The Rule on ‘Check and Balance’ and the Power of the Purse

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SUBJECT: The Rule on ‘Check and Balance’ and the Power of the Purse

I. Introduction

This memorandum provides an exhaustive analysis of the rule on check and balance as it pertains to the power of the purse under Philippine constitutional law. The power of the purse, fundamentally the authority to generate and allocate public funds, is a critical mechanism through which the principle of separation of powers is operationalized and the system of checks and balances is enforced. This research will trace the constitutional foundations, doctrinal interpretations, and practical applications of this power, focusing on the dynamic between the Congress (the holder of the primary power of the purse) and the Executive Department (the implementor of the budget). The analysis will also consider the role of the Judicial Department in adjudicating disputes arising from this interplay, thereby completing the tripartite check.

II. Constitutional Foundations

The 1987 Constitution explicitly vests the power of the purse in Congress. This is enshrined in several key provisions:
Article VI, Section 24: “All appropriation, revenue or tariff bills, bills authorizing increase of the public debt, bills of local application, and private bills shall originate exclusively in the House of Representatives, but the Senate may propose or concur with amendments.” This establishes the House* as the primary chamber for fiscal matters.
Article VI, Section 25: This extensive section details the General Appropriations Act (GAA) process. It mandates that no money shall be paid out of the Treasury except in pursuance of an appropriation made by law. It prohibits the enactment of a ridder unrelated to the subject of the appropriation bill and sets rules for special appropriations and the Congressional Pork Barrel (which is now unconstitutional as per the PDAF and DAP* rulings).
Article VI, Section 29: “No money shall be paid out of the Treasury except in pursuance of an appropriation* made by law.” This is the cardinal rule underpinning the entire system.
Article VII, Section 22: Grants the President the power to veto any particular item or items in an appropriation, revenue, or tariff bill. This is the Executive’s primary constitutional tool to check Congressional* spending priorities.

These provisions collectively ensure that the Executive Department cannot spend public funds without the prior consent and authorization of the Legislative Department, making Congress the most potent branch in fiscal governance.

III. The Power of the Purse as a Check on the Executive

Congress exercises its power of the purse as a check on the Executive in several concrete ways:

Authorization and Appropriation: The Executive must submit a proposed budget (National Expenditure Program). Congress scrutinizes, modifies, and ultimately passes the GAA, thereby setting the policy priorities and spending limits for the entire government. This process allows Congress to increase, decrease, or deny funding for Executive programs.

Line-Item Veto and Congressional Override: While the President has the item veto power, Congress can override this veto by a two-thirds vote of both Houses. This creates a dynamic where the Executive’s disapproval can be reversed, asserting Legislative supremacy in fiscal policy.

Power of the Purse in Investigations: Through its oversight function (Article VI, Section 22), Congress can conduct inquiries into the implementation of the GAA. The threat of reducing or withholding future appropriations serves as a powerful incentive for Executive agencies to comply with legislative intent.

Legislative Veto through the Power of the Purse: By refusing to appropriate funds for a specific Executive action or policy (e.g., a controversial treaty implementation, a military initiative), Congress can effectively nullify or stall that action, even if it falls within the President’s nominal powers.

IV. Executive Counter-Checks and the Power of the Purse

The Executive is not passive in this dynamic. It possesses significant powers to balance Congressional control:

The Veto Power: The President’s item veto power allows for the selective rejection of specific appropriation items without vetoing the entire GAA. This prevents Congress from forcing the President to accept undesirable riders or allocations by bundling them with essential funding.

Budget Preparation and Execution: The Executive initiates the budget process. By formulating the National Expenditure Program, it sets the initial agenda and framework for Congressional deliberation. Furthermore, the Executive controls the actual release and disbursement of funds (budget execution), allowing for operational flexibility through mechanisms like budgetary reserves and re-alignment, albeit within statutory limits.

The Power of Impoundment: While not explicitly granted by the Constitution, the Executive may, under certain justifications (e.g., to achieve savings, if a project becomes unnecessary), withhold the release of appropriated funds. However, this power is not absolute and is subject to legislative intent and judicial review, as clarified in cases like Bengzon v. Drilon.

V. Judicial Review: The Judiciary as Arbiter

The Judicial Department serves as the ultimate arbiter in disputes concerning the power of the purse, completing the check and balance system. The Supreme Court exercises its power of judicial review to:
Determine the constitutionality of appropriation laws and riders (e.g., declaring the PDAF and certain aspects of the DAP unconstitutional in Araullo v. Aquino III*).
Interpret the scope and limits of the item veto* power.
Define the permissible boundaries of Executive* impoundment and fund realignment.
Settle conflicts between Congress and the Executive* regarding the proper exercise of their respective fiscal powers, ensuring neither branch usurps the core function of the other.

VI. Key Doctrines and Jurisprudential Landmarks

Araullo v. Aquino III (2014): This landmark case struck down key acts under the Disbursement Acceleration Program (DAP). The Court ruled that the President’s power to augment items in the GAA is limited to items already existing in the GAA and from savings generated from the same branch of government. It reinforced that the power of the purse resides in Congress and the Executive cannot cross-allocate savings to programs outside the legislative authorization.

Philippine Constitution Association v. Enriquez (1994): This case clarified the item veto power, stating that an “item” refers to a specific appropriation of money, not the entire provision of a law. It also struck down the Legislative Veto provision in the General Appropriations Act, affirming that Congress cannot participate in the execution of laws after its passage.

Bengzon v. Drilon (1992): The Court ruled that while the President has some discretion in the execution of the budget, the unilateral withdrawal of an appropriation without a valid purpose (like achieving savings) constitutes an impermissible impoundment that violates the separation of powers.

Abakada Guro Party List v. Ermita (2005): While primarily about delegation of legislative power, this case touches on fiscal authority, reiterating that Congress cannot abdicate its core power of the purse.

VII. Comparative Analysis: Philippine Model vs. U.S. Model

The Philippine system is heavily modeled on the U.S. system, but with distinct nuances born from its constitutional text and jurisprudence.

Aspect of the Power of the Purse	Philippine Model (1987 Constitution)	United States Model (U.S. Constitution)
Origination Clause	Appropriation, revenue, and tariff bills originate exclusively in the House of Representatives (Art. VI, Sec. 24).	All bills for raising revenue originate in the House of Representatives; the Senate may propose/concur with amendments (Art. I, Sec. 7).
Executive Veto	President has the power to veto any particular item or items in an appropriation, revenue, or tariff bill (item veto) (Art. VII, Sec. 22).	The President may veto an entire bill, but lacks a constitutional line-item veto. Attempts through legislation (e.g., Line Item Veto Act of 1996) were declared unconstitutional (Clinton v. City of New York).
Treatment of Savings & Augmentation	Strictly regulated. Augmentation is allowed only for existing items in the GAA from savings generated within the same branch (Araullo v. Aquino III).	More flexible, governed by statutory impoundment control acts (e.g., ICA of 1974). The President can propose to rescind funds, but Congress must approve within a period.
Judicial Role	Active and interventionist in defining boundaries, especially post-DAP ruling. The Supreme Court asserts a strong role in policing separation of powers in fiscal matters.	Historically more deferential to political branches, but will intervene on constitutional grounds (e.g., INS v. Chadha on legislative veto).
Notable Limitation	Explicit constitutional prohibition on riders and on post-enactment Congressional involvement in execution (Art. VI, Sec. 25(2),(3)).	Riders are common. The anti-deficiency act and impoundment controls are statutory, not constitutional.

VIII. Contemporary Issues and Challenges

Post-DAP Budget Execution: The Executive now operates under stricter rules for fund realignment and augmentation, potentially affecting operational flexibility and responsiveness.

Conditional Implementations and Veto Messages: The practice of the President signing the GAA but issuing a veto message that directs specific implementation conditions raises questions about Executive overreach into the domain of appropriation.

The Scope of “Savings” and “Augmentation”: Despite the Araullo ruling, operational gray areas persist in defining what constitutes valid savings and what projects can be validly augmented, leading to potential friction.

Congressional Oversight vs. Micro-Management: The line between legitimate oversight and intrusive micromanagement of Executive agencies through the budget process remains a perennial issue.

IX. Conclusion

The rule on check and balance finds one of its most potent expressions in the power of the purse. The Philippine constitutional design deliberately fragments this power to prevent its abuse. While Congress holds the primary authority to authorize spending, the Executive checks this through the veto and controls implementation. The Judiciary, in turn, checks both by defining the outer limits of their authority. This intricate system, while creating friction, is essential for ensuring fiscal responsibility, legislative supremacy in policy-setting, and Executive accountability. The evolving jurisprudence, particularly from the Araullo case, continues to refine this balance, emphasizing that the core power of the purse is a non-delegable, essentially legislative function.

X. Recommendations

For Congress: Exercise its power of the purse with heightened diligence, moving beyond mere political bargaining to substantive policy-based appropriation. Strengthen its technical oversight capacity to effectively audit Executive budget execution.

For the Executive: Adhere strictly to the constitutional and jurisprudential limits on fund realignment and augmentation. Utilize the veto power judiciously and ensure veto messages do not effectively legislate or alter the GAA’s intent.

For Practitioners and Academics: Continue to scrutinize the implementation of the GAA and litigate clear violations of the Araullo framework. Further scholarly work is needed to clarify the operational definitions of “savings” and the permissible scope of augmentation in complex government operations.

Institutional Clarification: A legislative act codifying the rules on savings, augmentation, and impoundment in line with Araullo could provide clearer guidelines for both branches, reducing ambiguity and potential conflict.

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