SC voids P449.5-B unprogrammed funds hike
The Supreme Court has declared unconstitutional Congress' P449.5-billion increase in unprogrammed appropriations (UA) under the 2024 national budget and its P17.99-billion increase in the Department of Public Works and Highways' (DPWH) Special Road Fund for 2025.
In a decision penned by Senior Associate Justice Marvic Leonen on Tuesday, 20 October, the Court ruled that the increases violated the constitutional prohibition against Congress raising total appropriations beyond the amount recommended by the President.
The Court also invalidated provisions of the 2026 General Appropriations Act (GAA) allowing the release of unprogrammed funds under certain revenue conditions, citing insufficient safeguards against unchecked spending.
However, the justices clarified that unprogrammed appropriations, which serve as standby funds, are not inherently unconstitutional.
The ruling stemmed from petitions challenging provisions of the 2024, 2025 and 2026 national budgets.
The Court found that the 2024 bicameral conference committee transferred programs and projects from programmed to unprogrammed appropriations, creating additional fiscal space for other spending allocations.
These included infrastructure projects, medical assistance and social welfare programs under the DPWH, Department of Health, Department of Social Welfare and Development, and Department of Labor and Employment.
The justices also struck down a P12.75-billion increase in certain Special Accounts in the General Fund, citing restrictions under the Administrative Code.
The Court further ruled that the Strengthening Assistance for Government Infrastructure and Social Programs (SAGIP) allocations in the 2024 and 2025 budgets constituted prohibited lump-sum appropriations.
It said the arrangement allowed the Executive to identify specific infrastructure projects, including flood control works, after Congress had enacted the budget.
The bicameral conference committee was also faulted for failing to maintain adequate records explaining its budget amendments.
The Court stressed that the committee's authority is limited to reconciling differences between the House and Senate versions of the budget.
To prevent similar violations, the Court required clearer spending priorities, safeguards against lump-sum allocations and consistency with the government's fiscal program.
It also ruled that new or excess revenues should generally be directed toward programmed expenditures unless compelling reasons justify their allocation to unprogrammed funds.
The Court permanently barred the Senate, House of Representatives, Office of the Executive Secretary and Department of Budget and Management from implementing Special Provisions 1(a) and 1(b) under Chapter XLIII of the 2026 GAA.
For the 2024 and 2025 budgets, the justices applied the doctrine of operative fact, allowing certain irreversible actions and completed programs involving beneficiaries acting in good faith to retain their legal effects.
Several justices issued separate opinions, agreeing that unprogrammed appropriations are permissible but differing on the constitutional limits of congressional budget amendments.
The ruling establishes stricter limits on congressional changes to the national budget and stronger safeguards over the release of unprogrammed funds.