DAP and The Power of the Purse

In the rather recent case of Araullo v. Benigno Simeon Aquino III[1], involving the chronically divisive Disbursement Acceleration Program  (or the DAP), the Supreme Court adopted a strict review of the “savings” definition to determine the President’s power to transfer amounts between programs under the General 2011, 2012 and 2013 Appropriations Act. On the flip side, the Supreme Court refused to consider the DAP as an impoundment measure based on the narrow definition of Impoundment under the same years GAAs:

 “The petitioners assert that no law had authorized the withdrawal and transfer of unobligated allotments and the pooling of unreleased appropriations; and that the unbridled withdrawal of unobligated allotments and the retention of appropriated funds were akin to the impoundment of appropriations that could be allowed only in case of “unmanageable national government budget deficit” under the GAAs, thus violating the provisions of the GAAs of 2011, 2012 and 2013 prohibiting the retention or deduction of allotments.

In contrast, the respondents emphasize that NBC No. 541 adopted a spending, not saving, policy as a last-ditch effort of the Executive to push agencies into actually spending their appropriations; that such policy did not amount to an impoundment scheme, because impoundment referred to the decision of the Executive to refuse to spend funds for political or ideological reasons; and that the withdrawal of allotments under NBC No. 541 was made pursuant to Section 38, Chapter 5, Book VI of the Administrative Code, by which the President was granted the authority to suspend or otherwise stop further expenditure of funds allotted to any agency whenever in his judgment the public interest so required.
The assertions of the petitioners are upheld. The withdrawal and transfer of unobligated allotments and the pooling of unreleased appropriations were invalid for being bereft of legal support. Nonetheless, such withdrawal of unobligated allotments and the retention of appropriated funds cannot be considered as impoundment. According to Philippine Constitution Association v. Enriquez (citation omitted): “Impoundment refers to a refusal by the President, for whatever reason, to spend funds made available by Congress. It is the failure to spend or obligate budget authority of any type.” Impoundment under the GAA is understood to mean the retention or deduction of appropriations. The 2011 GAA authorized impoundment only in case of unmanageable National Government budget deficit, to wit:

Section 66. Prohibition Against Impoundment of Appropriations. No appropriations authorized under this Act shall be impounded through retention or deduction, unless in accordance with the rules and regulations to be issued by the DBM: PROVIDED, That all the funds appropriated for the purposes, programs, projects and activities authorized under this Act, except those covered under the Unprogrammed Fund, shall be released pursuant to Section 33 (3),Chapter 5, Book VI of E.O. No. 292.

Section 67. Unmanageable National Government Budget Deficit. Retention or deduction of appropriations authorized in this Act shall be effected only in cases where there is an unmanageable national government budget deficit. Unmanageable national government budget deficit as used in this section shall be construed to mean that (i) the actual national government budget deficit has exceeded the quarterly budget deficit targets consistent with the full-year target deficit as indicated in the FY 2011 Budget of Expenditures and Sources of Financing submitted by the President and approved by Congress pursuant to Section 22, Article VII of the Constitution, or (ii) there are clear economic indications of an impending occurrence of such condition, as determined by the Development Budget Coordinating Committee and approved by the President.

The 2012 and 2013 GAAs contained similar provisions.

The withdrawal of unobligated allotments under the DAP should not be regarded as impoundment because it entailed only the transfer of funds, not the retention or deduction of appropriations.”

This means that while the Court recognized that the power to define savings is primordially legislative, it also allowed wide leeway for the Executive to play around with appropriations in order to create savings. In other words, although the President, if allowed by law (remember that it is not an inherent power), can realign only those funds which are defined as “savings” by Congress, it seems that he can also create a new category of savings altogether by simply “withdrawing unobligated allotments”  and the act of withdrawing itself is not considered an impoundment within the statutory definition.

I for one am still on the fence regarding the DAP issue per se but I think this distinction made by the Supreme Court on the impoundment aspect is too sophisticated for its own good. DAP would allow the executive to  declare an allotment “unobligated” merely by cherry picking which PAPs to obligate. And that precisely is the essence of impoundment — the refusal of the executive to carry out an instruction by Congress.

The items in the appropriations act are permissions for the Executive to incur obligations for the corresponding items. At the same time, the  GAA also theoretically contains a corresponding negative instruction for the President NOT to incur obligations for programs where no appropriations were made by Congress. Thus, to the extent that President acts contrary to these instructions, can it not be said that he also violates his duty to “faithfully execute” the laws of the land?

Finally, I think that obligating items PRIOR to or independent of the GAA amounts to a kind of “executive appropriation” as it would have the unusual effect of forcing the legislature to enact an appropriation to cover the expenditure,  thus:

“While section 8 of article I enumerates the powers of the legislative branch, the appropriations clause in section 9 is not a grant of power.

Rather, the appropriations clause affirmatively obligates Congress to exercise a power already in its possession.

Congress’ power to appropriate originates in article I, section 8. The concept of “necessary and proper” legislation to carry out “all . . . Powers vested by this Constitution in the Government of the United States” includes the power to spend public funds on authorized federal activities

Article I, section 8 also grants Congress the obverse power: the power to prevent the spending of any public funds except as authorized by Congress.

That is, even if there were no appropriations clause in the Constitution, Congress would have the power to enact a statutory “appropriations clause,” worded exactly the same as the clause in article I, section 9, making Congress’ appropriations power exclusive. If Congress could not prohibit the Executive from withdrawing funds from the Treasury, then the constitutional grants of power to the legislature to raise taxes and to borrow money” would be for naught because the Executive could effectively compel such legislation by spending at will.

The `legislative Powers’ referred to in section 8 of article I would then be shared by the President in his executive as well as in his legislative capacity.

Since legislative appropriations power is rooted in article I, section 8, we may infer that a primary significance of the appropriations clause in section 9 lies in what it takes away from Congress: the option not to require legislative appropriations prior to expenditure. If the Constitution thus strictly forbids `executive appropriation’ of public funds, the exercise by Congress of its power of the purse is a structural imperative[2]. “



[1] GR No. 289207

[2] Stith, Kate, “Congress’ Power of the Purse” (1988). Faculty Scholarship Series. Paper 1267. http://digitalcommons.law.yale.edu/fss_papers/1267




Dynasties and Restricting the “Right to Run”

The dominant argument against the passage of legislation banning political dynasties is that no person should be deprived of his right to run for public office solely on the basis of his family name.  The argument contains two (2) angles: (i)  the scope of Congress’ authority to impose restrictions on the right to run and (ii) an “equal protection”  angle, both of which we will discuss in this article.

Driving our hook  directly into the flanks of these dual objections, it should be said right away that there is no Constitutional provision which specifically grants an individual any “right to run for public office.”    Nevertheless, the view has been expressed that the right “touches on” both the freedom of expression and freedom of association clauses of the Constitution. This reasoning is based on Mancuso vs. Taft [476 F2d 187 (1972)] where it was ruled that “any legislative classification that significantly burdens [the candidacy] interest must be subjected to strict equal protection review.”

In 2010 however, the Philippine Supreme Court denied application of the Mancuso doctrine, pointedly observing that the case had been overturned. More importantly, it declared that “’[t]he First Amendment does not in terms confer a right to run for public office, and this court has held that it does not do so by implication either.’ Thus, one’s interest in seeking office, by itself, is not entitled to constitutional protection” [Quinto v. Comelec, GR No. 189698 (citing Bart v. Telford, 677 F2d 622)]. Consequently, instead of  the “strict review” favored by Mancuso, the Court limited itself to a “balancing of interests” approach in determining the validity of a legislation limiting candidacy interest [1].

The implications of the Quinto ruling are that: (a) the so-called “right to run” is NOT a fundamentally protected right in the same category as the freedoms of expression and association; and (b) Congress may validly restrict a person’s “interest” to run for office provided only  that the limitations “[s]ubstantially serve governmental interests”  [Supra.]. In the case of putative anti-political dynasty legislation, the “governmental” or “state interest” involved is supplied by no less than  the Constitution itself, particularly the right to “equal access to opportunities for public service” under Article II, Section 26 to wit:

“Section 26. The State shall guarantee equal access to opportunities for public service, and prohibit political dynasties as may be defined by law.”

It may be worth mentioning now, if only for the sake of leaving no stone unturned, that there is another case [Powell vs. McCormack, 395 US 486 (1969)] where the US Federal Supreme Court ruled  that  “[t]he Constitution leaves the House xxx without authority to exclude any person, duly elected by his constituents, who meets all the requirements for membership expressly prescribed in the Constitution.”  The issue in Powell however, involves an interpretation of the authority of the two houses to be the “judge” of the qualifications of its members. It was held that this authority (of the Lower House) cannot be extended so as to allow the exclusion of a candidate, not otherwise disqualified by the Constitution, from taking his seat after being elected by his constituents. Therefore, the Powell ruling does not affect the authority of the Legislature to impose qualifications in addition to those already provided for in the Constitution BEFORE the candidate is elected or chooses to run. Besides again, our  Constitution (via the cited Section 26) itself directs Congress to require non-membership in a political dynasty as an additional qualification for candidates seeking to hold elective office.

Finally, I think that Quinto effectively disposes of the equal protection challenge against anti-political dynasty legislation in general.  Citing an earlier case (Farinas v. Executive Secretary,[GR No. 147387 (2003 )], the Court held that a “legal dichotomy” between the treatment of different classes is valid where substantial distinctions exist between the classes as to justify unequal treatment, to wit:

“The equal protection of the law clause in the Constitution is not absolute, but is subject to reasonable classification. If the groupings are characterized by substantial distinctions that make real differences, one class may be treated and regulated differently from the other. The Court has explained the nature of the equal protection guarantee in this manner:

 ‘The equal protection of the law clause is against undue favor and individual or class privilege, as well as hostile discrimination or the oppression of inequality. It is not intended to prohibit legislation which is limited either in the object to which it is directed or by territory within which it is to operate. It does not demand absolute equality among residents; it merely requires that all persons shall be treated alike, under like circumstances and conditions both as to privileges conferred and liabilities enforced. The equal protection clause is not infringed by legislation which applies only to those persons falling within a specified class, if it applies alike to all persons within such class, and reasonable grounds exist for making a distinction between those who fall within such class and those who do not.

Indeed, there does appear to be ample reason to treat members of political dynasties differently from the non-dynastic candidates. Two related studies of the Asian Institute of Management Policy Center (one a follow up of the other) suggest strong numerical correlation between poverty and incidence of dynasties. More particularly, the studies showed that there were more dynastic Congressmen in “regions with higher poverty, lower human development and more severe deprivation” [Mendoza, Beja, Vernida and Yap, An Empirical Analysis of Political Dynasties in the 15th Philippine Congress (January 1, 2012)] [2] Another  study (also made by the AIM Policy Center) of the 2013 Philippine Mid-Term Elections provided numerical evidence that suggests that President Aquino and Vice President Binay significantly helped to deliver votes to their relatives Bam Aquino and Nancy Binay. Of Noynoy Aquino and Bam Aquino, for instance, the study [3] observed that:

“President Aquino’s votes in 2010 turned out to be one of the strongest determinants of Senator Aquino’s votes in 2013. That variable is positive and statistically significant, indicating that support for the President may have also been reflected strongly in support for Senator Aquino. A 1 percentage point increase in the share of votes for President Aquino at the provincial level, translated into a 0.29 percentage point increase in the votes for his cousin, Bam Aquino.”




[1]  Quinto v. Comelec (supra) involved the validity of a “deemed resigned” provision (Section 4(a) of Comelec Resolution 8678, enforcing the prohibition against partisan politics by civil service employees, to wit:

‘Incumbent Appointive Official– Under Section 13 of RA 9369, which reiterates Section 66 of the Omnibus Election Code, any person holding a public appointive office or position, including active members of the Armed Forces of the Philippines, and officers and employees in government-owned or -controlled corporations, shall be considered ipso facto resigned from his office upon the filing of his certificate of candidacy.

 ‘Incumbent Elected Official– Upon the other hand, pursuant to Section 14 of RA 9006 or the Fair Election Act,which repealed Section 67 of the Omnibus Election Code[18] and rendered ineffective Section 11 of R.A. 8436 insofar as it considered an elected official as resigned only upon the start of the campaign period corresponding to the positions for which they are running, an elected official is not deemed to have resigned from his office upon the filing of his certificate of candidacy for the same or any other elected office or position. In fine, an elected official may run for another position without forfeiting his seat.

[2] http://dx.doi.org/10.2139/ssrn.1969605

[3] Canare, Lopez, Mendoza  and Yap. The 2013 Mid Term Elections: An Empirical Analysis of Dynasties, Vote Buying and the Correlates of Senate Votes,  (February 2014). Posted in: http://www.kapatiranparty.org/wp-content/uploads/2014/02/The-2013-Philippine-Mid-Term-Election-An-Empirical-Analysis-of-Dynasties-Vote-Buying-and-the-Correlates-of-Senate-Votes.pdf


Towards the end of 2013, the local utility MERALCO announced that their customers will be getting higher power bills because of higher generation charges during a temporary shutdown of the Malampaya natural gas facility which (unfortunately) coincided with problems with two (2) other plants and forcing the utility to get part of its electricity from the Spot Market[1]. Eager to pounce on negative sentiment that followed the announcement, groups led by certain legislators filed a Petition before the Supreme Court to stop the hike, claiming that MERALCO “colluded” with the generators to fatten corporate profits.  Even the Energy Secretary is talking about capping the amounts that generators can sell their power via the WESM.

If disallowed, MERALCO will be forced to bear the entire amount which represents the increased generation charges. What most people don’t realize is that MERALCO is a wires business[2] and is not allowed to make profit from the sale and purchase of electricity. Generation charges are being collected by MERALCO only as the agent of the generation companies and are considered “pass-through” charges under the scheme of Electric Power Industry Reform Act (EPIRA)[3].  Compelling MERALCO to pay for the higher generation charge is illegal and confiscatory as it will in effect obligate MERALCO to subsidize the power being distributed to its customers and will eat into the only revenue source that it is allowed by law to collect (the wheeling charge)[4].

What about the GenCos? Aren’t these fellows charging too much for the power that they are generating?

The sad truth is that generation companies are not public utilities and are driven entirely by a profit motivation. Government can attempt to curb the IPPs’ appetite but at the end of the day, it cannot force private business to get a haircut or to run plants for less than what they are content with.  While we can all cry “market abuse” to the Energy Regulatory Commission, the fact is that there are simply not enough power plants to effect the downward adjustment of prices.

Speaking of “market abuse,” the condition of the power market is exactly what it ought to be given government’s attitude towards the power sector. During the time of rotating brown-outs in the 1990s, Congress passed the Electric Power Crisis Act in 1993 [5] and all but laid out a red carpet so that Independent Power Producers would put up plants FAST in order to save a power hungry nation from literal darkness. They did but at some cost. And we’re still paying for those notorious take-or-pay contracts.

In 2001, the government solution to this train wreck (via the EPIRA) was to: (a) sell off ailing assets; (b) Unbundle power charges; (c) separate the: (i) Generation, (ii) Distribution  and (iii) Transmission sectors; (d) Reduce cross subsidies and cross-ownership; (e) mandate Retail Competition and Open Access and (f) establish a Wholesale Electricity Spot Market (WESM).

In short, the wise men of Philippine Legislature agreed that the way to arrest and ultimately reduce the price of power was to allow the law of supply and demand to freely dictate the prices.  Controlling generation charges artificially by imposing caps violates the de-regulation spirit of RA 9136, and again highlights the unstable nature of government policy which may prove counter-productive in the long run.

Admittedly, the EPIRA is not perfect. It has not brought about the reduction in power costs that it was designed for precisely because the imperfect provisions of the law have also been implemented less than perfectly. Nonetheless, government should resist the urge to give in to violent reactions calling for radical legislation in place of the current law unless it wishes to go back to the old Napocor regime. For one thing, it is not entirely clear how prices can be controlled by government in an environment where  the supply comes from a very limited pool. More importantly, increased and open competition is a proven formula for reducing prices and should rightfully remain the overarching strategy of national government going forward.  [7].



[1] Wholesale Electricity Spot Market (or WESM)

[2] See Sections 23 and 24 of RA 9136. The DU is allowed to charge for the use of its wires. Of the components of the electric bill, only the “distribution wheeling charges” pertain to MERALCO.

[3] See Section 25.

 [4] Under Section 43 of RA 9136, a Distribution Utility is allowed to charge a rate that allows “[r]ecovery of just and reasonable costs and a reasonable return on rate base (RORB) to enable the entity to operate viably.” See also Section 24, supra.

 [5] Republic Act 7648

[6] Republic Act 9513

[7] More to be discussed in a later article.

Why Pork Is Here To Stay

With new information on just how vast the conspiracy to raid public coffers via the PDAF floating to the surface almost every day, the cry for the abolition of the pork barrel has generated such a ground swell that the President was forced to issue a statement that “it is time to abolish the PDAF.”

Pundits were quick to point out (correctly so) that the President did not abolish the pork barrel but re-packaged it into a “pork substitute” — same taste but with less calories.  This is how our Chief’s statement reads:

“Now, we will create a new mechanism to address the needs of your constituents and sectors, in a manner that is transparent, methodical, and rational, and not susceptible to abuse or corruption.

“Together with Senate President Frank Drilon and Speaker Sonny Belmonte, I will make sure that every citizen and sector will get a fair and equitable share of the national budget for health services, scholarships, livelihood-generating projects, and local infrastructure. Your legislators can identify and suggest projects for your districts, but these will have to go through the budgetary process. If approved, these projects will be earmarked as line items, under the programs of your National Government. In this way, they will be enacted into law as part of our National Budget—every line, every peso, and every project open to scrutiny, as with all other programs of your government.”

This article will not spend too much time debating how much fat, if at all, was cut out from the rebooted pork barrel. We are concerned here with what abolishing the pork would really mean from a legal perspective.

In simple terms, the “pork barrel” is an item in the Appropriations Act. So in equally simple terms, all it should take to slay the hog is for: (a) the President to stop including it in the budget and/or (b) the Congress to stop appropriating for it.  But that doesn’t sound the same as “abolishing” it if by abolition is meant a permanent end to the pork barrel in whatever form.

Neither does it seem that Congress can legislate the abolition (or in other words prohibit future iterations of the pork barrel). Under the current state of jurisprudence, the Supreme Court has been willing to draw a very thin line between appropriation (which is a legislative function) and spending (which is an executive one). In Philconsa vs. Enriquez, [GR No. 113105 (1994)], the inclusion of the discretionary fund (then named the “Countrywide Development Fund”) in the year’s GAA was questioned on the ground that it effectively allowed members of Congress to exercise the non-legislative function of “spending” earmarked funds. The Supreme Court found that the “identifications [of the projects to be funded]” was merely “recommendatory” and the power to appropriate can be exercised in a manner that is “as detailed [or] as broad as Congress wants,” thus:

“Under the Constitution, the spending power called by James Madison as `the power of the purse,’ belongs to Congress, subject only to the veto power of the President. The President may propose the budget, but still the final say on the matter of appropriations is lodged in the Congress.

“The power of appropriation carries with it the power to specify the project or activity to be funded under the appropriation law. It can be as detailed and as broad as Congress wants it to be.

“The Countrywide Development Fund is explicit that it shall be used “for infrastructure, purchase of ambulances and computers and other priority projects and activities and credit facilities to qualified beneficiaries . . .” It was Congress itself that determined the purposes for the appropriation.

“Executive function under the Countrywide Development Fund involves implementation of the priority projects specified in the law.

“The authority given to the members of Congress is only to propose and identify projects to be implemented by the President. Under Article XLI of the GAA of 1994, the President must perforce examine whether the proposals submitted by the members of Congress fall within the specific items of expenditures for which the Fund was set up, and if qualified, he next determines whether they are in line with other projects planned for the locality. Thereafter, if the proposed projects qualify for funding under the Funds, it is the President who shall implement them. In short, the proposals and identifications made by the members of Congress are merely recommendatory.

“The procedure of proposing and identifying by members of Congress of particular projects or activities under Article XLI of the GAA of 1994 is imaginative as it is innovative.

“The Constitution is a framework of a workable government and its interpretation must take into account the complexities, realities and politics attendant to the operation of the political branches of government. Prior to the GAA of 1991, there was an uneven allocation of appropriations for the constituents of the members of Congress, with the members close to the Congressional leadership or who hold cards for “horse-trading,” getting more than their less favored colleagues. The members of Congress also had to reckon with an unsympathetic President, who could exercise his veto power to cancel from the appropriation bill a pet project of a Representative or Senator.

“The Countrywide Development Fund attempts to make equal the unequal. It is also a recognition that individual members of Congress, far more than the President and their congressional colleagues are likely to be knowledgeable about the needs of their respective constituents and the priority to be given each project.

Inasmuch as the insertion of a pork barrel fund the mechanics of which allowed identification of projects by members of Congress was held to be valid exercise of legislative authority under the Constitution, the present Congress cannot pass a law “abolishing” the pork barrel for good as it would be tantamount to prohibiting subsequent Congresses from exercising a power that is granted by the Constitution. In that sense therefore, it would seem that true “abolition” of the pork barrel would require the amendment of the Constitution.

Furthermore, there are two (2) angles here. First, is the vulnerability or susceptibility of the fund to conversion or misappropriation.  Second is the concern that the unequal distribution of the fund is subject to abuse or excessive horse trading that diminishes or even eliminates checks and balances. While the first can be more or less tempered by the placement of tighter controls, the second is a more complex issue that does not lend itself to quick and elegant solutions. Curiously, the discussion in Philconsa implies that the CDF was itself designed to address the problem of  “uneven allocation” based on closeness to the “Congressional leadership.” The problem is that in taking the distributive carrot away from Congressional leadership and giving it to the President, the pork barrel system merely provided for a change in the personality of the giver. Worse, it also blurs the question of who is actually wielding the so-called “power of the purse.”

Thus, more than the pork barrel itself, what should be re-examined is the continuation or abolition of what has been commonly referred to as “pork barrel politics” defined (broadly) as the distribution of benefits to politically affiliated representatives in order to obtain, directly or indirectly, some form of political advantage. Again, this is not an easy topic to tackle and it would be reckless to dispense “unsolicited advice” in the limited space that we have here without defining assumptions. Politics is a complex dynamic with many players. We can only change politics by affecting behavior and what remains to be seen is whether a change in the architecture will be enough to do that.

The Bangsamoro Pact

To the degree that our Constitution allows “autonomous regions” in Mindanao within areas “sharing common and distinctive historical and cultural heritage, economic and social structures and other relevant characteristics”(Article X, Section 15),  there is little argument on the recognition of a form of regional diversity which gives rise to a political right to a more or less separate government.

The problem is not in the recognition of the right.  There is already an Autonomous Region of Muslim Mindanao (ARMM). The key is figuring out why it did not put an end to hostilities. It can be argued that this is due to the inadequacy of a structure which is attributable to faulty craftsmanship. Beyond that, it also lacked credibility amongst the various muslim factions themselves and the leadership administering the region was challenged from within. The previous exercise was a rush job that failed to account for the sectarian differences and validate the bona fides of the group seeking to represent them.

Yet, for the second time around, the Government of the Republic of the Philippines is on the cusp of realizing another peace accord (a copy of the Framework Agreement on the Bangsamoro can be found here) with the same leadership — a splinter faction of the old and largely discredited face of the muslim resistance.  With due respect, are we sure we want to hand over the reins of government to a group of disgruntled ex-MNLF fighters without proof of their ability to lead the people they purport to represent?  To be more direct, can they control the numerous armed factions within the area and compel them to submit to their authority? As if to demonstrate the infighting (or to use a euphemism: “complex political dynamics”) among them, the Sultanate of Sulu has waged his own little war against Malaysia at the same time that the parties are seeking the kingdom’s intercession in the bargaining process. That the Moro Islamic Liberation Front has no control over the actions of the Sultanate hardly inspires confidence in their ability to police their own backyard.

Of course, peace is an overwhelming ideal. But why not a phased pullout of national government from the region? If its people seek autonomy, it is imperative to require  evidence of the ability to govern and consent of the governed — and these can only be demonstrated over time. By contrast, all the Framework Agreement seems to require is a plebiscite.

Lastly, the Constitution requires that the autonomous region exist within its own parameters. In “Province of North Cotabato vs. Government of the Republic of the Philippines” [GR No. 183591] the Supreme Court refused to give its imprimatur to a like minded document (the Memorandum of Agreement on Ancestral Domain or MOA-AD)  for the reason that it could not exist within the same legal plane as the Constitution. First, the Court noted that the Constitution cannot accomodate an “associative” relationship with the  Bangsamoro Juridical Entity (BJE) because it does not contemplate any other state existing within its sphere other than the Philippine state, to wit —

“No province, city, or municipality, not even the ARMM, is recognized under our laws as having an “associative” relationship with the national government. Indeed, the concept implies powers that go beyond anything ever granted by the Constitution to any local or regional government. It also implies the recognition of the associated entity as a state. The Constitution, however, does not contemplate any state in this jurisdiction other than the Philippine State, much less does it provide for a transitory status that aims to prepare any part of Philippine territory for independence.


“It is not merely an expanded version of the ARMM, the status of its relationship with the national government being fundamentally different from that of the ARMM. Indeed, BJE is a state in all but name as it meets the criteria of a state laid down in the Montevideo Convention, namely, a permanent population, a defined territory, a government, and a capacity to enter into relations with other states.”

Although the Framework Agreement uses the word “asymmetric” (or unequal) to describe its relationship with national government, any further reading of the text will not conclusively remove the notion that the relationship between the Bangsamoro Government  and the National Government is also one of association. Judged by the standards of the Montevideo Convention, it seems that the Bangsamoro entity also seems to have the same characteristics of a “state in all but name.” The Framework Agreement makes sure that it has a permanent population, a defined territory and a government. It may be true that the Framework Agreement provides that the Central Government shall have powers on “foreign policy,” neither does it clearly define the power as exclusive.






The Tiger in the Room: The Philippines Calls Out China

Reacting to an increasingly aggressive Chinese stance over the Scarborough Shoal, the Government of the Republic of the Philippines finally calls out the tiger in the room and filed an arbitral claim under the United Nations Convention on the Law of the Seas (UNCLOS). The reactions from other quarters are those that you would expect when confronted with the presence of a large and dangerous animal – silence.

The solution seems simple enough at first blush: contending parties bring their dispute before an impartial third party to decide and the resolution is binding on the parties.

In reality, it is anything but.

Legally, the Philippines has a good case to question the validity of the Chinese “nine dashed line.” However, there is a proverbial ocean between filing a claim and forcing China to leave the Scarborough Shoal. In international relations, might is often right and China is not called a “superpower” for nothing.

Some experts suggest that China can simply ignore the proceedings and refuse to appoint an arbitrator. In that case, Annex VII, Article 3, subparagraph (e) provides that the President of the International Tribunal on the Law of the Sea (ITLOS) can complete the composition of the panel:

(e) Unless the parties agree that any appointment under subparagraphs (c) and (d) be made by a person or a third State chosen by the parties, the President of the International Tribunal for the Law of the Sea shall make the necessary appointments. If the President is unable to act under this subparagraph or is a national of one of the parties to the dispute, the appointment shall be made by the next senior member of the International Tribunal for the Law of the Sea who is available and is not a national of one of the parties. The appointments referred to in this subparagraph shall be made from the list referred to in article 2 of this Annex within a period of 30 days of the receipt of the request and in consultation with the parties. The members so appointed shall be of different nationalities and may not be in the service of, ordinarily resident in the territory of, or nationals of, any of the parties to the dispute.

And who, it may be asked, is the President of the ITLOS? Let’s just say that he happens to be Japanese, which may be good or bad for the Philippines. We know that Japan is involved in its own territorial dispute with China over the Senkaku Islands but the Japanese has also made peaceful overtures to Beijing (see Washington Post article here). Will the Chinese not take advantage of the Japanese overture in its row with the Philippines?

China also has an objection to the jurisdiction of the arbitral tribunal. In 2006, it opted out of the Compulsory Procedures under Section 2, Part XV. The Chinese Declaration reads:

Declaration under article 298:

The Government of the People’s Republic of China does not accept any of the procedures provided for in Section 2 of Part XV of the Convention with respect to all the categories of disputes referred to in paragraph 1 (a) (b) and (c) of Article 298 of the Convention.

I have read somewhere that the statement of the Philippine claim is crafted to skirt China’s reservation. Nonetheless, there is a possibility that the tribunal will either decide the case and include its ruling on the jurisdictional objection in the award (as in the case of Nicaragua vs. Colombia before the ICJ) but there is nothing to prevent it from ruling on the objection preliminarily. The question of whether or not the tribunal has jurisdiction is one which the tribunal can itself resolve, under Article 288:

Article 288


1. A court or tribunal referred to in article 287 shall have jurisdiction over any dispute concerning the interpretation or application of this Convention which is submitted to it in accordance with this Part.

2. A court or tribunal referred to in article 287 shall also have jurisdiction over any dispute concerning the interpretation or application of an international agreement related to the purposes of this Convention, which is submitted to it in accordance with the agreement.

3. The Seabed Disputes Chamber of the International Tribunal for the Law of the Sea established in accordance with Annex VI, and any other chamber or arbitral tribunal referred to in Part XI, section 5, shall have jurisdiction in any matter which is submitted to it in accordance therewith.

4. In the event of a dispute as to whether a court or tribunal has jurisdiction, the matter shall be settled by decision of that court or tribunal.

So even at the early stages of the proceedings, there are many venues for China to flex its muscle. Indeed, even if the Philippines wins this case, it does not seem likely that China has any compelling motivation to accede to the award as it would be contrary to its Sino-centric position and its diplomatic stance that disputes should be resolved bilaterally. Granted that China’s behavior is not  becoming of a new global power. But if its past behavior is indeed any indication of what it intends to do in the future, it does not bode well for the smaller animals in the room.


A frank discussion about impeachment, after impeachment

Two things stand out from the exercise of impeaching the Chief Justice:

One, the voting could have been closer. 

Since Corona eventually “revealed” the true extent of his deposits (and in the process admitted the omission charged in the Complaint), his defense was confined to providing legal justification for the non-inclusion of certain amounts in his SALN. In essence, he claimed that he did not disclose a portion of his peso deposits because they were owned by other members of his family and he did not disclose the peso equivalent of his dollar deposits because the dollar deposits were absolutely confidential under the FCDA.

However, if the revelation had been done earlier and without constructing a veritable Marginot Line of technical obstacles to defeat court processes, the former Chief Justice would have avoided (largely if not entirely) the impression that he had something to hide. Then, the impeachment case would have been reduced to a purely legal question: whether or not the non-disclosure of certain assets in an official’s Statement of Assets Liabilities and Net Worth without intent to maliciously conceal these assets, constitutes a high crime which warrants impeachment of an official. The reality of it is that NONE of the Supreme Court justices’ SALNs are available to the public and the non-disclosure of true worth as required by law is not unique to Corona.  His case grated sensibilities only because it was colored by impropriety. Thus, had the defense been able to show lack of malicious intent to conceal, the Senate might have found it harder to justify removal of the highest magistrate on a single technical ground.

Two, a discussion of the Rules and the nature of the impeachment process is in order.

It must be of some significance that the provisionon “impeachment” is found in Article XI of the Constitution on “Accountability of Public Officers.” Read with the other provisions in the same Article, it takes no great leap of logic to realize that impeachment is simply a platform to allow the people to directly hold certain high officials accountable for their conduct in office.

On the other hand, the term “accountability” or the “state of being accountable” connotes not only liability for acts but “explanation.” In other words, an impeachment proceeding is not so much a trial (unfortunate persisting terminology notwithstanding) to prove that a public officer should be removed but as a national inquiry into his conduct while in office. The removal (and disqualification) of the impeached officer is nothing but the logical consequence of a positive finding of failure to properly render an account and is not punitive but protective. It is protective insofar as the removal (and/or disqualification) of the public officer is not designed so much as to punish the accountable officer but to prevent further damage to the people which he serves.

In Federalist No. 65, Alexander Hamilton argued that the Senate was the “most fit repository” of the power to decide impeachment cases because impeachment was “designed as a method of NATIONAL INQUEST” and the legislators are the most proper “inquisitors,” being the representatives of the nation themselves.If we subscribe to this proposition, then it also follows not only that a “fishing expedition” is allowed but that it is in fact the main point of the impeachment.
It was frustrating to see technical Rules of Evidence, on the theory that they are “suppletorily” applicable, be utilized to hamstring the process of discovery. For that matter, other procedural concepts are hardly appropriate in the context of impeachment proceedings. Chief of these is the extension of the Right of the respondent in an impeachment proceedings to the same presumption of innocence accorded to an accused in a criminal case. The fact that the prosecution agreed to such application hopefully has not elevated the principle to a precedent because it is simply misplaced. A respondent in an impeachment case cannot be given the same presumption because: (i) an impeachment case is not punitive and the respondent does not stand in the same footing  as the accused in a criminal case; and more importantly, (ii) the respondent in an impeachment case has already been impeached by the Lower House. Consequently, the burden is not on the prosecution but on the “defense” to show that the complaint is unmeritorious.

PPP for School Infrastructure: Old Dogs Old Tricks

Is there an answer to the classroom shortage?

Depending on who you ask, the Department of Education’s (DepEd) backlog for school buildings ranges anywhere from 30,000 to close to 200,000. DepEd itself pegs the estimate at 60,000 school buildings and admits that it has no way to fill the shortage on the present budget.

Part of the problem is that the DepEd model for constructing school buildings has always been one of traditional government procurement (i.e., government bids sites to its accredited contractors and pays for them pursuant to terms contained in a supply agreement). This prevents the department from going beyond its allotment and confines it to DPWH designs which are not only outdated but also expensive.

Last year, we introduced a different channel to the Department when our clients submitted an unsolicited proposal for the erection of 300 school buildings in Regions III and IV-A under the Build-Operate-Transfer (BOT) Law. Instead of “acting” on the proposal as the law requires however, the Department archived the proposal and invited private sector to participate in the PPP for School Infrastructure Program (PSIP). This program essentially allows private sector to submit bids for one, two or all three contract packages comprising approximately 10,000 school buildings in pre-selected areas in Regions I, III and IV-A under a Build-Lease-Transfer arrangement spanning 10 years.

There’s be a bit of vicarious nitpicking involved on account of the fact that our consortium desisted from submitting pre-qualification documents at the last minute due to unresolved issues on certain financial aspects of the PSIP. Fortunately, this frees us to discuss some of those very same issues here.

One of the principal concerns for our consortium was the absence of a government guaranty, especially considering the long payout period. The obligation was backed only by a Multi-Year Obligation Authority (MYOA) – a written recognition issued by the Department of Budget and Management that the agency concerned is authorized to enter into a forward obligation but which stops short of a guaranty. The banks were hesitant to backstop the consortium on this kind of security because the obligation was still budget dependent and there was no assurance that Congress would appropriate the amounts needed to finance the lease for a sustained period exceeding the term of the current administration.

At the same time, we felt that government imposed requirements on the contractor which were unrealistic and even illogical. For instance, that the project is based on a BLT arrangement backed by strict performance guaranties means that the transaction is purely turn-key and that non-delivery risk is virtually zero for the government. Yet the DepEd imposed ultra high capitalization requirements and construction experience thresholds which eliminated all but the biggest construction contractors and required smaller players to “rent” the bigger names for the purpose of pre-qualifying. The irony of it is that the big, traditional construction contractors may by themselves not be equipped to handle the delivery of 10,000 schoolrooms spread over  3 geographical regions in one year because the exercise is not at all akin to construction of a large structure in a single (or practically single) site. Rather, the project calls for rapid fire manufacturing of the building blocks, logistics, planning and massive deployment.

Despite all these inconsistencies however, the PSIP is essentially a good idea long in coming and one has to root for the project’s success notwithstanding private loyalties.  But having seen the bureaucracy up close, it’s difficult to shake the feeling that we are still a long way from 60,000.




Impeachment: How did it come to this?

Americans Reinstate Audencia Territorial: Judges take the Oath


Now that the impeachment trial of the Chief Justice is well underway, it is worth some time to examine how we had arrived at this situation.

After EDSA and under the helm of the first President  Aquino, the sovereign Filipino people  overhauled their Constitution for the second time (not counting the provisional Constitution). One of the most significant innovations of the 1987 Constitution was Article VIII, Section 1 which expressly bestows power on the courts not only to decide “actual controversies” but also to correct grave abuses of discretion “on the part any branch or instrumentality of government,” to wit:

Section 1. The judicial power shall be vested in one Supreme Court and in such lower courts as may be established by law.

Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable, and to determine whether or not there has been grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of government.

This “power” to review acts of other branches is not exactly new. In Angara vs. Electoral Commission (GR No. L-45081), the Supreme Court was asked to decide a conflict between a Resolution of  the National Assembly (i.e., the legislature) confirming the election of Jose Angara and a resolution of the Electoral Commission allowing his opponent until a certain date to file a protest. One of the issues raised in the case was whether the Supreme Court had jurisdiction to settle the controversy involving as it does a co-equal branch of government (the National Assembly) and a Constitutional body.

In its Decision penned by Justice Laurel, the Supreme Court recognized the supremacy of each branch “within its own sphere” but held, much like in Marbury vs. Madison, that the Constitutionally mandated system of checks and balances requires the Supreme Court to effectively check the other branches of government because of its power to determine constitutional boundaries and if other branches went beyond them. It went further than Marbury vs. Madison however, in that the High Court pronounced itself the “final arbiter” to settle constitutional conflicts in “times of social disquietude or political excitement,” thus:

The separation of powers is a fundamental principle in our system of government. It obtains not through express provision but by actual division in our Constitution. Each department of the government has exclusive cognizance of matters within its jurisdiction, and is supreme within its own sphere. But it does not follow from the fact that the three powers are to be kept separate and distinct that the Constitution intended them to be absolutely unrestrained and independent of each other. The Constitution has provided for an elaborate system of checks and balances to secure coordination in the workings of the various departments of the government. For example, the Chief Executive under our Constitution is so far made a check on the legislative power that this assent is required in the enactment of laws. This, however, is subject to the further check that a bill may become a law notwithstanding the refusal of the President to approve it, by a vote of two-thirds or three-fourths, as the case may be, of the National Assembly. The President has also the right to convene the Assembly in special session whenever he chooses. On the other hand, the National Assembly operates as a check on the Executive in the sense that its consent through its Commission on Appointments is necessary in the appointments of certain officers; and the concurrence of a majority of all its members is essential to the conclusion of treaties. Furthermore, in its power to determine what courts other than the Supreme Court shall be established, to define their jurisdiction and to appropriate funds for their support, the National Assembly controls the judicial department to a certain extent. The Assembly also exercises the judicial power of trying impeachments. And the judiciary in turn, with the Supreme Court as the final arbiter, effectively checks the other departments in the exercise of its power to determine the law, and hence to declare executive and legislative acts void if violative of the Constitution.

But in the main, the Constitution has blocked out with deft strokes and in bold lines, allotment of power to the executive, the legislative and the judicial departments of the government. The overlapping and interlacing of functions and duties between the several departments, however, sometimes makes it hard to say just where the one leaves off and the other begins. In times of social disquietude or political excitement, the great landmarks of the Constitution are apt to be forgotten or marred, if not entirely obliterated. In cases of conflict, the judicial department is the only constitutional organ which can be called upon to determine the proper allocation of powers between the several departments and among the integral or constituent units thereof.

That assertion of judicial supremacy has never been seriously questioned and arguably may even be critical to the orderly functioning of society. To be fair, the Supreme Court has showed self restraint in the exercise of judicial power. Oddly enough therefore, the need to express the authority to exercise judicial review more definitively in the Constitution came as a reaction to the perceived weakness of the Tribunal and its hesitation to correct legal abuses committed by the former President Marcos in cases like Javellana vs. Executive Secretary (GR No. L-4460) .

As it turns out, strengthening the judiciary is all well and good but inadvertently manufactures another logical dilemma: that of a counter-majoritarian court which has the power to strike down acts of the other branches of government. In other words, how is it possible, in a “democratic” government founded on the rule of the majority, for unelected magistrates to veto acts of officials elected by the people and in certain cases even influence policy? To whom are they accountable?

The obvious answer is that Justices of the Supreme Court are accountable to the people directly. Under Article XI, Section 3 of the 1987 Constitution, an impeachment complaint may be initiated by any citizen upon a resolution of endorsement of any member of the House of Representatives, thus:

Section 3.

  1. The House of Representatives shall have the exclusive power to initiate all cases of impeachment.

  2. A verified complaint for impeachment may be filed by any Member of the House of Representatives or by any citizen upon a resolution or endorsement by any Member thereof, which shall be included in the Order of Business within ten session days, and referred to the proper Committee within three session days thereafter. The Committee, after hearing, and by a majority vote of all its Members, shall submit its report to the House within sixty session days from such referral, together with the corresponding resolution. The resolution shall be calendared for consideration by the House within ten session days from receipt thereof.

  3. A vote of at least one-third of all the Members of the House shall be necessary either to affirm a favorable resolution with the Articles of Impeachment of the Committee, or override its contrary resolution. The vote of each Member shall be recorded.

  4. In case the verified complaint or resolution of impeachment is filed by at least one-third of all the Members of the House, the same shall constitute the Articles of Impeachment, and trial by the Senate shall forthwith proceed.

  5. No impeachment proceedings shall be initiated against the same official more than once within a period of one year.

  6. The Senate shall have the sole power to try and decide all cases of impeachment. When sitting for that purpose, the Senators shall be on oath or affirmation. When the President of the Philippines is on trial, the Chief Justice of the Supreme Court shall preside, but shall not vote. No person shall be convicted without the concurrence of two-thirds of all the Members of the Senate.

  7. Judgment in cases of impeachment shall not extend further than removal from office and disqualification to hold any office under the Republic of the Philippines, but the party convicted shall nevertheless be liable and subject to prosecution, trial, and punishment, according to law.

  8. The Congress shall promulgate its rules on impeachment to effectively carry out the purpose of this section.

However, this is true of all officials who can be removed by impeachment.  Thus, the provision is not specifically designed as a check against the abuses of a “rogue” court and may prove to be inadequate for the purpose.

As the impeachment grinds on and more legal issues are raised in the Senate, resort at some point to the Supreme Court almost seems inevitable. To what extent then, if at all, will the Supreme Court assert its role as the “final arbiter” of legal questions as against the exclusive jurisdiction of the Senate over impeachment cases?


The TRO Against the DOJ Watchlist Order: Will There Be a Constitutional Crisis?

DOJ defies TRO (Image from PDI)

Sabres have been drawn between the Supreme Court and the Executive Branch, under the banner of the Department of Justice (DOJ) Secretary Leila De Lima. Like most struggles in history, this clash is about a woman and the refusal of one of the zealous pursuers to let go.

Citing medical necessity and her constitutional “right to travel”, the former President sought judicial intervention against an Order of the Department of Justice placing her under a Watch List which effectively prevents her from leaving the country. That relief came on Wednesday (the 15th of November) in the form of a Temporary Restraining Order (TRO) issued by what is popularly perceived as an Arroyo loaded  Court. Despite the TRO, the DOJ has instructed the Bureau of Immigration and Deportation (BID) not to allow GMA to board her plane until after the Supreme Court rules on its hastily filed Motion for Reconsideration.

In the meantime, the camp of the former Chief Executive has filed Contempt charges against De Lima.

So far, no one has blinked.

Leaving the constitutional issues (which warrant a more incisive discussion) for later, we focus our attention on the TRO issued by the High Tribunal and why I don’t believe that it will lead to a “Constitutional Crisis” as alarmists are presently claiming.

For the most part, the reasons why it should not have been issued have been discussed in the most lucid and convincing fashion by Justice Sereno in her dissenting opinion.  I just wish to add that in this case, a Temporary Restraining Order is severely misplaced.

The purpose of a TRO, or any injunctive relief for that matter,  is to preserve the status quo until the merits of the controversy can be heard (Rodulfa v. Alfonso, 76 Phil 225, citing Frederick v. Huber, 180 Pa. 572, 37 Atl. 90). The “status quo” (or more properly, the status quo ante litem) is not necessarily what the situation  is obtaining immediately preceding the filing the case. Rather, it refers to “last, actual, peaceable and uncontested status” before the litigation.

In other words, the status quo which is required to be preserved in this case is that government is poised to indict the former president for crimes committed during her office. That Congressman Arroyo was scheduled to leave the country is not “the last peaceable and uncontested status” because precisely her right to leave the country and the validity of the restriction imposed by the Watch List Order is the very lis mota of her petition before the Supreme Court. To allow her to leave and eventually avoid prosecution for her alleged offenses  would destroy or change the status quo rather than preserve it.

In the case of Yuquico v. Quiambao [GR No.191238], an intra-corporate dispute was filed by the stockholder’s group  led by respondents against those of petitioners. As part of their complaint, the Quiambao group contested the legitimacy of the corporate officers elected during a meeting held on 01 March 2004. Clarifying its earlier order to restore the status quo, the Supreme Court explained that the last, actual, peaceable, uncontested status of the parties prior to the filing of the case could not be the results of the election of officers on 01 March 2004 as this is precisely the meat of the controversy in the case.

In annulling the assailed RTC resolution, the CA. correctly opined, citing Mayor Garcia v. Hon.
Mojica,that the last actual peaceable uncontested status of the parties prior to the filing of Civil
(SEC) Case No. U-14 would not refer to the result of the election of officers held on March 1, 2004
since that election did not precede the present controversy; it is, in fact, the real controversy.
The last actual peaceable uncontested status of the parties prior to the filing of this case would be the
composition of STRADEC’s directors and officers prior to the March 1, 2004 elections, or that
obtaining during the 2003-2004 elections.

So for the most part, I hope that the DOJ secretary stands firm on her decision to keep GMA within reach of her department’s prosecutors. I certainly do not believe that her apparent insouciance to the Supreme Court directive would result in a constitutional crisis.

Indeed, this is not the first time, and it certainly would not be the last, that a branch of government has ignored and even defied another co-equal branch. On 11 June  1963, three African American students applied for admission before the University of Alabama following the landmark decision of the US Federal Supreme Court in Brown v. Board of Education which ruled in 1954 that the segregation policy in public schools was unconstitutional.  Then Governor George Wallace of Alabama blocked the entrance to the school auditorium to deny access to the African-American students in open defiance of the decision.  It took a direct order from the President of the United States and the intervention of the National Guard to resolve the standoff.  Had the federal government not agreed or supported the decision, it would be nothing but a victory on paper, largely ignored in application.

Even Marbury v. Madison (5 US 137) , the recognized progenitor of today’s concept of judicial review, stemmed from a refusal of the Secretary of State  (James Madison) to affix the seal of the United States on William Marbury’s commission after he was appointed as justice of the peace by the previous President John Adams. Keenly aware that the Supreme Court of the United States could not do anything if the Secretary of State disregarded an express directive issued by the Court, Justice Marshall refused to issue a writ of mandamus against the Madison on the ground that it had no power to do so in the exercise of its original jurisdiction. It ruled that Section 13 of the Judiciary Act which gave the Supreme Court such power of mandamus was unconstitutional. In so doing, Justice Marshall deftly avoided a conflict with the executive department but paved the way for general acknowledgement that the Court had the power to review an act of Congress.

An equally important aspect of that decision is often unappreciated. Nowhere is it mentioned in Marbury that the power of the Supreme Court to determine whether an act is unconstitutional is the exclusive province of the judiciary. Contrary to the general impression, all branches of government are duty bound to observe the Constitution. Hence, it necessarily follows that the executive and the legislative must have the authority to determine the constitutionality of official acts. The President is duty bound not to support a law which he strongly believes to be unconstitutional. By the same token, the Executive should also be free to disagree with the decision of the Supreme Court. In such an event, he is in fact under obligation by his own oath to bring the matter of their disagreement again to the Supreme Court for consideration.