THIRTEEN 
REPUBLIC 
SECOND 
Mny 16 p::,: :I 
TH CONGRESS OF THE) 
OF THE PHILIPPINES) 
REGULAR 
SESSION) 
P 
, '  
~~~~~~~ 
8.w :--- 
SENATE 
S.B. No. 
2160 
Introduced by SENATOR ALFRED0 S. LIM 
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, I 
177 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 proposed PI .053 trillion budget, P340 billion, 
or 32%, has been earmarked for debt service, thus, leaving Congress 
with authority to scrutinize only the remaining b8% 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 


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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. Guillenno 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 
ISwful authorizations or appropriations, unless they are repealed or 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 ra'sed. As to whether or 
not the country should honor its internationa I 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 to determine in the exercise of their 
wisdom and sound discretion. At p. 238 
The subsequent case of Philconsa, Wigberto Taiiada, Albarto 
Romulo, Raul S. ROCO, Neptali A. Gonzales, Edgardo J. Angara vs. 
Hun. 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, Bartolorne 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: 


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xxx. 
4. Will the operationalization of the automatic 
appropriation scheme continue in perpetuity given the 
seemingly blind obeisance to the questioned decreed 
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 impotept by 
anachronistic presidential 
decrees of martial law vintage which, according to the 
dissenting opinion of Justice lsagani 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 decree 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.” 
A 


Idol, 16 1'3.' 
THIRTEENTH CONGRESS OF THE) 
REPUBLIC OF THE PHILIPPINES) 
SECOND 
REGULAR 
SESSION) 
SENATE 
S.B. No. 
2160 
~ 
Introduced by SENATOR ALFRED0 S. LIM 
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 the House of Representatives 
of the Philippines in Congress assembled: 
SECTION 1. Sfafemenf of Pohcy. - 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 


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equal appropriation to bring about a balanced government 
expenditure program. 
SECTION 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 Sectiorr 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 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 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 due: 
Provided, further, That the Monetary 


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Board shall make provisions out of current foreign 
exchange 
receipts 
for 
the 
foreign 
exchange 
requirements to sewice the external debt. 
SECTION 3. Repeal of Section 7 of Presidential Decree No. 81, 
Section 31 of Presidential Decree No. I 177 and Sections I, 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. 
Section 4. Effectivity. - This Act shall take effect upon its 
approval. 
Approved