Landmark decision: SC declares some provisions in 2024-2026 PH nat'l budgets as unconstitutional

MANILA, Philippines — In a landmark decision reining in congressional power over the national budget, the Supreme Court En Banc has declared several provisions in the 2024, 2025, and 2026 General Appropriations Acts (GAA) unconstitutional. 

In a press statement on Tuesday (October 20, 2026), the Court states that Congress violated the Constitution by inflating unprogrammed appropriations and special funds beyond the spending caps proposed by the President.

The ruling, penned by Senior Associate Justice Marvic M.V.F. Leonen, granted and partly granted consolidated petitions filed by lawmaker Edcel C. Lagman, former Senator Aquilino "Koko" Pimentel III, former Representative Edgar R. Erice, Leila M. De Lima, and civil society groups including the Filipinos for Peace, Justice and Progress Movement, Inc.

Unconstitutional Budget Increases

The High Tribunal invalidated key portions of three consecutive national budgets:

* 2024 GAA (Republic Act No. 11975): Declared unconstitutional due to a PHP 449.5 billion increase introduced by Congress to unprogrammed appropriations, effectively exceeding the original budget ceiling recommended by the Executive branch under the National Expenditure Program (NEP).

* 2025 GAA (Republic Act No. 12116): Invalidated because Congress added PHP 17.99 billion to the Department of Public Works and Highways (DPWH) Special Road Fund beyond the President's proposal. Additionally, a PHP 12.75 billion increase in Special Accounts in the General Fund (SAGF) was found to violate the Administrative Code.

* 2026 GAA (Chapter XLIII, Special Provisions 1[a] and [b]): Struck down for establishing vague and overly broad mechanics for unprogrammed funds that bypassed revenue targets and operated partly as prohibited lump-sum allocations.

The Court permanently enjoined the Senate, the House of Representatives, the Office of the Executive Secretary, and the Department of Budget and Management (DBM) from implementing the voided 2026 special provisions.

Strict Safeguards for Unprogrammed Funds

While the Court clarified that Unprogrammed Appropriations are not unconstitutional per se, it emphasized that they must act as narrow, contingent safeguards rather than unchecked spending mechanisms.

To prevent future abuses, the Supreme Court laid down four mandatory constitutional conditions for unprogrammed appropriations:

1. No Lump Sums: Unprogrammed appropriations can never take the form of post-enactment lump-sum funds.

2. Strict Revenue Differentiation: Congress must presumptively use new income or non-tax revenue for programmed expenditures unless clear and convincing exceptions (such as foreign-assisted projects) justify placing them under unprogrammed items.

3. Clear Prioritization Standards: Explicit standards for spending priorities must be provided when multiple purposes are listed.

4. Fiscal Consistency: Contingent funds must stay within the overall national fiscal program framework.

The Decision specifically flagged the item "Strengthening Assistance for Government Infrastructure and Social Programs" (SAGIP) in the 2024 and 2025 budgets, calling it an illegal lump sum that served as a "covert repository" for DPWH infrastructure projects, including flood control projects, by transferring legislative allocative power to the Executive post-enactment.

Bicameral Committee Overreach and Distortion

The Supreme Court heavily admonished the Bicameral Conference Committee for severely distorting the 2024 budget. By moving Programs, Activities, and Projects (PAPs) from programmed to unprogrammed status and hiking funds for SAGIP and foreign-assisted projects, the committee created "artificial fiscal space." 

This maneuver allowed lawmakers to add funding for basic infrastructure and social assistance programs like AKAP, TUPAD, and DOH medical assistance.

The Court reiterated that the Bicameral Committee’s authority is strictly limited to reconciling actual disagreeing provisions between House and Senate bills. It rebuked the committee for lack of transparency, pointing out the absence of recorded discussions or supporting documents explaining the budget shifts.

Application of Operative Fact and Liabilities

Regarding spent allocations under the 2024 and 2025 budgets, the Supreme Court ruled that the doctrine of operative fact applies—protecting irreversible programs and good-faith beneficiaries.

However, the Court explicitly warned that this doctrine does not shield authors, proponents, or implementors from criminal, civil, or administrative liability unless a competent tribunal formally finds that they acted in good faith.

Key Takeaways from Separate Opinions

The En Banc decision reflected a wide spectrum of judicial viewpoints:

* Chief Justice Alexander G. Gesmundo, alongside Justices Zalameda, J. Lopez, Dimaampao, Singh, and Villanueva, maintained that unprogrammed funds are valid standby tools for emergencies or crises, provided they do not break constitutional spending caps or bypass executive proposals.

* Justice Ramon Paul L. Hernando and Justice Antonio T. Kho, Jr. dissented from the majority's view that unprogrammed funds are constitutional, arguing that they lack explicit funding sources at enactment or illegally transfer the legislative power of the purse to the Executive.

* Justice Alfredo Benjamin S. Caguioa concurred while urging the Court to expressly abandon the Tolentino v. Secretary of Finance doctrine to curtail excessive Bicameral Conference Committee power.

* Justice Amy C. Lazaro-Javier agreed on the invalidity of the provisions but argued that applying the doctrine of operative fact is premature without a full financial audit of released funds.

* Justice Samuel H. Gaerlan called for immediate systemic reforms to the Bicameral Conference Committee, emphasizing it should serve as "a bridge between two chambers," not an "alternative legislative procedure."