The Palace exposed its playbook for the national budget scandal under President Ferdinand Marcos Jr. by turning former Budget Secretary Amenah Pangandaman into a sacrificial lamb.
During the second round of oral arguments on 21 April, Solicitor General Darlene Berberabe argued before the Supreme Court that President Marcos need not personally approve the release of Unprogrammed Appropriations (UA).
The discussion centered on the release of UA funds once “excess funds” had supposedly been established.
In the 2024 budget, the Department of Finance extracted P89.9 billion from the Philippine Health Insurance Corp. and another P107 billion from the Philippine Deposit Insurance Corp.
The UA was used to allow the insertion of pet projects of legislators in the national budget, including the anomalous flood control structures.
Barberabe argued that the General Appropriations Act (GAA) gives authority over the UA directly to the budget secretary.
Berberabe confirmed to Senior Associate Justice Marvic Leonen that the Department of Budget and Management (DBM) may issue Special Allotment Release Orders (SARO) without presidential approval.
Leonen pressed further and asked if it was her position that under the GAA, the “buck” stops with the DBM chief and that there is no need for the President to approve the SARO, to which Berberabe replied “Correct, your honor.”
The documents submitted by the Office of the Solicitor General also maintained that the evaluation and processing of requests from government agencies, as well as subsequent approvals for the release of funds, fall “within the functional mandate of the DBM.”
Justice Leonen issued a sharp pushback to Berberabe, saying, “The DBM Secretary is now the co-equal of the President?”
He pointedly said, “So, in other words, the DBM secretary is no longer an alter ego of the President, that the DBM secretary is now co-equal to the President.”
The remark exposed the constitutional problem with Berberabe’s argument.
Under the doctrine of qualified political agency, Cabinet secretaries act as the President and are subordinate to him, not independent from him.
Leonen pressed further, noting that the DBM secretary reports to and is accountable to the President, as he cited Section 35, Chapter 5, Book VI of Executive Order 292 or the Administrative Code.
It provides that the President approves special budget requests before these are transmitted to the DBM, which then issues the SARO.
Leonen suggested that the DBM may have violated the law, given Berberabe’s admission that the President had no involvement in the SARO issuances.
During the exchange, Leonen zeroed in on whether proper documentary safeguards were actually followed.
When Leonen asked, “Can you assure this court that every expenditure in 2024 and in 2025 had come from a certification accompanying a SARO?”, Berberabe could only respond: “That’s theoretically the case, your honor.”
The Executive’s 2024 National Expenditure Program had proposed P281.9 billion in UA, but the figure ballooned to P731.4 billion in the enacted budget, an increase of about P449.5 billion.
What emerged during the Supreme Court consultations was Berberabe’s apparent attempt to remove President Ferdinand Marcos Jr. from the corruption equation, a defense that, in turn, raised an even more serious issue for Pangandaman.
The implication was stark: the DBM may have acted beyond its constitutional authority by issuing SAROs without presidential approval.
