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Constitutional Provisions on Budgeting

By John Dx Lapid for Macroeconomics



a. Section 24, Article VI, which states that;

All appropriations, revenue or tariff bills 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.

notes:

Money bills MUST originate in the HR. The Supreme Court explained this
in Tolentino V. Secretary of Finance, 1994, the Court said the exclusivity of
the prerogative of the HR means simply that the lower house ALONE can
initiate the passage of a revenue bill, such that, if the House does not initiate
one, no revenue law will be passed.

The Senate can completely overhaul the BILL, by amendment of parts or
by amendment by substitution, and come out with one completely different
from what the House approved.

Textually, it is the BILL which MUST EXCLUSIVELY originate from the
LOWER HOUSE; but the LAW itself which is the product of the total
bicameral legislative process originates not just from the House but from both
the Senate and the house.

Why in the H of R? District Representatives are closer to the pulse of
the people than senators are and are therefore in a better position to
determine both the extent of the legal burden they are capable of bearing and
the benefits that they need. (1987 Constitution of the Philippines a
Commentary, Bernas 2003 edition)

Appropriation law - A statute the primary purpose and specific purpose of
which is to authorize the release of public funds from the treasury.

Classification:
1. General Appropriation law passed annually, intended to provide for
the financial operations of the entire government during one fiscal
period.

2. Special Appropriation law designed for a specific purpose.

take note that;

a. Appropriation must be devoted to public purpose (Pascual V. Secretary
of Public Works and Communications)

b. The sum authorized to be released must be determinate or at least
determinable (Guingona V. Carague)

Limitations on special appropriation measures;

i. Must specify the public purpose for which the sum is intended.
ii. Must be supported by funds actually available as certified to by the
National Treasurer, or to be raised by a corresponding revenue
proposal included therein [Sec. 25, (4), Art. VI]


b. Section 25 (1), Article VI, states that;

The Congress may not increase the appropriations recommended by
the President for the operation of the government as specified in the
budget. The form, content, and manner of preparation of the budget
shall be prescribed by law.

Note: this is a limitation provided by the Constitution to the power of the
Congress to exclusively enact the Appropriation law.

c. Section 25 (2), Article VI states that;

No provision or enactment shall be embraced in the General
Appropriations Bill unless it relates specifically to some particular
appropriation therein. Any such provision or enactment shall be limited
in its operation to the appropriations to which it relates.

Note: All provisions or enactments in the General Appropriations Bill shall
relate SPECIFICALLY to the particular appropriation therein. Such provision
shall be LIMITED only in its operation to which it relates.

d. Section 25 (4), Article VI:

A special appropriations bill shall specify the purpose for which it is
intended, and shall be supported by funds actually available as certified
by the National Treasurer, or to be raised by a corresponding revenue
proposal therein.

Note:
Requisites for a Special Appropriations Bill
1. Specific purpose for which it is intended
2. It should be supported by funds actually available
3. Such funds should be certified by the National Treasurer

Special Appropriation Bill/Law
- Designed for a specific purpose.

e. Section 25 (5), Article VI:

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
e offices from savings in other items of their respective appropriations.

Note:
General Rule: The Congress cannot pass or enact a law
authorizing ANY transfer of appropriations.

Exception: The Congress may enact a law authorizing to augment
any item in the general appropriations law for the offices of the
President, Senate President, Speaker of the House, Chief Justice,
and the Heads of the Constitutional Commissions.

(Take note that the list of who are authorized to transfer funds
is exclusive.)

Such fund shall be from the savings in other items of the respective
appropriations of the offices.

Hence if there are savings in the appropriations of a certain office
such fund can be transferred, however it needs a law to allow it, it is
not discretionary on their part.
f. Section 25 (7), Article VI;
If, by the end of any fiscal year, the Congress shall have failed to pass
the general appropriations bill for the ensuing fiscal year, the general
appropriations law for the preceding fiscal year shall be deemed re-
enacted and shall remain in force and effect until the general
appropriations bill is passed by the Congress.
Note: the end of fiscal year in the Philippines is the same with the calendar
year. The budget is drafted by the President before the year ends.



Notes:

Constitutional rules on general appropriations law:

1. The Lower House cannot increase the appropriations recommended by
the President as specified in the budget.

2. The form, content and manner of preparation of the budget shall be
prescribed by law.

3. No provision or enactment shall be embraced unless it relates
specifically to some particular appropriation therein.

4. Procedure for approving the appropriations for Congress shall strictly
follow the procedure for approving appropriations for other departments
and agencies.

5. Prohibition against transfer of appropriations.

6. Prohibition against appropriations for sectarian benefit. (religious benefit)
[Sec. 29 (2), Article VI]

7. Automatic reappropriation.

Section 25, Article VI paragraphs 1, 2, 3, 4, 5, 7are the limitation on the power
to appropriate.


Note:

The historic practice is that the presidential budget may be decreased but
not increased.

Provisions unrelated to the appropriation bill are considered prohibited
riders

Enactment of a law to transfer funds is prohibited by law.

o Except: when the President, Senate president, Speaker of the
House, Chief Justice and the heads of the Constitutional
Commissions may by legislation (there is a necessity to enact a
law to allow them to have the authority), be authorized to augment
ANY ITEM IN THE General Appropriations Law for their respective
offices PROVIDED THAT IT WILL BE TAKEN IF EVER THERE
ARE savings in other items of their respective appropriations.

o Take note that the list of who are authorized to transfer funds
is exclusive.

We must take note that the appropriations MUST BE for A PUBLIC
PURPOSE, of course.

The test of the constitutionality of a statute requiring the
use of public funds is whether the statute is designed
to promote the public interest, as opposed to the
furtherance of the advantage of individuals, although
such advantage to individuals might incidentally serve the
public. (Bernas, 2003)


g. Section 22, Article VII:

The President shall submit to the Congress within thirty (30) days from
the opening of every regular session, as the basis of the General
Appropriations Bill, a budget of receipts and expenditures and sources
of financing, including receipts from existing and proposed revenue
measures.

Note: the president shall submit a BUDGET OF RECEIPTS AND
EXPENDITURES AND SOURCES OF FINANCING; this should be the
basis of the General Appropriations Bill which shall be exclusively drafted
by the lower house.

Sources of financing this phrase implies that financing can come from
sources other than revenue measures.

When shall the President submit the Budget?
- 30 days from the opening of the regular session of
the Congress, this begins every year on the 4th
Monday of July.

h. Section 27 (2), Article IV;
The President shall have the power to VETO ANY particular ITEM or
ITEMS in an appropriation, revenue, or tariff bill, but the veto shall not
affect the item or items to which he does not object.


Note: the president has the power to VETO ANY PARTICULAR ITEM or
ITEMS in an appropriation, revenue or tariff bill however it shall not affect the
item or items which the president does not object.


Note: it is only the General Appropriations Bill that the President can
exercise the Line Veto (A kind of veto that allows the president to
particularly reject a provision)

Doctrine of Inappropriate Provisions

A provision that is constitutionally inappropriate for an appropriation bill may
be singled out for veto even if it is not an appropriation or revenue item. In
essence what this means is that the President may veto riders in an
appropriation bill.

Executive Impoundment

It is the refusal of the President to spend funds already allocated by Congress
for a specific purpose.

References

Political Law outline reviewer by Justice Antonio Nachura, 2009

The 1987 Constitution of the Republic of the Philippines, a Commentary, Fr.
Joaquin Bernas, 2003

The 1987 Constitution of the Republic of the Philippines, a Comprehensive
Reviewer, Fr. Joaquin Bernas, 2011