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GR No. 209287, et al
July 1, 2014
Bersamin, J.

Petitioners/Respondents: ANG DAMI. Basta main respondent si Noynoy in his capacity as the Fresident of the Philippines

The DAP is basically a program where savings of government projects from unreleased appropriations and withdrawal of
unobligated allotments, as well as unprogrammed funds, were used in order to augment the funding of another government
project. This is a system under the DBM designed to help boost the Philippine economy. Pursuant to the DAP, NBC No. 41 was
issued to implement the DAP.

Basically, the NBC No 41 allows the augmentation of projects not considered in the budget expected to be implemented during
the year. (The budget is pursuant to the general appropriations act, or GAA, for that given fiscal year.) SoThe government
declares savings coming from unobligated allotments and withdrawing unreleased appropriations, which are later released and
applied to augment existing projects and support other priority projects.

Now, DAP is NOT an appropriation measure, because there was no law required to implement it. This is pursuant to Sec 29(1) of
Article VI, where the president may adapt the budget to changes depending on the countrys economy.

However, the unreleased appropriations and withdrawn obligated allotments under the DAP were NOT savings. Thus,
transferring them would contravene sec.25(5) of Art VI. Said section requires that there be a LAW authorizing the transfer, and
in that section, the funds to be transferred must be SAVINGS and the purpose is to AUGMENT an item for the respective offices
of the Pres, Senate Pres, Speaker, Chief Justice, and heads of Consti Comms.

First, for compliance with 25(5), there must be a LAW. However, the GAAs of 2011 and 2012 authorizing the transfer of funds
were unconstitutional. Why? Because the GAAs allowed the augmentation of any item in the act, even if the item belonged to
an office outside the Executive.

Next, there were NO SAVINGS from which funds could be sourced for the DAP. Why? Because the funds in the DAP were not
actually savings. How? Because savings means excess money after the items that needed funding have been funded. In NBC No.
541, no legal basis was given as to justify the treatment of unreleased or unalloted appropriations as savings.

Next, the funds under the DAP should not be used to augment items not provided for in the GAA. But what happened was that
the DAP authorized the transfer of funds to projects not under the GAA. What was worse is that it allowed cross-border
augmentations, or transfers to funds that are not within the respective offices of the Pres, Senate Pres, etc. Eh bawal yun. So

There was also an issue on impoundment. But di impoundment yung DAP. Impoundment entails deduction of appropriations,
and not transfer, which is precisely what the DAP authorizes.)

Hence, DAP is unconstitutional.

Intro, parang thesis lang: The petitioners are assailing the constitutionality of the (1) Disbursement Acceleration Program
[DAP], (2) National Budget Circular [NBC] No. 41, and (3) related issuance of the Dept of Budget and Management [DBM]
implementing the DAP. Basically, the main point is that the DAP violates Sections 25(5) & 29(1), Article VI of the Consti.

This all started when Jinggoy delivered a frivileged speech wherein he revealed that certain senators, himself included, received
50M pesos each as incentive for voting in favor of Coronas impeachment. As a response, Sec. Abad of DBM released a pubic
statement which stated that the funds given to the senators were part of the DAP, which was in place since 2011.

What is DAP in the first place? According to Sec. Abad, DAP is a program designed by DBM to ramp up the spending (of the
govt) to accelerate economic expansion. Basically, the less the government spends, the slower the GDP of the country rises.
Kaya may DAP para tumaas GDP natin. Abad also said that it was the senators were the ones that requested the funding.

The funds under the DAP are taken from:
1. unreleased appropriations under Personnel Services
2. unprogrammed funds
3. carry-over appropriations unreleased from the previous year, and
4. budgets for slow-moving items or projects that had been realigned to support faster-disbursing projects

But the DBM later claimed that the DAP releases were sourced from:
1. savings of the government, derived from:
a. pooling of unreleased appropriations, like unreleased Personnel Services appropriations, and
appropriations from slow-moving/discontinued projects, and
b. the withdrawal of unobligated allotments, also for slow-moving programs, earlier released to govt
agencies; and
2. unprogrammed funds

Procedural Issue: W/N certiorari, prohibition and mandamus are proper remediesNOT gonna include this na. So I dunno.
Substantive issues:
1. (relevant to our class) W/N DAP violates Sec 29 of Art VI
2. (relevant to our class) W/N DAP, NBC No 541 and other implementing issuances violate Sec 25(5) of Art VI
3. W/N DAP violates: EPC, system of checks and balances, principle of public accountability
4. W/N there exists a factual & legal justification to issue a TRO against the DAP
5. W/N the release of unprogrammed funds under the DAP was in accord with the GAAs (gen. appropriation acts)

Overview of the Philippine Budget System
Really boring shit, but I will include it anyway
Budget is defined by Commonwealth Act No. 246 as the financial program of the National Government for a
designated fiscal year, consisting of the statements of estimated receipts and expenditures.
o Simply put, budget is the master financial plan of the government
o The purpose of the national budget is to protect the people, the territory and sovereignty of the State, by
performing vital functions which require public expenditures.
Governments raise money bywell, you should know this by now, Montero babiestaxation.
The Philippine budget cycle has four phases: (skip this if you want. Super technical ng shizniz but if magtanong sya
about this, wellsana hindi. Trolololol. But do read the budget legislation and budget execution parts, he might
ask the procedure in Congress.)
the DBM issues a budget call
The budget call contains the parameters, guidelines and procedures set by the
Development Budget Coordination Committee (DBCC) to aid government agencies in
the preparation and submission of their budget proposals
There are two kinds of budget calls:
o National Budget Call: addressed to all agencies, including state universities
and colleges; and
o Corporate Budget Call, addressed to all GOCCs and govt financial institutions
After the budget call, the agencies submit their respective agency budget proposals
The govt agencies partner with civil society organizations and other citizen-stakeholders
in the preparation of the proposals
The proposals are presented before a technical panel of the DBM
DBM reviews the budget proposals, comes up with recommendations, and consolidates
the recommended budgets into the National Expenditure Program (NEP) and a Budget
of Expenditures and Sources Financing (BESF)
Both NEP and BESF (besfrIend. Lol. Labo. Sssh Jates concentrate!) are again presented to the DBM
and the DBCC for reprioritization and refinements.
Once approved by el Presidente and the Cabinet, the DBM prepares the budget documents for
submission to Congress. The documents consist of: (1) Presidents Budget Message, and (2) the
BESF (as mandated by Article VII, Sec. 22), and the NEP
At this point, the ponente discusses definitions of all sorts of government expenditures shiz. Yes,
puro definitions, so skip if you want. Super boring. Dont say I didnt warn you.
Basically there are kinds of puhlic/government expenditures, classified into two categories:
(1) capital expenditures or those whose usefulness lasts for more than one year, and
which add to the assets of the government, and
(2) current operating expenditures, or purchases of goods and services the benefit of
which does not extend beyond the fiscal year. Current operating expenditures consist
of: (a) personal services and (b) maintenance of other operating expenses
Public expenditures are also broadly grouped into: economic development expenditures, social
services or social development expenditures, general government expenditures, national defense
expenditures, and public debt.
Public revenues cover all income or receipts of the govt treasury used to support govt
expenditures. There are two aspects of this:
Quasi-private income where the State holds property and engage in trade which
generate revenues
Taxes lifeblood of the govt blah blah
Hi Cler! Sana di ako matawag today.
Look at the full text to see where the govt gets its revenue. Basically some are general
sources (income from business operations, interest income, forex gains,
grants/donations) and specific sources (taxes on income, property, goods and services,
fines and penalties, etc.)
2. BUDGET LEGISLATION (I think this is the part relevant to Sec. 25?)
covers the period commencing from the time the Congress receives the Presidents budget,
inclusive of NEP and BESF, up to the approval by the President of the GAA (general appropriations
Basically the Presidents Budget is assigned to the House of Reps appropriations committee
(AppCom) on first reading.
The AppCom conduct budget hearings,
Thereafter, the House drafts the General Appropriations Bill (GAB. Think of GAP, but B). (Thus,
the bill originates from the House of Reps.)
The GAB is presented by the AppCom in plenary session.
Ang itim ni Nat.
As with other laws, the GAB is approved on the third reading before it is transferred to
the Senate
The Senate, upon receipt, would conduct its own hearings. The Senate may actually conduct the
hearings simultaneously with the Houses deliberations.
The Senates Finance Committee may submit proposed amendments only after the
Houses version is formally transmitted to the Senate.
Then comes the Bicameral Conference Committee for the purpose of harmonizing conflicting
provisions of the GAB.
Then, the GAB is presented to the President for approval.
President (think Your Man, Our Man, Armand Dulay) then reviews it. He may veto it and all, or
even identify some items for conditional implementation.
If, by the end of the fiscal year, Congress shall have failed to pass the GAB, the GAA for the
preceding fiscal year shall be deemed reenacted until the GAB is passed by Congress!
At this point, pagod na ako, so bear with me. Oso. Bear.
The budget execution phase is the primary function of the DBM
The DBM (not LBM ah, mind you) is tasked to perform the ff procedures:
a. issue programs and guidelines for the release of funds
b. prepare an allotment and cash release program
c. release allotments
d. issue disbursement authorities
Prior to the implementation, the various dept and agencies are required to submit the Budget
Execution Documents to outline their plans and performance targets. The docs must contain the
physical and financial plans, the monthly cash program, estimate of monthly income, and list of
obligations not yet due and demandable.
Upon approval, the DBM prepares the allotment release program (sets a limit for allotments to a
specific agency) and cash release program (fixes the monthly, quarterly and annual
Allotment is different from appropriation, because the latter is the general legislative authority
to spend (remember this definition!).
To settle obligations incurred by the agencis, the DBM issues a disbursement authority known as
notice of cash allocation (NCA). The NCA specifies the maximum amount of cash that can be
withdrawn from a govt servicing bank for the period indicated.
Noncash disbursements may also be authorized.
A cash disbursement ceiling for overseas operations is also authorized.
this phase ensures that the govt funds have been effectively and efficiently utilized to achieve the
States socio-economic goals.
Aiza can I have extra rice?
Accountability may be examined by performance targets and outcomes; accountability reports;
review of performance; and COA audits. DONE. BOOM. TANGINA THIS PART.

Nature of the DAP as a fiscal plan
The DAP, as earlier mentioned, was designed to promote economic growth.
When Noynoy made pasok to the presidency, he made efficiency and transparency in govt spending a significant
focus of his administration.
While this resulted in an improved fiscal deficit in the GDP (5%), it also decelerated govt project implementation and
payment schedules.
o The World Bank opined that observed because of this, the Philippine economic growth could be reduced
Hence, DAP was created.
o DAP was meant to be a stimulus package for fast-track public spending to push economic growth by
investing on high-impact projects to be funded from the savings generated during the year as well as
from as unprogrammed funds.
o The government, by spending on public infrastructure, would signify its commitment of ensuring
profitability for prospective investors.
o DAP aims to stimulate the economy by way of accelerated spending, by:
Streamlining the implementation processes through infrastructure projects of DPWH and DEPED,
Frontlining PPP (private-public partnership) projects
o Butdid the stimulus package work?
Partially yes.
The DAP contributed to 1.3% GDP growth by the 4th quarter of 2011.
The economy grew by 11.8% year on year, and infrastructure spending grew to 34% by Sept 2013.
o But how were the projects funded under the DAP chosen? They were chosen based on:
Multiplier impact on the economy and infrastructure devt
Beneficial effect on the poor
Translation into disbursements

DAP SOURCES AND DISBURSEMENTSheto na ang meat! Ilabas na ang extra rice!
Based on a memorandum from DBM Secretary Abad dated 12 October 2011, the following are the sources of DAP:
o Unreleased personal services appropriations (30billion php)
o Unreleased appropriations (482 million)
o Unprogrammed fund from 2010 (12.3 billion)
o Carryover appropriation from 2010 (21.5 billion)
o Budget items for realignment (7.7 billion)
o TOTAL: 72,110,000,000 pesos
Among the projects to benefit from the DAP are:
o FOR GOCCs and Govt financial instituions
Rehab of LRT 1 and 2
National Housing Authority
Philippine Heart Center
Credit Info Corp
Bangko Sentral equity infusion
Etc., totaling an allotment of 26,945,000,000 pesos
o LGUs/Govt agencies
BIR data processing
COA IT infrastructure
DND housing facilities
DA irrigation and the Mindanao Rural Development Project
DOJ operating requirements
DOST establishment of the National Meteorological and Climate Center
DPWH various infrastructure projects
ARMM comprehensive peace and devt intervention
LGU support fund
various local projects
Quezon province Development assistance
Etc., totaling 44 billion pesos
o GRAND TOTAL: 70.895 billion pesos
Thereafter, on 12 Dec 2011, Abad requested Noynoy for omnibus authority to consolidate the savings and unutilized
o The purpose of the request for omnibus authority is that it will allow the DBM to undertake projects, even if
their implementation carries over to 2012, without necessarily impacting the budget deficit cap in 2012.
This request for omnibus authority was followed by substantially identical requests

NBC NO. 541 read this carefully. The bulk of the issues come from this fucking circular
To implement the memo of Abad, he issued NBC No. 541, addressed to all heads of departments, agencies, etc., with
the subject Adoption of Operational Efficiency MeasureWithdrawal of Agencies Unobligated Allotments as of June
30, 2012
According the NBC No. 541, In the event that a measure is necessary to further improve the operational efficiency
of the government, the President is authorized to suspend or stop further use of funds allotted for any agency or
expenditure authorized in the GAA. (in other words, withdrawal of unobligated allotments)
o This is because for from Jan-May 2012, the govt didnt meet its spending targets. Thus, in order to
accelerate spending and sustain fiscal targets, Abad deemed it necessary to implement expenditure
measures to optimize the use of available resources.
The unobligated allotments to be withdrawn shall cover those of all govt agencies, pertaining to: (1) capital outlays, (2)
maintenance and other operating expenses,
and (3) personal services corresponding to unutilized pension benefits declared as savings by the agencies concerned.
o However, the following shall not be covered:
Constitutional offices granted fiscal autonomy by the consti
State universities and colleges that adopted a predetermined budget ceiling
Operating expenses earmarked for specific purposes, or subject to realignment conditions accdg
to the GAA
Foreign-assisted projects
Special purpose funds (e.g. calamity funds, PDAF!!!, E-government fund, etc) (oo, PDAF!! Had this
been constitutional, it means na bawal i-stop ang pagdisburse ng PDAF under NBC No. 541!)
#quito #qdaf
For the purpose of determining the amount of unobligated allotments that shall be withdrawn, all depts/agencies/etc
are required to submit, not later than 30 July 2012, accountability reports
All released allotments which remained unobligated as of 30 June 2012 shall be immediately considered for
withdrawal, based on substantial carryover appropriations (but not if the project has a two-year timeframe).
The withdrawn allotments may be:
o Reissued for the original programs and projects, from which the allotments were withdrawn (in other
words, pwede ibalik sa project na tinanggalan ng allotment);
o Realigned to cover additional funding for other existing programs; or
o Used to augment existing programs/projects of any agency to fund priority programs not considered in
the 2012 budget but expected to be started or implemented during the year (eh gago pala eh!)
By 30 September 2012, the withdrawn allotments shall be pooled and form part of the governments overall savings
Utilization of consolidated withdrawn allotments for other priority programs and projects shall be subject to the
approval of Noynoy
TO SUMMARIZE HOW THE DAP WORKS: The government declares savings coming from unobligated allotments and
withdrawing unreleased appropriations, which are later released and applied to augment existing projects and
support other priority projects. Boompanis.

DAP is not an appropriation measure, so no appropriation law was required to adopt or implement it
Petitioners (well, some of them, not all) said that the Congress did not enact a law to establish DAP. But the OSG said
that since DAP is neither a fund nor an appropriation, but a program for spending, the law was not necessary
SC took the OSGs view. Love you Mahrra!
Also, Noynoy did not usurp the legislative power under Section 29(1) of Article VI:
o The President has sufficient discretion during the execution of the budget to adapt the budget to changes in
the countrys economic situation
o He could pool savings and identify projects to be funded under the DAP
o No appropriation was involved, because money had already been set apart by Congress through the GAA
o Thus, no usurpation of legislative power

Unreleased appropriations and withdrawn unobligated allotments under the DAP were NOT SAVINGS, and the use of such
appropriations contravened Article VI, Sec 25(5)
BV ka Jag, ang short ng digest mo.
Ang haba talaga ng DAP case. I now know how Cler feels.
Anyway, although executive discretion and flexibility are necessary in the execution of the budget, ANY TRANSFER
o The SC concedes that executive discretion is necessary to achieve sound fiscal administration
Thus, the President and the heads of offices require flexibility in making necessary adjustments
o The President has the power to transfer funds to meet unforeseen events that may otherwise impede the
efficient implementation of projects under the GAA
o Congress has traditionally allowed much flexibility to the President in allocating funds pursuant to the GAAs.
This flexibility comes in the form of policies that the executive may adopt during the budget
execution phase.
The DAP thus falls in this category as a policy.
o (Then comes a whole bunch of historical shit on how the president has been given the authority to transfer
funds blah blah blah)
o Basically the SC ends this part by saying Sec 25(5) should be interpreted in the context of a limitation on
the Presidents discretion over the appropriations during the budget execution phase
Requisites for the valid transfer of appropriated funds under Sec 25(5):
o There is a law authorizing the President, Senate President, Speaker, Chief Justice, and heads of the Consti
o The funds to be transferred are savings generated from the appropriations for their respective offices
o The purpose of the transfer is to augment an item in the general appropriations law for their respective

FIRST REQUISITE: The GAAs of 2011 and 2012 lacked valid provisions authorizing transfers of funds under the DAP.
Thus, unconstitutional.
o Section 25(5) is NOT a self-executing provision, so there must be a law to implement it. That law is generally
the GAA of a given fiscal year.
o Under the GAAs of 2011 and 2012, the provision on the Use of Savings says: The *people I mentioned
earlier] are hereby authorized to augment any item in this Act from savings in other items of their
respective appropriations.
That provision was used by the DBM to justify the use of savings under the DAP.
o But..a fair reading of this shows that the GAAs of both 2011 and 2012 did not carry the phrase for their
respective offices as contained in Sec 25(5). Thus, the provision is textually unfaithful to the Consti.

transfers of funds within their offices
What was included in the GAAs was the phrase to augment any item in this Act, thereby
allowing the transfer of funds from savings to augment any item in the GAA, even if the item
belonged to an office outside the Executive (see the list I placed sa taas)
At the very least, the provisions cannot be used to claim authority to transfer appropriations
from the Executive to another branch
o After realizing the problem, Congress inserted the omitted phrase in the counterpart provision in the 2013
GAA: The *insert the people+ are hereby authorized to use savings in their respective appropriations to
augment actual deficiencies incurred for the current year in any item of their respective appropriations
SECOND REQUISITE: There were NO savings from which funds could be sourced for the DAP
o The central question to be asked is: Were the funds used in the DAP actually savings? Answer is a
resounding NO.
o Petitioners argue that the term savings should be understood to refer to the excess money after the items
that needed funding have been funded. Thus, there could only be savings when the projects (for which the
funds had been appropriated) were actually implemented
o OSG argues differently, by saying that savings were appropriations balances, being the difference
between the appropriation authorized by congress, and the actual amount allotted for the appropriation.
o SC sided partially with the petitioners
o SC thereafter enumerated certain principles in ascertaining the meaning of savings, to wit:
First principle: Congress wields the power of the purse; that is, Congress decides how the budget
will be spend, what projects to fund, and how much is to be spent for each project
Second principle: The Executive is expected to faithfully execute the GAA and to spend the budget
in accordance with the GAA
Third principle: In making the Presidents power to augment operative under the GAA, Congress
recognizes the need for flexibility in budget execution. Thus, Congress diminishes its own power of
the purse by delegating a fraction of its power to the Executive. BUT, Congress does not thereby
allow the Executive to override its authority thereby exceeding the delegated authority.
Fourth principle: Savings should be actual, or something that exists presently in fact and not
something theoretical, possible or hypothetical.
o Thus, savings should be construed strictly against expanding the scope of the power to augment.
o Under the GAA of 2011, 2012 and 2013, the following definition of savings can be found:
Savings refer to portions or balances of any programmed appropriation in this Act free from any
obligation of encumbrance which are (i) still available after the completion or final discontinuance
or abandonment of the work, activity or purpose for which the appropriation is authorized; (ii)
from appropriations balances arising from unpaid compensation and related costs pertaining to
vacant positions and leaves of absence without pay; and (iii) from appropriations balances
realized from the implementation of measures resulting in improved systems and efficiencies and
thus enabled agencies to meet and deliver the required or planned targets, programs and services
approved in this Act at a lesser cost.
The three instances basically say that savings could be generated only upon the purpose of the
appropriation being fulfilled, or upon the need for the appropriation being no longer existent.
Likewise, the phrase free from any obligation or encumbrance also implies that the
appropriation was at that stage when the appropriation was already obligated and released.
Thus, the appropriation must have reached the agency.
It is only at the agency level when it could be determined that the project was
completed, discontinued or abandoned; or that the targets were realized at a lesser
o What are unreleased appropriations anyway?
According to DBM, these are those that are, well, unreleased. Duh.
They were unreleased because of either noncompliance with documentary requirements, or
unavailability of funds.
But the funds of these do not reach the agencies, but remain with the DBM.
Ergo, unreleased appropriations refer to appropriations with allotments but without
disbursement authority.
o Now, the DBM (in NBC No. 541) declared that part of the savings brought under the DAP came from the
pooling of unreleased appropriations, such as personnel services appropriations, unreleased appropriations
of slow-moving and discontinued projects.
This declaration by the DBM by itself does not state the clear legal basis for the treatment of
unreleased or unalloted appropriations as savings.
They have not yet ripened into categories of items from which savings can be generated.
o For the SC to consider unreleased appropriations as savings would undercut the Congress power of the
Such appropriations had not even reached the agency concerned vis--vis the projects for which
the Congress had allocated them

been used first? How can you use funds when the funds had not even reached the agency?
o For unobligated allotments, these were encompassed by the definition of savings in the GAA. But
according to the provision cited, the unobligated allotments are qualified by three enumerated instances of
when savings would be realized.
As such, unobligated allotments could not be indiscriminately declared as savings without first
determining whether any of the three instances existed.
This signified that the DBMs withdrawal of unobligated allotments had disregarded the
definition of savings under the GAAs
o Likewise, petitioners accuse respondents of forcing the generation of savings in order to have a larger
fund available for discretionary spending. This would effectively deprive funding for projects with existing
appropriations under the GAAs. SC sided with them on this point.
This is because theres no law authorizing the withdrawal and transfer of unobligated allotments
and the pooling of unreleased appropriations.
o Nonetheless, such withdrawal and the retention of appropriated funds cannot be considered as
Impoundment refers to the refusal by the President, for whatever reason, to spend funds made
available by Congress. It is the failure to spend or obligate budget authority of any type.
The withdrawal of unobligated allotments should not be regarded as impoundment because it
only entailed the transfer of funds, not the retention or deduction of appropriations.
o Lastly under this point, the Executive could not circumvent the Admin Code by declaring unreleased
appropriations and unobligated allotments as savings prior to the end of the fiscal year.
Under the Admin Code, the President is authorized to suspend the further expenditure of funds
for any agency.
It must be noted that DBM did not suspend or stop further expenditures. Rather, it contemplated
a transfer of funds.
Thus, walang savings because the funds were transferred and not retained. This is inconsistent
with the definition of savings na dapat, may excess money after the items that needed to be
funded have been funded.
THIRD REQUISITE: The rule is that no funds from savings could be transferred under the DAP to augment deficient
items not provided in the GAA. But the DAP allows the augmentation of projects not in the GAP. Thus, unconsti!
o The term augment means to enlarge or increase in size, amount or degree. This applies to funds, and not
something elsewell, basta. Labo.
o The GAAs of 2011-2013 set as a condition for augmentation that the appropriation for the project item to
be augmented must be deficient. (In other words, kulang yung pera for a specific project)
o Thus, an appropriation for any project must first be determined to be deficient before it could be
augmented from savings.
o In 2013, a total of 144.4 billion pesos worth of projects were implemented through DAP. However, upon
careful review of the documents contained in seven evidence packets, the savings pooled under the
DAP were allocated to projects not covered by any appropriations in the pertinent GAAs.
For instance, funds were transferred to the Disaster risk, Exposure, Assessment and Mitigation
(DREAM) Project of DOST. While appropriation was provided by Congress, under the DAP the
Executive allotted funds for personnel services and capital outlays which were not included in the
appropriation made by Congress.
A similar situation occurred with the project called establishment of the advanced failure analysis
laboratory for DOST, where particular disbursements were allowed under the DAP, but were not
included in the GAAs. This was unlawful.
It must be worth stressing that if a particular project proposed by the President was not included
in the GAAs, it means that Congress did not see it fit to receive funds. And the President should
respect that.
o Although the Executive was authorized to spend in line with its mandate to faithfully execute laws, such
authority did not translate to an unfettered discretion to submit his own will for that of Congress.
o By providing that the Pres, Senate Pres, Speaker, Chief Justice, Heads of Consti Commissions may be
authorized to augment any item in the GAA for their respective offices, the Consti delineated borders
between their offices.
Funds appropriated for one office are prohibited from crossing over to another office, even in
the guise of augmentation.
Such unconstitutional transfers are called cross-border augmentations
o In the oral arguments held for the case, Secretary Abad admitted to making some cross-border
Two instances of cross-border augmentations were narrated:
(1) The House of Representatives requested the President to grant them an augmentation for
the building of their e-library, because according to the House, failure to do so may result to
serious deterioration
(2) COA (yes, COA!!!) asked for extra funds from the Pres for information technology equipment,
as well as fees for consultants.
Eh super obvious that these are cross-border augmentations not supported by appropriations
under the GAA!

ButJustice Mendoza, representing the Congress in this case, argued that the cross-border
transfers were in the nature of aid instead of augmentation
He said that they felt there would be chaos if no money is given as aid
But, the court said that, regardless of the characterization as augmentation or aid,
cross-border transfers were prohibited under Sec 25(5) of Article VI.

Sourcing the DAP from unprogrammed funds despite the original revenue targets not having been exceeded was invalid
The 2011, 2012 and 2013 BESFs defined unprogrammed appropriations as those that provided standby authority
to incur additional agency obligations for priority projects when revenue collections exceeded targets, and when
additional foreign funds are generated.
The DBM contemplated that the unprogrammed funds could be availed of when any of the three instances occur:
(1) the revenue collections exceeded the original revenue targets in the BESFs submitted by the Pres to Congress
(2) New revenues were collected from sources not originally considered in the BESFs
(3) Newly-approved loans for foreign-assisted projects were secured
o Thus under this system, even if the revenues not considered in the BESFs were collected, the basic condition
that the revenue collections should exceed the revenue targets must still be complied with in order to
justify the release of unprogrammed funds.
o In other words, marerelease lang ang unprogrammed funds if may sobrang revenue.
The 2011 and 2012 GAAs, however, contemplated only the first two scenarios enumerated above
However, a fair reading of the provisions of the two GAAs (medyo mahaba so look at the full text na lang) would show
that the provisions did not at all waive compliance with the basic requirement that revenue collections must still
exceed the original revenue targets
However, when the SC required the respondents (Noynoy and friends) to submit a certification form the Treasure to
the effect that the revenue collections had exceeded the original targets, they submitted certifications pertaining to
only one source of revenue: dividends from the shares held by the govt in GOCCs.
However (again. But bawal daw magstart ng sentences with however), it must be noted that the unprogrammed
funds, being standby appropriations, were to be released only when there were revenues in excess of what the
programmed appropriations required. As such, the revenue targets should be considered as a whole and not
o Otherwise, we would be dealing with artificial revenue surpluses.
o Thus, the revenue collections as a whole must exceed the total of the revenue targets stated in the BESF.

Next is a challenge to EPC, checks and balances, and public accountability charges.
For EPC, the SC was not in the position to rule on it because kulang yung evidence
On checks and balanceswell the doctrine on separation on powers answers this one.
As for public accountabilitywell good intention naman yung paggawa sa DAP (given that the aim is to boost the
Philippine economy). Mali lang talaga yung konsepto ng DAP

As for the doctrine of operative fact
A legislative or executive act that is declared void for being unconstitutional cannot give rise to any right or obligation
o The term executive act is broad enough to encompass decisions of admin bodies and agencies under the
Exec department
However, at times, rigidly applying the rule may at times be impracticable and wasteful
It is applicable in this case.
Given that the DAP and the related issuances were executive acts, the consequences resulting from them could not
be ignored or could no longer be done
As already mentioned, the implementation of the DAP resulted into the use of savings pooled by the Executive to
finance the PAPs that were not covered in the GAA, or that did not have proper appropriation covers, as well as to
augment items pertaining to other departments of the Government in clear violation of the Constitution.
o To declare the implementation of the DAP unconstitutional without recognizing that its prior
implementation constituted an operative fact that produced consequences in the real as well is unfair and
o Unless the doctrine is held to apply, the Executive as the disburser and the offices under it and elsewhere
as the recipients could be required to undo everything that they had implemented in good faith under the
o That scenario would be enormously burdensome for the Government. Equity alleviates such burden.

WHEREFORE, the Court PARTIALLY GRANTS the petitions for certiorari and prohibition; and DECLARES the following acts and
practices under the Disbursement Acceleration Program, National Budget Circular No. 541 and related executive issuances
UNCONSTITUTIONAL for being in violation of Section 25(5), Article VI of the 1987 Constitution and the doctrine of separation of
powers, namely:
(a) The withdrawal of unobligated allotments from the implementing agencies, and the declaration of the withdrawn
unobligated allotments and unreleased appropriations as savings prior to the end of the fiscal year and without
complying with the statutory definition of savings contained in the General Appropriations Acts;
(b) The cross-border transfers of the savings of the Executive to augment the appropriations of other offices outside the
Executive; and
(c) The funding of projects, activities and programs that were not covered by any appropriation in the General
Appropriations Act.
The Court further DECLARES VOID the use of unprogrammed funds despite the absence of a certification by the National
Treasurer that the revenue collections exceeded the revenue targets for non-compliance with the conditions provided in the
relevant General Appropriations Acts.