Lictag, Jeff Lynden

Case Digest
Araullo vs Aquino
GR. No. 209287
Facts:
On September 25, 2013, Sen. Jinggoy Estrada in his privilege speech, he revealed that Senators,
including himself, had been allotted an additional P50 Million each as incentive for voting in favor of the
impeachment of Chief Justice Renato C. Corona. In response, Secretary Florencio Abad of the DBM issued a
public statement that the releasing to Senators is a part of spending acceleration program of the DAP. He
clarified that the funds had been released to the Senators based on their letters of request for funding and
that it was not the first time that releases from the DAP had been made because the DAP had already been
instituted in 2011 to ramp up spending after sluggish disbursements had caused the growth of the gross
domestic product to slow down. He explained that the funds under the DAP were usually taken from
unreleased appropriations under Personnel Services, unprogrammed funds, carry-over appropriations
unreleased from the previous year, and budgets for slow-moving items or projects that had been realigned to
support faster-disbursing projects. The DBM listed the following as the legal bases for the DAPs use of
savings,6 namely: (1) Section 25(5), Article VI of the 1987 Constitution, which granted to the President the
authority to augment an item for his office in the general appropriations law; (2) Section 49 (Authority to Use
Savings for Certain Purposes) and Section 38 (Suspension of Expenditure Appropriations), Chapter 5, Book VI
of Executive Order (EO) No. 292 (Administrative Code of 1987); and (3) the General Appropriations Acts
(GAAs) of 2011, 2012 and 2013, particularly their provisions on the (a) use of savings; (b) meanings of savings
and augmentation; and (c) priority in the use of savings. As for the use of unprogrammed funds under the
DAP, the DBM cited as legal bases the special provisions on unprogrammed fund contained in the GAAs of
2011, 2012 and 2013. After which, the herein petitioners brought to the Courts attention NBC No. 541
(Adoption of Operational Efficiency Measure Withdrawal of Agencies Unobligated Allotments as of June 30,
2012), alleging that NBC No. 541, which was issued to implement the DAP, directed the withdrawal of
unobligated allotments as of June 30, 2012 of government agencies and offices with low levels of obligations,
both for continuing and current allotments. In due time, the respondents filed their Consolidated Comment
through the Office of the Solicitor General (OSG). The Court directed the holding of oral arguments on the
significant issues raised and joined.
Issues:
Procedural Issue:
Whether or not certiorari, prohibition, and mandamus are proper remedies to assail the
constitutionality and validity of the Disbursement Acceleration Program (DAP), National Budget Circular (NBC)
No. 541, and all other executive issuances allegedly implementing the DAP
Substantive Issues:
Whether or not the DAP, National Budget Circular NBC No. 541, and all other executive issuances
allegedly implementing the DAP are constitutional
Whether or not the DAP violates the Equal Protection Clause, the system of checks and balances, and
the principle of public accountability enshrined in the 1987 Constitution considering that it authorizes the
release of funds upon the request of legislators

Decision:
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, 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 remedies of certiorari and prohibition are necessarily broader in scope and reach, and the writ of
certiorari or prohibition may be issued to correct errors of jurisdiction committed not only by a tribunal,
corporation, board or officer exercising judicial, quasi-judicial or ministerial functions but also to set right,
undo and restrain any act of grave abuse of discretion amounting to lack or excess of jurisdiction by any
branch or instrumentality of the Government, even if the latter does not exercise judicial, quasi-judicial or
ministerial functions. This application is expressly authorized by the text of the second paragraph of Section 1,
supra which sets right and undo any act of grave abuse of discretion amounting to lack or excess of jurisdiction
by any branch or instrumentality of the Government, the Court is not at all precluded from making the inquiry
provided the challenge was properly brought by interested or affected parties. Thus, petitions for certiorari
and prohibition are appropriate remedies to raise constitutional issues and to review and/or prohibit or nullify
the acts of legislative and executive officials.
The DAP did not violate Section 29, Art. VI of the Constitution. DAP was merely a program by the
Executive and is not a fund nor is it an appropriation. It is a program for prioritizing government spending. As
such, it did not violate the Constitutional provision cited in Section 29, Art. VI of the Constitution. In DAP no
additional funds were withdrawn from the Treasury otherwise; an appropriation made by law would have
been required. Funds, which were already appropriated for by the GAA, were merely being realigned via the
DAP. There is no executive impoundment in the DAP. Impoundment of funds refers to the Presidents power
to refuse to spend appropriations or to retain or deduct appropriations for whatever reason. Impoundment is
actually prohibited by the GAA unless there will be an unmanageable national government budget deficit
(which did not happen). Nevertheless, theres no impoundment in the case at bar because whats involved in
the DAP was the transfer of funds.
The transfers made through the DAP were unconstitutional. It is true that the President and even the
heads of the other branches of the government are allowed by the Constitution to make realignment of funds,
however, such transfer or realignment should only be made within their respective offices. Thus, no crossborder transfers/augmentations may be allowed. But under the DAP, this was violated because funds
appropriated by the GAA for the Executive were being transferred to the Legislative and other non-Executive
agencies. Further, transfers within their respective offices also contemplate realignment of funds to an
existing project in the GAA. Under the DAP, even though some projects were within the Executive, these
projects are non-existent insofar as the GAA is concerned because no funds were appropriated to them in the
GAA. Although some of these projects may be legitimate, they are still non-existent under the GAA because
they were not provided for by the GAA. As such, transfer to such projects is unconstitutional and is without
legal basis. On the issue of what are savings. These DAP transfers are not savings contrary to what was
being declared by the Executive. Under the definition of savings in the GAA, savings only occur, among other

instances, when there is an excess in the funding of a certain project once it is completed, finally discontinued,
or finally abandoned. The GAA does not refer to savings as funds withdrawn from a slow moving project.
Thus, since the statutory definition of savings was not complied with under the DAP, there is no basis at all for
the transfers. Further, savings should only be declared at the end of the fiscal year. But under the DAP, funds
are already being withdrawn from certain projects in the middle of the year and then being declared as
savings by the Executive particularly by the DBM. Unprogrammed funds from the GAA cannot be used as
money source for the DAP because under the law, such funds may only be used if there is a certification from
the National Treasurer to the effect that the revenue collections have exceeded the revenue targets. In this
case, no such certification was secured before unprogrammed funds were used.