Heal as one? Why Duterte's special budget powers bill may be unconstitutional

AT A GLANCE

MANILA, Philippines – Both chambers of Congress are busy deliberating on the bills that will grant special powers to President Rodrigo Duterte – as Malacañang had requested – to arrest the spread of the coronavirus disease (COVID-19). 

The one-month coronavirus lockdown is threatening to doom millions of "No Work, No Pay" Filipino families to hunger, as lawmakers pushed for interventions to blunt the crippling effects of the pandemic on the economy. 

COVID-19 first surfaced as a "mysterious" illness in China in November 2019. The Philippine government, as well as lawmakers, appeared to have overlooked the possibility of an outbreak in the country when the 2020 budget was passed.

Now, the Philippine Congress is scrambling to pass legislation that would fund the government's efforts to deal with the pandemic, as Duterte certified the measure as urgent.

But experts said that certain provisions in the bill – particularly what counts as "savings" – are unconstitutional. A throwback to the Disbursement Acceleration Program controversy?

House vs Senate bills

On Sunday, March 22, the initial version of the Malacañang draft had been leaked.

Malacañang's initial draft is asking for power to "temporarily take over or direct the operation" of private businesses needed during the coronavirus emergency, among others. This sparked anger on social media.

A revised draft was sent to both chambers of Congress later on Sunday. The business takeover provision was tweaked to include only private hospitals and health facilities.

Both Senate and House bills adopted the 19 "authorized powers" sought by Malacañang.

The main difference between the two is how they call the powers to be granted to the President.

Under Senate Bill No. 1413, co-authored by Senate President Vicente Sotto III and Senator Pia Cayetano, the last sentence of Section 3 or the declaration of policy did not carry the term "emergency powers":

Section 3. Declaration of policy. The COVID-19 pandemic has greatly affected nations worldwide, including the Philippines, and has caused and is continuing to cause loss of lives and disruption to the economy…xxx By reason thereof, and in order to optimize the efforts of the President to carry out the tasks needed to implement the aforementioned policy, it is imperative to grant him authority subject to such limitations as hereinafter provided.

Meanwhile, HB 6616, introduced by the House leadership led by House Speaker Alan Peter Cayetano, states:

Section 3. Declaration of policy. xxx By reason thereof, and in order to optimize the efforts of the President to carry out the tasks needed to implement the aforementioned policy, it is imperative to grant him emergency powers subject to such limitations as hereinafter provided.

It remains to be seen whether the term "emergency powers" will be adopted when the bill is passed. If both chambers pass their respective versions on 3rd and final reading, then lawmakers would have to meet to reconcile the differences. 

But the meatiest, and perhaps most contentious provisions, are the budgetary items.

Unconstitutional

Section 4(16) of the bill is unconstitutional, said two experts.

Section 4(16) would allow Duterte to "reprogram, reallocate and realign" any appropriation in the 2020 budget "for whatever purpose the President may deem necessary and desirable" to respond to the coronavirus. (emphasis ours)

Retired Supreme Court senior associate justice Antonio Carpio and UP constitutional law professor Dan Gatmaytan said Section 4(16) is contrary to Section 25(5) Article VI of the charter which says: "No law shall be passed authorizing any transfer of appropriations."

Carpio said only savings are allowed to be used to augment funding, not appropriations. An "appropriation" simply means that money has been set aside for specific purposes as authorized by law. Money for projects is sourced from the total amount of appropriations and once released by the Department of Budget and Management, funds can be "obligated" or committed for payment.

The remaining amount from the released funds – but which were not committed for payment – can be declared as "savings." Officially, Section 67 of the General Provisions of the 2020 General Appropriations Act defined savings as the "portion or balances of any released appropriations in this act which have not been obligated."

There could be remaining funds because projects were already completed or there was a policy to discontinue or abandon them. Government could have saved money by paying less, thus leaving available funds from the projected spending for projects.

"Section 4(16) is unconstitutional insofar as reprogramming and reallocation of appropriations are concerned because only savings from appropriations can be transferred," Carpio told Rapler.

Because the word "any" was mentioned in Section 4(16), it may also be interpreted as including the budget of other branches such as the judiciary and constitutional bodies.

"The President can only [transfer] savings from appropriations in the approved budget of the executive branch. He cannot [transfer] savings in the judiciary, the legislature, or the constitutional commissions. Section 4(16) should just be deleted," said Carpio.

A budget insider also cautioned against the liberal use of the phrase "reprogram, reallocate, and realign" in Section 4(16), citing the Supreme Court decision on the DAP or Disbursement Acceleration Program.

"[Savings] should not cross branches of government and it should not fund non-existent items in the GAA. Saying that the President has the power to realign, reprogram, and reallocate is unclear. It may or may not authorize the creation of new budget items," the insider said.

In short, the President cannot spend money on projects or programs that are not listed in the 2019 or 2020 GAA. This was part of contentions against the DAP controversy. For example, in 2013, ex-budget chief Benjamin Diokno questioned the P700-million worth of assistance to Quezon province funded by DAP, which was not in the 2013 budget.

In 2014, the High Court declared spending for items not listed in the budget as unconstitutional.

Savings

There are two subparagraphs in the authorized powers section that refer to "savings:"

On Section 4(14), Carpio and former budget chief Florencio Abad share the view that Duterte does not need this bill because the Constitution is sufficient. 

For example, Section 25(5), Article VI of the Constitution says: "The President... may, by law, be authorized to augment any item in the general appropriations law for their respective offices from savings in other items of their respective appropriations."



The proposed "Section 4(14) is superfluous and only invites controversy because it empowers the President to cancel approved appropriations, a delegation of legislative power," said Carpio.

Carpio added: "There is no need to cancel an approved appropriation if its purpose can no longer be achieved due to an epidemic, a situation which automatically creates savings out of the approved appropriation."

In the coronavirus pandemic, for instance, the funds for government projects that have been canceled because of the lockdown and work stoppage automatically become savings. Duterte does not need a special power to cancel projects just to generate savings. 

What's problematic is Section 4(15).

Gatmaytan said that the bill is "circumventing" the DAP ruling by "using the phrase 'unutilized or unreleased balance in a special purpose fund' whose purpose has been abandoned since the declaration of the State of Emergency."

But here's the catch, as laid out in Section 67 of the 2020 GAA's General Provisions: "If the case of final discontinuance or abandonment is used as basis in the declaration of savings, such discontinuance or abandoned program activity, or project, shall no longer be proposed for funding in the next two fiscal years." (emphasis ours)

This means that if the salary hike fund is "abandoned" to be used for COVID-19 measures, for example, this fund cannot be added in the 2021 and 2022 budgets. The proposed bill did not list, too, which specific items in the special purpose funds would be abandoned. 

Other options


Gatmaytan said there are other ways to look for money in the current setup – without additional presidential powers.

"If there is a need for money, perhaps Congress can enact a supplementary budget subject to Article VI, section 25(4)," said Gatmaytan. This allows for a special appropriation bill that "shall specify the purpose for which it is intended."

All the government needs to do is get a certification from the National Treasurer that the funds are available, or ensure that government revenues will cover the cost.

In late 2014, for instance, the Aquino administration passed a P22-billion supplemental budget for post-Yolanda rehabilitation and MRT3 capacity extension.

There are also contingency funds that are under the President’s control that can be used.

 These funds are lodged under the Special Purpose Funds, meaning, they can only be used subject to the approval of the President.

Abad said there are items in the 2019 and 2020 GAA with "significant allocations" amounting to a total of P250.9 billion from the Special Purpose Fund, Health Facilities Enhancement Fund, and Duterte's Confidential and Intelligence Fund.

Abad said these could be used to fund the requirements needed to address COVID-19, instead of passing the two bills.

"The use of the items does not require a new law. Just administrative tweaking at the level of the department head or the President, depending on the amount," Abad told Rappler.

"The law is already there. GAA 2019 and GAA 2020," the ex-budget chief added.

When will the special powers end?



Another issue is the discretion that the bill gives to Duterte to determine when his special powers will end.



Section 9 of the bill says the powers may be withdrawn "by means of a concurrent resolution of Congress or ended by Presidential proclamation." (emphasis ours)



Section 9 also says it will take effect for two months "or longer if the calamity persists, without prejudice to the powers that the President may continue to exercise under the Constitution or other laws."



These clauses give Duterte the power to have a say on when to end his special powers.



But Gatmaytan pointed out that Article VI, Section 23(2), the very constitutional provision being invoked by this bill, clearly says that the powers will end in two ways only, and neither involves the president.



The two ways are: "Unless sooner withdrawn by resolution of the Congress" and "such powers shall cease upon the next adjournment thereof."



"These are temporary measures that are needed to address contingencies, but wary of concentrating powers in the Executive, the framers wisely put restrictions in the grant of powers under Article VI, Section 23," said Gatmaytan.



So even though the bill says the powers will end in two months, "the problem is that the bill provides for other ways for the emergency powers to terminate," said Gatmaytan. The President could very well end up choosing to extend the duration of his powers. – with a report from Mara Cepeda/Rappler.com

HEADER PHOTO: Vehicles continue to pile up at the Quezon City and Rizal Province boundary due to the quarantine control point along Batasan-San Mateo Road on the day of the total lockdown on March 17, 2020. Photo by Martin/San Diego/Rappler

 

Aika Rey

Aika Rey covers the Philippine Senate for Rappler. Before writing about politicians, she covered budget, labor, and transportation issues.

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Lian Buan

Lian Buan covers justice and corruption for Rappler. She is interested in decisions, pleadings, audits, contracts, and other documents that establish a trail. If you have leads, email lian.buan@rappler.com or tweet @lianbuan.

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