II.

The creation of the Legal Education Board does not impair the fiscal autonomy of the
Judiciary.

The Constitution guarantees the fiscal autonomy of the judiciary. Section 3, Article 8
of the 1987 Constitution provides:

The Judiciary shall enjoy fiscal autonomy. Appropriations for the Judiciary may not be
reduced by the legislature below the amount appropriated for the previous year and, after
approval, shall be automatically and regularly released.

Definition of Fiscal autonomy

Fiscal autonomy is a guarantee given by the Constitution to certain units of the

government. It is intended as a guarantee of separation of powers and of independence
from political agencies.

In Bengzon v. Drilon,1 the Supreme Court had the opportunity to define the scope
and extent of fiscal autonomy in the following manner:

As envisioned in the Constitution, the fiscal autonomy enjoyed by the Judiciary, the Civil
Service Commission, the Commission on Audit, the Commission on Elections, and the Office of the
Ombudsman contemplates a guarantee of full flexibility to allocate and utilize their resources with
the wisdom and dispatch that their needs require. It recognizes the power and authority to levy,
assess and collect fees, fix rates of compensation not exceeding the highest rates authorized by law
for compensation and pay plans of the government and allocate and disburse such sums as may be
provided by law or prescribed by them in the course of the discharge of their functions.

Fiscal autonomy means freedom from outside control. The Judiciary, the
Constitutional Commissions, and the Ombudsman must have the independence and
flexibility needed in the discharge of their constitutional duties. The imposition of
restrictions and constraints on the manner the independent constitutional offices allocate
and utilize the funds appropriated for their operations is anathema to fiscal autonomy and
violative not only of the express mandate of the Constitution but especially as regards the
Supreme Court, of the independence and separation of powers upon which the entire fabric
of our constitutional system is based.

As above discussed by jurisprudence, fiscal autonomy only means freedom from

interference of budget allocation and the purposes to which such budget must be used. The
creation of LEB does not in any way prescribe the manner of allocating the budget or
purposes for which appropriations must be used.

1 G.R. No. 103524April 15, 1992

 Also, Section 3, Article 8 of the Philippine Constitution merely provides that
appropriations for the Judiciary may not be reduced by the legislature below the amount
appropriated for the previous year. The act of creating LEB, therefore, has not resulted to
any reduction of the appropriations of the Supreme Court. Hence, it is false to conclude that
the legislature impaired fiscal autonomy by mere creation of the LEB.

Process of budget allocation and

non-transferability of budget explained.

The process was explained in this wise, in Guingona v. Carague:2

1. Budget preparation. The first step is essentially tasked upon the Executive
Branch and covers the estimation of government revenues, the determination of budgetary
priorities and activities within the constraints imposed by available revenues and by
borrowing limits, and the translation of desired priorities and activities into expenditure
levels.

Budget preparation starts with the budget call issued by the Department of Budget
and Management. Each agency is required to submit agency budget estimates in line with
the requirements consistent with the general ceilings set by the Development Budget
Coordinating Council (DBCC).

With regard to debt servicing, the DBCC staff, based on the macro-economic
projections of interest rates (e.g. LIBOR rate) and estimated sources of domestic and
foreign financing, estimates debt service levels. Upon issuance of budget call, the Bureau of
Treasury computes for the interest and principal payments for the year for all direct
national government borrowings and other liabilities assumed by the same.

2. Legislative authorization. At this stage, Congress enters the picture and

deliberates or acts on the budget proposals of the President, and Congress in the exercise of
its own judgment and wisdom formulates an appropriation act precisely following the
process established by the Constitution, which specifies that no money may be paid from
the Treasury except in accordance with an appropriation made by law.

3. Budget Execution. Tasked on the Executive, the third phase of the budget process
covers the various operational aspects of budgeting. The establishment of obligation
authority ceilings, the evaluation of work and financial plans for individual activities, the
continuing review of government fiscal position, the regulation of funds releases, the
implementation of cash payment schedules, and other related activities comprise this
phase of the budget cycle.

2 G.R. No. 94571 , April 22, 1991

 4. Budget accountability. The fourth phase refers to the evaluation of actual
performance and initially approved work targets, obligations incurred, personnel hired and
work accomplished are compared with the targets set at the time the agency budgets were
approved.

Hence, the items upon which the budget is allocated are already determined prior to
its approval. No deviation from the approved budget allocation may be allowed, since the
process requires accountability, wherein the actual expenditure is evaluated to comply with
the work targets as approved.

Further, funds, or "appropriations" as used in the first clause of Section 25(5) of

Article VI, cannot be transferred from one branch to another branch or to a Constitutional
Commission, or even within the same branch or Constitutional Commission. Thus, funds or
appropriations for the Office of the President cannot be transferred to the Commission on
Elections. Likewise, funds or appropriations for one department of the Executive branch
cannot be transferred to another department of the Executive branch. The transfer of funds
or appropriations is absolutely prohibited, unless the funds qualify as "savings," in which
case the savings can be realigned to an existing item of appropriation but only within the
same branch or Constitutional Commission.3

In line with this, there could be no opportunity or slightest chance of commingling

or even a deliberate transfer of funds because the law prohibits the same and by virtue of
separation of powers.

The Legal Education Board is attached

to the Department of Education, thus,
budget for its operations, originate from
the Department of Education, and
not from the Supreme Court. Hence,
no budget of the Supreme Court
has been impaired.

The Legal Education Board is attached to the Department of Education which is

under the Executive Department. Hence, the budget for its operations will originate
exclusively from the approved budget of the Department, and not from the Supreme Court.
Although it may be said that the matters covered by LEB are in consonance with the
development of the system of legal education, which is also one of the objectives of the
Supreme Court, it cannot be gainsaid that there will be impairment of fiscal autonomy
3 Belgica v. Ochoa, G.R. No. 208566 , G.R. No. 208493, G.R. No. 209251 November 19, 2013
because the fact remains that the LEB is under the Executive Department which is separate
and independent from the Judicial Department.

The budget of the Judicial Department will remain within the sphere of its
undertakings, including but not limited to admission to the practice of law, the Integrated
Bar, and legal assistance to the underprivileged, which in sum involves members of the Bar
and the development of the legal system itself.

III.

Conclusion