The Congress establishes by law Philippine Funds, Inc., a private corporation, to receive foreign donations coming from abroad during national and local calamities and disasters, and to enable the unhampered and speedy disbursements of the donations through the mere action of its Board of Directors. Thereby, delays in the release of the donated funds occasioned by the stringent rules of procurement would be avoided. Also, the releases would not come under the jurisdiction of the Commission on Audit (COA).
(a) Is the law establishing Philippine Funds, Inc. constitutional? Explain your answer. (3%)
(b) Can the Congress pass the law that would exempt the foreign grants from the jurisdiction of the COA? Explain your answer. (3%)
(a) No. The law violates the Constitutional prohibition against the formation, organization, or regulation of private corporations, except by general law. Answer
(b) No. Congress cannot pass such a law since it violates the Constitutional prohibition that no law shall be passed exempting any entity of the Government or its subsidiary in any guise whatever, or any investment of public funds, from the jurisdiction of the Commission on Audit.