MANILA — The Supreme Court has struck down the 2024 and 2025 national budgets after finding that Congress exceeded its constitutional authority by increasing spending allocations beyond the President’s recommendations, while imposing sweeping restrictions on unprogrammed funds under the 2026 budget.
In a landmark ruling penned by Senior Associate Justice Marvic Leonen, the Supreme Court en banc invalidated a P449.5-billion increase in unprogrammed appropriations under the 2024 General Appropriations Act (GAA) and questioned billions of pesos in additional allocations under the 2025 spending law.
The Court also declared unconstitutional key provisions governing the release and utilization of unprogrammed appropriations in the 2026 GAA, citing excessive executive discretion, inadequate safeguards and the absence of clear spending priorities.
Among the irregularities identified in the 2025 budget was an additional P17.99 billion allocated to the Department of Public Works and Highways (DPWH) Special Road Fund.
The tribunal also ruled that a P12.75-billion increase in the Special Accounts in the General Fund of certain government agencies violated the Administrative Code, which prohibits Congress from increasing amounts in special provisions beyond those proposed by the President.
The decisions arose from petitions filed by the late former congressman Edcel Lagman, former senator Aquilino “Koko” Pimentel III and other petitioners, including the Filipinos for Peace, Justice and Progress Movement Inc.
Congressional overreach
The Supreme Court particularly questioned the bicameral conference committee’s handling of the 2024 budget, finding that it went beyond its mandate of reconciling differences between the spending measures approved by the Senate and the House of Representatives.
The tribunal noted that the committee’s report lacked adequate documentation explaining adjustments to budget items and failed to provide supporting records justifying the changes.
The ruling also identified the Strengthening Assistance for Government Infrastructure and Social Programs (SAGIP) allocations in the 2024 and 2025 unprogrammed budgets as unlawful lump-sum appropriations.
According to the Court, SAGIP effectively allowed the executive branch to determine specific spending allocations after Congress had already enacted the national budget, undermining the legislature’s constitutional power of appropriation.
The disputed allocations became a funding pool for various infrastructure projects, including flood control initiatives, and opened the way for increased spending on several government assistance programs.
These included DPWH infrastructure projects, the Department of Health’s Medical Assistance to Indigent Patients program, the Department of Social Welfare and Development’s Ayuda sa Kapos ang Kita Program, and the Department of Labor and Employment’s Tulong Panghanapbuhay sa Ating Disadvantaged or Displaced Workers Program.
Stricter safeguards for 2026
For the 2026 national budget, the Supreme Court invalidated Special Provisions 1(a) and (b) under Chapter XLIII, ruling that these granted the executive branch excessive discretion in determining how unprogrammed funds would be released and spent.
While emphasizing that unprogrammed appropriations are not inherently unconstitutional, the tribunal stressed that their utilization must be governed by clearly defined standards, transparency and fiscal accountability.
The Court directed Congress to eliminate lump-sum allocations from unprogrammed appropriations and establish specific spending priorities whenever funds are intended for multiple purposes.
It also required lawmakers to distinguish the conditions governing the use of newly generated income and additional non-tax revenues for programmed and unprogrammed expenditures.
Such revenues must generally be directed toward already programmed government expenditures unless compelling reasons justify their use for other purposes.
The tribunal further emphasized that unprogrammed appropriations must remain within the national fiscal program and serve only as limited contingency funding rather than an unrestricted source of additional government spending.
The Supreme Court permanently prohibited the Senate, House of Representatives, Office of the Executive Secretary and acting secretary of the Department of Budget and Management from implementing the invalidated provisions of the 2026 GAA.
Possible liabilities remain
Despite invalidating the 2024 and 2025 budgets, the Court applied the doctrine of operative fact to protect programs and transactions that could no longer be reversed, particularly where beneficiaries had acted in good faith.
The doctrine, however, does not automatically shield government officials and other individuals responsible for proposing, authoring or implementing the unconstitutional budget provisions.
Those involved could still face criminal, civil or administrative liability, depending on the findings of the appropriate courts or tribunals.
Any protection based on good faith must be independently established before the proper authorities.
The ruling underscores the constitutional limits on congressional budget amendments and executive spending discretion, reinforcing the principle that public funds must be appropriated and disbursed under clearly defined legal safeguards./PN
