Guingona vs.

Caraque, 196 SCRA 221, 1991

Requirements as to certain laws: Appropriation laws

Facts: "According to Sec. 5, Art. XIV of the Constitution:

'(5) The State shall assign the highest budgetary priority to education and ensure that teaching will attract and
retain its rightful share of the best available talents through adequate remuneration and other means of job
satisfaction and fulfillment.'

Issue: Whether or not the automatic appropriation for debt service in the 1990 budget is unconstitutional

Ruling: As against this constitutional intention, P86 Billion is appropriated for debt service while only P27 Billion is
appropriated for the Department of Education in the 1990 budget. It is plain, therefore, that the said appropriation
for debt service is inconsistent with the Constitution, hence, void (Art. 7, New Civil Code)." While it is true that
under Section 5(5), Article XIV of the Constitution Congress is mandated to "assign the highest budgetary priority
to education" in order to "insure that teaching will attract and retain its rightful share of the best available talents
through adequate remuneration and other means of job satisfaction and fulfillment," it does not thereby follow
that the hands of Congress are so hamstrung as to deprive it the power to respond to the imperatives of the
national interest and for the attainment of other state policies or objectives. As aptly observed by respondents,
since 1985, the budget for education has tripled to upgrade and improve the facility of the public school system.
The compensation of teachers has been doubled. The amount of P29,740,611,000.00 8 set aside for the
Department of Education, Culture and Sports under the General Appropriations Act (R.A. No. 6831), is the highest
budgetary allocation among all department budgets. This is a clear compliance with the aforesaid constitutional
mandate according highest priority to education.

Having faithfully complied therewith, Congress is certainly not without any power, guided only by its good
judgment, to provide an appropriation, that can reasonably service our enormous debt, the greater portion of
which was inherited from the previous administration. It is not only a matter of honor and to protect the credit
standing of the country. More especially, the very survival of our economy is at stake. Thus, if in the process
Congress appropriated an amount for debt service bigger than the share allocated to education, the Court finds
and so holds that said appropriation cannot be thereby assailed as unconstitutional. As authorized under P.D. 1967
and R.A. 4860 and 245, as amended. The Court, therefor, finds that R.A. No. 4860, as amended by P.D. No. 81,
Section 31 of P.D. 1177 and P.D. No. 1967 constitute lawful authorizations or appropriations, unless they are
repealed or otherwise amended by Congress. The Executive was thus merely complying with the duty to
implement the same. There can be no question as to the patriotism and good motive of petitioners in filing this
petition. Unfortunately, the petition must fail on the constitutional and legal issues raised. As to whether or not
the country should honor its international debt, more especially the enormous amount that had been incurred by
the past administration, which appears to be the ultimate objective of the petition, is not an issue that is presented
or proposed to be addressed by the Court. Indeed, it is more of a political decision for Congress and the Executive
to determine in the exercise of their wisdom and sound discretion. WHEREFORE, the petition is DISMISSED,
without pronouncement as to costs. SO ORDERED
Philconsa vs. Enriquez, G.R. No. 113105, August 19, 1994

Requirements as to certain laws: Appropriation laws

Facts: House Bill No. 10900, the General Appropriation Bill of 1994, was passed and approved by both houses of
Congress on December 17, 1993. As passed, it imposed conditions and limitations on certain items of
appropriations in the proposed budget previously submitted by the President. It also authorized members of
Congress to propose and identify projects in the "pork barrels" allotted to them and to realign their respective
operating budgets.

Issue: Whether or not a member of Congress can realign his allocation for operation expenses to any other
expense category

Ruling: Realignment of Allocation for Operating Expenses. A member of Congress may realign his allocation for
operational expenses to any other expense category provided the total of said allocation is not exceeded." The
appropriation for operating expenditures for each House is further divided into expenditures for salaries, personal
services, other compensation benefits, maintenance expenses and other operating expenses. In turn, each
member of Congress is allotted for his own operating expenditure a proportionate share of the appropriation for
the House to which he belongs. If he does not spend for one item of expense, the provision in question allows him
to transfer his allocation in said item to another item of expense.

Petitioners assail the special provision allowing a member of Congress to realign his allocation for operational
expenses to any other expense category (Rollo, pp. 82-92), claiming that this practice is prohibited by Section 25(5)
Article VI of the Constitution. Said section provides: "No law shall be passed authorizing any transfer of
appropriations: however, the President, the President of the Senate, the Speaker of the House of Representatives,
the Chief Justice of the Supreme Court, and the heads of Constitutional Commissions may, by law, be authorized to
augment any item in the general appropriations law for their respective offices from savings in other items of their
respective appropriations."

The proviso of said Article of the Constitution grants the President of the Senate and the Speaker of the House of
Representatives the power to augment items in an appropriation act for their respective offices from savings in
other items of their appropriations, whenever there is a law authorizing such augmentation.

The special provision on realignment of the operating expenses of members of Congress is authorized by Section
16 of the General Provisions of the GAA of 1994, which provides: "Expenditure Components. Except by act of the
Congress of the Philippines, no change or modification shall be made in the expenditure items authorized in this
Act and other appropriation laws unless in cases of augmentations from savings in appropriations as authorized
under Section 25(5) of Article VI of the Constitution."

Under the Special Provisions applicable to the Congress of the Philippines, the members of Congress only
determine the necessity of the realignment of the savings in the allotments for their operating expenses. They are
in the best position to do so because they are the ones who know whether there are deficiencies in other items of
their operating expenses that need augmentation. However, it is the Senate President and the Speaker of the
House of Representatives, as the case may be, who shall approve the realignment. Before giving their stamp of
approval, these two officials will have to see to it that: (1) The funds to be realigned or transferred are actually
savings in the items of expenditures from which the same are to be taken; and (2) The transfer or realignment is
for the purpose of augmenting the items of expenditure to which said transfer or realignment is to be made, and
(3) whenever there is a law authorizing it.

WHEREFORE, the petitions are DISMISSED, except with respect with respect to (1) G.R. Nos. 113105 only insofar as
they pray for the annulment of the veto of the special provision on debt service specifying that the fund therein
appropriated "shall be used for payment of the principal and interest of foreign and domestic indebtedness". So
ordered.
Tolentino vs. Sec. of Finance, G.R. No. 115455, August 25, 1994

Requirements as to certain laws: Tax laws

Facts: Republic Act No. 7716 seeks to widen the tax base of the existing VAT system and enhance its
administration by amending the National Internal Revenue Code.

Issue: Whether or not Republic Act No. 7716 did not "originate exclusively" in the House of
Representatives as required by Art. VI, § 24 of the Constitution

Ruling: Art. VI, Sec. 24: All appropriation, revenue or tariff bills, bills authorizing increase of the public debt, bills of
local application, and private bills shall originate exclusively in the House of Representatives, but the Senate may
propose or concur with amendments.

To begin with, it is not the law - but the revenue bill - which is required by the Constitution to "originate
exclusively" in the House of Representatives. It is important to emphasize this, because a bill originating in the
House may undergo such extensive changes in the Senate that the result may be a rewriting of the whole. To insist
that a revenue statute - and not only the bill which initiated the legislative process culminating in the enactment of
the law - must substantially be the same as the House bill would be to deny the Senate's power not only to "concur
with amendments" but also to " propose amendments." It would be to violate the coequality of legislative power
of the two houses of Congress and in fact make the House superior to the Senate.

The contention that the constitutional design is to limit the Senate's power in respect of revenue bills in order to
compensate for the grant to the Senate of the treaty-ratifying power and thereby equalize its powers and those of
the House overlooks the fact that the powers being compared are different. We are dealing here with the
legislative power. Which under the Constitution is vested not in any particular chamber but in the Congress of the
Philippines, consisting of “a Senate and a House of Representatives. “The exercise of the treaty-ratifying power is
not the exercise of legislative power. It is the exercise of a check on the executive power. There is, therefore, no
justification for comparing the legislative powers of the House and of the Senate on the basis of the possession of
such nonlegislative power by the Senate.

Indeed, what the Constitution simply means is that the initiative for filing revenue, tariff, or tax bills, bills
authorizing an increase of the public debt, private bills and bills of local application must come from the House of
Representatives on the theory that, elected as they are from the districts, the members of the House can be
expected to be more sensitive to the local needs and problems. On the other hand, the senators, who are elected
at large, are expected to approach the same problems from the national perspective. Both views are thereby made
to bear on the enactment of such laws.

Nor does the Constitution prohibit the filing in the Senate of a substitute bill in anticipation of its receipt of the bill
from the House, so long as action by the Senate as a body is withheld pending receipt of the House bill. The Court
cannot, therefore, understand the alarm expressed over the fact that on March 1, 1993, eight months before the
House passed H. No. 11197, S. No. 1129 had been filed in the Senate. After all it does not appear that the Senate
ever considered it. It was only after the Senate had received H. No. 11197 on November 23, 1993 that the process
of legislation in respect of it began with the referral to the Senate Committee on Ways and Means of H. No. 11197
and the submission by the Committee on February 7, 1994 of S. No. 1630. For that matter, if the question were
simply the priority in the time of filing of bills, the fact is that it was in the House that a bill (H. No. 253) to amend
the VAT law was first filed on July 22, 1992. Several other bills had been filed in the House before S. No. 1129 was
filed in the Senate, and H. No. 11197 was only a substitute of those earlier bills. WHEREFORE, the petitions in these
cases are DISMISSED.
Lung Center vs. Q.C., G.R. No. 144104, June 29, 2004

Requirements as to certain laws: Tax laws

Facts: The petitioner Lung Center of the Philippines is a non-stock and non-profit entity established on January 16,
1981 by virtue of Presidential Decree No. 1823. Erected in the middle of the aforesaid lot is a hospital known as the
Lung Center of the Philippines. A big space at the ground floor is being leased to private parties, for canteen and
small store spaces, and to medical or professional practitioners who use the same as their private clinics for their
patients whom they charge for their professional services. Almost one-half of the entire area on the left side of the
building along Quezon Avenue is vacant and idle, while a big portion on the right side, at the corner of Quezon
Avenue and Elliptical Road, is being leased for commercial purposes to a private enterprise known as the Elliptical
Orchids and Garden Center. The petitioner accepts paying and non-paying patients. It also renders medical services
to out-patients, both paying and non-paying. Aside from its income from paying patients, the petitioner receives
annual subsidies from the government.

Issue: Whether or not Petitioner is exempted to tax

Ruling: Section 28(3), Article VI of the 1987 Philippine Constitution provides, thus:

(3) Charitable institutions, churches and parsonages or convents appurtenant thereto, mosques, non-profit
cemeteries, and all lands, buildings, and improvements, actually, directly and exclusively used for religious,
charitable or educational purposes shall be exempt from taxation.

Under the 1973 and 1987 Constitutions and Rep. Act No. 7160 in order to be entitled to the exemption, the
petitioner is burdened to prove, by clear and unequivocal proof, that (a) it is a charitable institution; and (b) its real
properties are ACTUALLY, DIRECTLY and EXCLUSIVELY used for charitable purposes. "Exclusive" is defined as
possessed and enjoyed to the exclusion of others; debarred from participation or enjoyment; and "exclusively" is
defined, "in a manner to exclude; as enjoying a privilege exclusively." If real property is used for one or more
commercial purposes, it is not exclusively used for the exempted purposes but is subject to taxation. The words
"dominant use" or "principal use" cannot be substituted for the words "used exclusively" without doing violence to
the Constitutions and the law. Solely is synonymous with exclusively.

What is meant by actual, direct and exclusive use of the property for charitable purposes is the direct and
immediate and actual application of the property itself to the purposes for which the charitable institution is
organized. It is not the use of the income from the real property that is determinative of whether the property is
used for tax-exempt purposes. The petitioner failed to discharge its burden to prove that the entirety of its real
property is actually, directly and exclusively used for charitable purposes. While portions of the hospital are used
for the treatment of patients and the dispensation of medical services to them, whether paying or non-paying,
other portions thereof are being leased to private individuals for their clinics and a canteen. Further, a portion of
the land is being leased to a private individual for her business enterprise under the business name "Elliptical
Orchids and Garden Center." Indeed, the petitioner's evidence shows that it collected P1, 136,483.45 as rentals in
1991 and P1, 679,999.28 for 1992 from the said lessees. Accordingly, we hold that the portions of the land leased
to private entities as well as those parts of the hospital leased to private individuals are not exempt from such
taxes. On the other hand, the portions of the land occupied by the hospital and portions of the hospital used for its
patients, whether paying or non-paying, are exempt from real property taxes. IN LIGHT OF ALL THE FOREGOING,
the petition is PARTIALLY GRANTED. The respondent Quezon City Assessor is hereby DIRECTED to determine, after
due hearing, the precise portions of the land and the area thereof which are leased to private persons, and to
compute the real property taxes due thereon as provided for by law.
Tan vs. Del Rosario, 237 SCRA 324, 2000

Requirements as to certain laws: Tax laws

Facts: Petitioner contends that the title of House Bill No. 34314, progenitor of Republic Act No. 7496, is a
misnomer or, at least, deficient for being merely entitled, "Simplified Net Income Taxation Scheme for the Self-
Employed and Professionals Engaged in the Practice of their Profession" (Petition in G.R. No. 109289).

The full text of the title actually reads:

"An Act Adopting the Simplified Net Income Taxation Scheme For The Self-Employed and Professionals Engaged In
The Practice of Their Profession, Amending Sections 21 and 29 of the National Internal Revenue Code, as
Amended."

Issue: Whether or not the Republic Act No. 7496 violates the constitutional requirement that taxation shall be
uniform and equitable

Ruling: Petitioner intimates that Republic Act No. 7496 desecrates the constitutional requirement that taxation
"shall be uniform and equitable" in that the law would now attempt to tax single proprietorships and professionals
differently from the manner it imposes the tax on corporations and partnerships. The contention clearly forgets,
however, that such a system of income taxation has long been the prevailing rule even prior to Republic Act No.
7496.

Uniformity of taxation, like the kindred concept of equal protection, merely requires that all subjects or objects of
taxation, similarly situated, are to be treated alike both in privileges and liabilities (Juan Luna Subdivision vs.
Sarmiento, 91 Phil. 371). Uniformity does not forfend classification as long as: (1) the standards that are used
therefor are substantial and not arbitrary, (2) the categorization is germane to achieve the legislative purpose, (3)
the law applies, all things being equal, to both present and future conditions, and (4) the classification applies
equally well to all those belonging to the same class.

What may instead be perceived to be apparent from the amendatory law is the legislative intent to increasingly
shift the income tax system towards the schedular approach 2 in the income taxation ofindividual taxpayers and to
maintain, by and large, the present global treatment 3 on taxable corporations. We certainly do not view this
classification to be arbitrary and inappropriate.

Petitioner gives a fairly extensive discussion on the merits of the law, illustrating, in the process, what he believes
to be an imbalance between the tax liabilities of those covered by the amendatory law and those who are not.
With the legislature primarily lies the discretion to determine the nature (kind), object (purpose), extent (rate),
coverage (subjects) and situs (place) of taxation. This court cannot freely delve into those matters which, by
constitutional fiat, rightly rest on legislative judgment. Of course, where a tax measure becomes so unconscionable
and unjust as to amount to confiscation of property, courts will not hesitate to strike it down, for, despite all its
plenitude, the power to tax cannot override constitutional proscriptions. This stage, however, has not been
demonstrated to have been reached within any appreciable distance in this controversy before us. WHEREFORE,
the petitions are DISMISSED. No special pronouncement on costs. SO ORDERED.
Garcia vs. Executive Secretary, 211 SCRA 219, 1992

Requirements as to certain laws: Tax laws

Facts: Petitioner assails the validity of Executive Orders Nos. 475 and 478. He argues that Executive Orders Nos.
475 and 478 are violative of Section 24, Article VI of the 1987 Constitution which provides as follows:

"Section 24. All appropriation, revenue or tariff bills, bills authorizing increase of the public debt, bills of local
application, and private bills shall originate exclusively in the House of Representatives, but the Senate may
propose or concur with amendments."

He contends that since the Constitution vests the authority to enact revenue bills in Congress, the President may
not assume such power of issuing Executive Orders Nos. 475 and 478 which are in the nature of revenue-
generating measures.

Issue: Whether or not petitioner’s contention that revenue measures are prohibited to the President that it is
within the province of the Legislative Department only

Ruling: Under Section 24, Article VI of the Constitution, the enactment of appropriation, revenue and tariff bills,
like all other bills is, of course, within the province of the Legislative rather than the Executive Department. It does
not follow, however, that therefore Executive Orders Nos. 475 and 478, assuming they may be characterized as
revenue measures, are prohibited to the President, that they must be enacted instead by the Congress of the
Philippines.

Section 28(2) of Article VI of the Constitution provides as follows:

"(2) The Congress may, by law, authorize the President to fix within specified limits, and subject to such limitations
and restrictions as it may impose, tariff rates, import and export quotas, tonage and wharfage dues, and other
duties or imposts within the framework of the national development program of the Government."(Underscoring
supplied)

There is thus explicit constitutional permission to Congress to authorize the President "subject to such limitations
and restrictions as [Congress] may impose" to fix "within specific limits" "tariff rates . . . and other duties or
imposts . . . ."

WHEREFORE, premises considered, the Petition for Certiorari, Prohibition and Mandamus is hereby DISMISSED for
lack of merit. Costs against petitioner. SO ORDERED.