Supreme Court declares 2024, 2025 budgets unconstitutional

The SC rules that in so far as the 2024 and 2025 budgets are concerned, the doctrine of operative fact applies. This recognizes the validity of an assailed act prior to the determination of its unconstitutionality.

AT A GLANCE

• The Supreme Court of the Philippines declared the 2024 and 2025 General Appropriations Acts unconstitutional due to unauthorized increases in appropriations by Congress.
• While the court acknowledged the validity of certain funds under the doctrine of operative fact, it emphasized that this does not protect those responsible from potential legal liabilities.

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MANILA, Philippines – The Supreme Court (SC), on Tuesday, October 20, declared the 2024 and 2025 General Appropriations Acts (GAA), or budget laws, unconstitutional.

“The Supreme Court (SC) declared as unconstitutional, first, the 2024 General Appropriations Act (GAA) because of Congress’ increase of the unprogrammed appropriations by P449.5 billion, which resulted in an increase in the President’s total recommended appropriations; second, Special Provisions 1(a) and (b), Chapter XLIII of the 2026 GAA; and third, the 2025 GAA because of Congress’ increase of the Special Road Fund by P17.99 billion, which also resulted in an increase in the President’s total recommended appropriation,” said the ruling penned by Senior Associate Justice Marvic Leonen.

The SC en banc granted the petition of former lawmaker Edcel Lagman and partly granted the legal action of former senator Koko Pimentel challenging the increase in unprogrammed appropriations made by Congress in the 2024 budget.

“It declared unconstitutional Republic Act No. (RA) 11975 or the 2024 GAA because the total appropriations were effectively increased by P449.5 billion,” said the SC.

Unprogrammed funds are standby appropriations that may only be used once specific conditions are met, such as when government revenues exceed targets or when foreign grants and loans are on the table.

In its ruling, the High Court also granted the petition filed by Filipinos for Peace, Justice and Progress Movement, Inc. et al., and declared RA No. 12116, or the 2025 budget law, unconstitutional because of the P17.99-billion increase to the Department of Public Works and Highways’ Special Road Fund. The SC said this “resultantly increased” the budget’s total recommended appropriations.

“As regards the P12.75-billion increase to certain agencies’ Special Accounts in the General Fund, these were found to have violated Book VI, Chapter 4, Section 25 of the Administrative Code, which prohibits increasing amounts in special provisions beyond those proposed by the President,” said the SC.

As to the petition questioning the constitutionality or legality of unprogrammed funds itself, the SC only partially granted the challenge filed by Caloocan City 2nd District Representative Edgar Erice and Mamamayang Liberal Representative Leila de Lima.

The High Court explained that unprogrammed appropriations are not unconstitutional per se, but they need clear limits and safeguards to ensure fiscal discipline, transparency, and accountability.

“They (unprogrammed appropriations) become constitutionally infirm when they lack sufficient standards, effectively granting the executive unchecked spending authority that weakens fiscal discipline and undermines funding for programmed projects when estimated government revenues are not realized,” said the ruling.

But will the funds be returned? The SC ruled that in so far as the 2024 and 2025 budgets are concerned, the doctrine of operative fact applies to these funds. This legal principle recognizes the validity of an assailed act prior to the determination of its unconstitutionality.

“However, the doctrine covers only irreversible programs whose beneficiaries acted in good faith. It does not shield authors, proponents, or implementors from criminal, civil, or administrative liability unless the proper tribunals explicitly find that they acted in good faith,” the SC explained. – Rappler.com