POWERS OF CONGRESS -the tax provision was germane; it was not a tax; it was a
fee/regulatory mechanism
Inherent Powers
1. Police power- make, ordain, establish all manner of
wholesome and reasonable laws, statutes, and ordinances
as they shall judge for the good and welfare of the
constituents
2. Power of taxation
3. Power of eminent domain
4. Contempt power
Legislative/Plenary power (to legislative)
1. Appropriation
2. Taxation
3. Expropriation
4. Authority to make, frame, demand, enact and repeal laws
5. Ancillary powers-- conduct inquiry and punish for
contempt
Limitations on Legislative Power
Law- formal statement of norms in society as agreed upon by the
people through their representatives
Rights- inherent; found in the Constitution
Obligations- in the part of the people through the social contract
Example: obligation to contribute (through taxation to
finance the operation of the government for the benefit of
the citizens)
1. Substantive limitation
-found in the Bill of Rights
-circumscribe/restricts both exercise of the power itself
and the allowable subject of legislation
-to ensure due and equal process
2. Formal / Procedural limitations
-manner of passing bills and the form they should take
LEGISLATIVE PROCESS
Requirements as to bills
As to titles of bills [Article VI, Section 26 (1)]
Rider clause: every bill passed by the Congress shall embrace only
one subject which shall be expressed in the title thereof
Purpose
1. To afford everyone due process
2. To avoid surprises to legislators that what they agreed or
voted for might create other obligations or to impede the
power of legislation
3. To avoid deficiencies
4. To avoid log-rolling or producing a bill that is different
from what was intended
Tio v. Videogram Regulatory Board
Issue: an act was enacted creating the Videogram Regulatory Board
but there was a tax provision in the title which, according to the
petitioner was not germane to the subject and was a rider
Court: the constitutional requirement was sufficiently complied with
if the title be comprehensive enough to include the general purpose
which a statute seeks to achieve
-requirement is satisfied if all parts of the statute are related and are
germane to the subject matter expressed in the title as long as they
are not inconsistent with or foreign to the general subject and title
-the title is not required to be an index of the contents of the bill
Lidasan v. COMELEC
-issue on The Act Creating The Municipality of Dianaton, Lanao Del
Sur that include barrios in Cotabato and changes boundaries of the
two provinces
Court: subject of the statute must be expressed in the tile of the bill
because the Constitution does not require the Congress to read the
entire text of the bill before voting on it
-title must be sufficient to inform the legislator, persons interested,
and the public of the nature, scope, and consequences of the
proposed law and its operation
-the title of the Act was misleading because without being impliedly
included in the title, the act was actually going to change boundaries
of political subdivisions without sufficiently informing the people
affected about it, much less the legislators
Dela Cruz v. Paras
-an issue on the ordinance in Bulacan prohibiting the operation of
nightclubs and amendment on its subject
Court: when the subject is to be amended, any amendment should
be reflected in the title
-the title should prevail over the subject should there be
inconsistency because the title is what gives notice to the public
-there should be consistency in the title, subject, and text
Tobias v Abalos
-An Act Converting the Municipality of Mandaluyong into a Highly
Urbanized City to be known as the City of Mandaluyong
Court: converting Mandaluyong into a highly urbanized city has the
natural and logical consequence of creating a separate congressional
district
-this consequence need not be stated in the title
Requirements as to certain laws
Article VI, Section 24. All appropriation, revenue or tariff bills, bills
authorizing increase of public debt, bills of local application, and
private bills shall originate exclusively in the House of
Representatives but the Senate may propose or concur with
amendments.
Appropriation Laws
1. Must be for a public purpose
2. Appropriation must be by law
3. Cannot appropriate public funds or property, directly or
indirectly in favor of
a. Any sect, church, or sectarian institution/system
of religion
b. Any priest, preacher, minister, or other religious
teacher or dignitary as such except if the priest is
assigned in the Armed Forces, ay penal
institution, govt orphanage, leprosarium
4. Government is not prohibited from appropriating money
for a valid secular purpose even if it incidentally benefits a
religion (example: temporary use of public property for
religious purposes is valid as long as the property is valid to
all religions)
Specific Limitations (for General Appropriation Bills)
1. Congress may not increase the appropriations
recommended by the President for the operation of the
government as specified in the budget [Section 25(1)].
 2. Form, content, and manner of preparation shall be
prescribed by law [Section 25(1)].
3. No provision or enactment shall be embraced in the
general appropriations bill unless it relates specifically to
some particular appropriations therein.
4. Procedure in approving appropriations for the Congress
shall strictly follow the procedure for approving
appropriations for other department and agencies [Section
25 (3)].
5. No law shall be passed authorizing any transfer of
appropriations. However, the following may, by law, be
authorized to augment any item in the general
appropriation law for their respective offices from savings
in other items of their respective appropriations
a. President
b. Senate President
c. Speaker of the House of Representative
d. Chief Justice of the Supreme Court
e. Chairs of Constitutional Commissions
executive proposal—National Expenditure Program
Requirements of appropriation (Muyot discussion)
1. Must originate from the House of Representatives. The
Senate may amend and confirm.
2. Congress cannot increase but it can decrease or
redistribute appropriations.
3. Line items of projects, programs, activities
-each line item is already a law in itself
-must be listed side-by-side with the appropriated amount
-Congress may insert provisions in the line item that are
and should be consistent with the particular line item
-appropriation for religious purpose is prohibited
4. Process
5. Special appropriation
6. Augmentation – within the same department; no cross-
border transfer
7. Discretionary funds—subject to accounting and
regulations (must be for public purpose; to be supported by
appropriate vouchers; and subject to such guidelines as may be
prescribed by law)
8. Re-enactment
Note: To be valid, an appropriation must indicate a specific amount
and a specific purpose or object of expenditure. A purpose may be
specific even if it is broken down into different related sub
categories of the same nature.
Demetria v. Alba
Court: The president has the authority to transfer appropriations.
However, he does not have the power to indiscriminately transfer
funds from one department of the executive department to just any
program, activity, or project of another department bureau or office
in included in the GAA
-without regard as to whether or not the funds to be
transferred are actually savings in the item from which the
same are to be taken
-without determining whether or not the transfer is for the
purpose of augmenting the item to which said transfer is to
be made
-this would constitute undue delegation of legislative power to the
President
-opens the possibility for the enactment of unfunded appropriations
and uncontrolled expenditures
Savings- what is left after the activity has been done or if it has not
been done at all
Augmentation- be done for a specific item which must exist as an
activity or project that is in appropriations law
Example: The President augments the budget of an activity
or project by using unused savings from other projects
Note: When the executive realigns, it is undue exercise of legislative
power because the Congress already approved of the existing
project
Principles in ascertaining the meaning of savings
1. Congress wields the power of purse
2. The Executive is expected to faithfully execute the GAA
and spend the budget in accordance with the provisions of
the GAA
3. Congress does not allow the Executive to override its
authority over the purse as to let the Executive exceed its
delegated authority
4. Savings should be actual (real or substantial), or something
that exists presently in fact, not merely theoretical,
possible, potential or hypothetical.
Guingona v. Carague
Issue: constitutionality of the automatic appropriation act for debt
servicing in the 1990 budget
-a lumpsum was stated in the GAA regardless of how the lumpsum
will be spent
Court: not unconstitutional
-automatic appropriation provides for the flexibility for the effective
execution of debt management policies (to take advantage of the
market)
-without automatic appropriation laws, the government needs to
await for a congressional action first which may no longer be
responsive to the debt situation faced by the country
-the act is to enable the government to make prompt payment and /
or advances for all loans to protect and maintain the credit standing
of the country
Government Budgeting Process
1.Budget preparation
-Executive
-starts with the budget call issued by the DBM
2. Legislative authorization
-deliberates/acts on budget proposals of the President
-formulates an appropriation
3. Budget execution
-Executive
4. Budget accountability
-evaluation of the actual performance based on initially approved
work targets
Belgica v Executive Secretary
-Priority Development Assistance Fund (PDAF)
Court: it is unconstitutional and the legislative usurping the power
of the executive by intervening after the GAA has been executed or
already being executed
-pork barrel comes in during the BUDGET EXECUTION which was
under the power of the executive and not the legislative
Araullo v Aquino
-Disbursement Acceleration Program (DAP)
-if there were slow moving projects, their funds are realigned
to other projects which were not even in the GAA
 -funds were transferred from one department to another by
the President through the DBM
-no provision defining “savings” in the GAA
Court: it is beneficial but it is unconstitutional
-what was done was not augmentation but realignment which was
not within the scope of power of the President but within the power
of the Congress
-the executive did not even wait or make sure what was being
transferred were actually savings
Tax Laws (Section 28)
Purposes of Taxation
1. Pay debts and provide for the common defense and
general warfare
2. Raise revenue
3. Instrument of national and social policy
4. Instrument for extermination of undesirable acts and
enterprises
5. Tool for regulation
6. Imposition of tariffs designed to encourage and protect
locally produced goods against competition for imports
Limitations
1. For public purpose
-even if the immediate beneficiaries are private individuals
2. Uniform
-when it operates with the same force and effect in every
place where the subject of it is found
-does not prohibit classification
3. Equitable
-when who has more is being charged more
-not equitable when it specifically targets the poor or a
specific class
4. Progressive
-the rate increases as the tax base increases
-for a more equitable distribution of wealth
-tax burden is based on the taxpayer’s capacity to pay
-suited to the social conditions of the people
Delegated Tax Legislation [Section 28(2)]
The Congress may, by law, authorize the President to fix within
specified limits subject to such limitations and restriction as it may
impose
-tariff rates
-import/export quotas
-tonnage/wharfage dues
-other duties or imposts within the framework of the
national development program of the PH
Tax Exemptions [Section 28(3)(4)]
*must be passed with the concurrence of a majority of all the
members of the Congress
(Performing public functions in providing services)
-churches
-parsonages/convents
-mosques
-non-profit cemeteries
-all lands, buildings, improvements actually, directly, and exclusively
used for religious, charitable, and educational purposes
Tolentino v Secretary of Finance
Issues on the equal protection clause of the taxation system
1. Discrimination against the freedom of press and the print
media
Court: tax system not discriminatory because the print
media have transactions involving printing and publication
which are different from the transactions of the mass
media
2. Freedom of religion
-based on sale of bibles, not on practice of religion
*progressive taxation is a directive to Congress and is not a judicially
enforceable right
*tax exemption granted in a general law cannot be withdrawn in a
special law
Lung Center v QC
Court: Lung Center is a charitable institution
-a charitable institution does not lose its character and its exemption
from taxes simply because it derives income from payment of
patients or receives subsidy from the government so long as the
money received is devoted or used altogether to the charitable
object it intends to achieve; no money inures to the private benefit
of the persons managing or operating the institution
-however, portions of real property that are leased to private
entities are not exempt from real property taxes as these are not
actually, directly, and exclusively used for charitable purposes
Tan v Del Rosario
Court: The Simplified Net Income Taxation Scheme did not adopt the
gross income taxation scheme but actually retained the net income
tax scheme through allowing deductions from the gross income
-the SNIT is uniform and equitable
Garcia v Executive Secretary
-the power to set tariff is vested on the President because of the
nature of tariffs being fast-changing. Thus, the President is expected
to set tariffs in response to the market and policies of other
countries (for economic and political reasons)
-there is explicit constitutional permission to authorize the president
subject to such limitations and restrictions as the congress may
impose
-the tariff is a form of tax but unlike tax, it cannot be said that
substantial revenues for the government are raised by the
imposition of the increased tariff rate
-the increase in tariff was also to protect local industries and not just
to merely raise revenues
John Hay Peoples Alternative v Lim
-nowhere in the RA is there a grant of tax exemption to special
economic zones yet to be established in base areas
-in RA 7227, it is clear that it is only the Subic SEZ which was granted
by Congress with tax exemption.
-there was no express intention to extend the benefits to other SEZs
yet to be established
-there was undue delegation of the legislative’s power of tax-
exemption to the President
Appellate Jurisdiction of the Supreme Court (Article VI, Section 30)
No law shall be passed increasing the appellate jurisdiction of the
Supreme Court as provided in this Constitution without its advice
and concurrence.
-Congress has the power to apportion the jurisdiction of courts; free
to add or substract from the power of the courts
-a response to the concern that the SC might be swamped with
jurisdictional concerns which might inhibit it from expeditious
disposition of important cases
Fabian v Desierto
-the Ombudsman Act was being challenged for being enacted
without the advice and consent of the SC
-what the Supreme Court may only exercise in review are those final
judgments and orders of the lower court, it does not include quasi-
judicial bodies
-the 1997 Rules of Civil Procedure only includes CA, Sandiganbayan,
and RTC. Ombudsman not included
-SC may not review administrative disciplinary actions as these are
factual controversies and the SC is not a trier of facts
-it is the revenue bill, not the law, which is required to originate
exclusively from and be initiated by the HOR
-the HOR alone can initiate the passage of a revenue bill. If the HOR
did not initiate one, no revenue law will be passed
-the bill originating from the HOR may undergo extensive changes in
the Senate and a totally distinct bill may be produced. Senate is
not bound to retain what the other House approved
-the bicameral conference committee may insert or substitute
provisions for as long as it is germane to the subject of the bills
Philconsa v Enriquez
(refer to Art’s digest)
-the President can veto a line item in the GAA while other line items
remain valid
-special provisions may be inserted in a line item only if they are
germane to the line item

PROCEDURE FOR THE PASSAGE OF BILLS

1. First reading
2. Committee
-hearing
-committee report
3. Second Reading
-sponsorship
-interpellation
-amendment
-vote
4. Third Reading
-vote
*same procedures as the other house
5. Bicameral Conference Committee
-composed of equal number of members from the Senate
and the HOR
-makes recommendations to houses on how to reconcile
conflicting provisions/versions
-BCC members are usually granted blanket authority to
negotiate/reconcile bills
- at the end of the process, the BCC comes up with a
bicameral committee report which is then submitted to
respective chambers for approval
6. President
-approve
-veto (return to Congress and may still be passed as a law by
voting of 2/3 of both houses, voting separately)

*No bill passed by either house shall become a law unless it has
passed 3 readings on separate days
*Printed copies in its final form must have been distributed to its
members 3 days before the passage of the bill
Exception: President certifies to the necessity of the its immediate
enactment to meet a public calamity or emergency; the
certification applies to the printing requirement and the readings
on separate days requirement

Tolentino v Secretary of Finance

-the three reading on separate days requirement only applies to bills
introduced for the first time in either house of Congress, not on
the Bicameral Conference Committee Report
-the factual basis of the presidential certification on the exception
requires a different standard of review