Republic of the Philippines
HOUSE OF REPRESENTATIVES
‘Quezon City

Fifteenth Congress
First Regular Session

HOUSE BILI. No. 4296,

INTRODUCED BY REPRESENTATIVE MARC DOUGLAS C. CAGAS IV

AN ACT STRENGTHENING THE LEGISLATURE’S POWER OF THE PURSE
AMENDING CERTAIN SECTIONS OF REPUBLIC ACT 4860 (AS AMENDED BY
PRESIDENTIAL DECREE 81) AND PRESIDENTIAL DECREES 1177 AND1967,
AND FOR OTHER PURPOSES

EXPLANATORY NOTE,

The Power of the purse has been defined as the influence that legislatures have
over public policy because of their power to vote money for public purposes. The
Philippine Congress, both Houses voting separately, must authorize, by law through the
General Appropriations Act, the president's budgetary requests and requirements to fund
the agencies and programs of the executive branch.

This so-called "power of the purse” is the ability of Congress or any other
legislative body to control what the other two branches of government do by
appropriating of not appropriating budget funds to the other branches. For example. the
President as Commander-in-Chief of the military forces has the right to decide how those
forces are used within the scope of constitutional and statutory restrictions, Under the
Constitution, the president may call out such armed forces to prevent or suppress lawless
violence, invasion or rebellion. However. even though that is within his authority, he
cannot do that unless he has the funds in the military budget to do it. If Congress refuses
to appropriate money for such a military purpose, Congress can effectively prevent the
President from doing something he has the legal right to do.

Presidential Decree 81, the Foreign Borrowing Act, provides that, for loans,
credits or indebtedness undertaken by the Republic in furtherance of the purposes stated
in the deeree, the: payment of the principal, interest, taxes and other nominal banking
charges shall be from the automatic appropriation of the net revenues generated by the
project. Further to this, any insufficiency in the amount of payments shall be
automatically covered by budgetary savings which would be set aside to cover the
insufficiency. Should the budgetary savings be inadequate, an automatic appropriation of
funds in the national treasury of funds not yet appropriated shal! ensue to cover the
amounts needed. With the automatic appropriation of funds or budgetary savings for its
payment, clearly no legislative involvement or oversight takes place with regard to the
necessity, importance or legality of these transactions entered into by the President for the
Republic.

In Presidential Decree 1177, the President has been able to effectively curtail
Congress’ power aver the purse as the Chief Executive has been allowed not only to realign
monies, but to even withhold releases and payments should he so decide that public interest



so requires. ‘Thus, even though Congress may have expressed its policies and sentiments
by virtue of appropriating and allocating funds for specific purposes, it may subsequently
still be rendered ineffective as there may be a realignment or redirection of those funds to
and for another purpose as may be deemed necessary by the President.

Finally, Presidential Decree 1967 reiterates the capacity of the President to
appropriate such amounts necessary out of any funds in the National Treasury not
otherwise appropriated to effect payments on both forcign and domestic loans entered into
or guaranteed by the Republic,

The ability to appropriate, realign, redirect and withhold funds all form part of
Congress’ power over the purse; a clear means for the Legislature to influence policies and
actions which the Executive must undertake. The aforementioned decrees have effectively
given prerogatives reserved for the legislature and merged them with that of the
executive's. This has weakened the checks and balances given to the legislature as a means
to equalize the balance of power that it must exercise as a co-equal branch of government.

With the amendments sought to be introduced by the bill hercin, Congress will
again rightly assume ils power over the purse, thus curtailing the untrammeled discretion of
the Chief Executive.

‘The camest approval of this legislative measure is therefore, requested.

GZEIDCC an
MARC DOUGLAS C, CAUIAS TV


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

Fifteenth Congress
First Regular Session

HOUSE BILL No. 4296

INTRODUCED BY REPRESENTATIVE MARC DOUGLAS C. CAGAS IV

AN ACT STRENGTHENING THE LEGISLATURE ’S POWER OF THE PURSE
AMENDING CERTAIN SECTIONS OF REPUBLIC ACT 4860 (AS AMENDED BY
PRESIDENTIAI. DECREE 81) AND PRESIDENTIAL DECREFS 1177 AND1967,
AND FOR OTHER PURPOSES

Be it enacted by the Senate and House of Representatives of the Philippines in

Congress assembled:

SECTION 1. Section 6 of Republic Act No. 4680, as amended by Presidential
Decree No. 81, is hereby amended to read as follows:

SEC. 6. CONGRESS SHALL APPROPRIATE THE NECFSSARY
AMOUNT OUT OF ANY FUNDS 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 DUF.

SECTION 2. Section 43 of Presidential Decree No. 1177 is hereby amended to
tead as follows:

Section 43. Suspension of Expenditure of Appropriations. Except as
otherwise provided in the General Appropriations Act and whenever in {his}
THEIR judgment, AS MAY BE RECOMMENDED BY THE PRESIDENT. the
public interest so requires. CONGRESS MAY, BY LAW, AUTHORIZE the
President [; upon notice to the head of office concerned, is authorized] to suspend
or otherwise stop further expenditure of funds allotted for any agency, or any
other expenditure authorized in the General Appropriations Act, except for
personal services appropriation used for permanent officials and employees.

SECTION 3. Scction 44 of Presidential Decree No. 1177 is hereby amended to
read as follows:

Section 44, Authority 10 Approve Fund Transfers. CONGRESS, VOTING
SEPARATELY, MAY, BY LAW AUTHORIZE the President [shall have the
authority] to transfer any fund appropriated for the different departments, bureaus,
offices and agencies of the Executive Department which are included in the
General Appropriations Act, to any program, project, or activity of any


department, bureau or office included in the General Appropriations Act or
approved after its enactment.

LIKEWISE, CONGRESS, VOTING SEPARATELY, MAY, BY LAW
AUTHORIZE the President [shall, likewise, have the authority] to augment any

from savings in the appropriations of another department, bureau, office or
agency within the Executive Branch, pursuant to the provisions of Article Vi
[VII], Section 25 [16] (5) of the Constitution.

SECTION 4. Section 53 of Presidential Decree No. 1177 is hereby amended to
read as follows:

Seetion $3. Administration of Lump-Sum Funds. THE DEPARTMENT
OF BUDGET AND MANAGEMENT MAY NOT RELEASE LUMP SUM
FUNDS APPROPRIATED [NX THE GENERAL APPROPRIATIONS ACT
UNLESS AND UNTIL THE UTILIZATION OF THE SAID FUNDS AVE
BEEN FULLY ITEMIZED AND CONCURRED TO BY A MAJORITY OF
THE MEMBERS OF CONGRESS, VOTING SEPARATELY. THEREAFTER,
THE DEPARTMENT SHALL ADMINISTER THE PROPER EXECUTION OF
EXPENDITURES AS PROVIDED FOR THERLOF. [The Budget Commission
shall administer the Lump-Sum Funds appropriated in the General Appropriations
Act, except as otherwise specified therein, including the issuance of Treasury
Warrants covering payments to implementing agencies or other creditors, as may
be authorized by the President. ]

SECTION 5, Section 55 of Presidential Decree No. 1177 is hereby amended to
read as follows:

Section 88. Authority to Use Savings for Certain Purposes. Savings in the
appropriations provided in the General Appropriations Act may ONLY be used
for the settlement of the following obligations incurred during a current fiscal year
or previous fiscal years as may be RECOMMENDED BY THE. PRESIDENT
AND CONCURRED 10 BY A MAJORITY OF THE MEMBERS OF
CONGRESS, VOTING SEPARATEI.Y, [approved by the Commissioner in
accordance with rules and procedures as may be approved by the President]:

{a} Claims of officials, employees and laborers who died or were injured
in line of duty, including burial expenses as authorized under existing law:
(b) Commutation of terminal leaves of employees due to retirement,
resignation or separation from the service through no fault of their own in
accordance with the provisions of existing law, including unpaid claims
for commutation of matemity leave of absence;

(©) Payment of retirement gratuities of separation pay of employers
separated from the service due to government reorganization;

(@) Payment of salaries of employees who have been suspended or
dismissed as a result of administrative or disciplinary action, or separated
from the service through no fault of their own and who have been
subsequently exonerated andor reinstated by virrue of decisions of
competent authority

(c) Cash awards to deserving officials and employees in accordance with
the civil service law;

() Salary adjustments of officials and cmployees as a result of
classification action under, and implementation of, the provisions of the


Compensation and Position Classification Act, including positions
embraced under the Career Fxecutive Service;

{g) Peso support to any undertaking that may be entered into by the
government with international organizations, including administrative and
other incidental expenses;

(8) Covering any deficiency in peso counterpart fund commitments for
foreign-assisted projects, as may he approved by the President;

(@ Priority activities that will promote the economic well-being of the
nation, including food production, agrarian reform, energy development,
disaster relict, and rehabilitation.

@) Repair, improvement and provision of government buildings and
infrastructure and other capital assets damaged by natural calamities:

(k) Expenses in connection with official participation in trade fairs, civic
parades, celebrations, athletic competitions and cultural activities. and
payment of expenses for the celebration of regular or special official
holidays;

() Payment of obligations of the government or any of its departments or
agencies as a result of final judgment of the Courts, and

{m) Payment of valid prior year's obligations of government agencies with
any other government office or agency, including government-owned or
controlled corporations.

SECTION 6. Section 88 of Presidential Decree No. 1177 is hereby repealed.
SECTION 7. Section 89 of Presidential Decree No. 1177 is hereby amended to
read as follows:
Section 89, Rules and Regulations. The DEPARTMENT OF BUDGET

AND MANAGEMENT [Budget Convnission] shall issue the rules and
regulations governing the implementation of this Decree.

SECTION 8. Section 1 of Presidential Decree No. 1967 is hereby amended to
read as follows:

Section 1. CONGRESS SHALL(There is hereby) appropriate(d), out of
any funds in the National Treasury not otherwise appropriated, such amounts as
may be necessary to effect payments on foreign or domestic loans, or foreign or
domestic loans whercon creditors make a call on the direct and indirect guarantee
of the Republic of the Philippines, obtained by:

a. the Republic of the Philippines the proceeds of which were relent to
government-owned ot conirolled corporations and/or government financial
institutions;

b. government-owned or controlled corporations and/or government financial
institutions the proceeds of which were relent to public or private institutions:

c. government-owned or controlled corporations and/or financial institutions and
guaranteed by the Republic of the Philippines;

d. other public or private institutions and guaranteed by government-owned or
controlled corporations and/or government financial institutions.


SECTION 9. Amendments — No amendments to this Act can be made by way of
provisions introduced or inserted into a General Appropriations Act hereatter enacted.

SECTION 10. Repealing Clause. Ail laws, executive orders, executive issuances,
mules and regulations or part thereof inconsistent or contrary to the provisions of this Act,
are hereby repealed or amended accordingly.

SECTION 11. Separability Clause. In case any provision of this Act is declared
unconstitutional or invalid, the other provisions hereof which are not affected thereby
shall continue in full force and effect.

SECTION 12. Effectivity. — This Act shall take cffect immediately after its
publication in two (2) national newspapers of general circulation.

Make DOUGLAS C. CAGAS IV