Civil Service Commission v. Department of Budget and Management

EN BANC

[G.R. No. 158791. July 22, 2005.]

CIVIL SERVICE COMMISSION, petitioner, vs. DEPARTMENT OF BUDGET AND MANAGEMENT, respondent.

The Solicitor General for petitioner.

Mary Grace R. Chua and Ariston P. Aganon for Sec. E. Boncodin.

SYLLABUS

1.POLITICAL LAW; CONSTITUTIONAL LAW; FISCAL AUTONOMY; AUTOMATIC AND REGULAR RELEASE OF APPROPRIATIONS; CONSTRUED. — The DBM furthermore argues that this Court's Resolution of June 3, 1993 in A.M. No. 92-9-029-SC (the Resolution) reading: After approval by Congress, the appropriations for the Judiciary shall be automatically and regularly released subject to availability of funds means that fund releases may still be subject to a cash release program. In support of this argument, the DBM cites a letter dated May 18, 1993 of then Chief Presidential Legal Counsel Antonio T. Carpio (now a member of this Court) to the Secretary of Budget and Management, regarding A.M. No. 92-9-029-SC then pending with this Court. The letter quotes then Chief Justice Narvasa's summary of this Court's position on the controversy, which summary states, inter alia: "4) the Court will look to releases by the DBM of funds against the approved budget of the Judiciary, in the full amount sought and promptly upon notice; it is willing to consider and pass upon suggestions by the DBM for scheduling of releases; . . ." In the same letter, the Chief Presidential Legal Counsel, after considering the Court's position, opined that one of the principles by which the constitutional mandate on judicial fiscal autonomy can be achieved is that "[a]fter approval by Congress, the appropriations for the judiciary shall be automatically and regularly released subject to availability of funds" — which opinion, the DBM alleges, is the position adopted by this Court. Instead of supporting the DBM's position, however, this letter only shows the consistency of this Court in interpreting "automatic release" as requiring the full release of appropriations. The Court's willingness to pass upon suggestions for scheduling of releases in no way implies that it was assenting to an incomplete or delayed release of funds. Rather, it was a recognition by this Court that scheduling of releases, as such, does not violate the Constitution and is, in fact, presupposed in the phrase "automatically and regularly released." The phrase "subject to availability of funds" must thus be understood in harmony with the constitutional mandate to automatically release funds as the same has been consistently interpreted by this Court. It is not an authority for the DBM to implement a policy which, although labeled "cash payment schedule," actually goes beyond mere scheduling of releases and effects a withholding and reduction of the approved appropriations, as it did in the present case against petitioner Civil Service Commission.

2.ID.; ID.; ID.; AGENCY VESTED THEREWITH MAY SUBMIT REPORT RELATIVE TO ITS APPROPRIATION FOR RECORDS PURPOSES ONLY. — Finally, while acknowledging the unconstitutionality of imposing a "no report, no release" policy on agencies clothed with fiscal autonomy, the DBM prays for a clarification that such agencies are still responsible for the timely submission to it of financial reports. The Court considers it sufficient to echo the following statements in the Separate Opinion of former Chief Justice Hilario G. Davide, Jr.: This is not to say that agencies vested with fiscal autonomy have no reporting responsibility at all to the DBM. This is precisely the reason why guideline No. 5 under the Resolution of 3 June [1993] states that the Supreme Court, or constitutional commissions clothed with fiscal autonomy for that matter, may submit reports relative to its appropriation "for records purposes only." The word "may" is permissive [Dizon v. Encarnacion, 119 Phil. 20, 22 (1963)], as it is an auxiliary verb manifesting "opportunity or possibility" and, under ordinary circumstances, "implies the possible existence of something." [Supangan, Jr. v. Santos, G.R. No. 84663, 24 August 1990] . . . Interdependence will work only if it is undertaken within the parameters of the Constitution."

D E C I S I O N

CARPIO MORALES, J p:

The Civil Service Commission (petitioner) via the present petition for mandamus seeks to compel the Department of Budget and Management (respondent) to release the balance of its budget for fiscal year 2002. At the same time, it seeks a determination by this Court of the extent of the constitutional concept of fiscal autonomy.

By petitioner's claim, the amount of P215,270,000.00 was appropriated for its Central Office by the General Appropriations Act (GAA) of 2002, while the total allocations for the same Office, if all sources of funds are considered, amount to P285,660,790.44. 1 It complains, however, that the total fund releases by respondent to its Central Office during the fiscal year 2002 was only P279,853,398.14, thereby leaving an unreleased balance of P5,807,392.30.

To petitioner, this balance was intentionally withheld by respondent on the basis of its "no report, no release" policy whereby allocations for agencies are withheld pending their submission of the documents mentioned in Sections 3.8 to 3.10 and Section 7.0 of National Budget Circular No. 478 on Guidelines on the Release of the FY 2002 Funds, 2 which documents are:

1.Annual Cash Program (ACP)

2.Requests for the Release of Special Allotment Release

3.Summary List of Checks Issued and Cancelled

4.Statement of Allotment, Obligations and Balances

5.Monthly Statement of Charges to Accounts Payable

6.Quarterly Report of Actual Income

7.Quarterly Financial Report of Operations

8.Quarterly Physical Report of Operations

9.FY 2001 Preliminary and Final Trial Balance

10.Statement of Accounts Payable

Petitioner contends that the application of the "no report, no release" policy upon independent constitutional bodies of which it is one is a violation of the principle of fiscal autonomy and, therefore, unconstitutional. DaAISH

Respondent, at the outset, opposes the petition on procedural grounds. It contends that first, petitioner did not exhaust administrative remedies as it could have sought clarification from respondent's Secretary regarding the extent of fiscal autonomy before resorting to this Court. Second, even assuming that administrative remedies were exhausted, there are no exceptional and compelling reasons to justify the direct filing of the petition with this Court instead of the trial court, thus violating the hierarchy of courts.

On the merits, respondent, glossing over the issue raised by petitioner on the constitutionality of enforcing the "no report, no release" policy, denies having strictly enforced the policy upon offices vested with fiscal autonomy, it claiming that it has applied by extension to these offices the Resolution of this Court in A.M. No. 92-9-029-SC (Constitutional Mandate on the Judiciary's Fiscal Autonomy) issued on June 3, 1993, 3 particularly one of the guiding principles established therein governing the budget of the Judiciary, to wit:

5.The Supreme Court maysubmit to the Department of Budget and Management reports of operation and income, current plantilla of personnel, work and financial plans and similar reports only for recording purposes. The submission thereof concerning funds previously released shallnot be a condition precedent for subsequent fund releases. (Emphasis and underscoring supplied)

Respondent proffers at any rate that the delay in releasing the balance of petitioner's budget was not on account of any failure on petitioner's part to submit the required reports; rather, it was due to a shortfall in revenues. 4

The rule on exhaustion of administrative remedies invoked by respondent applies only where there is an express legal provision requiring such administrative step as a condition precedent to taking action in court. 5 As petitioner is not mandated by any law to seek clarification from the Secretary of Budget and Management prior to filing the present action, its failure to do so does not call for the application of the rule. AECacS

As for the rule on hierarchy of courts, it is not absolute. A direct invocation of this Court's original jurisdiction may be allowed where there are special and important reasons therefor, clearly and specifically set out in the petition. 6 Petitioner justifies its direct filing of the petition with this Court "as the matter involves the concept of fiscal autonomy granted to [it] as well as other constitutional bodies, a legal question not heretofore determined and which only the Honorable Supreme Court can decide with authority and finality". 7 To this Court, such justification suffices for allowing the petition.

Now on the substantive issues.

That the "no report, no release" policy may not be validly enforced against offices vested with fiscal autonomy is not disputed. Indeed, such policy cannot be enforced against offices possessing fiscal autonomy without violating Article IX (A), Section 5 of the Constitution which provides:

Sec. 5.The Commission shall enjoy fiscal autonomy. Their approved appropriations shall be automatically and regularly released.

In Province of Batangas v. Romulo, 8 this Court, in construing the phrase "automatic release" in Section 6, Article X of the Constitution reading:

Section 6.Local government units shall have a just share, as determined by law, in the national taxes which shall be automatically released to them,

held:

Webster's Third New International Dictionary defines "automatic" as "involuntary either wholly or to a major extent so that any activity of the will is largely negligible; of a reflex nature; without volition; mechanical; like or suggestive of an automaton." Further, the word "automatically" is defined as "in an automatic manner: without thought or conscious intention." Being "automatic," thus, connotes something mechanical, spontaneous and perfunctory. As such the LGUsare not required to perform any actto receive the"just share"accruing to them from the national coffers. . . ." (Emphasis and underscoring supplied) 9

By parity of construction, "automatic release" of approved annual appropriations to petitioner, a constitutional commission which is vested with fiscal autonomy, should thus be construed to mean that no condition to fund releases to it may be imposed. This conclusion is consistent with the above-cited June 3, 1993 Resolution of this Court which effectively prohibited the enforcement of a "no report, no release" policy against the Judiciary which has also been granted fiscal autonomy by the Constitution. 10

Respecting respondent's justification for the withholding of funds from petitioner as due to a shortfall in revenues, the same does not lie. In the first place, the alleged shortfall is totally unsubstantiated. In the second place, even assuming that there was indeed such a shortfall, that does not justify non-compliance with the mandate of above-quoted Article IX (A), Section 5 of the Constitution. SAHIDc

Asturias Sugar Central, Inc. v. Commissioner of Customs teaches that "[a]n interpretation should, if possible, be avoided under which a statute or provision being construed is defeated, or as otherwise expressed, nullified, destroyed, emasculated, repealed, explained away, or rendered insignificant, meaningless, inoperative, or nugatory." 11

If respondent's theory were adopted, then the constitutional mandate to automatically and regularly release approved appropriations would be suspended every year, or even every month 12 that there is a shortfall in revenues, thereby emasculating to a significant degree, if not rendering insignificant altogether, such mandate.

Furthermore, the Constitution grants the enjoyment of fiscal autonomy only to the Judiciary, the Constitutional Commissions of which petitioner is one, and the Ombudsman. To hold that petitioner may be subjected to withholding or reduction of funds in the event of a revenue shortfall would, to that extent, place petitioner and the other entities vested with fiscal autonomy on equal footing with all others which are not granted the same autonomy, thereby reducing to naught the distinction established by the Constitution.

The agencies which the Constitution has vested with fiscal autonomy should thus be given priority in the release of their approved appropriations over all other agencies not similarly vested when there is a revenue shortfall.

Significantly, the Year 2002 GAA itself distinguished between two types of public institutions in the matter of fund releases. With respect to government agencies in general, the pertinent General Provisions of the GAA read as follows:

Sec. 62.Prohibition Against Impoundment of Appropriations.No appropriations authorized in this Act shall be impounded through deduction or retention, unless in accordance with the guidelines for the imposition and release of reserves and the rules and regulations for deduction, retention or deferral of releases shall have been issued by the DBM in coordination with the House Committee on Appropriations and the Senate Committee on Finance. Accordingly, all the funds appropriated for the purposes, programs, projects and activities authorized in this Act, except those covered by Special Provision No. 1 of the Unprogrammed Fund shall be regularly and automatically released in accordance with the established allotment period and system by the DBM without any deduction, retention or imposition of reserves. (Emphasis and underscoring supplied)

Sec. 63.Unmanageable National Government Budget Deficit.Retention or reduction of appropriations authorized in this Actshall be effected only in cases where there is unmanageable national government budget deficit.

Unmanageable national government budget deficit as used in this Section shall be construed to mean that the actual national government budget deficit has exceeded the quarterly budget deficit targets consistent with the full-year target deficit of P130.0 billion as indicated in the FY 2002 Budget of Expenditures and Sources of Financing submitted by the President to Congress pursuant to Section 22, Article VII of the Constitution or there are clear economic indications of an impending occurrence of such condition, as determined by the Development Budget Coordinating Committee and approved by the President. (Emphasis and underscoring supplied)

 

In contrast, the immediately succeeding provision of the Year 2002 GAA, which specifically applied to offices vested with fiscal autonomy, stated:

Sec. 64.Appropriations of Agencies Vested with Fiscal Autonomy.Any provision of law to the contrary notwithstanding, the appropriations authorized in this Act for the Judiciary, Congress of the Philippines, the Commission on Human Rights, the Office of the Ombudsman, the Civil Service Commission, the Commission on Audit and the Commission on Elections shall be automatically and regularly released. (Emphasis and underscoring supplied)

Clearly, while the retention or reduction of appropriations for an office is generally allowed when there is an unmanageable budget deficit, the Year 2002 GAA, in conformity with the Constitution, excepted from such rule the appropriations for entities vested with fiscal autonomy. Thus, even assuming that there was a revenue shortfall as respondent claimed, it could not withhold full release of petitioner's funds without violating not only the Constitution but also Section 64 of the General Provisions of the Year 2002 GAA. CSIcHA

This Court is not unaware that its above-cited June 3, 1993 Resolution also states as a guiding principle on the Constitutional Mandate on the Judiciary's Fiscal Autonomy that:

4.After approval by Congress, the appropriations for the Judiciary shall be automatically and regularly released subject to availability of funds. (Underscoring supplied)

This phrase "subject to availability of funds" does not, however, contradict the present ruling that the funds of entities vested with fiscal autonomy should be automatically and regularly released, a shortfall in revenues notwithstanding. What is contemplated in the said quoted phrase is a situation where total revenue collections are so low that they are not sufficient to cover the total appropriations for all entities vested with fiscal autonomy. In such event, it would be practically impossible to fully release the Judiciary's appropriations or any of the entities also vested with fiscal autonomy for that matter, without violating the right of such other entities to an automatic release of their own appropriations. It is under that situation that a relaxation of the constitutional mandate to automatically and regularly release appropriations is allowed.

Considering that the budget for agencies enjoying fiscal autonomy is only a small portion of the total national budget, only in the most extreme circumstances will the total revenue collections fall short of the requirements of such agencies. To illustrate, in the Year 2002 GAA the budget for agencies vested with fiscal autonomy amounted only to P14,548,620,000.00, which is 2.53% of the total appropriations in the amount of P575,123,728,000.00. 13 In Year 2003 GAA, which was re-enacted in 2004, the budget for the same agencies was P13,807,932,000.00, which is 2.27% of the total appropriations amounting to P609,614,730,000.00. 14 And in the Year 2005, the budget for the same agencies was only P13,601,124,000.00, which is 2.28% of the total appropriations amounting to P597,663,400,000.00. 15

Finally, petitioner's claim that its budget may not be reduced by Congress lower than that of the previous fiscal year, as is the case of the Judiciary, must be rejected. DHIETc

For with respect to the Judiciary, Art. VIII, Section 3 of the Constitution explicitly provides:

Section 3.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. 16 (Emphasis and underscoring supplied)

On the other hand, in the parallel provision granting fiscal autonomy to Constitutional Commissions, a similar proscription against the reduction of appropriations below the amount for the previous year is clearly absent. Article IX (A), Section 5 merely states:

Section 5.The Commission shall enjoy fiscal autonomy. Their approved annual appropriations shall be automatically and regularly released.

The plain implication of the omission of the provision proscribing such reduction of appropriations below that for the previous year is that Congress is not prohibited from reducing the appropriations of Constitutional Commissions below the amount appropriated for them for the previous year. DcTSHa

WHEREFORE, the petition is, in light of all the foregoing discussions, GRANTED. Respondent's act of withholding the subject funds from petitioner due to revenue shortfall is hereby declared UNCONSTITUTIONAL.

Accordingly, respondent is directed to release to petitioner the amount of Five Million Eight Hundred Seven Thousand, Three hundred Ninety Two Pesos and Thirty Centavos (P5,807,392.30) representing the unreleased balance of petitioner's appropriation for its Central Office by the General Appropriations Act for FY 2002.

SO ORDERED.

Quisumbing, Carpio, Corona Callejo, Sr., Azcuna, Chico-Nazario and Garcia, JJ., concur.

Davide, Jr., C.J., see separate concurring opinion.

Puno, J., also concur with the CJ's separate opinion.

Panganiban, J., I concur and also join the separate opinion of CJ Davide.

Ynares-Santiago, J., concur with ChJ separate opinion also.

Sandoval-Gutierrez, J., I also concur with the CJ in his separate opinion.

Austria-Martinez, J., I concur with the main and separate opinion.

Tinga, J., I concur with both main and separate opinions.

Separate Opinions

DAVIDE, JR., C.J.:

The Civil Service Commission (CSC) is before this Court on a petition for mandamus to compel the Department of Budget and Management (DBM) to release immediately its unfunded allotment for Fiscal Year 2002 in the amount of P5,807,392.30. The petitioner also prays that this Court determine the extent of the fiscal autonomy granted to government agencies by the Constitution. acADIT

Under the reenacted General Appropriations Act for Fiscal Year 2000, for FY 2001, the Civil Service Commission (CSC) had the total allotment of P270,343,318.86. As shown by the Notice of Cash Allocation (NCA) and the withheld Tax Remittance Advice (TRA), the Department of Budget and Management (DBM) released only P263,972.204.43 of the total allotment for the CSC thereby leaving an unfunded allotment of P6,371,024.43, which the DBM did not release to the CSC during FY 2001. Only after six months into FY 2002 or on 12 July 2002 did the DBM release P1,324,930.00 of the unfunded allotment of the CSC; the DBM released the balance of P5,046,095.00 on 14 October 2002 or on the last quarter of the following fiscal year.

For FY 2002, the CSC had a total allotment of P285,660,790.44 but the total amount released, as shown by the NCA and the TRA, was only P279,853,398.14. The DBM did not release the unfunded amount of P5,807,392.30, even as the instant petition was filed on 16 July 2003.

Petitioner CSC alleges in its petition for mandamus that the DBM would not release allotments without its having complied with National Budget Circular No. 478 dated 5 February 2002 that sets the guidelines on the release of funds for FY 2002. Item No. 13 of the circular states that one of its purposes is "[t]o prescribe the required reports prior to release of funds." The same circular requires all agencies to submit an Annual Cash Program (ACP) and reiterates the policy of "no report, no release" of funds. Aside from the ACP, the following reports must be submitted: (1) summary list of checks issued and cancelled [SLCIC]; (2) statement of allotment, obligation and balances; (3) monthly statement of charges to accounts payable; (4) quarterly report of actual income; (5) quarterly financial report of operations; (6) quarterly physical report of operations; (7) preliminary and final trial balance; and (8) statement of accounts payable.

The CSC asserts that these "tedious" requirements of the DBM undermine fiscal autonomy because budgetary appropriations could not be released without complying therewith. Moreover, since it enjoys fiscal autonomy, the CSC must not be made to defend its budget during deliberations thereon in Congress, as the reduction of its budget as compared to that of the previous fiscal year would defeat the purpose of fiscal autonomy, which precludes undue pressure from Congress when it deliberates on the bill for the General Appropriations Act.

Citing Santiago v. Vasquez, 1 the CSC adds that the issue of fiscal autonomy involves "an exceptional and compelling circumstance" that justifies availment of a remedy within the jurisdiction of this Court. More importantly, the far-reaching implications of the petition demands that the questions raised should be judicially resolved. Like the CSC, other constitutional bodies vested with fiscal autonomy are entitled to the automatic and regular release of approved budget, both in terms of allotment and of cash allocation.

On the other hand, the DBM asserts that its reporting requirements are not intended to defy the mandate of fiscal autonomy constitutionally vested on the CSC because those were "meant to control the budget deficit and regulate cash flow." Fiscal autonomy does not dispense with accountability. As such, the petition should be dismissed because the CSC failed to exhaust administrative remedies and violated the doctrine of judicial hierarchy.

Traversing the contentions of the DBM, the CSC argues that the rule on exhaustion of administrative remedies and the principle of hierarchy of courts need not be observed when legal questions are raised before this Court. The issue of whether the constitutional provision on fiscal autonomy has been curtailed by reporting requirements imposed by the DBM is a legal issue, which only this Court may decide with finality. By its reliance on the principle of accountability, the DBM missed the point of the petition, as submission of accounting reports and other documents are not the only means of determining accountability. Under the concept of fiscal autonomy, the annual appropriations of constitutional bodies vested with that mandate shall be automatically and regularly released by the DBM, with or without the submission of accounting reports and other documents, which the DBM requires as a condition for the release of budgetary appropriations. TcaAID

 

The Court is thus faced with two basic issues: (1) the propriety of the remedy of mandamus; and (2) whether the constitutionally mandated fiscal autonomy of the CSC has been violated. Being interrelated, these issues will be discussed together.

The writ of mandamusis available as a remedy before this Court under these circumstances:

When any tribunal, corporation, board, officer or person unlawfully neglects the performance of an act which the law specifically enjoins as a duty resulting from an office, trust, or station, or unlawfully excludes another from the use and enjoyment of a right or office to which such other is entitled, and there is no other plain, speedy and adequate remedy in the ordinary course of law, the person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered commanding the respondent, immediately or at some other time to be specified by the court, to do the act required to be done to protect the rights of the petitioner, and to pay the damages sustained by the petitioner by reason of the wrongful acts of the respondent. 2

As an extraordinary remedy, mandamus may be availed of only if the legal right to be enforced is well-defined, clear and certain. 3 It lies only to compel an officer to perform a ministerial duty, not a discretionary one. The duty is ministerial only when its discharge requires neither the exercise of official discretion nor judgment. 4 The performance of a duty which involves the exercise of discretion may be compelled by mandamus "in cases where there is gross abuse of discretion, manifest injustice, or palpable excess of authority." 5 The remedy of mandamus, over which this Court has original jurisdiction, is proper "to enforce a public right and to compel the performance of a public duty, most especially when mandated by the Constitution." 6

In this instance, what is sought to be observed and implemented by the DBM is the constitutional mandate of fiscal autonomy, which is vested in the CSC under Article IX-A, Section 5 of the Constitution, which explicitly states that

[t]he Commission shall enjoy fiscal autonomy. Their approved annual appropriations shall be automatically and regularly released.

This provision is reiterated in Book II, Chapter 5, Section 26 of the Administrative Code of 1987, and in Section 63 of the General Provisions of the General Appropriations Act for FY 2000 (Republic Act No. 8760). 7

The DBM, as the agency statutorily vested with the responsibility of implementing the National Budget, 8 is duty-bound to observe this constitutional provision. Exercise of discretion is eschewed; what is required of the DBM is merely the ministerial act of implementing fiscal autonomy. Its responsibility vis-à-vis the National Budget is circumscribed only by its general responsibility to see to the "efficient and sound utilization of government funds and revenues to effectively achieve our country's development objectives." 9

When the DBM issued National Budget Circular No. 478 on 5 February 2002, it aimed to apply the guidelines for the release of FY 2002 funds to "all heads of departments/agencies/state universities and colleges and other offices of the National Government, government-owned or controlled corporations and local government units." In other words, the circular would apply to all government agencies with no exceptions whatsoever, and therefore, it subjects all government agencies, including those constitutionally vested with fiscal autonomy, to reporting requirements "prior to the release of funds." 10 This means that noncompliance with the requirements of the circular would result not only in delay in the release of duly appropriated funds for any fiscal year but even in the withholding thereof within the same fiscal year.

The DBM has failed to explain why National Budget Circular No. 478 is addressed to all government agencies. All it states in its Comment on the Petition is that the "no report no release of funds" policy is "not strictly applied to agencies belonging to the fiscal autonomous group," which are allegedly placed under the Not Needing Clearance column of the Agency Budget Matrix or Annex A of the circular. 11

However, the "disaggregation" of two types of government agencies into "Needing Clearance" (NC) and "Not Needing Clearance" (NNC) in National Budget Circular No. 478 does not imply that fiscal autonomous agencies under the Constitution are included among those with funds that can be released without clearances or documentary supports. This is clear from this provision of the circular:

3.2.2The NNC column refers to budgetary items not enumerated in Item 3.2.1 above including the following Special Purpose Funds (SPFs):

•Agriculture and Fisheries Modernization Program

•Internal Revenue Allotment

•Area Development Assistance Fund, and

•Local Government Empowerment Fund.

Paragraph 3.2.1 provides that the "NC column pertains to the portion of the agency budget which can only be released upon compliance with certain documentary requirements." Note should be taken of the fact that paragraph 3.2.2 speaks of Special Purpose Funds and enumerates only funds prescribed statutorily. 12 By the principle of ejusdem generis, funds intended for government agencies with fiscal autonomy, which is provided by the Constitution and not by a statute, are excluded from the Special Purpose Funds. While this will not necessarily imply that the National Budget Circular No. 478 was issued to specifically and singularly impose the submission of documentary requirements upon the CSC, it ineluctably proves that the DBM may still require the CSC to comply therewith, as it did require the CSC to submit the above-mentioned reports. Indeed, the admission of the DBM that it does not strictly apply the "no report no release of funds" policy is very revealing. ADCSEa

Article IX-A, Section 5 of the Constitution clearly provides that constitutional commissions such as the CSC are entitled to automatic and regular release of duly approved appropriations. In Province of Batangas v. Romulo 13 the Court explained the meaning of the term "automatically released," as used in Article X, Section 6 of the Constitution, which provides that "[l]ocal government units shall have a just share, as determined by law, in the national taxes which shall be automatically released to them." The Court said:

Webster's Third New international Dictionary defines "automatic" as "involuntary either wholly or to a major extent so that any activity of the will is largely negligible; of a reflex nature; without volition; mechanical; like or suggestive of an automaton." Further, the word "automatically" is defined as "in an automatic manner: without thought or conscious intention." Being "automatic," thus, connotes something mechanical, spontaneous and perfunctory." As such, the LGUs are not required to perform any act to receive the just "share" accruing to them from the national coffers. As emphasized by the Local Government Code of 1991, the "just share" of the LGUs shall be released to them "without need of further action." (Emphasis supplied.)

Province of Batangas also quotes this explanation of the Court, in another Decision, on the term "automatic release" of LGU funds:

. . . A basic feature of local fiscal autonomy is the automatic release of the shares of LGUs in the national internal revenue. This is mandated by no less than the Constitution. The Local Government Code specifies further that the release shall be made directly to the LGU concerned within five (5) days after every quarter of the year and "shall not be subject to any lien or holdback that may be imposed by the national government for whatever purpose." As a rule, the term "shall" is a word of command that must be given a compulsory meaning. The provision is, therefore, imperative. 14

Article IX-A, Section 6 of the Constitution mandating the automatic and regular release of appropriations for the CSC being couched imperatively on account of the use of the word "shall," the DBM gravely abused its discretion and exceeded its authority in including the CSC in the coverage of its National Budget Circular No. 478 and by requiring the CSC to comply with the "no report no release of funds" policy. Its abuse of discretion is grave and gross, as no less than the Constitution commands the automatic and regular release of funds appropriated by law for the CSC. DSEIcT

Moreover, the factual premises of this petition are by no means uncertain or doubtful as to proscribe availment of the writ of mandamus as an extraordinary remedy under the Rules of Court. The claims of the CSC that the unfunded balance of its appropriation of P6,371.024.43 for FY 2000 was not released by the DBM during that fiscal year, and that its unfunded balance of appropriations for FY 2001 of P5,046,095 was likewise not released until after the filing of the instant petition on 11 July 2003, are not rebutted by the DBM. There was then, clearly, failure on the part of the DBM to perform its duty of automatically and regularly releasing appropriated funds for the CSC as required by the Constitution. To reiterate, such failure cannot be anything but grave abuse of discretion — the DBM violated not just a contractual provision 15 for which it could be called to task but no less than a constitutional provision.

Assuming that the writ of mandamus has been rendered moot by the supervening event of the release of the balance of funds appropriated for the CSC for fiscal years 2001 and 2002, albeit delayed and beyond those fiscal years, the issue raised in the petition is of paramount importance to constitutional bodies vested with fiscal autonomy that it cries out for resolution. On this matter, the Court has said:

Granting arguendo that, as contended by the respondents, the resolution of the case had already been overtaken by supervening events as the IRA, including the LGSEF, for 1999, 2000 and 2001, had already been released and the government is now operating under a new appropriations law, still, there is compelling reason for this Court to resolve the substantive issue raised by the instant petition. Supervening events, whether intended or accidental, cannot prevent the Court from rendering a decision if there is a grave violation of the Constitution. Even in cases where supervening events had made the cases moot, the Court did not hesitate to resolve the legal or constitutional issues raised to formulate controlling principles to guide the bench, bar and public. 16 (Emphasis supplied.)

 

The issue of whether the constitutionally mandated fiscal autonomy of the CSC has been violated must be resolved, and for that purpose, the rule on hierarchy of courts will not prevent this Court from assuming jurisdiction over the petition. 17 With respect to the allegation that the CSC should have exhausted administrative remedies before filing the instant petition, that doctrine is not absolute. It admits of these exceptions when judicial action may be validly resorted to immediately: (1) when the question raised is purely legal; (2) when the administrative body is in estoppel; (3) when the act complained of is patently illegal; (4) when there is urgent need for judicial intervention; (5) when the claim involved is small; (6) when irreparable damage will be suffered; (7) when there is no other plain, speedy and adequate remedy; (8) when strong public interest is involved; (9) when the subject of the controversy is private land; and (10) in quo warranto proceedings. 18 At least four of these exceptions are found in this instance: the question raised is purely legal; the act complained of is patently illegal as it involves the violation of a constitutional provision; there is no other plain, speedy and adequate remedy available to the CSC, and strong public interest is involved because a government agency is charged with no less than violation of the Constitution. As this Court said in Province of Batangas, when the application of a constitutional provision is involved, the relaxation of procedural rules to resolve the controversy is warranted.

Moreover, the DBM erroneously invokes a Resolution of this Court to defend its position of compliance with the mandate of fiscal autonomy of the CSC. According to the DBM, the Resolution of 3 June 1993 in A.M. No. 92-9-029-SC (Constitutional Mandate on the Judiciary's Fiscal Autonomy) allegedly started a "healthy correspondence between the Supreme Court and the DBM that eventually led to the crafting of guiding principles on fiscal autonomy which presently governs the budget of the judiciary." 19 For a clear picture of that "healthy correspondence," the said Resolution is quoted in full as follows:

A.M. No. 92-9-029-SC (Constitutional Mandate on the Judiciary's Fiscal Autonomy).

The administrative matter at bar treats of Section 3, Article VIII of the Constitution reading as follows:

"SEC. 3.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."

In a letter dated August 27, 1992, addressed to Hon. Salvador M. Enriquez, Jr., Secretary of Budget and Management, the Chief Justice made the following statements as regards the budget of the Court and of the Presidential Electoral Tribunal, and of the Judiciary in general, viz.:

"The Court wishes me to express to you its deep disappointment upon its discovery that your Department revised the Court's budget for 1993 that it had asked you, through my letter to you of April 24, 1992, simply to submit to the Congress for consideration and approval. The Court has been informed that your Department made its own determination of the Court's needs and plans as regards personal services (including the creation of new court salas and new positions), capital outlay (including the acquisition of equipment), and maintenance and operating expenses.

It is to be regretted that this was done without prior consultation with, or even advance notice to, the Court, much less a statement of the reasons therefor, and despite the Court's having made known to you its desire that the fiscal autonomy provisions of the Constitution be strictly observed. You will recall that I had occasion to stress this in my letter to you of February 14, 1992, and again in the letter dated May 22, 1992 which in the Court's behalf I, together with the heads of the other independent constitutional offices, addressed to Her Excellency, then President Corazon C. Aquino — of which you were doubtless made aware, and to which was appended the 'Joint Resolution' on Fiscal Autonomy of all said officers, dated April 3, 1992. I once more intimated this in my letter to you of April 24, 1992 transmitting the Court's budget for 1993 to you 'for submission in due course to the Congress of the Philippines and eventual inclusion in the National Budget.' In any event, in its decision in G.R. No. 103524 (Cesar Bengzon, et al. v. Hon. Franklin N. Drilon, etc., et al.) and Adm. No. 91-8-225-CA (Request of Retired Justices Manuel P. Barcelona, et al.), promulgated on April 15, 1992, the Court has made the meaning of fiscal autonomy quite clear.

'What is fiscal autonomy?

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. If the Supreme Court says it needs 100 typewriters but DBM rules we need only 10 typewriters and sends its recommendations to Congress without even informing us, the autonomy given by the Constitution becomes an empty and illusory platitude.

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. In the interest of comity and cooperation, the Supreme Court, Constitutional Commissions, and the Ombudsman have so far limited their objections to constant reminders. We now agree with the petitioners that this grant of autonomy should cease to be a meaningless provision.'

In my letter to you of February 14, 1992 above adverted to, I pointed out that

'. . . the constitutional provision . . . is clear in what it commands and implies: that within the bounds of its allotted appropriations, the Judiciary, represented by the Supreme Court, is the sole judge of how they are to be spent, and where and when; and that the Court does not have to justify its programs of expenditures, or be answerable in the ordering of its priorities, to any person or agency. No lesser authority can be inferred from the cited provision, no other meaning given to the term "fiscal autonomy" and the unmistakable injunction that appropriations for the Judiciary "shall be automatically and regularly released," i.e., even without request therefor, and most certaintly without being compelled to justify or explain its requirements.'

As one of the three great departments of Government, coordinate and co-equal vis-à-vis the Executive and the Legislative branches, the Court feels that, under the circumstances, it is entitled to know why and by what authority the unilateral revision of its budget has been done, and what steps you believe might now be taken to ensure that any change in the Court's 1993 budget be entrusted solely to the Congress to which, after all, this function rightfully and exclusively belongs.

I hardly need add that much the same things may be said about the action taken on the budget of the Presidential Electoral Tribunal by your office which, regrettably, again appears to have substituted its own judgment for that of the Tribunal as to some of its requirements."

The letter closed with the request that the Honorable Secretary give the matter "preferential attention" and a reply be submitted in five (5) days.

The Hon. Secretary of Budget and Management having duly responded, orally and in writing, with the assistance of the Solicitor General, the Chief Justice had occasion to address another letter on the same subject to the latter, under date of January 15, 1993, in which the following statements were made, viz.:

"Whatever past practice the Court might have put up with 'in the interest of comity and cooperation,' as Bengzon so aptly states, there was no agreement to subject budget proposals of the Judiciary as to what is referred to as 'the standard preparation, review and evaluation process of the DBM,' or to recognize in that department the capacity to raise issues on the proposals for submission to Congress 'for arbitration.'

The Court recognizes that it is the duty of the DBM to obtain as accurate a picture of total resources as possible for any given year and suggest to Congress how essential services and other programs of Government might be funded. In other words, DBM studies priorities and proposes to the legislature how the expected revenues should be apportioned among the various agencies and instrumentalities of the Government. This function, however, in so far as the Judiciary is concerned, is purely advisory and should address nothing more specific than general fiscal policy. It may not be exercised in such a manner as, under the guise of budget preparation, to infringe the Judiciary's independence and fiscal autonomy.

To be very clear, the Court's position is that the fiscal autonomy guaranteed by the Constitution makes it the sole judge of the requirements of the Judiciary and how these are to be funded from monies appropriated by law, and of the Judiciary's priorities and their ordering. This prerogative is subject only to the constitutional authority vested in Congress over the national budget. (Italics supplied.)

 

I do appreciate . . . your . . . intent to reduce the areas of irritation and annoyance between the Court and the DBM on the question of how the Judiciary's budget is to be dealt with. On the other hand, in light of Bengzon, any accommodation that would to any extent dilute the Court's authority on the matter would be out of the question."

Again the Honorable Secretary of Budget and Management made due response. In none of their responses above-mentioned did either the Secretary or the Solicitor General manifest any serious objection to the Court's basic postulates; indeed, both expressed substantial agreement therewith. cDACST

After deliberating on the matter, THE COURT RESOLVED TO ESTABLISH THE FOLLOWING GUIDING PRINCIPLES GOVERNING THE BUDGET OF THE JUDICIARY, INCLUDING THE PRESIDENTIAL ELECTORAL TRIBUNAL, HENCEFORTH TO BE OBSERVED AND IMPLEMENTED BY ALL CONCERNED, to wit:

1.The Court shall prepare the annual budget proposal for the judiciary and itself submit it to Congress for approval. A copy thereof shall be submitted to the Department of Budget and Management pursuant to Section 22 of Article VI of the Constitution which provides that "[t]he President shall submit to the Congress within thirty days from the opening of every regular session, as the basis of the general appropriations bill a budget of expenditures and sources of financing, including receipts from existing and proposed revenue measures."

2.The budget proposal for the Judiciary, as prepared by the Supreme Court, shall be incorporated in the draft national budget. The Department of Budget and Management may make revisions thereon as it may deem appropriate provided that the latter clearly indicate that the revisions are its own and not the Court's, and provided further that each item as to which revision is sought by the Department shall be indicated in brackets on the draft national budget for consideration by the Congress.

3.The Department of Budget and Management shall consult with the Supreme Court concerning its comments on and suggested revisions of the proposed budget for the Judiciary.

4.After approval by Congress, the appropriations for the Judiciary shall be automatically and regularly released subject to availability of funds.

5.The Supreme Court may submit to the Department of Budget and Management reports of operation and income, current plantilla of personnel, work and financial plans and similar reports only for recording purposes. The submission thereof concerning funds previously released shall not be a condition precedent for subsequent fund releases. (Emphasis supplied.)

The "healthy" exchange of communications between then Chief Justice Andres R. Narvasa and DBM Secretary Salvador M. Enriquez, Jr. was occasioned by the practice of the DBM of reducing the budget submitted by the Judiciary without consultation with the Court; hence the third guideline prescribed in the Resolution that requires such consultation with respect to any revisions of the budget proposed by the Judiciary.

In its Comment on the Petition, the DBM makes capital of the fourth guideline prescribed in that Resolution, explaining as follows:

16.Even the Supreme Court recognizes the need to grant the Executive Department some form of flexibility during times when cash resources are scarce. In setting the guiding principle that will govern budget execution, it has been agreed that:

"After approval by Congress, the appropriations for the Judiciary shall be automatically and regularly released subject to availability of funds." (Emphasis supplied.)

Consequently, every month, it behooves upon the department to coordinate with the revenue collecting agencies and determine if total revenue collections meets (sic) total projections, if the deficit ceiling has been surpassed, and if the total disbursement program exceeds this ceiling. On the basis of these data, total amount of cash to be released for the month is set. If the total disbursement program is less than the ceiling, then allotments of agencies are released in full. However, if total disbursement program exceeds the ceiling, agency allotments are only partially released.

17.Although the amount to be released may vary depending upon cash availability, there is no uncertainty with regard to the release schedule. Unfailingly, respondent ensures that cash enters petitioner's coffers every month. Such regularity is required because several mandatory expenditures, the most important being salaries, are paid monthly. Consequently, despite the implementation of a cash release program, respondent ensures that the approved allotment of petitioner is regularly released. 20

By this explanation, the DBM lamely excuses itself from compliance with the mandate of fiscal autonomy of the CSC on account of alleged lack of government funds. Certainly, fiscal autonomy would be a meaningless term if there are no funds with which to implement it. However, this simplistic approach to the issue, which focuses narrowly on the regularity of releases of funds for basic expenditures such as monthly salaries, appears to constitute the entirety of the DBM's total understanding of fiscal autonomy. It betrays the DBM's lack of comprehension of the concept of fiscal autonomy; its adamant refusal to abide by that constitutional mandate, a matter that was noted by the Court in Bengzon v. Drilon, 21 and its undisguised admission that, in the releases of appropriated funds, the CSC is treated similarly as other government agencies without fiscal autonomy.

Fiscal autonomy means more than automatic and regular release of appropriated funds. This is the intent of the framers of the Constitution.

When the fiscal autonomy of constitutional commissions was discussed by the Constitutional Commission, Commissioner Christian Monsod emphasized that fiscal autonomy is broader than just the automatic release of appropriations. It includes other rights in the sense that fiscal autonomy includes the non-imposition of any other procedures like the pre-audit system in bodies that enjoy fiscal autonomy, although the inclusion of pre-audit procedures would "defeat the objective of automatic and regular release." By such explanation, Commissioner Crispino de Castro temporarily withdrew his amendment that would have deleted the sentence "[t]he Commission shall enjoy fiscal autonomy" 22 and hence, the provision has remained in the fundamental law.

The same concept of fiscal autonomy as not limited to automatic and regular release of funds has been espoused by this Court. In Bengzon v. Drilon, the Court declared that "[t]he 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. . . ."

The same stand has been expressed by the Constitutional Fiscal Autonomy Group (CFAG) composed of the Judiciary and the constitutional bodies granted fiscal autonomy when, on 3 April 1992, it issued Joint Resolution No. 1 (Ensuring and Operationalizing the Fiscal Autonomy Granted by the 1987 Constitution to the Judiciary, the Civil Service Commission, the Commission on Audit, the Commission on Elections, and the Office of the Ombudsman) under these premises:

Lest the constitutional grant of fiscal autonomy remain a meaningless, illusory platitude, there is an imperative need to flesh it out, operationalize it, breathe life into it and give it substance and vigor by translating it into practical realities. The mere automatic and regular release of the approved appropriations does not suffice to ensure fiscal autonomy. In the very real sense, the fiscal autonomy contemplated in theConstitution is "enjoyed" even before and, with more reasons, after the release of the appropriations. There is still a need to institutionalize adequate safeguards towards vitalizing the constitutional mandate of fiscal autonomy.

Thus, in keeping with the constitutional design, the formulation, execution and implementation of the budgets of the Judiciary, the Constitutional Commissions (CSC, COA and COMELEC) and the Office of the Ombudsman should be within the context of fiscal autonomy which they enjoy in order to further safeguard, ensure and guarantee their independence. The present budgetary policies and guidelines, as hereinabove outlined, insofar as they apply to the Judiciary, the Constitutional Commissions (CSC, COA and COMELEC) and the Office of the Ombudsman tend to detract from the subject constitutional vesture of fiscal autonomy. By virtue thereof, as earlier seen, the DBM is able to exercise and wield a tight control over the various phases of the budget process that the budgets of said agencies undergo, thereby completely negating and impairing the independence that is the very essence of fiscal autonomy.

Control is anathema to fiscal autonomy. Viewed from the constitutional standpoint, it is an anachronism of sorts. More specifically, as is the present practice, the Judiciary, the Constitutional Commissions and the Office of the Ombudsman go through exactly the same budget process as all the other regular agencies of government, particularly the Executive Branch. Their budget proposals are subjected to close scrutiny by the DBM or suffer reductions/cuts. DBM's strict imposition of restrictions, limitations or constraints on fund allocation and utilization specified in the General Appropriations Act, P.D. 1177 and administrative/executive issuances denies these independent constitutional offices the desired flexibility inherent in fiscal autonomy and considerably stifles their initiative and effectiveness in the management of their resources. Thereby, DBM assumes unwarranted authority over these offices' financial operations. Fiscal autonomy is unduly infringed upon. (Emphasis supplied.)

It has been more than 13 years since CFAG Joint Resolution No. 1 was issued. Unfortunately, the same practices of the DBM that control the budget of fiscally autonomous government agencies in defiance of the Constitution are still being perpetrated. The instant petition is indeed an opportune time for the CSC to assert fiscal autonomy.

 

The CSC appears to denounce only the irregular and controlled releases of appropriated funds by the DBM in its petition for mandamus. Nonetheless, a reading of the petition would show that it is actually aimed at compelling the DBM to respect, observe, and implement the constitutional mandate of fiscal autonomy of the Judiciary, the Constitutional Commissions, and the Office of the Ombudsman, which, in exercising its statutory responsibilities, the DBM has cast aside. By imposing National Budget Circular No. 478 on all government agencies without qualification, the DBM has actually subverted and weakened the very purpose for the grant of fiscal autonomy — the independence of the grantees. Obviously, the DBM shrugged off and overlooked the very reason for the grant of fiscal autonomy — constitutional bodies vested with "independent" powers must be "insulated from interference by the political departments." 23

This is not to say that agencies vested with fiscal autonomy have no reporting responsibility at all to the DBM. This is precisely the reason why guideline No. 5 under the Resolution of 3 June 1992 states that the Supreme Court, or constitutional commissions clothed with fiscal autonomy for that matter, may submit reports relative to its appropriation "for records purposes only." The word "may" is permissive, 24 as it is an auxiliary verb manifesting "opportunity or possibility" and, under ordinary circumstances, "implies the possible existence of something." 25 It is therefore incorrect for the DBM to state that "independence without interdependence is folly" with respect to reporting requirements. Interdependence will work only if it is undertaken within the parameters prescribed by the Constitution.

As correctly pointed out by the CSC, reporting its financial status to the DBM is not the end-all and be-all of accountability. As constitutional bodies, the agencies concerned must know the consequences of unmitigated and reckless expenditure of public funds. Article II, Section 27 of the Constitution adopts the State policy to "maintain honesty and integrity in the public service and take positive and effective measures against graft and corruption." 26 Article XI, Section 1 provides that "[p]ublic office is a public trust" and hence, "[p]ublic officers and employees must at all times be accountable to the people, serve them with utmost responsibility, integrity, loyalty, and efficiency, act with patriotism and justice, and lead modest lives." Surely, these constitutional provisions must mean more than mere platitudes to constitutional offices vested with fiscal autonomy, a privilege denied other government agencies, because those offices must be independent in the exercise of their constitutional functions. It bears emphasis that the same constitutional offices and institutions themselves are not the only ones accountable for illegal expenditures; the officials running the institutions are equally and personally responsible therefor. 27

With fiscal autonomy, the constitutional bodies may allocate and disburse funds "as may be provided by law or prescribed by them in the course of the discharge of their functions." 28 In this regard, the experience of the CSC in the manner by which the DBM treated its constitutional mandate of fiscal autonomy is not unusual. This Court itself has its share of experiences in asserting its fiscal autonomy. These are manifest in Resolutions this Court has issued relative to the exercise of its mandate of administrative supervision over courts and personnel thereof under Article VIII, Section 6 of the Constitution. 29 Worth mentioning is one administrative matter where the DBM, claiming that the Court erroneously interpreted the law, applied its own interpretation of the same law. 30 Indeed, like the CSC, this Court has been at the receiving end of the DBM's arbitrary refusal to release appropriated funds in derogation of the fiscal autonomy of the Judiciary. SIcTAC

In Bengzon v. Drilon, this Court has observed that constitutional bodies vested with fiscal autonomy "have so far limited their objections" to the manner by which the DBM interprets fiscal autonomy "to constant reminders" in the "interest of comity and cooperation" that must pervade the relationship of government agencies. But, in the same Decision, the Court agreed with the petitioners that the grant of fiscal autonomy "should cease to be a meaningless provision." Again, more than 13 years have passed since the Court made that observation. Like recent admonitions of the Court for the DBM to pay heed and implement the constitutional provision on fiscal autonomy, that pronouncement "has apparently fallen on deaf ears." 31

This Court is not oblivious to the reality that there is a budget deficit and the country, as it were, is performing a tight balancing act between economic recovery and financial collapse. However, that situation is no reason for the DBM to brush aside the constitutionally prescribed fiscal autonomy of the CSC and the other constitutional bodies vested with that mandate. The present fiscal situation of this country is in fact a challenge to the capability of the DBM to efficiently and effectively exercise its responsibility of managing government budget while according due respect to the Constitution and its provisions on fiscal autonomy.

ACCORDINGLY, I vote to GRANT the petition. Respondent Department of Budget and Management should be enjoined to respect and implement the constitutional provision granting fiscal autonomy to the Civil Service Commission.

 

Footnotes

1.Rollo at 6.

2.Id. at 25-35.

3.Id. at 99-100.

4.Id. at 100.

5.C.N. Hodges v. City of Iloilo, 125 PHIL 442, 447-448 (1967).

6.Manalo v. Gloria, 236 SCRA 130, 138 (1994).

7.Rollo at 9.

8.429 SCRA 736 (2004).

9.Id. at 760.

10.Art. VIII, Section 3.

11.29 SCRA 617, 628 (1969).

12.Respondent states in its Comment: "Consequently, every month, it behooves upon the department to coordinate with the revenue collecting agencies and determine if total revenue collections meets total projections, if the deficit ceiling has been surpassed, and if the total disbursement program exceeds this ceiling. On the basis of these data, total amount of cash to be released for the month is set. If the total disbursement program is less than the ceiling, then allotments of agencies are released in full. However, if total disbursement program exceeds the ceiling, agency allotments are only partially released." (Rollo at 100-101)

13.R.A. No. 9162, General Appropriations Act, FY 2002.

14.R.A. No. 9206, General Appropriations Act, FY 2003.

15.R.A. No. 9336, General Appropriations Act, FY 2005.

16.Article VIII, Section 3.

DAVIDE, JR., C.J.:

1.G.R. Nos. 99289-90, 27 January 1993.

2.1997 RULES OF CIVIL PROCEDURE, Rule 65, Sec. 3.

3.See: COMELEC v. Judge Quijano-Padilla, 438 Phil. 72, 91 (2002).

4.Esquivel v. Ombudsman, 437 Phil. 702, 716 (2002).

5.Roque v. Office of Ombudsman, 366 Phil. 568, 575 (1999) citing Angchangco, Jr. v. Ombudsman, 335 Phil. 766 (1997).

6.Chavez v. PCGG, 366 Phil. 863, 871-872 (1999).

7.The GAA provision reads:

"Sec. 63. Appropriations of Agencies Vested with Fiscal Autonomy. Any provision of law to the contrary notwithstanding, the appropriations authorized in this Act for the Judiciary, Congress of the Philippines, the Commission on Human Rights, the Office of the Ombudsman, the Civil Service Commission, the Commission on Audit and the Commission on Elections shall be automatically and regularly released."

This is now Sec. 70 of the General Provisions of the GAA for FY 2005 (Rep. Act No. 9336).

8.ADMINISTRATIVE CODE OF 1987, Book IV, Title XVII, Chapter 1, Sec. 2.

9.Id.

10.Paragraph 1.3 providing for the purpose(s) of the circular states: "To prescribe the required reports prior to the release of funds."

11.Comment, p. 5.

12.The Agricultural and Fisheries Modernization plan is funded under Sec. 112 of Rep. Act No. 8435, as amended by Rep. Act No. 9281. The Internal Revenue Allotment is provided for by Sec. 284, Chapter 1 of the Local Government Code (Rep. Act No. 7160). An example of an area development assistance fund is that created on 25 July 1986 by Executive Order No. 265 (Creating the Aurora Integrated Area Development Project Office, Providing Funds Thereof and For Other Purposes). The Local Government Empowerment Fund is provided for under the provisions on Allocations to Local Government Units under the General Appropriations Act.

13.G.R. No. 152774, 27 May 2004.

14.Pimentel, Jr. v. Aguirre, 391 Phil. 84, 105-106 (2000).

15.See: COMELEC v. Judge Quijano-Padilla, 438 Phil. 72 (2002).

16.Province of Batangas v. Romulo, supra.

17.Id.

18.Castro v. Sec. Gloria, 415 Phil. 645, 651-652 (2001) citing Sunville Timber Products, Inc. v. Abad, G.R. No. 85502, 24 February 1992.

19.Comment of DBM, p. 2.

20.Comment of the DBM, p. 6.

21.G.R. No. 103524, 15 April 1992. In that case, the Court observed:

"The exercise of the veto power in this case may be traced back to the efforts of the Department of Budget and Management (DBM) to ignore or overlook the plain mandate of the Constitution on fiscal autonomy. The OSG Comment reflects the same truncated view of the provision.

We have repeatedly in the past few years called the attention of DBM that not only does it allocate less than one percent (1%) of the national budget annually for the 22,769 Justices, Judges, and court personnel all over the country but also examines with a fine-toothed comb how we spend the funds appropriated by Congress based on DBM recommendations."

22.1 RECORD OF THE CONSTITUTIONAL COMMISSION (15 July 1986) 559-561; 1 JOURNAL OF THE CONSTITUTIONAL COMMISSION (15 July 1986) 258.

23.See: Concurring opinion of Justice Hugo E. Gutierrez, Jr. in Cojuangco, Jr. v. PCGG, G.R. Nos. 92319-20, 2 October 1990.

24.Dizon v. Encarnacion, 119 Phil. 20, 22 (1963).

 

25.Supangan, Jr. v. Santos, G.R. No. 84663, 24 August 1990.

26.CONST., Art. II, Sec. 27.

27.Chapter 5, Book VI of the Administrative Code of 1987 states:

"SEC. 43. Liability for Illegal Expenditures. — Every expenditure or obligation authorized or incurred in violation of the provisions of this Code or of the general and special provisions contained in the Annual General or other Appropriations Act shall be void. Every payment made in violation of said provisions shall be illegal and every official or employee authorizing or making such payment, or taking part therein, and every person receiving such payment shall be jointly and severally liable to the Government for the full amount so paid or received.

Any official or employee of the Government knowingly incurring any obligation, or authorizing any expenditure in violation of the provisions herein, or taking part therein, shall be dismissed from the service, after due notice and hearing by the duly authorized appointing official. If the appointing official is other than the President and should he fail to remove such official or employee, the President may exercise the power of removal."

28.Bengzon v. Drilon, G.R. No. 103524, 15 April 1992.

29.See: Resolutions in A.M. No. 02-12-01-SC (Re: Resolution Granting Automatic Permanent Total Disability Benefits to Heirs of Justices and Judges who Die in Actual Service) dated 24 November 2004; A.M. No. 04-7-05-SC (Re: Properties Proposed to be Purchased by Associate Justice Jose C. Vitug) dated 30 September 2004; and A.M. No. 11238-Ret. (Re: Expiration of the Fixed Term of Office of Atty. Saaduddin A. Alauya, Office of the Jurisconsult, Zamboanga City).

30.In the Resolution of 3 August 2004 in A.M. No. 11238-Ret., the Court held that "the mandate of fiscal autonomy, read with Section 6, Article VIII of the Constitution providing that the Supreme Court shall have 'administrative supervision over all courts and personnel thereof,' is the foundation of the authority of the Supreme Court to prescribe compensation or vest judicial ranking upon officials of the Judiciary." It added that "neither has the DBM the authority to implement its own interpretation of the law in disparagement of Resolutions issued by the Court in the exercise of its constitutional powers, without so much as a request for a reconsideration of such Resolutions. By such unilateral acts, the DBM has unfortunately but effectively fortified itself as a tribunal on financial matters higher than this Court. By reviewing the Resolutions of the Court, passing judgment on legal issues therein, and implementing its own conclusions in blatant disregard of the principle of separation of powers, the DBM unwittingly trampled on dangerous territory."

31.Resolution of 24 November 2004 in A.M. No. 02-12-01-SC, supra.