong Alyansang $a%abayan, and
several other concerned citiAens to file various petitions with the upreme -ourt questioning the
validity of the %AP. Among their contentions was;
%AP is unconstitutional $ecause it violates the constitutional rule which provides that "no money
shall be paid out of the &reasury ecept in pursuance of an appropriation made by law.#
ecretary A$ad argued that the %AP is $ased on certain laws particularly the .AA &savings and
augmentation provisions thereof', ec. 17&7', Art. BI 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. BI, -onstitution'.
II. Whether or not the %AP realignments can $e considered as impoundments $y the e*ecutive.
III. Whether or not the %AP realignmentsEtransfers are constitutional.
IB. Whether or not the sourcing of unprogrammed funds to the %AP is constitutional.
B. Whether or not the %octrine of ,perative !act is applica$le.
HELD:
I. >o, the %AP did not violate ection 1D&3', Art. BI 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 prioritiAing
government spending. As such, it did not violate the -onstitutional provision cited in ection 1D&3',
Art. BI 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 the heads 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 (sa!ings)
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 recogniAes 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 %AP effects 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.