SIXTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES )
First Regular Session )

HOUSE OF REPRESENTATIVES { £

House Bill NoB 202

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 Legisiature.

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 trlion 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
224 (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authorizations or appropriations, unless they are repealed or otherwise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 intemational 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, itis 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. Femandez, 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:

20K.

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. [atp. 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.”

MAXIMO B. RODRIGUEZ, JR.


SIXTEENTH CONGRESS
REPUBLIC OF THE PHILIPPINES
First Regular Session

HOUSE OF REPRESENTATIVES.

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

House Bill No. 8330.2

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 turned 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 concemed, 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 govermment-owned or controlled corporation concemed
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,