JONATHAN DELA CRUZ v. PAQUITO OCHOA JR.: SETTING THE PARAMETERS OF VALID APPROPRIATIONS AND THE PRESIDENT’S ITEM-VETO POWER
By: Raphael U. Rayco[1]
No less than the 1987 Philippine Constitution mandates that “[t]he 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.[2]” The provision provides for the President’s “line-item veto” powers. In Belgica v. Executive Secretary,[3] the Supreme Court held that there cannot be singular lump-sum appropriations. These are appropriations with broad provisions that leave a great deal of discretion to the public official entrusted with the administration of public funds. These appropriations preclude the exercise by the President of his veto power since there are no specific line-items for him to discernibly veto. It stated:
Since such appropriation type necessitates the further determination of both the actual amount to be expended and the actual purpose of the appropriation which must still be chosen from the multiple purposes stated in the law, it cannot be said that the appropriation law already indicates a “specific appropriation of money” and hence, without a proper line-item which the President may veto. As a practical result, the President would then be faced with the predicament of either vetoing the entire appropriation if he finds some of its purposes wasteful or undesirable, or approving the entire appropriation so as not to hinder some of its legitimate purposes.[4]
In Jonathan Dela Cruz v. Paquito Ochoa, Jr., the Supreme Court clarified what constitutes valid “line-items,” which are allocations of a specified singular amount for a specified singular purpose, as can be gleaned from the General Appropriations Act (GAA) and the details and documents attached to it. Furthermore, the Court explained the difference between “line-items” from “lump-sum appropriations,” which are invalid for hampering the exercise by the President of his veto power under Article VI, Section 27(2) of the 1987 Philippine Constitution.[5]
Notably, Dela Cruz v. Ochoa involved the Department of Transportation and Communications (DOTC), which is now the Department of Transportation (DOTr). In 2020, this administrative office received an annual budget of Php 99,396,428.000.00.
The Land Transportation Office (LTO), under its mandate, and for the specific purpose of creating a uniform license plate design, formulated the Motor Vehicle License Plate Standardization Program (MVPSP) to supply new license plates for both old and new vehicle registrants. In connection with the program, DOTC was allotted a total of ₱4,843,753,000 in the 2014 GAA[6] for what is labeled as “MFO 2: Motor Vehicle Registration and Driver’s Licensing Regulatory Services.”
The petitioners in Dela Cruz v. Ochoa argue that considering that “Motor vehicle plate making project” did not appear as an item in the 2014 National Expenditure Program (2014 NEP) and the 2014 GAA, unlike in the 2013 GAA, the use of the funds allocated for the MF02 for the MVPSP amounted to a prohibited transfer of appropriations under Article VI, Section 25(5) of the Constitution.
The Supreme Court previously held that an appropriation, to be valid, must indicate a specific amount and a specific purpose. However, the purpose may be specific even if it is broken down into different related sub-categories of the same nature.[7] In the present case, the Court found that the purpose of the appropriation under the GAA, which is for the LTO to “aid law enforcement and improve the motor vehicle registration database,” is already specific. It naturally and logically included plate-making, since plate-making was an integral component of the registration process.
Moreover, the Court ruled that the valid line-item “Motor Vehicle Registration and Driver’s Licensing Regulatory Services” did not constitute a lump-sum appropriation since the specific appropriations of money could already be found under “Details of the FY 2014 Budget” which was attached to the 2014 GAA.
It is imperative to discuss the relevant parts of the Philippine Budget System to provide adequate background on the item-veto powers of the President and the parameters of such powers.
The Philippine Budget System consists of four phases: (1) Budget Preparation; (2) Budget Legislation; (3) Budget Execution; and (4) Accountability. Under the first phase, the various departments and agencies submit their respective Agency Budget Proposals to the Department of Budget and Management (DBM). The second phase, also known as the Budget Authorization Phase, starts when Congress receives the President’s Budget and ends with the President’s approval of the GAA. Then, the implementation of the GAA is directed by the guidelines issued by the DBM under the third phase. Finally, the Accountability Phase ensures that the government funds have been effectively and efficiently utilized to achieve the State’s socio-economic goals.[8]
The General Appropriation Bill (GAB) is created in Phase 2 of the budget system. After the GAB goes through the houses of Congress separately, the House of Representatives and the Senate will then constitute a panel each to sit in the Bicameral Conference Committee to harmonize the conflicting provisions of their versions. The “harmonized” version of the GAB is next presented to the President for approval. The President reviews the GAB and prepares the Veto Message. Finally, budget items are subjected to either direct veto or conditional implementation.[9]
In Bengzon v. Secretary of Justice[10], the US Supreme Court explained that a valid item of an appropriation bill must be an “item which, in itself, is a specific appropriation of money, not some general provision of law which happens to be put into an appropriation bill.”
Since 2014, the National Government has grouped or aligned the programs, activities, or projects of each department and agency into the Major Final Outputs (MFOs) in a new system for the preparation of the National Budget, called “Performance Informed Budgeting”. However, the groupings do not mean that there are no more line-items in the 2014 GAA. The ruling in Belgica v. Executive Secretary,which cited Bengzon,noted that line-items under appropriations should be “specific appropriations of money” that would still enable the President to exercise his veto power over the same.
More recently, in Araullo v. Aquino III[11], the Court differentiated the term “item” from “expense categories.” The former was defined as “the last and indivisible purpose of a program in the appropriation law,” while the latter was described as allotment classes which are set in more general terms in the GAA. The Supreme Court explained in that case that the President cannot exercise his veto power over an expense category, as he may only veto the item to which that expense category belongs.
The Supreme Court ruled in Belgica that “an item of appropriation must be an item characterized by singular correspondence – meaning an allocation of a specified singular amount for a specified singular purpose, otherwise known as a “line-item.” The Court noted that a valid line-item has a dual purpose, as it not only allows the item to be consistent with its definition as a “specific appropriation of money,” but also ensures that the President may discernibly veto the same.
In Dela Cruz v. Ochoa, the Supreme Court noted that the details of the FY 2014 Budget, which was attached to the 2014 GAA, show that the MFOs constituted the expense category or class; while the last and indivisible purpose of each program (the line-item) was an appropriation for a “Motor vehicle registration system.” It satisfied the valid line-item requirement which the President could discernibly veto which counts as a “specific appropriation of money,” as contemplated under the law and in jurisprudence.
Studying Dela Cruz v. Ochoa, another issue that comes to mind is the contested impending implementation of the Child Safety in Motor Vehicles Act,[12] which is also tasked upon the DOTr. Some motor vehicle drivers and members of Congress[13] criticize this Act, which requires children 12 years old and below who are under one hundred fifty (150) centimeters or fifty-nine (59) inches in height to use “child restraint systems” or specialized child car seats in motor vehicles, subject to certain exceptions under the law. The Act includes a Nationwide Public Information Campaign and Certification Training Programs, both of which require the utilization of a substantial part of the appropriated budget for the DOTr.
Section 14 of the Act states that “[t]he initial amount necessary for the implementation of this Act shall be charged against the current appropriation of the DOTr” subject to several Proviso. One such proviso notes that the funds necessary for the continued implementation of the Act shall be included in the annual General Appropriations Act.
Dela Cruz vs. Ochoa serves as a guideline for Congress in preparing and creating the General Appropriations Act, specifically the budget allotment for the DOTr in the following years, especially when the Act would start its full implementation since it has been deferred by the LTO due to Covid-19 global pandemic. The Legislature ought to be mindful of the line-item requirement and ensure that the budget allotment for the implementation of this Act would not be in the form of a singular lump-sum appropriation.
[1] Raphael U. Rayco, UST Faculty of Civil Law, 2A, UST Law Review Understudy.
[2] Section 27(2), Article VI of the 1987 Philippine Constitution.
[3] G.R. 208566, November 19, 2013; Perlas-Bernabe, J.
[4] Id.
[5] G.R. No. 219683; January 23, 2018; Bersamin, J.
[6] Republic Act No. 10633
[7] Goh v. Bayron, G.R. No. 212584; November 25, 2014; Carpio, J.
[8] Araullo vs. Aquino III; G.R. No. 209287, February 3, 2015; Bersamin, J.
[9] Id.
[10] G.R. No. L-42821, January 18, 1936; Malcolm, J.
[11] G.R. No. 209287, February 3, 2015; Bersamin, J.
[12] R.A. No. 11229, otherwise known as “An Act Providing for the Special Protection of Child Passengers in Motor Vehicles and Appropriating Funds Therefor”
[13] Adonis, Meg and Aurelio Julie M. February 02, 2021. DOTr urged to suspend child car seat law. Inquirer.net. Retrieved from https://newsinfo.inquirer.net/1390861/dotr-urged-to-suspend-child-car-seat-law#ixzz6lOZ8r0JB
