Institute of Politics and Governance

Republic of the Philippines
Supreme Court
Manila
(continued)

THE RESPONDENTS

23. Public respondents Ronaldo Zamora, Benjamin Diokno, and Leonor Magtolis-Briones are the incumbent Executive Secretary, Secretary of the Department of Budget and Management, and National Treasurer, respectively. The said respondents are all public officers and are being sued in their official capacity. Public respondent Commission on Audit (COA) is a public agency. Respondent Zamora may be served summons and other processes at his office at Malacañang Palace, Manila; respondent Diokno at his office also at Malacañang Palace, Manila; respondent Magtolis-Briones at her office at the Bureau of Treasury, Palacio del Gobernador, Intramuros, Manila; and respondent COA at its office at Commonwealth Avenue, Quezon City.

24. Public respondents are primarily charged with the duty of implementing the year 2000 General Appropriations Act.

JURISDICTIONAL ALLEGATIONS

25. Pursuant to Section 1, Rule 65 of the Rules of Court, the petitioners hereby certify, as shown by the attached affidavits, that, they have not commenced any action involving the same issues before the Supreme Court, the Court of Appeals, or different divisions thereof, or before any other tribunal or agency, and that to the best of their knowledge, no such action or proceeding is pending in the Supreme Court, the Court of Appeals, or different divisions thereof, or any other tribunal or agency. The petitioners also certify that should they hereafter learn that a similar action or proceeding has been filed or is pending in the Supreme Court, the Court of Appeals, or different divisions thereof, or any other tribunal or agency, they undertake to promptly inform the aforesaid courts and other tribunal or agency thereof, within five (5) days therefrom.

26. The petitioners further certify that upon the filing of this Petition, they have paid the required docket fees. Proof of service of copies of this Petition on the respondents and on the Solicitor General is submitted together with this Petition.

TIMELINESS AND URGENCY OF THE PETITION

27. President Joseph Ejercito Estrada approved, on 16 February 2000, the year 2000 GAA, vetoing certain items, as well as special and general provisions (not including the provisions herein assailed as unconstitutional). As a result of such approval, the respondents have started the implementation of, and continue to implement, the year 2000 GAA with the unconstitutional provisions assailed in this Petition. The respondents continuously commit acts constituting grave abuse of discretion amounting to lack or excess of jurisdiction in violation of the rights of the petitioners and other taxpayers and citizens.

28. With the Congress’ recent opening for its third and final regular session, among its first tasks will be the deliberations for the budget for the year 2001. The immediate resolution of the issues raised in this Petition will prevent the Congress and the Executive from repeating in next year’s GAA, the same transgression of the Constitution and the Local Government Code that they blatantly committed in the year 2000 GAA.

THE MATERIAL FACTS

29. For Fiscal Year 2000, local governments were supposed to get P121.778 Billion as their Internal Revenue Allotment (IRA). Attached to this Petition as Annex A is a certified copy of Section 1, XXXVII (A) of the proposed national budget for year 2000. The proposed budget shows the amount of P121.778 Billion appropriated for the IRA.

30. House Bill No. 8374, the General Appropriations Bill for Fiscal Year 2000, was passed by the House of Representatives without any reduction in the P121.788 Billion proposed by the Executive. At the Senate, however, the Finance Committee proposed a P30 Billion cut on the IRA. Attached to this Petition as Annex B is a certified copy of the records of the deliberations of the Senate on House Bill No. 8374, on 6 December 1999. In his sponsorship speech for House Bill No. 8374, Senator John H. Osmeña, Chairperson of the Senate’s Committee on Finance, stated:

In the light of our revenue limitations, we have in general instituted cuts as follows:

In travel – 50% in the repairs and maintenance of government facilities – 100% in confidential expenses – 50% across the board; other services – 25%; non-infra capital outlay –25%; training and seminars – 100%.

As a matter of courtesy, we have not cut the budget of the Office of the President proper, the Office of the Vice President, the House of Representatives, and the Judiciary.

As a matter of policy, we have not cut the budget of SUCs’ except that of the University of the Philippines and the Debt Service.

We have created on a contingent basis the Internal Revenue Allotment for the local governments. One, we have cut that to P30 billion, and two, we have provided for travel and confidential expenses on a contingent basis of P19.6 billion. (Senate records of deliberations, 6 December 1999, p. 23 [24]; emphasis added.)

31. Expectedly, local officials raised a howl over the proposal. In an unprecedented act, these officials, through the Union of Local Authorities of the Philippines (ULAP, the confederation of the different leagues of local governments), took to the streets and marched in protest against the proposed move. They likewise threatened a four-day work stoppage unless the P30B was restored as a regular appropriation. Soon thereafter, notwithstanding the local officials’ complaints and protests, House Bill No. 8374 was passed by both houses of the Congress with P10 Billion of the IRA placed under “unprogrammed funds.”

32. On 16 February 2000, President Joseph Ejercito Estrada approved House Bill No. 8374. The President vetoed some items, as well as special and general provisions of the bill. Unfortunately, the P10 Billion cut imposed by the legislature was preserved. House Bill No. 8374, thus, became a law -- Republic Act No. 8760, entitled, “AN ACT APPROPRIATING FUNDS FOR THE OPERATION OF THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES FROM JANUARY ONE TO DECEMBER THIRTY-ONE, TWO THOUSAND, AND FOR OTHER PURPOSES.”

33. Section 1, XXXVII (A) of Republic Act No. 8760, the year 2000 GAA, reads:

XXXVII. ALLOCATIONS TO LOCAL GOVERNMENT UNITS

A. INTERNAL REVENUE ALLOTMENT

For apportionment of the shares of local government units in the internal revenue taxes in accordance with the purpose indicated hereunder………………………………………………..P111,778,000,000

x x x __________x x x__________ x x x

The special provisions of Section 1, LIV, on the other hand, provides:

LIV. UNPROGRAMMED FUND

x x x__________ x x x__________ x x x

Special Provisions

1. Release of the Fund. The amounts herein appropriated shall be released only when the revenue collections exceed the original revenue targets submitted by the President of the Philippines to Congress pursuant to Section 22, Article VII of the Constitution or when the corresponding funding or receipts for the purpose have been realized except in the special cases covered by specific procedures in Special Provision Nos. 2, 3, 4, 5, 7, 8, 9, 13 and 14 herein: PROVIDED, That in cases of foreign-assisted projects, the existence of a perfected loan agreement shall be sufficient compliance for the issuance of a Special Allotment Release Order covering the loan proceeds: PROVIDED, FURTHER, That no amount of the Unprogrammed Fund shall be funded out of the savings generated from programmed items in this Act.

x x x__________ x x x __________x x x

4. Additional Operational Requirements and Projects of Agencies. The appropriations for Purpose 6 – Additional Operational Requirements and Projects of Agencies herein indicated shall be released only when the original revenue targets submitted by the President of the Philippines to Congress pursuant to Section 22, Article VII of the Constitution can be realized based on a quarterly assessment of the Development Budget Coordinating Committee, the Committee on Finance of the Senate and the Committee on Appropriations of the House of Representatives and shall be used to fund the following:

x x x __________x x x __________x x x

Internal Revenue Allotments Maintenance and Other Operating Expenses P10,000,000,000 -------------------- Total, IRA P10,000,000,000 --------------------

A certified copy of the quoted portion of the year 2000 GAA (pp. 1114-1115 and 1166-1174) is attached to this Petition as Annex C.

34. While P2.5 Billion, supposedly part of the P10 Billion IRA placed under “unprogrammed funds,” were released to the local governments belatedly in March for the first quarter; to date, no such release had been made for the second and third quarters of the year, in clear violation of the Constitution and the Local Government Code, as will be shown in the discussion below.

ISSUE

THE MAIN ISSUE IN THIS PETITION IS WHETHER OR NOT THE LEGISLATIVE AND THE EXECUTIVE BRANCHES OF THE GOVERNMENT, SPECIALLY THE RESPONDENTS HEREIN, COMMITTED (AND IN THE CASE OF THE RESPONDENTS, ARE STILL COMMITTING) GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN PASSING, APPROVING, AND IMPLEMENTING, RESPECTIVELY, THE YEAR 2000 GAA INSOFAR AS THE WITHHOLDING OF THE P10 B IRA IS CONCERNED.

The resolution of this principal issue depends, in turn, on the resolution of the constitutional issues raised at the outset of this petition, to wit:

1) ARE SECTION 1, XXXVII (A) AND LIV, SPECIAL PROVISIONS 1 AND 4, OF THE YEAR 2000 GAA NULL AND VOID FOR BEING UNCONSTITUTIONAL AS THEY VIOLATE THE AUTONOMY OF LOCAL GOVERNMENTS BY PLACING TEN BILLION PESOS (P10 BILLION) OF THE INTERNAL REVENUE ALLOTMENTS DUE TO THE LOCAL GOVERNMENTS UNDER “UNPROGRAMMED FUNDS” THEREBY VIOLATING THE CONSTITUTIONAL MANDATE IN ART. X, SEC. 6, THAT THE LOCAL GOVERNMENT UNITS’ JUST SHARE IN THE NATIONAL TAXES SHALL BE AUTOMATICALLY RELEASED TO THEM?