Archive for the ‘Philippines’ Category

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.




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.


An Uneasy Peace and Hard Choices

Soldiers Carry `Lucky' Wounded

`They Kept Coming' (Photo and caption from Philippine Daily Inquirer)

It can’t be easy to be Marvic Leonen  in Mindanao these days.

While achieving peace is Mindanao remains an overriding ideal, to say that the Al-Barka incident strikes a serious blow to the peace talks does not quite capture the complexity of the issues surrounding the Mindanao insurgency.

The ambush of  19 soldiers by the Moro Islamic Liberation Front (the single most brutal skirmish in years)  resurfaces some old questions, not least of which is the legal status of the conflict as well as the MILF themselves. The government at least seems unable to make up its mind whether this breakaway group of Nur Misuari’s Moro National Liberation Front (MNLF) should be treated as legitimate belligerents under international law or common bandits.  Perhaps they are something else entirely.

From a more pragmatic standpoint however, it raises doubts as to whether peace itself is attainable under the present framework.

For one, the ambush at Al-Barka begs the question of whether government is talking to the right people. If MILF admits responsibility for Al-Barka, then its sincerity and good faith are both vulnerable to scrutiny. On the other hand, if another group is responsible, the status of the MILF as “top dog” would appear to be disputable at best.

Indeed, the MILF’s insistence on a Bangsamoro sub-state presupposes their ability to preserve the peace themselves and to keep “splinter groups” such as Umbra Kato’s Bangsamoro Islamic Freedom Fighters (BIFF) in tow. If the MILF can’t prevent “disgruntled” members from taking up AK-47s and running amok amidst the scores of the Philippine Army’s best trained soldiers,  how can they possibly keep peace using a motley crew of ex-farmers?

If the MILF gets their sub-state, what are they going to do with it? One certainly can’t look at the ARMM for inspiration.



The First Hundred

The overarching strategy appears to hinge on the promotion of Public-Private Partnerships (or PPPs). Other than the fact that this is by no means an innovation, infrastructure development by itself is not a recipe for bringing the country out of its status as the perennial bridesmaid of Southeast Asia into the club of the sought after. There are tough choices to be made regarding population control, balancing the budget, peace and order plus of course, the manner and degree of aggressiveness in fighting corruption. Hard decisions require deft political handling and large political capital. While there is still hope, the President has to make these choices soon before his coin runs out.

PPPs and Risk, Part 1

Finally, opening the floodgates to indiscriminate government guarantees is short-sighted and counter-productive. At the end of the day, the increased cost of a government guaranty against regulatory risk will be borne by the tax payers. Since most PPP contracts will outlive President Aquino’s administration, he should be wary about putting his signature on a piece of paper which will doom his successor (and the one after that) to additional fiscal burdens, especially where the benefit is not clear or the need is not immediate.

Noynoy, Gibo, Villar and the new EDSA Revo-lections

Critics bemoan the fact that many Filipinos are reduced to electing the “least corrupt” rather than the “most competent” candidate for the highest post in the land. But that argument presupposes that the two concepts are mutually exclusive. On the contrary, we cannot deny that it is precisely the sad state of the country which calls for a comparison not of one’s track record of real and hyperbolic accomplishments but a demonstration of what one has NOT done despite being possessed of power. In this, Noynoy is head and shoulders above all. As it turns out, Noynoy has shown by his previous conduct that he is the most competent to wield the awful powers of the President by showing its grandest manifestation — that of RESTRAINT.

Who’s Holding the Purse? The Line Item Veto and other Fun Facts Part I

The true “power of the purse” does not arise from the requirement that all revenue bills must originate from Congress as stated in Article VI, Section 24 of the Constitution. Rather, it lies in the dynamic created by the concept that the President must ask Congress for money. Thus, more than the authority of Congress to institute revenue measures, the true nature of the power shows itself in the authority of Congress to WITHHOLD money from the President.

The Acting Secretary of Justice: Error or Something Else?

Amidst a storm of public protests and faced with mutiny from his own lieutenants (the Department’s high level career prosecutors ), Acting Secretary Agra stands pat on his unpopular decision to move for the discharge of Autonomous Region of Muslin Mindanao (ARMM) Governor Zaldy Ampatuan and former Maguindanao Vice Governor Akmad Ampatuan from the criminal charges stemming from the Maguindanao Massacre.

The Resolution has been the subject of all manner of punditry from armchair lawyers to conspiracy theorists.  In essence, most critics decry both the unholy speed by which the Secretary issued his decision and the fact that he sustained the legally weak defense  of alibi over positive testimony of one of the witnesses.   Adding my own two cents worth to these, most litigators will tell you (as well as anyone else who has had experience petitioning the DOJ) that if there’s one thing that the Department is NOT known for, it’s promptness.  Setting aside the possibility that the Acting Secretary may have precisely chosen to break with this particular DOJ tradition, it is still puzzling that he would act contrary to what prosecutors have historically been inclined (even told) to do , which is to prosecute in the event of conflicting evidence.

Whether Secretary Agra (a former advocate of volunteer legal aid for the poor) deserves the vilification that he is receiving today depends on another question which has only been asked implicitly — whether the resolution to absolve two of the high profile principals in the massacre constitutes simple error which is arguably the Secretary’s to make or rather bears the earmarks of something more sinister.

During the earlier part of my legal career, I was part of the team of private prosecutors that appeared in the case of “People of the Philippines v. Hubert Webb.” Webb, the son of a Philippine Senator, was one of the accused in the brutal rape of Carmela Vizconde and the slaughter of the entire Vizconde household.

Immediately after Hubert Webb was indicted, he questioned the finding of probable cause against him by the DOJ Panel despite producing exculpatory evidence in the preliminary investigation consisting of, interestingly enough , alibi.  Specifically, he presented documentary evidence that would supposedly place him in the United States  at the time that the crime was committed.

The Supreme Court, in Webb v. De Leon [GR No. 121245 (23 August 1995)], ruled that faced with “conflicting pieces of evidence,” the DOJ correctly found probable cause to indict the accused. It also explained that probable cause was synonymous with “probability of guilt” and therefore required a LOWER QUANTUM AND QUALITY of evidence than that required for conviction, to wit:

Given these conflicting pieces of evidence of the NBI and the petitioners, we hold that the DOJ Panel did not gravely abuse its discretion when it found probable cause against the petitioners. A finding of probable cause needs only to rest on evidence showing that more likely than not a crime has been committed and was committed by the suspects. Probable cause need not be based on clear and convincing evidence of guilt, neither on evidence establishing guilt beyond reasonable doubt and definitely, not on evidence establishing  absolute certainty of guilt. As well put in Brinegar v. United States, while probable cause demands more than “bare suspicion,” it requires “less than evidence which would justify . . . conviction.” A finding of probable cause merely binds over the suspect to stand trial. It is not a pronouncement of guilt.

Considering the low quantum and quality of evidence needed to support a finding of probable cause, we also hold that the DOJ Panel did not, gravely abuse its discretion in refusing to call the NBI witnesses for clarificatory questions. The decision to call witnesses for clarificatory questions is addressed to the sound discretion of the investigator and the investigator alone. If the evidence on hand already yields a probable cause, the investigator need not hold a clarificatory hearing. To repeat, probable cause merely implies probability of guilt and should be determined in a summary manner. Preliminary investigation is not a part of trial and it is only in a trial where an accused can demand the full exercise of his rights, such as the right to confront and cross-examine his accusers to establish his innocence. In the case at bar, the DOJ Panel correctly adjudged that enough evidence had been adduced to establish probable cause and clarificatory hearing was unnecessary.

In other words, the Philippine Supreme Court directs that if the Secretary were to err in the exercise of quasi-judicial powers of determining probable cause, he should do so on the side of INDICTING the accused, instead of setting him free.

From all accounts, the Acting Secretary seems to be as astute as any individual who had previously held his position.  Thus, it becomes difficult to justify his decision on account of a mere catastrophic failure to appreciate the ruling in Webb v. De Leon.  Yet the other conclusion is simply too scary to contemplate.

What It Will Probably Take Part II: More on Including the Poor in the Equation

Theoretically, higher income per capita should offset the effects of either a lower minimum wage or a moratorium on wage increases. Stated otherwise, a lower legislated minimum wage would cease to be relevant when a larger part of the workforce is doing higher level jobs and are therefore earning way beyond any floor set by government.