Who enjoys discretion to realign the budget?

The word war between the Supreme Court and Malacañang over the Court’s budget is, at its core, a fight on the discretion to “realign” the millions left unspent each year by the constitutional agencies. The rhetoric of fiscal autonomy carries the heavy weight artillery of judicial independence and the separation of powers, but it increasingly sounds hollow. In the words of a UP Law Center opinion, the Executive’s proposal will “curtail the practice … of not filling up vacant positions in order that they may be converted into savings that can be used as discretionary funds” especially, I must add, staff bonuses.

The UP Law Center’s Institute of Government and Law Reform (IGLR), through its director, Florin T. Hilbay, has issued a legal opinion upon the request of Sen. Edgardo J. Angara on the constitutionality of the Executive’s proposal to budgetary “impoundment.” Professor Hilbay opines: It’s at best equivocal. The constitutional text can go either way.

That is why it is, to say the least, rather awkward for the Supreme Court to remind us however subtly that it will have the last say. That may close the debate at the level of legal doctrine but not at the level of constitutional norms. The Court should be the last agency to reduce this to a question of turf, and the first to see it as one of transparency and public accountability.

Apparently, some P2 billion of the budget for constitutional bodies is for personnel positions that are left unfilled. The current practice is that those funds, once released to the agency and if left unspent, become a virtual piggy bank to be spent at the discretion of the agency head. The Executive now proposes that the amount be placed in a separate fund to be held in trust for the agency and to be released only upon proof that the position has been filled.

The Court understandably invokes the Constitution: “The Judiciary shall enjoy fiscal autonomy. Appropriations for the Judiciary … after approval [by Congress], shall be automatically and regularly released.”

The IGLR however says that there is nothing in the Constitution that expressly prohibits the Executive’s proposal. “Since the amount is kept in trust, the original designation for unfilled vacancies of the Judiciary is preserved; it does not amount to an infringement of Congress’ power to appropriate. … Neither does conditioning the release of the funds upon proof of the vacancy being filled [violate the rule of] automatic, regular release. Discretion as to whether or not the amounts are released (i.e., filling up a particular vacancy) is still lodged with the Judiciary [though the actual appointment is made by the President—RCP], and the requirement of presenting proof is a de minimis procedural requirement, amounting to a notice requirement that imposes no burden on the Judiciary’s fiscal autonomy.”

The Executive thus wields no real discretion which it can hold, as it were, like a Damocles’ sword over the Court’s neck. Indeed, it removes the perverse incentive for agencies to create more personnel items than it needs and to slow down its hiring so that those budget items remain unused and available for “realignment.”

On the other hand, the IGLR recognizes that the proposal may impinge upon judicial independence in two ways. One, “pooling together the Judiciary’s funds with those of other independent constitutional agencies … may render the guaranteed minimum amount illusory.” The danger is that the other agencies may outstrip the Judiciary in filling up the vacant posts unless the Executive ensures that the agencies keep to the congressional allotments, or better still by avoiding the commingling of funds. Two, the budget department can, in prescribing the guidelines, aggrandize its power and unduly fringe “automatic release.”

The power of constitutional agencies to “re-align” their savings—that is to say, their discretion to spend their savings as they please—is based on the Constitution itself. “No law shall be passed authorizing any transfer of appropriations; however (the constitutional bodies) 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.” But note the qualifier: “by law.”

Over the years, this discretion has been extravagantly construed. Pardon the budgetary legalese but this is one sample: “The unexpended year-end balances of the approved appropriations already released to the [constitutional agencies] shall remain valid appropriation. …. The savings in released allotment shall be treated as Continuing Appropriations.” That means that Congress has allocated the money, the Executive has released it, and the agency may now spend it differently from the original congressional allocation.

That is why the move by the budget department is completely understandable. If the piggy bank arises once the funds are released by the Executive, then the Executive should release the funds only when they’re ready to be used. That way the congressional allocation is respected, the release by the Executive is still automatic (upon proof of the filled vacancy) and entails no executive discretion, and yet the constitutional agency’s discretion to realign is minimized.

Shorn of the constitutional rhetoric, this is a fight over the power to realign budgets, and the power of agency heads to convert the unused salaries for potential staff members, into bonuses for current staff members. Government staff are underpaid, and for sure these perks help their families survive. Realignment is an ad hoc, non-transparent and thus often inequitable coping mechanism, and it is time we confronted it as the aberration rather than the rule.

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