Taxpayers can’t get back P467B flagged by SC

MANILA, Philippines — At least P467 billion in disputed funding increases in the 2024 and 2025 national budgets will not be returned to government coffers, even as the Supreme Court’s ruling declaring the increases unconstitutional prompted lawmakers to demand greater transparency and tighter scrutiny of the proposed P7.2-trillion national budget for next year.

Supreme Court spokesperson Camille Ting said on Wednesday that funds spent on irreversible programs whose beneficiaries acted in good faith would remain valid under the doctrine of operative fact.

“The court mentioned that for those programs, irreversible programs, where the beneficiaries acted in good faith, under the doctrine of operative fact, they would be considered valid. So … there will be no funds returned in that case,” Ting told reporters in a briefing.

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READ: SC ruling shows 2024, 2025 GAAs ‘worst’ in history – Lacson

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The ruling covers the P449.5 billion in unprogrammed appropriations added to the 2024 General Appropriations Act (GAA) and a P17.992-billion increase in the Department of Public Works and Highways’ Special Road Fund under the 2025 GAA.

The high court, in its 121-page decision penned by Senior Associate Justice Marvic Leonen, found that Congress committed grave abuse of discretion by increasing unprogrammed appropriations and other special provisions beyond the amounts proposed by the executive branch.

Ting said criminal or administrative liability arising from the unconstitutional budget increases should be pursued before the appropriate tribunals.

The government may also seek reconsideration of the ruling, which is not yet final and executory.

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SolGen to appeal

The Office of the Solicitor General will ask the Supreme Court to reconsider its ruling, Palace press officer Claire Castro said.

“We respectfully request the Supreme Court to reexamine its decision. The Office of the Solicitor General has also been directed to file a motion for reconsideration,” Castro said.

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She maintained that unprogrammed appropriations remained a legitimate funding mechanism and argued that requiring total government collections to exceed the overall revenue target before the funds could be used went beyond conditions previously established by Congress.

“In our view, the condition set by the Supreme Court—that total collections must first exceed the total revenue target before unprogrammed appropriations can be utilized—constitutes an outright alteration of the conditions established by Congress,” she said in Filipino.

Castro also maintained that President Marcos violated no law by signing the budgets and that the use of the funds had been properly accounted for.

‘Worst budgets’

Sen. Panfilo Lacson said the ruling underscored the constitutional limits on Congress’ power to alter the National Expenditure Program (NEP), coming as the Senate scrutinizes the House version of the proposed 2027 budget.

“One good thing about the Supreme Court ruling is its timing. It couldn’t have come at a better time when the House version of the 2027 general appropriations bill is undergoing scrutiny by the Senate,” Lacson said.

He called the 2024 and 2025 budgets the worst Congress had approved since the Supreme Court struck down the Disbursement Acceleration Program (DAP) under the 2013 budget.

“The 2024 and 2025 GAAs will go down in history as the worst budgets ever passed by Congress after the [DAP] under the 2013 GAA was also declared unconstitutional by the SC,” he said.

Lacson said unspent funds might no longer be disbursed, while those already spent might not be invalidated.

Sen. JV Ejercito, chair of the Senate finance committee, vowed that the questionable budget practices would not recur under his watch as senators review the proposed P7.2-trillion national budget for 2027.

“Let me assure the Filipino people: What transpired in past budget deliberations will not happen under my watch in the proposed 2027 national budget,” Ejercito said.

He said senators had exercised restraint in preparing the 2026 budget, agreeing not to increase unprogrammed appropriations beyond the amounts proposed in the NEP.

“We will carefully study the court’s ruling, particularly its implications for the preparation, approval, and implementation of the 2027 national budget,” he added.

Senate President Pro Tempore Vicente Sotto III also pledged to maintain the transparency measures adopted during the 2026 budget deliberations, including livestreaming proceedings.

“What we did with the 2026 budget, if you recall, is we made it transparent,” Sotto said. “That’s why I even recommended livestreaming, which we did.”

Sotto said reports of proposed changes to the 2027 spending bill that could violate the constitutional limits identified by the court would not be tolerated.

“There were supposedly some changes … We will not allow it in the Senate,” he said.

Court draws the line

The high court said Congress had distorted the budget by shifting funds away from programs in the President’s original proposal, creating fiscal space for increases elsewhere.

“Congress is constitutionally prohibited from increasing the President’s total recommended appropriations in the Budget of Expenditures and Sources of Financing, which covers both programmed and unprogrammed appropriations,” the decision said.

The court clarified that unprogrammed appropriations, which serve as contingency funds and may be released only when prescribed conditions are met, are not unconstitutional in themselves. However, they must comply with constitutional limits and cannot grant the executive unchecked spending authority or undermine programmed projects when projected revenues fall short.

It ruled that unprogrammed appropriations must not contain lumpsum allocations, must have clear prioritization standards when covering multiple purposes, and must remain consistent with the national fiscal program.

The 2024 budget’s unprogrammed appropriations reached P449.5 billion, the highest since the category was separated as a distinct budget item in 1989. Congress added 43 new unprogrammed line items worth P303.1 billion.

These included P59 billion for priority social programs covering health, social welfare, higher education and technical-vocational education, and P51.5 billion for government counterpart funding for foreign-assisted projects.

Congress, the court said, “severely distorted the budget by defunding strategic development programs and projects” in the original programmed appropriations, creating an “artificial” fiscal space for other allocations.

The court also questioned the Strengthening Assistance for Government Infrastructure and Social Programs (Sagip), which accounted for about 30 percent of unprogrammed funds in the 2024 and 2025 budgets.

It found that Sagip covered unrelated purposes and gave the executive excessive discretion to select funded projects, violating the principle of nondelegation of legislative powers.

Described by the court as a “covert repository of lumpsum allocations for DPWH,” Sagip was excluded from the 2026 budget.

Mamamayang Liberal Rep. Leila de Lima thanked the court for “setting clear constitutional limits” on funding intended “to be a standby, not a slush fund.”

“The court has put it back in its proper place,” said De Lima, a copetitioner in one of the cases partially granted by the high court.

She lamented that the court stopped short of striking down standby funds altogether, saying unprogrammed appropriations had grown excessively and become a way to create artificial fiscal space for lawmakers’ preferred projects.

ACT Teachers Rep. Antonio Tinio called the ruling a “welcome, significant and long-overdue check on both branches.”

He urged the House to recall its version of the 2027 budget and overhaul its unprogrammed funding provisions, warning that similar provisions could again be declared unconstitutional if left unchanged.

Navotas Rep. Toby Tiangco, who voted against the House budget bill, said the ruling reinforced the need for transparency and accountability in budget deliberations and closer scrutiny of lumpsum and discretionary allocations.

“Alterations to the budget cannot be made without clear explanation and accountability,” Tiangco said.

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“The budget must never serve as an instrument of power or self-interest. It should be a tool to uplift the lives of every Filipino. And we cannot achieve that without transparency and accountability,” he added. —With reports from Luisa Cabato, Kenneth Christiane Basilio and Keith Clores