A Briefing on the DAP

Posted on Posted in 2014-2015

By Vanessa Siy Van

With the recent court hearings on the misallocation of government funds in the Priority Development Assistance Fund (PDAF) scam, another case has been put under the national spotlight. The Disbursement Acceleration Program (DAP) has been ruled by the Supreme Court as partially unconstitutional last July 1, 2014. This led President Aquino to defend the legality of DAP in a press conference last July 14, 2014, sparking a heated debate over the limits of the executive branch over the other branches of government.

It’s DAP, not PDAF

In all appropriation, renewal, and increase in program spending, it is standard protocol to first send a proposal to go through the legislative branch, namely, the Congress and Senate, and then seek approval from the executive branch.

According to the Republic of the Philippines’ Department of Budget and Management, the DAP was a program designed by President Aquino to speed up economic growth by bypassing the need for Congress to approve budget reallocation. Unlike PDAF, DAP was designed as a program, a mechanism, rather than a set of funds. It would draw its funds from savings and unprogrammed funds. The Department of Budget and Management defines savings as the remnants of old abandoned programs or excess from these programs while unprogrammed funds are defined as static funds that have yet to be assigned for any program. What the DAP aimed to do was increase public spending without being delayed by red tape and could be funnelled into existing programs that ideally had high-impact.

The Philippine Star quoted Budget Secretary Florencio Abad during a senate hearing last July 25 saying that the DAP was implemented as early as October 2011 and terminated on December 2013 on the grounds of having already fulfilled its goal.

On paper and in print

The empirical data presented by the DBM shows that “With the introduction of DAP, government disbursements in the fourth quarter of 2011 grew by 32.5 percent. This pulled up full-year public spending to grow by 2.3 percent. With the sustained application of DAP, spending further grew to 14.1 percent in 2012 and 5.8 percent in 2013. The growth of infrastructure spending, in particular, improved from -28.7 percent in 2011, to 27.6 percent in 2012 and 21.6 percent in 2013.” They conclude that this program increased the GDP up to 7.2% in 2013, as verified by the World Bank.

Institutions such as the Bangko Sentral ng Pilipinas defended the DAP, saying that it helped earn “coveted credit rating of investment grade from global debt-watchers, while the peso strengthened against the dollar to the benefit of the business process outsourcing industry, overseas Filipino workers, and the export sector.”

One of the points of contention with the DAP is that none of the claimed effects have actually been felt by Philippine society. Despite the increasing GDP numbers, poverty rate has remained the same since the program was implemented. According to the National Statistical Coordination Board, poverty still afflicted more than a third of the population between 2006 and 2009. Since poverty statistics, released every three years, were published again in late 2012. NSCB maintains that the poverty rate was almost stagnant.

Organizations such as the IBON Foundation argued that the funds should have been directed towards projects on the ground that would have benefitted Filipinos, in order for them to have felt the tangible effects of DAP. They further contest that only about 1% of the funds given to BSP were approved for loans to the public.

Another contentious point raised was President Aquino’s failure to mention DAP in the 2012 and 2013 State of the Nation Address, in which he was supposed to discuss his implemented programs and their subsequent improvements.

The final ruling

The debate peaked at the SC’s declaration of the DAP unconstitutional in three of its acts, namely “The withdrawal of unobligated allotments from the implementing agencies and the declaration of the withdrawn unobligated allotments and unreleased appropriations as savings prior to the end of the fiscal year and without complying with the statutory definition of savings contained in the General Appropriations Act, Cross-border transfers of savings of the executive department to offices outside the executive department” and “Funding of projects, activities, programs not covered by appropriations in the General Appropriations Act.”

All this means that the DAP allowed funds to flow from older projects without meeting the formal declaration of savings, as well as to projects and bodies that were not within the scope of the executive department or approved by the other branches that those bodies were under.

President Aquino cited provisions in the Philippine Constitution that allowed the president to divert any funds under savings and that his actions were done in “good faith” and meant to help the Philippine economy and Filipinos.

Things left unsaid

What people outside the political community should really note is why a provision for executive overriding even exists in the first place. The very nature of the constitution is to prevent any branch of government from being able to act without knowledge or consent from the others. Putting aside thoughts of “good faith” for a moment, we have to consider if the grounds for such action were urgent and necessary enough. There are parties who laud and condemn what President Aquino did, but in the end, we have to consider the precedents for
uture presidents who might not act in “good faith.”

President Aquino, and all Filipinos, should realize that the values that a particular administration stands for will realistically stand only for as long as that administration is in power. After the 2016 elections, they will no longer be held accountable for the actions their precedents have set. In the event that plunder, corruption, or misappropriation of public funds arises, without the knowledge of other bodies, the Aquino administration will be powerless to stop it. Citing the same constitutional provision as a defense now sets a shaky standard.

Unless the matter at hand is urgent, timely, and extremely pragmatic, the circumstances of the DAP are extremely difficult to justify. Good faith or not, people felt that they were legally

kept in the dark, and this is something the sneakier politicians – the ones this administration is trying to put away – will capitalize on.

Perhaps this is something Mr. Aquino should really consider.


Sources:

  • http://www.gov.ph/2013/10/05/constitutional-and-legal-bases-for-the-disbursement-acceleration-program-dap/
  • http://www.philstar.com/headlines/2014/07/24/1349824/dap-introduced-senate-2011-abad
  • http://www.gmanetwork.com/news/story/371938/economy/moneyandbanking/bsp-defends-p30-b-dap-take-insists-phl-gained-economic-benefits
  • http://www.rappler.com/nation/62070-sc-declares-dap-partially-unconstitutional?gclid=COnB9YGS5b8CFU8HvAodoRcAcQ
  • http://www.philstar.com/headlines/2014/07/25/1350077/abad-law-allowed-dap
  • http://www.dbm.gov.ph/?page_id=9769#Caption2
  • http://2010presidentiables.wordpress.com/2010/05/28/philippine-gdp-growth-1qtr-2010-but-poverty-rate-remain-high/
  • http://www.philstar.com/headlines/2013/04/24/934243/poverty-level-phl-unchanged-06
  • http://newsinfo.inquirer.net/619718/presidents-defense-of-dap-on-national-tv-hailed-jeered

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