The Supreme Court (SC) declared as unconstitutional, first, the 2024 General Appropriations Act (GAA) because of Congress’s increase of the unprogrammed appropriations by PHP 449.5 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’s increase of the Special Road Fund by PHP 17.99 billion, which also resulted in an increase in the president’s total recommended appropriations.
In a Decision written by Senior Associate Justice Marvic M.V.F. Leonen, the SC En Banc granted the petition of Edcel C. Lagman et al. (G.R. No. 271059) and partly granted the petition of Aquilino “Koko” Pimentel III et al. (G.R. No. 271347) challenging the increase in unprogrammed appropriations made by Congress in the 2024 GAA. It declared unconstitutional Republic Act No. (RA) 11975 or the 2024 GAA because the total appropriations were effectively increased by PHP 449.5 billion.
The SC also granted the petition by Filipinos for Peace, Justice and Progress Movement, Inc. et al. (G.R. No. E-02472). It declared unconstitutional RA 12116 or the 2025 GAA because of the PHP 17.99-billion increase to the DPWH Special Road Fund made by Congress, which resultantly increased the president’s total recommended appropriations.
As regards the PHP 12.75-billion increase to certain agencies’ Special Accounts in the General Fund (SAGF), 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.
The SC partly granted Edgar R. Erice and Leila M. De Lima’s petition (G.R. No. E-04036) challenging the constitutionality of Chapter XLIII of the 2026 GAA, which authorizes unprogrammed appropriations.
The SC ruled that Unprogrammed Appropriations are not unconstitutional per se. However, this budgetary item needs clear limits and safeguards to preserve fiscal discipline, transparency, and accountability. They 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. The Court further ruled that the budgetary ceiling imposed under Article VI, Sec. 25(1) of the Constitution applies to the total of programmed and unprogrammed appropriations.
This was true for Special Provisions 1(a) and (b) of Chapter XLIII of the 2026 GAA, hence, unconstitutional. Pegging fiscal conditions 1(a) and (b) to any new or excess revenue, without regard to whether the whole revenue target was exceeded, departs from the unprogrammed appropriations’ original feature as a deficit neutral mechanism, undermines fiscal discipline and the coherent fiscal program contemplated in Article VII, Section 22 of the Constitution, and repudiates the Court’s ruling in Araullo v. Aquino III. Additionally, the provisions were overly broad, lacked prioritization standards, and partly functioned as prohibited lump sum appropriations.
The Court also noted that the item “Strengthening Assistance for Government Infrastructure and Social Programs (SAGIP)” under the 2024 and 2025 GAA unprogrammed appropriations (it was removed in the 2026 GAA) is a prohibited lump sum appropriation because it gives the Executive post-enactment identification/allocative powers, which are constitutionally vested in Congress. As such, it became the covert repository of lump sum allocations for DPWH infrastructure like flood control projects.
The Court thus emphasized that to be constitutional, unprogrammed appropriations must comply with the following conditions:
In no case shall there be lump sums in Unprogrammed Appropriations.
As part of Congress’s legislative oversight, and given the distinction between spending for the deficit and spending through unprogrammed appropriations, the conditions for the use of new income, as well as additional earnings of the Government from non-tax revenue sources, should be clearly differentiated between programmed and unprogrammed expenditures, with Congress presumptively using these new funds for programmed expenditures, except when there are clear and convincing reasons, such as foreign assisted projects, for including them under Unprogrammed Appropriations.
Congress should prescribe sufficient standards in terms of prioritization for spending when there is more than one purpose under the Unprogrammed Appropriations.
The provision for Unprogrammed Appropriations should be within the national fiscal program established in the Budget and consistent with its nature as a narrow contingent appropriation.
As to the PHP 449.5 billion increase in the unprogrammed appropriations of the 2024 GAA, these were made by the Bicameral Conference Committee through transfers of Programs, Activities, and Projects from programmed to unprogrammed and significant increases in the allocation for SAGIP and Support to Foreign Assisted Projects. Congress severely distorted the budget creating artificial fiscal space in the programmed appropriations which paved the way for increases in allocations for DPWH basic infrastructure programs (BIP), Sustainable Infrastructure Projects Alleviating Gap (SIPAG), DOH’s medical assistance to indigents, DSWD’s Ayuda sa Kapos ang Kita Program (AKAP) and DOLE’s Tulong Panghanapbuhay sa Ating Disadvantaged or Displaced Workers Program (TUPAD).
The Court reemphasized that the Bicameral Conference Committee’s power exists only when there are disagreeing provisions in the House and Senate versions of the bill. The nature of the disagreeing provisions will determine the scope of their authority and the allowable extent of the changes or amendments to settle the conflicting provisions. The SC reminded the Committee that its proceedings must be transparent and accountable. It noted that there were no records of the Committee’s discussions, and its report did not explain the increases and decreases in budget items, in violation of the Rules of the House and the Senate. Neither did the Committee submit any documents supporting the changes in the budget.
The SC permanently prohibited the Senate, House of Representatives, Office of the Executive Secretary, and the Department of Budget and Management Acting Secretary from implementing Special Provision 1(a) and (b), Chapter XLIII of the 2026 GAA.
As to the 2024 and 2025 GAA, the SC held that the doctrine of operative fact applies. 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.
Separate Opinions
Chief Justice Alexander G. Gesmundo agreed that unprogrammed appropriations are not unconstitutional. He explained that they give the President limited flexibility to respond to present realities, especially during crises. He said unprogrammed appropriations are valid as long as they act as limited standby authorization and do not undermine the national fiscal program. He also stressed that Congress cannot increase the amount of unprogrammed appropriations proposed by the Executive. Any increase in unprogrammed appropriations must be matched by a corresponding decrease in programmed appropriations.
Associate Justice Alfredo Benjamin S. Caguioa agreed that unprogrammed appropriations are not unconstitutional per se but emphasized that their release must comply with constitutional safeguards. He maintained that lump-sum appropriations may be permissible provided they do not effectively constitute pork barrel funds. He also called for the express abandonment of the doctrine in Tolentino v. Secretary of Finance allowing the Bicameral Conference Committee to introduce amendments to provisions on which both chambers had already agreed.
Associate Justice Ramon Paul L. Hernando maintained that unprogrammed appropriations in the GAA are unconstitutional because they do not have identified sources of funding, as required by the Constitution. He said that if excess or additional revenues become available, they should be allocated through a special appropriations law enacted in accordance with the Constitution.
Associate Justice Amy C. Lazaro-Javier agreed that the provisions on unprogrammed appropriations and the SAGF in the 2024, 2025, and 2026 GAAs are unconstitutional because they exceeded the spending limits proposed by the President and relaxed the rules for release of contingent funds. However, she said that the SC should defer ruling on the application of the doctrine of operative fact until there is a complete accounting of the funds released and how they were used, since the doctrine can only be applied after all relevant facts have been established.
Associate Justice Henri Jean Paul B. Inting agreed that Special Provisions 1(a) and 1(b) of the 2026 GAA are invalid. He explained that these provisions allow the release of funds based on excess collections from a single non-tax revenue source or on new revenues not included in the Budget of Expenditures and Sources of Financing, even when total revenues have not exceeded the government’s targets. He added that Congress cannot reclassify items between programmed and unprogrammed appropriations because budget preparation, including deciding which programs and projects to prioritize, is a function of the Executive branch.
Associate Justice Rodil V. Zalameda agreed that unprogrammed appropriations are not unconstitutional by themselves. He said they serve a useful purpose by allowing the government to respond to extraordinary and unforeseen national needs, as long as safeguards are observed. However, Justice Zalameda disagreed with the view that the Congress unconstitutionally increased unprogrammed appropriations in the 2024 GAA. He said the constitutional limit on increasing the President’s proposed budget applies only to funds for government operations and does not cover contingent or standby funds.
Associate Justice Samuel H. Gaerlan said there is a need for safeguards on the powers of the Bicameral Conference Committee. He proposed limiting the committee to reconciling actual disagreements between the Senate and the House, requiring written records of major changes, prohibiting unrelated provisions, making its proceedings public, and giving both chambers enough time to review its report. He emphasized that the committee should be “a bridge between two chambers” that completes the legislative process, not “an alternative legislative procedure.”
Associate Justice Jhosep Y. Lopez agreed that unprogrammed appropriations are not unconstitutional per se. However, he disagreed with the majority’s conclusion that Congress may not increase unprogrammed appropriations beyond the amounts proposed by the President, maintaining that the constitutional limitation under Article VI, Section 25(1) applies only to programmed appropriations supported by identified funding sources and does not extend to contingent or standby appropriations such as unprogrammed appropriations.
Associate Justice Japar B. Dimaampao also agreed that unprogrammed appropriations are not unconstitutional per se, as no provision of the Constitution expressly prohibits them. He explained that their inclusion in the GAA does not violate the principle of separation of powers because Congress itself authorizes and approves these appropriations. According to Justice Dimaampao, this shows there is no “tug-of-war between the two co-equal branches of government.”
Associate Justice Antonio T. Kho, Jr., disagreed with the majority’s ruling that unprogrammed appropriations are not unconstitutional, maintaining that the system allows the Executive to determine specific projects, funding amounts, and priorities after the enactment of the national budget. He emphasized that the power of the purse primarily belongs to Congress, which must make essential spending decisions through legislation, while the Executive’s role is limited to implementing the budget.
Associate Justice Maria Filomena D. Singh agreed that unprogrammed appropriations are not unconstitutional per se, but viewed them as advance enactments of supplemental or special appropriations that are subject to their own budget ceiling. However, she disagreed with the majority’s view that the Bicameral Conference Committee was barred from recommending the increase solely because both the Senate and the Houses had previously approved the same amount. She said that the constitutional problem arises when the increase exceeds the President’s proposal.
Associate Justice Raul B. Villanueva also agreed that unprogrammed appropriations are not unconstitutional. He said they should be allowed as long as the amounts do not exceed those proposed by the President in the National Expenditure Program (NEP). He added that once the NEP is submitted to Congress, it may not increase the total amount of unprogrammed appropriations as it pleases. Instead, it must limit them to the specific purposes identified in the NEP. (Courtesy of the SC Office of the Spokesperson)
