FIFTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES —)
First Regular Session )

HOUSE OF REPRESENTATIVES

717
House Bill No. 171?

Introduced by Representative Rufus B. Rodriguez and
Representative Maximo B. Rodriguez, Jr.

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 P1.138 trillion national budget, P318 billion, or 28%, 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.D. 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.D. No. 81, Section 31 of P.D. 1177 and P.D. 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repealed or otherwise amended by Congress.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 for
Congress and the Executive fo determine in the exercise of their
wisdom and sound discretion. [At p. 238]

The subsequent case of Philconsa, Wigberto Tanada, Alberto Romulo,
Raul S. Roco, Neptali A. Gonzales, Edgardo J. Angara vs. Hon. Salvador
Enriquez, 235 SCRA 506 (1994), reiterated the same pronouncement and went
on further to state that “a provision in an appropriations act cannot be used to
repeal or amend other laws."

Yes, 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:

2x,

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 automatic appropriation would comprise the bulk of the
GAA, 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?

Xxx. [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.”
anil r

My

MAXIMO B. RODRIGUEZ, JR.


FIFTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES —)
First Regular Session )

HOUSE OF REPRESENTATIVES

House BillNo. 1717

Introduced by Representative Rufus B. Rodriguez and
Representative Maximo B. Rodriguez, Jr.

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 SECTIONS 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
mandates 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 tured over in
full, after deducting actual and necessary expenses for the operation
and 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 case the revenue
realized is insufficient to cover the principal, interest and other charges,
such portion of the budgetary savings as may be necessary 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 fund in the National Treasury not otherwise appropriated, to cover
the payment of the principal and interest on such loans, credits or
indebtedness as and when they shall become due: Provided, further,
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. Repeal 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 fifteen (15) days following

its publication in the Official Gazette or in any daily newspaper of general
circulation in the Philippines.

Approved.