Sounding Board

Fiscal autonomy


The controversy between the Supreme Court and the Department of Budget and Management over the unused appropriations for the judiciary is about fiscal autonomy. Fiscal autonomy is a guarantee given by the Constitution to certain units of the government.  It is intended as a guarantee of separation of powers and of independence from political agencies. The units that have been given fiscal autonomy are the constitutional commissions, the ombudsman and the judiciary. The language used in the grant of the guarantee is almost identical for all three units. The Supreme Court jealously guards fiscal autonomy.

The guarantee for the Constitutional Commissions says, “The Commission shall enjoy fiscal autonomy. Their approved annual appropriations shall be automatically and regularly released.” For the Ombudsman it says, “The Office of the Ombudsman shall enjoy fiscal autonomy. Its approved annual appropriations shall be automatically and regularly released.”  The provision for the judiciary has an addition not found in the other two: “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.”

There is a similar provision for local governments although the phrase fiscal autonomy is not used.  It says: “Local government units shall have a just share, as determined by law, in the national taxes which shall be automatically released to them.”  The Supreme Court has had the opportunity to explain the meaning of the phrase “automatically and regularly released.”  When President Ramos issued an executive order saying that “Pending the assessment and evaluation by the Development Budget Coordinating Committee of the emerging fiscal situation, the amount equivalent to 10% of the internal revenue allotment to local government units shall be withheld,” this was challenged as an unconstitutional restriction on local autonomy.

The Supreme Court ruled: “Such withholding clearly contravenes the Constitution and the law.  Although temporary, it is equivalent to a holdback, which means ‘something held back or withheld, often temporarily.’ Hence, the ’temporary’ nature of the retention by the national government does not matter.  Any retention is prohibited.”

The phrase “automatically and regularly released” was also a subject of contention between the Civil Service Commission (CSC) and the budget secretary.  The controversy involved the “no report, no release” policy imposed by the DBM on funds appropriated for the CSC.

In resolving the issue the Court harked back to an earlier decision on the meaning of “automatic release” for local government units relying on the dictionary meaning of “automatic.”  “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. x x x”

The Court concluded: “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.”

The DBM tried to wiggle out of its predicament claiming that the “no report, no release” was due to a shortfall in revenues.  The Court said that such shortfall does not justify non-compliance with the Constitution and 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.”

Having said all that, one might ask how the current controversy on unspent funds of the judiciary will be resolved.  I anticipate that the resolution will be along the lines of a 1993 Supreme Court resolution on the judiciary’s fiscal autonomy.  The resolution says: “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.”

Related to all this, of course, is the issue of impoundment, that is, the holding of unspent appropriated funds. It is something done by presidents as a form of “executive veto.”  It was first used by Thomas Jefferson. There is no provision in the Constitution on the subject.  The concept has come up in local jurisprudence, but the Supreme Court has heretofore refrained from passing judgment on its constitutionality.

Finally, like it or not, the Constitution means what the Supreme Court says it means, until the Supreme Court changes its mind.  We know who will referee the controversy between the Supreme Court and the DBM.

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  • Anonymous

    Congress is already subservient to the Executive because of money.  If you don’t vote for their measure or impeach who they want to impeach, no pork barrel release.

    Now they want the Supreme Court to be more “cooperative” by holding on to money appropriated for the judiciary.  Since the justices says this is unconstitutional already, then there should be no more argument about it.

    Congress is not independent.  Let’s support the independence of the Judiciary, our last hope for check and balance. 

  • Anonymous

    If I said “(A)bad is bad”, I meant it to be a pun in the context of freedom of expression. It was not meant to cast aspersion on the person of Mr. Abad, but a criticism on his official acts as a public officer.

    While I may not approve, for whatever it is worth, of how Secretary Abad is toying with fiscal autonomy of the Judiciary, I am not ready to conclude that Mr. Abad is a dishonest man. Perhaps, he was ill-advised on the matter, just as PNOY was ill-advised that the Quirino hostage taking was a local matter best left to the Manila police. I hope PNOY and Secretary Abad already fired those dumb-wits.

    Anyhow, Secretary Abad should not be disheartened by the flak he might have received on the oversight of constitutional matters. I believe Secretary Abad is in the right direction to implement MPBF in the Executive branch. Plugging the leakages in the Executive branch is a tremendous feat worthy of emulation.

    Secretary Abad, however, should be graceful enough to rethink of imposing MPBF on constitutional bodies enjoying fiscal autonomy. No harm done yet, Sir.

  • markx

    is autonomy over and above abusive, corrupt, immoral practices of the judiciary? i dont think so!

    • Anonymous

      What abusive, corrupt, immoral practices are you referring too? Let’s not be badder than (A)bad. The good Secretary did not cite a single expenditure of the SC that he deems wasteful or immoral or illegal or all of them combined.

      Yes, you are right. Don’t think of things that do not exist.

  • markx

    is the office of the president under the authority of the SC?

    • Anonymous

      Maybe you should ask if Secretary Abad is over and above the words of the constitution.

  • markx

    does the SC approved their own budget?

    • Anonymous

      Budget is preparatory to Appropriations. Preparation of the National Budget is an executive function; Appropriation is the power of the purse of the HOR. Such power is expressly limited, among others, by the constitutional ban against diminishing the appropriations of the judiciary. On the other hand, the executive is enjoined against impounding the funds of the judiciary by the constitutional requirement that the appropriations of the judiciary shall be automatically released, of course, after enactment of the GAA.

  • markx

    so what is fiscal autonomy to fiscal check and balance?

    if fiscal autonomy is constitutional, does it makes the fiscal check and balance unconstitutional?  

    • Anonymous

      Yes, the proposal of Abad to withhold portions of the appropriation for the Judiciary is unconstitutional whether it be meant as a check and balance or otherwise.

    • Anthony R

      that’s why 1986 constitution created the COA for the checks and balance of their funds.

  • markx

    how many times does the SC undermines the constitution for the sake of protecting their own and their patron?

    • Anonymous

      You need to be more specific. What case in the SC are you referring to? Maybe you can also give a hint on who is the patron of the SC? Kasi sabi ng constitution co-equal ang Judiciary sa ibang branches of Government.

  • Anonymous

    Feeling ko alam naman ng exective branch na unconstitional yun ginaws nila gusto lang nilang gumawa sila ng source ng ingay para maminimize yun perceived nilang “legal abuse of funds” ng judisciary. Good tactic.

    • Anonymous

      Tactic ba yan ng Daang Matuwid? It may not be so presumptuous to say that most Filipinos never realized that brazen unconstitutional acts are among the means of “Daang Matuwid”.

      • Anonymous

        “legal abuse of funds” I like that.

        Is it unconstitional to hold back a part of the judiciary’s budget? Maybe.

        Is it right to request budget for more than they actually need, so that they can keep the extra cash? Parang hindi.

        The constitution is an ongoing effort. Me mga provisions ito na pwede pang i-tweak. The constitution is a powerful tool, but like any other tool, its use is dependent on the purpose of whoever is using it.

        At least, nalaman ng tao kung pano kumurakot nang legal ang mga sangay ng gobyerno.

  • Mario Valdivia

    Talagang ang batas dito sa atin pinapahirap…

    Sa akin kasi ay simple lang ang solusyon dito…

    Gumawa ang SC ng budget na kailangan nila ng 5,000 additional staff amounting to 2B.

    Ang sabi ng Executive, hawakan muna namin ang pera habang hindi pa nila nalalagyan ang bawat posisyon at ibigay namin AGAD kung meron na kayo nakuha…

    Kung baga, kung makuha ka na 1,250 staff, ibigay ko na 1/4 ng 2B o 500M, so and so forth o etc.

    Ano ang PROBLEMA DOON?

    • Anonymous

      “Hey Justice, my choice is not on your list. May you, please, change this list before I leave for Batanes. You know, I might not be able to release the funds on time if we can’t agree on this now.”

          Such seemingly casual conversation, precisely, is the evil sought to be prevented by Section 3, Article VIII of the 1987 Philippine Constitution, it reads:

          “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.”

          The plain words clearly mandate to have the appropriations of the Judiciary released without condition in whatever form. Such mandate is not dependent on the loftiest goals of honest men.

          The PROBLEM is that Secretary (A)bad wants exactly the opposite of what the constitution requires of him to do. He wants his HONESTY and LOFTY GOALS prevail over the PLAIN WORDS OF THE CONSTITUTION.

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