',. 
SIXTEENTH CONGRESS OF THE REPUBLIC 
OF "fHE PHILIPPINES 
First Regular Session 
SENATE 
Senate Bill No. 
8 7 6 
) 
) 
) 
It 
-13 
JUL 17 P 3 : I 8 
INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
EXPLANATORY NOTE 
No money shall be paid out of the Treasury except in pursuance of an 
appropriation made by law. (Sec. 29 (1) Art. VI, Constitution). The power of 
appropriation is described by James Madison as the "spending power." Thus, it is 
the most important prerogative of Congress. Indeed, while the power of the 
"sword" is attributed to the Executive and the power of the "pen" to the Judiciary, 
the power of the "purse" belongs to the Legislature. 
Unfortunately, that power of the "purse" has been diluted by Presidential 
Decree Nos. 81, 
1177 and 1967 because they mandated the automatic 
appropriation of debt payment and converted Congress into a mere rubber-
stamp. 
Ironically, debt service had been eating up a big chunk of our budget. 
Currently, of the P1.8 trillion national budget, P367 billion, or 20%, has been 
earmarked for debt service (interest payment), thus, leaving Congress with 
authority to scrutinize only the remaining 72% but leaving debt service as is. 
Several attempts in the past had been exerted even by distinguished 
members of this august body to seek judicial nullification of these Presidential 
Decrees but to no avail as the consistent response of the Supreme Court even to 
members of this Branch of the Government had been that if we want to rid 
ourselves of these bad laws (P.O. Nos. 81, 1177 and 1967), we must repeal 
them. In the case of Teofisfo T. Guingona, Jr. and Aguilino Q. Pimentel, Jr. VS. 
Hon. Guillermo Carague, 196 SCRA 221 (1991), the High Court ruled: 
"The Court, therefore, finds that R.A. No. 4860, as amended 
by P.O. No. 81, Section 31 of P.O. 1177 and P.O. No. 1967 
constitute lawful authorizations or appropriations, unless they are 
repealed or otherwise amended by Congress. The Executive was 
thus merely complying with the duty to implement the same. 
There can be no question as to the patriotism and good 
motive of petitioners in filing this petition. Unfortunately, the petition 
must fail on the constitutional and legal issues raised. As to whether 
or not the country should honor its international debt, more 
especially the enormous amount that had been incurred by the past 
administration, which appears to be the ultimate objective of the 
petition, is not an issue that is presented or proposed to be 
addressed by the Court. Indeed, it is more of a political decision fur 


" 
, 
" 
Congress and the Executive to determine in the exercise of their 
wisdom and sound discretion."[At p. 238]" 
The subsequent case of Phi/consa, Wigberto Tanada, Alberto Romulo, 
Raul S. Roeo, Neptali A Gonzales, Edgardo J. Angara vs. Han. Salvador 
Enriquez, 235 SeRA 506 (1994), reiterated the same pronouncement and went 
on fUlther to state that "a provision in an appropriations act cannot be used to 
repeal or amend other laws." 
Ves, these PDs were crafted during the one-man rule of Pres. Marcos 
and, thus, should be stricken off our statute books now and forever. 
A noted Constitutionalist and Professorial Lecturer in the University of the 
Philippines, Bartolome C. Fernandez, Jr., in his dissertation Congressional 
Power of the Purse Vis-A-Vis Automatic Appropriations for Debt Servicing, Vol. 
XVII, The Lawyers Review No.1, p. 4, Jan. 1993, posed the following questions: 
xxx. 
4. Will the operationalization of the automatic appropriation scheme 
continue in perpetuity given the seemingly blind obeisance to the 
questioned decrees on the part of both the Legislative and the Executive? 
When will it end, if at all? 
5. Will not the time come around when items under the all-encompassing 
~lJtQm~tic ~ppropri~tion would comprise the bulk of the GM, thereby 
virtually emasculating Congress regarding its power of appropriation? 
6. When will Congress come around to regaining and reasserting its 
power of the purse under the 1987 Constitution regarding such automatic 
appropriations? 
7. When will Congress come around reasserting its role as the policy-
determining body of the government as envisioned under the Constitution 
by determining by itself, in the course of the legislative process, the proper 
appropriations for debt servicing which, admittedly, is a matter of policy? 
8. How long will Congress allow itself to be rendered impotent by 
anachronistic presidential decrees of martial law vintage which, according 
to the dissenting opinion of Justice Isagani A. Cruz in the Guingona case, 
"are on the whole tainted with authoritarianism and enfeebled by lack of 
proper study and draftsmanship, let alone suspect motives."? 
9. Will the present Congress be emboldened to demonstrate political will 
and strike down once and for all these decrees and consign them to 
oblivion? 
x x x. [at p. 7] 
Verily, the bill will once and for all cleanse our statute books of remaining 
vestiges of martial rule and restore to Congress its enviable, absolute and 
exclusive "power of the purse." 
OY EJERCITO ESTRADA 
Senator 


SIXTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
First Regular Session 
-=~===-
SENATE 
Senate Bill No. 8 '7 B 
) 
) 
) 
'13 
JUL 17 r 3 :1fl 
INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
-= 
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AN ACT 
RESTORING TO CONGRESS THE POWER 'TO APPROPRIATE PAYMENTS 
ON DEBT SERVICE, REVIVING. FOR THE PURPOSE SECTION 6 OF 
REPUBLIC ACT NO. 4860 (FOREIGN BORROWING ACT), AND REPEALING 
SECTION 7 OF PRESIDENTIAL DECREE NO. 81, SECTION 31 OF 
PRESIDENTIAL DECREE NO. 1177 AND SEC-nONS 1,2 AND 3 OF 
PRESIDENTIAL DECREE NO. 1967 
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled: 
SECTION 1. Statement of Policy. - The Constitution vests upon and 
mahdates 
Congress to enact appropriation 
measures for government 
expenditure whether domestic or foreign. However, because of the continued 
effectivity of certain Presidential Decrees of former Pres. Ferdinand Marcos 
providing for the automatic appropriation of amounts as payments for foreign 
debts in the annual budget without need of congressional action since 1972 up to 
the present, Congress is revoking these presidential decrees and restoring to it 
full power to exercise its authority in determining the necessary but reasonable 
amount as part of the annual budget that may be appropriated to service the 
country's foreign debts with due regard to domestic but equally vital government 
services that need equal appropriation to bring about a balanced government 
expenditure program. 
SEC. 2. Revival of the Original Text of Section 6 of Republic Act. No. 
4860. - Section 6 of Republic Act No. 4860 otherwise known as the "Foreign 
Borrowing Act" as amended by Republic Act No. 6142 which had been amended 
by Section 7 of Presidential Decree No. 81, Section 31 of Presidential Decree 
No.1177 and Sections 1, 2 and 3 of Presidential Decree No. 1967 is hereby 
revived as follows: 
"Section 
6. 
Any provision 
of law to 
the contrary 
notwithstanding, and in order to enable the Republic of the 
Philippines to pay the principal, interest. taxes and other normal 
banking charges on the loans, credits or indebtedness, or on the 
bonds, debentures, securities or other evidences of indebtedness 
sold in international markets under the authority of this Act, all the 
revenue realized from the projects financed by such loans, credits 
or indebtedness, or on the bonds, debentures, securities or other 
evidences of indebtedness, shall be turned over in full, after 
deducting actual and necessary expenses for the operation and 
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maintenance of said projects, to the National Treasury by the 
government office, agency or instrumentality, or government-owned 
or controlled corporation concerned, which is hereby appropriated 
for the purpose as and when they shall become due. In caSH the 
revenue realized is insufficient to cover the principal, intHrest and 
other charges, such portion of the budgetary savings as may be 
necHssary to cover the balance or deficiency shall be set aside 
exclusively for the purpose by the government office, agency or 
instrumentality, or government-owned or controlled corporation 
concerned: Provided, That, if there still remains a deficiency, the 
Congress shall appropriate the necessary amount of any funds in 
the National Treasury not othelWise appropriated, to cover the 
payment of the principal and interest on such loans, credits or 
indebtedness as and when they shall become due: Provided, 
furtfler, That the Monetary Board shall make provisions out of 
current foreign exchange receipts for the foreign exchange 
requirements to service the external debt." 
SEC. 3. Repeaj of Section 7 of Presidential Decree No. 81, Section 31 
of Presidential Decree No. 1177 and Sections 1, 2 and 3 of Presidential 
Decree No. 1967. - Section 7 of Presidential Decree No. 81, Section 31 of 
Presidential Decree No. 1177 and Sections 1, 2 and 3 of Presidential Decree No. 
1967 and other provisions of said decrees which are inconsistent herewith are 
hereby REPEALED. 
SEC. 4. EffectiVity. - This Act shall take effect upon its approval. 
Approved,