Primary Holding

The Supreme Court issued a ruling declaring several aspects of the DAP (Disbursement Acceleration Program) unconstitutional, including: the withdrawal of unobligated allotments and their designation as savings before the fiscal year's end, the cross-border transfers of savings to offices outside the Executive branch, and the use of savings to fund programs, activities, or projects not covered by the GAA (General Appropriations Act). In applying the Operative Fact Doctrine, the Court established that while projects already implemented under the DAP in good faith would remain intact, the officials responsible for these actions could still be held accountable.

Background

The Disbursement Acceleration Program (DAP) was a mechanism introduced by the Department of Budget and Management (DBM) under Secretary Florencio Abad. It allowed the executive branch to pool savings from various government agencies and realign them to other projects to accelerate economic growth. However, petitioners argued that it violated the constitutional power of Congress over appropriations.

Facts

• 1. The Disbursement Acceleration Program (DAP) was introduced to expedite government spending and improve economic growth by realigning funds from slow-moving projects to other priority projects.
• 2. Funds were sourced from unreleased appropriations, unprogrammed funds, and unobligated allotments declared as savings.
• 3. Senator Jinggoy Estrada revealed that senators received additional funds as incentives for voting to convict Chief Justice Renato Corona during his impeachment trial, linking it to the DAP.
• 4. Petitioners challenged the legality of DAP, arguing that realigning funds without Congressional approval was unconstitutional.

Arguments of the Petitioners

• 1. The DAP violated Article VI, Section 25(5) of the 1987 Constitution, which limits the President’s power to realign funds only within the Executive Department and only for augmentation of existing appropriations.
• 2. The program circumvented the legislative power of the purse, allowing the executive to fund projects not included in the GAA.
• 3. The cross-border transfers of savings to constitutional bodies like the Commission on Audit (COA) and the House of Representatives were unconstitutional.
• 4. The Executive had no authority to declare savings midyear, as savings can only be determined at the end of the fiscal year.
• 5. The system of checks and balances was undermined, giving the Executive too much discretion over government funds.

Arguments of the Respondents

• 1. The President had the constitutional power to realign savings under Article VI, Section 25(5) and Section 38 of the Administrative Code of 1987.
• 2. The DAP was not a new program, but rather a mechanism to speed up spending of already authorized funds.
• 3. The economic benefits of DAP outweighed the technical constitutional violations.
• 4. The Executive had the discretion to declare savings anytime as part of its administrative and fiscal management powers.

Issues

• 1. Whether the petitions had legal standing – The Supreme Court ruled that the petitioners had locus standi as taxpayers, legislators, and concerned citizens.
• 2. Whether the DAP violated Article VI, Section 29(1) of the 1987 Constitution, which states that no money shall be paid out of the Treasury except in pursuance of an appropriation made by law – The Supreme Court ruled yes, as DAP involved unauthorized spending.
• 3. Whether the President’s power to augment budgets under Article VI, Section 25(5) was violated – The Supreme Court ruled yes, as the redefinition of savings and cross-border fund transfers were unconstitutional.
• 4. Whether the Operative Fact Doctrine should apply – The Court ruled that DAP-funded projects already completed in good faith would not be undone, but officials responsible for unconstitutional acts could still be held accountable.

Ruling

• 1. The Supreme Court ruled that several acts under the DAP were unconstitutional, particularly:
• 2. The redefinition of savings to include unobligated funds withdrawn midyear.
• 3. The cross-border transfer of funds to agencies outside the Executive branch.
• 4. The use of DAP funds to finance projects not covered by the GAA.
• 5. The Court left the determination of liability to the proper tribunals, including the Commission on Audit (COA) and the Ombudsman.

Doctrines

• 1. Doctrine of Separation of Powers – The Executive cannot usurp the legislative power of appropriation.
• 2. Operative Fact Doctrine – Acts done in good faith before the ruling remain valid, but those responsible for unconstitutional acts may still be held liable.
• 3. Power of Augmentation (Article VI, Section 25(5)) – The President cannot realign savings to create new budget items, only to augment existing appropriations.

Key Excerpts

• 1. “No money shall be paid out of the Treasury except in pursuance of an appropriation made by law.” (Article VI, Section 29(1) of the Constitution)
• 2. “The Executive cannot circumvent constitutional limitations by redefining what constitutes ‘savings’.”

Precedents Cited

• 1. Belgica v. Ochoa (2013) – A similar case where the Supreme Court ruled the Priority Development Assistance Fund (PDAF) unconstitutional.
• 2. People v. Vera (1937) – Established the direct injury test for legal standing.
• 3. David v. Macapagal-Arroyo (2006) – Allowed taxpayer standing in cases involving unconstitutional government actions.

Statutory and Constitutional Provisions

• 1. Article VI, Section 25(5) – Limits the President’s power to realign funds.
• 2. Article VI, Section 29(1) – No public money can be spent without Congressional appropriation.
• 3. Administrative Code of 1987, Section 38 – Grants the President power to suspend expenditures but not to declare new savings.