Budget face-off before SC today

THE Supreme Court is set to tackle a high-stakes legal showdown over a controversial provision in the 2024 General Appropriations Act (GAA) that allows the government to tap surplus funds from state-owned corporations. The Court has scheduled oral arguments on Tuesday, Feb. 4, for two petitions challenging what critics call an unconstitutional maneuver that grants the executive branch unchecked spending power. The legal battle raises concerns over constitutional budgetary processes, separation of powers, and fiscal transparency. The core issue in both petitions revolves around Special Provision No. 1(d) of the Unprogrammed Appropriations in the 2024 GAA, which authorizes the government to use surplus funds from government-owned or -controlled corporations (GOCCs) to finance specific projects. The petitioners argue that this provision may have been enacted improperly or is unconstitutional. The first petition was filed by former Senate president Aquilino Pimentel III, labor and civil society groups such as Sentro ng mga Nagkakaisa at Progresibong Manggagawa and the Public Services Labor Independent Confederation Foundation Inc., as well as the Philippine Medical Association. Legal scholars such as Dante Gatmaytan and Ibarra Gutierrez are also among those who filed the petition. A separate petition filed by prominent left-leaning political figures from Bayan Muna, including Neri Colmenares, Teodoro Casiño, Carlos Zarate and Ferdinand Gaite, has also challenged the provision. The respondents in the case include top government officials such as Speaker Martin Romualdez, Senate President Francis Escudero, Finance Secretary Ralph Recto, Executive Secretary Lucas Bersamin, and Philippine Health Insurance Corp. (PhilHealth) President Emmanuel Ledesma Jr. President Ferdinand Marcos Jr. was named as a respondent in the second petition. The petitioners pointed out that this provision allows the executive branch to reallocate funds outside the regular congressional appropriations process, potentially violating the Constitution's provisions on budget execution and fund transfers. Unprogrammed appropriations are budget items that may only be released if specific funding sources, such as excess revenue collections or loans, become available. However, the petitioners contend that the inclusion of GOCC fund balances as a source raises questions about whether Congress properly legislated this authority and whether it undermines its exclusive power over government finances. The legal arguments advanced by the petitioners focus on unconstitutional delegation of legislative power, violation of the separation of powers, and concerns over potential misuse and lack of accountability. The petitioners further argued that the provision effectively grants the executive branch undue discretion in utilizing GOCC fund balances without clear legislative oversight. They argue that allowing the executive to use these funds without congressional approval undermines the legislature's exclusive power over appropriations. Concerns were also raised that the provision could lead to off-budget spending, bypassing standard transparency and accountability mechanisms. Government lawyers are expected to argue that the provision is a valid budgetary mechanism that ensures financial flexibility in addressing government priorities. They may also contend that the use of GOCC fund balances is not new and has precedent in previous budgets. The Supreme Court has outlined preliminary issues for consideration, including whether a temporary restraining order (TRO) or status quo ante order should be issued to halt the implementation of the provision while the case is being heard. The Court's decision could have far-reaching implications on government budgeting, fiscal policy and executive-legislative relations. If the provision is struck down, it may limit the executive's ability to access GOCC funds for discretionary spending in future budgets. Conversely, if upheld, it may set a precedent for broader executive control over unprogrammed funds. The Palace reassured the public on Monday that the 2025 national budget has been stripped of unprogrammed appropriations and only has items that are deemed priorities by the president. Bersamin, reacting to the recent call of the Catholic Bishops' Conference of the Philippines (CBCP) for the public to reject this year's national budget as it "breeds corruption and patronage politics," defended the president and the national spending plan. "What should be remembered is that the president directly vetoed the largest amount of appropriations in history. No president before him had ever so deeply and comprehensively purged the budget of unnecessary items," Bersamin said. The president exercised his veto power over P194 billion line items when he signed the 2025 General Appropriations Act (GAA) on Dec. 30, 2024.