G.R. No. 94571 ; April 22, 1991
TEOFISTO T. GUINGONA, JR. and AQUILINO Q. PIMENTEL, JR., petitioners, vs. HON. GUILLERMO CARAGUE, in his capacity as Secretary, Budget & Management, HON. ROZALINA S. CAJUCOM in her capacity as National Treasurer and COMMISSION ON AUDIT, respondents.

FACTS

Petitioners, Senators of the Philippines, filed this suit challenging the constitutionality of the automatic appropriation for debt service in the 1990 national budget. The 1990 budget totaled P233.5 billion, of which P86.8 billion was automatically appropriated for debt service under Presidential Decrees No. 81, 1177, and 1967. In contrast, the appropriation for the Department of Education, Culture and Sports was P27.017 billion. Petitioners argued this allocation violated the constitutional mandate assigning the highest budgetary priority to education.
Respondents contended the petition presented a political question, arguing that the repeal or amendment of the cited decrees was a matter for legislative judgment, not judicial review.

ISSUE

The primary issues were: (1) whether the automatic appropriation for debt service violated Section 5, Article XIV of the Constitution on the highest budgetary priority for education; (2) whether P.D. Nos. 81, 1177, and 1967 remained operative under the 1987 Constitution ; and (3) whether they violated Section 29(1), Article VI of the Constitution , which requires that money be paid from the Treasury only pursuant to an appropriation made by law.

RULING

The Supreme Court dismissed the petition. On the threshold issue, the Court held the matter was justiciable, not a political question, as it involved the interpretation of constitutional provisions on appropriations—a duty falling within judicial power.
On the substantive issues, the Court ruled that the constitutional provision on the highest budgetary priority for education is not absolute but directive to Congress. It is a guideline for legislative discretion, not a mandatory rank ordering that courts can enforce. The Court found no constitutional violation, as the allocation for debt service was based on legal obligations from validly incurred loans, and the education budget still received a significant allocation.
Regarding the validity of the presidential decrees, the Court held they remained operative as “laws” under the transitory provisions of the 1987 Constitution until repealed, amended, or revoked. The automatic appropriation mechanism they established constituted an “appropriation made by law” as required by Section 29(1), Article VI, as the decrees themselves provided the specific appropriation authority. The Court emphasized that debt service is a necessary charge on the national treasury to maintain the government’s financial credibility and is distinct from the policy-setting function of annual general appropriations acts.