G.R. No. 235310, October 11, 2022
HON. ANICETO D. BERTIZ III, AS A MEMBER OF THE HOUSE OF REPRESENTATIVES AND AS A TAXPAYER, PETITIONER, VS. HON. SALVADOR C. MEDIALDEA, IN HIS CAPACITY AS THE EXECUTIVE SECRETARY; ET AL., RESPONDENTS.

FACTS

The 2016 General Appropriations Act (GAA) appropriated P587,497,000 for the Driver’s License Card (DLC) Project of the Land Transportation Office (LTO). The LTO subsequently procured cards via direct contracting for P187,080,000, leaving an unexpended balance of P341,713,000. For Fiscal Year 2017, the LTO proposed a new DLC project with a budget of P528,793,000. The 2017 GAA later appropriated P573,450,000 for this 2017 DLC Project. However, prior to the enactment of the 2017 GAA, the LTO’s Bids and Awards Committee (BAC) initiated procurement for the 2017 project. It set the Approved Budget for the Contract at P836,000,000 by combining the unexpended 2016 balance and the proposed 2017 budget. The contract was eventually awarded to Dermalog Joint Venture.
Petitioner Aniceto Bertiz III, a Member of the House and a taxpayer, filed a petition for certiorari and prohibition. He argued that the 2017 DLC Project was implemented without a valid appropriation at the time of bidding, as the 2017 GAA was not yet law. He contended that using the 2016 balance for a 2017 project violated the constitutional rule that no money shall be paid from the Treasury except pursuant to an appropriation made by law. He also alleged the bidding was rigged.

ISSUE

Whether the LTO committed grave abuse of discretion in implementing the 2017 DLC Project by using the unexpended balance from the 2016 GAA prior to the enactment of the 2017 GAA, thereby violating the constitutional provision on appropriation.

RULING

The Supreme Court DISMISSED the petition. The Court held that the LTO did not commit grave abuse of discretion and that the constitutional provision on appropriation was not violated. The legal logic is anchored on the nature of a continuing appropriation and the proper budget cycle. The appropriation under the 2016 GAA for the DLC project was a “current operating expenditure,” which constitutes a continuing appropriation. Such appropriations are available for obligation and expenditure for the purpose intended until the project is completed or the need for the service ceases, provided the agency has a valid cash allocation. The unexpended balance from 2016 did not automatically revert to the general fund at the end of the fiscal year; it remained validly appropriated for the same DLC project.
Consequently, when the LTO-BAC used the 2016 balance to fund part of the 2017 project, it was utilizing a valid and existing appropriation law (the 2016 GAA) for the very purpose for which it was intended—the procurement of driver’s license cards. The subsequent enactment of the 2017 GAA, which provided a separate and full appropriation for the new iteration of the project, cured any perceived deficiency and provided independent authority. The Court found no misrepresentation in indicating “General Fund 101” as the funding source, as this correctly referred to the government’s general fund from which the 2016 appropriation was drawn. The allegations of a rigged bidding were deemed unsubstantiated.