Araullo Et Al. vs. Aquino III Et Al

MARIA CAROLINA P. ARAULLO, et al. v.
BENIGNO SIMEON
AQUINO III, et al.
G.R. Nos. 209287, 209135, 209136, 209155, 209164, 209260, 209442,
209517 & 209569, 3 February 2015, EN BANC, (Bersamin, J.)
The exercise of the power to augment shall be strictly construed by virtue of its being an
exception to the general rule that the funding of PAPs shall be limited to the amount fixed by
Congress for the purpose. Necessarily, savings, their utilization and their management will also be
strictly construed against expanding the scope of the power to augment. Such a strict interpretation
is essential in order to keep the Executive and other budget implementors within the limits of their
prerogatives during budget execution, and to prevent them from unduly transgressing Congress
power of the purse.
The ascertainment of good faith, or the lack of it, and the determination of whether or not
due diligence and prudence were exercised, are questions of fact. The want of good faith is thus better
determined by tribunals other than this Court, which is not a trier of facts.
In this Motion for Reconsideration, Aquino III, et al. maintain that the
issues in these consolidated cases were mischaracterized and unnecessarily
constitutionalized because the Courts interpretation of savings can be overturned
by legislation considering that savings is defined in the General Appropriations Act
(GAA), hence making savings a statutory issue. They aver that the withdrawn
unobligated allotments and unreleased appropriations constitute savings and may be
used for augmentation and that the Court should apply legally recognized norms
and principles, most especially the presumption of good faith, in resolving their
motion.
On their part, Araullo, et al. pray for the partial reconsideration of the
decision on the ground that the Court failed to declare as unconstitutional and illegal
all moneys under the Disbursement Acceleration Program (DAP) used for alleged
augmentation of appropriation items that did not have actual deficiencies. They
submit that augmentation of items beyond the maximum amounts recommended by
the President for the programs, activities and projects (PAPs) contained in the
budget submitted to Congress should be declared unconstitutional.
ISSUES:
1. Are the acts and practices under the DAP, particularly their non-conformity
with Section 25(5), Article VI of the Constitution and the principles of
separation of power and equal protection, constitutional?
2. Did the Courts Decision invalidated all DAP-funded projects?
UST Law Review, Vol. LIX, No. 1, May 2015
3. Did the Courts Decision throw out the presumption of good faith of the
authors, proponents and implementors of the Disbursement Acceleration
Program (DAP)?
RULING:
1. No. Regardless of the perceived beneficial purposes of the DAP, and
regardless of whether the DAP is viewed as an effective tool of stimulating the
national economy, the acts and practices under the DAP and the relevant provisions
of NBC No. 541 cited in the Decision should remain illegal and unconstitutional as
long as the funds used to finance the projects mentioned therein are sourced from
savings that deviated from the relevant provisions of the GAA, as well as the
limitation on the power to augment under Section 25(5), Article VI of the
Constitution. In a society governed by laws, even the best intentions must come
within the parameters defined and set by the Constitution and the law. Laudable
purposes must be carried out through legal methods.
Section 38, Chapter 5, Book VI of the Administrative Code refers to the
authority of the President to suspend or otherwise stop further expenditure of
funds allotted for any agency, or any other expenditure authorized in the GAA.
When the President suspends or stops expenditure of funds, savings are not
automatically generated until it has been established that such funds or
appropriations are free from any obligation or encumbrance, and that the work,
activity or purpose for which the appropriation is authorized has been completed,
discontinued or abandoned.
The reversion to the General Fund of unexpended balances of
appropriations savings included pursuant to Section 28 Chapter IV, Book VI of
the Administrative Code22 does not apply to the Constitutional Fiscal Autonomy
Group (CFAG), which include the Judiciary, Civil Service Commission,
Commission on Audit, Commission on Elections, Commission on Human Rights,
and the Office of the Ombudsman. The reason for this is that the fiscal autonomy
enjoyed by the CFAG.
Section 39 is evidently in conflict with the plain text of Section 25(5),
Article VI of the Constitution because it allows the President to approve the use of
any savings in the regular appropriations authorized in the GAA for programs and
projects of any department, office or agency to cover a deficit in any other item of
the regular appropriations. As such, Section 39 violates the mandate of Section
25(5) because the latter expressly limits the authority of the President to augment an
item in the GAA to only those in his own Department out of the savings in other
items of his own Departments appropriations. Accordingly, Section 39 cannot
serve as a valid authority to justify cross-border transfers under the DAP.
Augmentations under the DAP which are made by the Executive within its
department shall, however, remain valid so long as the requisites under Section 25(5)
are complied with.
2. No. It is to be emphatically indicated that the Decision did not declare

the en masse invalidation of the 116 DAP-funded projects. To be sure, the Court
recognized the encouraging effects of the DAP on the countrys economy, and
acknowledged its laudable purposes, most especially those directed towards
infrastructure development and efficient delivery of basic social services. It bears
repeating that the DAP is a policy instrument that the Executive, by its own
prerogative, may utilize to spur economic growth and development.
This modified interpretation does not take away the caveat that only DAP
projects found in the appropriate GAAs may be the subject of augmentation by
legally accumulated savings. Whether or not the 116 DAP-funded projects had
appropriation cover and were validly augmented require factual determination that is
not within the scope of the present consolidated petitions under Rule 65.
Nonetheless, the Decision did find doubtful those projects that appeared to
have no appropriation cover under the relevant GAAs on the basis that: (1) the
DAP funded projects that originally did not contain any appropriation for some of
the expense categories (personnel, MOOE and capital outlay); and (2) the
appropriation code and the particulars appearing in the SARO did not correspond
with the program specified in the GAA.
Accordingly, the item referred to by Section 25(5) of the Constitution is the
last and indivisible purpose of a program in the appropriation law, which is distinct
from the expense category or allotment class. There is no specificity, indeed, either
in the Constitution or in the relevant GAAs that the object of augmentation should
be the expense category or allotment class. In the same vein, the President cannot
exercise his veto power over an expense category; he may only veto the item to
which that expense category belongs to.
3. No. The Court has neither thrown out the presumption of good faith
nor imputed bad faith to the authors, proponents and implementors of the DAP.
The contrary is true, because the Court has still presumed their good faith by
pointing out that the doctrine of operative fact cannot apply to the authors,
proponents and implementors of the DAP, unless there are concrete findings of
good faith in their favor by the proper tribunals determining their criminal, civil,
administrative and other liabilities.

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MARIA CAROLINA P. ARAULLO, et al. v.

UST Law Review, Vol. LIX, No. 1, May 2015

2. No. It is to be emphatically indicated that the Decision did not declare

UST Law Review, Vol. LIX, No. 1, May 2015

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