DAP

How does the DAP work and what is wrong with it?Jul-aye! 14, 2014 roundabouts 3:15in the evenin'

The Disbursement Acceleration Program (DAP) was declared unconstitutional by the Supreme Court (SC) last July 1, 2014. Today, 13 days after the decision was released, the Palace will finally break its silence on the matter and will let the President himself speak. Before they effectively eradicate all criticism and rationality toward the issue with a hi-hello-ako-po-nga-pala-ang-Presidente-niyo broadcast, I would like to do my part and put out a briefer on the situation—a statement, if you may—the way I believe, the DAP must be understood. 1. Quoting a Senator, the DAP is a work of “evil genius.” Here is how it works.Before we begin, we must explain how the DAP works in simpler terms so that we can place things in the right context. (The Aquino administration is lucky because people don’t like reading legalese/won’t take time to understand legal documents.) For this part of the piece, I will not state anything that will veer too far from the SC’s decision on the DAP (which you will see if you click here:http://newsinfo.inquirer.net/615833/sc-declares-dap-unconstitutional-source). I will just state what exactly made the DAP unconstitutional according to the SC in simpler words and will later explain why these are bad. The SC struck three parts of the DAP as unconstitutional. By unconstitutional, it means that the highest authority of the land in interpreting laws says it is wrong because: A) The fact that the executive branch can funnel funds (which Abad insists are “savings”) to itself and, afterwards, has all the power to distribute it to whoever they deem worthy. B) The fact that they can distribute these funds outside the executive branch. C) The fact that these funds are not covered in the General Appropriations Act. So, what do these mean? Let’s explain step-by-step. Item “A” states that it is unconstitutional for the executive branch (under the guidance of the President and the Budget Secretary) to accumulate savings and give these savings to other branches of government. Why is this wrong? For normal people like us, saving up should be a perfectly logical thing to do (if not encouraged). If you avoid spending your gas money by not using the car often, you can spend that money on something more useful—on a bike, or your children’s tuition, on insurances, whatever. It makes perfect sense for individuals BUT this can’t work when you’re thinking about the government. Why? Because, as stated by the SC decision, it ultimately ruins the balance between the three branches of government. How? If, for example, the Department of Health asks for 100 billion pesos for its budget for 2013, but only spends 50 billion—or half—then the President can opt to spend the other 50 billion pesos elsewhere. In essence, the savings from the DAP is just like the kickback our Congressmen and Senators get from their pork barrel.  

But there are two things that make the DAP more “evil” than the Pork Barrel (a.k.a. PDAF):1) As stated in item “C” of the SC’s decision, there is no need to liquidate exactly where these savings are going; and 2) the DAP is not really “savings” because it works hand-in-hand with another Abad wonder—the Zero-Based Budgeting System. How does the Zero-Based Budgeting System work? In much simpler terms, the Zero-Based Budgeting System works this way: The Department of Budget Management (DBM) makes assessments on how your department worked the year before. If they see that you are profitable (their number one criteria), then they’ll give you more funding. Unlike previous budgeting plans, Abad’s zero-based budgeting assumes that all departments are to get no budgets unless they show that they are productive. (Side comment: So, even if you’re a school like UP, you better profit or else the DBM won’t fund you—because, yeah, schools are legit businesses now.) So, what’s wrong with this? Let’s go back to the DAP. The fact that the DBM is given the final say in who gets major funding and who goes broke in the coming year is exactly what’s wrong with it. Abad has all the right to say that the Department of National Defense (DND), for example, will get 250 billion next year, fully knowing that the DND will only need 100 billion. This makes a “savings” of 150 billion. This 150 billion will go to the DAP. Where will this 150 billion go? Because the DAP’s provisions say that it need not be liquidated, then we’ll never know. This is not a conspiracy theory. This is exactly how it works and they’ve been at it since 2010. That’s why it was declared unconstitutional. What about item “B”? What makes it so bad if the executive branch can give the money to other branches of government? I shall answer this in the next part.  2. The issue is not about where the money went but why was the DAP created.Some people argue that it’s okay that the President spent the DAP. Some argue that the President and Butch Abad are of impeccable moral character and can, therefore, spend these “savings” whichever way they desire. Senator Bambam Aquino uses this argument to divert the issue away from the “why’s” and into the “how much was wasted,” as if one peso was different from 50 million pesos when used for the same evil. Senator Escudero, to wash his hands clean of accepting the 50-million peso “stimulus package”, also argues that it’s a question of where the funds went, not what the funds stood for. Let me use this analogy for that claim: You asked your child to buy you a drink from the sari-sari store. You gave him 100 pesos, so you have a change of around 80 pesos. You love your child and you knew that he deserved the 80 pesos, and yes, he’d probably spend it on something useful. So, yeah, never mind that he never returned the change. Anyway, it’s okay for him to use it and spend it on whatever he likes. Is this analogy right? If that’s the way you see the DAP, then that’s an odd and small-minded way to look at this issue because the DAP entails something greater than that. 

The thing about the DAP is that it can be used across branches of government. This is where item “B” comes in. The government’s three branches must work in a balanced manner—that is why there are checks and balances working within the three. Ideally, no branch of government should encroach on the other’s responsibilities and freedoms. If the legislative branch suddenly decides that it should, instead, implement law and order then they take away the job of the executive. If the judiciary branch suddenly decides that it should write new laws, then that takes the job away from Congress. If the executive branch decides that it should take control of the two other branches, then that’s a dictatorship. You see, these three branches must work together in a conscientious and balanced way. One of Congress' special roles is to appropriate the budget yearly. Being our elected representatives in handling our taxes, they discuss how much money goes to where through the General Appropriations Act (GAA), one of the important bills it passes every start of the session. (Note: The executive branch can only make augmentations on the GAA, not create new deeds altogether, because the President is not the people's representative in the same way that congressmen are.) How is this related to the DAP? If the DAP can freely be given out to other branches of government, then the executive can exercise influence on Congressmen, Senators, Judges, and Senator-Judges in a legitimate and hassle-free method. The President no longer needs to declare Martial Law to make itself omnipotent. How does the DAP allow him to be omnipotent? The President can use the DAP—a perfectly legal function until June 30, 2014—to give out “money for projects/judiciary function” to people they need to exercise their influence upon. Best part is that, under the DAP, these “projects” need not be liquidated. The DAP tilts the balance by giving the executive branch the power of the purse which is traditionally held by Congress during the short period of budget hearing that happens only once a year. The DAP renders the other branches of government inutile by making the government’s money (from taxpayers’ wallets) largely in the executive branch’s control. The 50 million pesos the Senators got after voting for Corona’s impeachment is not imaginary. Aside from being confirmed by Senator Jinggoy Estrada, a letter for Senator Cayetano was posted online. (See it here: http://www.tribune.net.ph/headlines/pia-tries-to-dodge-dap-links-but-fails) True, these cannot be qualified immediately as bribes. But it also can’t be qualified as not-bribes because nobody will ever know for sure where the money went and why the money was given. That’s the deceiving nature of the DAP. That’s the “evil genius” Joker Arroyo was saying behind the DAP. 3. Noynoy is not an angel and it was not done in “good faith.”It is true that the DAP, like the PDAF or the Pork Barrel, has been around since time immemorial. But just because PGMA, Erap, and the rest used it, that doesn’t mean Noynoy is absolved from using it. Noynoy gave PGMA’s and Erap’s once-in-a-blue-moon “prerogatives” a name and institutionalized it for his everyday use. 

Noynoy cannot feign innocence because he himself petitioned against it when he was a still a Senator. (Surprise! Noynoy did something useful as a Senator!) You can view that bill here:http://www.senate.gov.ph/lisdata/105799392!.pdf 4. The DAP was not a stimulus fund and it had no effect in our economy.The DAP has no effect whatsoever with the GDP; there is no detectable correlation between the two. It is not a “stimulus package” in the same way that the US government gave stimulus packages for companies during the recession; it is not a bailout measure. It is too small to make an impact on the economy but too big to be in the hands of a few individuals. More importantly, it did not come out from loans from abroad, nor did it come from any peso-stretching measure. It was simply a transfer of money from some people’s bank accounts to other people’s bank accounts in order to court influence. Tell me, please, how did our economy benefit from the 50 million pesos our Senators received? To be fair, nonetheless, the DAP may or may not have been given for projects that needed urgent fundings. But there's something odd with using the DAP when the President has 282 billion pesos in his discretionary funds (a much bigger amount than what they claim to have spent during the DAP's existence) allocated in the national budget. But why use the DAP instead of the 282 billion pesos when these discretionary funds can be put to the same "immediate use"? Only one logical reason arises: Because unlike the DAP, these funds need to be included in the GAA and afterwards, liquidated. 5. It is never a waste of time to fight for accountability.Heads must roll with the DAP. Huge crimes were made against our Constitution and we can’t just let it pass. While, personally, I know that the impeachment complaint won’t get far with Congress being occupied by Aquino’s allies, there’s no harm in standing up for the right. However, there is harm in just letting things pass when you know you were wronged. Fr. Bernas, the “constitutionalist,” said that it’s a “waste of time.” We see his point, yes. But I can’t help but feel pity for the guy—he obviously sees that the Constitution he has worked so hard to make and to teach only falls flat on the feet of politics. Lean Alejandro once said, “The struggle for freedom is the next best thing to actually being free.”  I know I won’t stand for this. I hope you don’t, too.

According to PNoy: Supreme Court is wrong, #DAP is rightJuly 14, 2014

by benign0

In essence, what Philippine President Benigno Simeon ‘BS’ Aquino III said in his address to the public today on the issue of the fiasco surrounding the now-illegal Disbursement Acceleration Program (DAP) consists of two key messages:(1) The DAP was used in good faith; and,(2) The Philippine Supreme Court was wrong to rule it ‘unconstitutional’.

To make the notion of ‘good faith’ accessible to a bigger swath of his audience, President BS Aquino used a purported text message sent to him earlier in which the use of the DAP was likened to how one might decide to park on a No Parking zone to assist someone in need of emergency help. BS Aquino would like us to believe that this scenario presents us with a clear either-or situation. Get away with breaking the law to attend to an emergency or ignore an emergency to comply with the law.The fact is, that scenario really is not strictly either-or as you can actually doboth. To that supposed conundrum, the resolution is quite simple…Go ahead and help the guy in need, then pay the fine if you get issued a parking ticket.Note that the Big Assumption there, however, is that a person was actually helped by that hypothetical illegal parker.Nonetheless, good intentions are like assholes. Everyone’s got them. Mass murders have been committed and wars started because some bozo thought that he or she was doing the human race a great favour. That is why we have courts and justice systems. You need a coherent framework to provide perspective that third parties can use to objectively evaluate the goodness or badness of your actions. Without that mechanism, everyone would have license to shoot anyone they personally deem not worthy of their place under the sky.Then again, that sort of sounds like the sort of thing that happens in societies like the Philippines, doesn’t it? Go figure.Just the same, as President of the Philippines, BS Aquino should serve as the exemplar of subjection to the rule of Law. And the Supreme Court has the final word when it comes to interpreting that law. Aquino knows that perfectly well. He wouldn’t have spent megabucks to fund the impeachment of former Chief Justice Renato Corona in 2012 if he did not recognise the power wielded by a judge’s words and the finality the bang of a gavel puts in these.Unfortunately, the message he brought across in his address to the public today was tantamount to an insult on the Filipinos’ intelligence and a flick of the bird to the SC. He even repeated the same flawed take on the fiscal position of the Philippines he articulated in his first State of the Nation Address in 2010 (the historical details of which I repackaged for the occasion this morning).What a guy.This is the man Filipinos selected to be their leader in a colossal collective lapse in judgement. But that’s water under the bridge. The question now iswhat happens next. President BS Aquino said his government will be seeking Congressional support in appealing (possibly overturning) the SC ruling. How he’s going to do that now that there is no more pork or DAP to dangle in front of greedy snouts will be an interesting puzzle to ponder while we wait for the next episode in this teleserye.

PNoy on DAP: 'Hindi tayo lumabag sa batas'

The President insists that the DAP is not unconstitutional despite the Supreme Court decision saying otherwise.

"We were given an opportunity to bring delayed services to the people using government savings. That is what DAP is."

This was what President Benigno Simeon Aquino III said during his July 14 national address, wherein he highlighted the benefits that the Disbursement Acceleration Program (DAP) brought.

The DAP, though, had been tagged as the "President's pork" and has been declared unconstitutional by the Supreme Court. However, Aquino said, "Excuse me, ang DAP ay hindi PDAF."

He then went on to say, "Hindi tayo lumabag sa batas nang ipinatupad namin ang DAP. Nagulat kami, hindi isinaalang-alang ng SC ang ginamit naming batayan ng DAP. Walang pananagutan sa batas ang nagpatupad ng kautusan kung ginawa 'in good faith.' Sa SC ruling, ipinagpalagay na walang good faith."

In closing, Aquino stated, "Mabuti ang DAP. Tama ang intensyon, tama ang pamamaraan, tama ang resulta. Mga boss, hindi ko hahayaang pahabain pa ang pagdurusa niyo kung ngayon pa lang kaya nang ibsan ito."

Defending the DAP

On Friday, July 4, had announced that he had rejected the resignation of Budget Secretary Florencio “Butch” Abad, who has been identified as the brains behind the DAP.

Aquino had said, "To accept his resignation is to assign to him a wrong and I cannot accept the notion that doing a right by our people is a wrong. Therefore I have decided not to accept his resignation and I think the whole Cabinet should be made aware of this."

He had also pointed out, "Yung the notion in the current atmosphere is DAP was bad for the people. Even our most vociferous critics have accepted that DAP was good for our people."

Abad's vow

Over the weekend, Abad broke his silence and said he takes full responsibility for developing the program and the controversy it has generated.

In statement released on Saturday, July 12, Abad said, "Although I was wholly prepared to relinquish my post, I am grateful for the President’s expression of his continuing trust and confidence in my leadership of the Department. I have thus chosen to defer to his better judgment and stay."

Abad then added: "I am determined, as I have always been, to do justice to the President’s faith in my integrity and competence. Developments over the last year were not merely instructive; they now spur us within the DBM to carry out our responsibilities with greater vigilance and meticulousness. I assure the people that we will proceed with a keener awareness of the standards against which our work will be measured, but also with a deeper appreciation of the great opportunities for reform ahead of us."

How DAP began

In time for the President's July 14 national address, the Official Gazette posted a brief history of the DAP. We are posting the text below:

"The Disbursement Acceleration Program (DAP) is a stimulus package under the Aquino administration designed to fast-track public spending and push economic growth. This covers high-impact budgetary programs and projects which will be augmented out of the savings generated during the year and additional revenue sources. The DAP was approved by the President on October 12, 2011, upon the recommendation of the Development Budget Coordination Committee (DBCC) and the Cabinet Clusters.

The DAP was conceptualized in September 2011 and introduced in October 2011, in the context of the prevailing underspending in government disbursements for the first eight months of 2011 that dampened the country’s economic growth. Such government intervention was needed because key programs and projects, most notably public infrastructure, were moving slowly. The need to accelerate public spending was also brought about by the global economic situation as well as the financial toll of calamities in that year. While the economy has generally improved in 2012 and 2013, the use of DAP was continued to sustain the pace of public spending as well as economic expansion."

‘DOJ not qualified to probe DAP cases’ By Edu Punay (The Philippine Star) | Updated July 12, 2014 - 12:00am

MANILA, Philippines - The Department of Justice (DOJ) is not qualified  to investigate possible crimes under the Disbursement Acceleration Program (DAP), according to the petitioners in the Supreme Court (SC) decision last week that struck down President Aquino’s stimulus funds.

Former Manila councilor Greco Belgica, head of the group Reform PH, slammed the move of DOJ under Secretary Leila de Lima to limit its investigation of DAP to five opposition senators whose funds reportedly went to bogus non-government organizations of suspected pork barrel fund scam operator Janet Lim-Napoles.

“We’re talking about P149 billion in DAP funds spent in just two years, which have been declared illegal by the Supreme Court. Now why are they limiting the investigation only to five senators? That’s selective,” Belgica said.

The DOJ, which also received P11 million in DAP funds, has started investigation on the reported P425 million in DAP funds allocated to five senators – Juan Ponce Enrile, Jinggoy Estrada, Ferdinand Marcos Jr., Ramon Revilla Jr. and Vicente Sotto III – and which eventually went to the NGOs of Napoles.

Belgica also cited the manner by which the DOJ investigated the pork barrel scam as basis for his statement.

He explained the SC, in its decision last year voiding the pork barrel of lawmakers, ordered a probe against all who utilized the pork barrel from 1991 to present.

Headlines ( Article MRec ), pagematch: 1, sectionmatch: 1

But the DOJ filed cases only against three opposition senators – Enrile, Revilla and Estrada, he said.

“That’s why we know the investigation is politically motivated and not a true pursuit of justice. It’s more of an escape from liability at the expense of the others,” said Belgica, who was also petitioner in the pork barrel fund case.

Critics slammed Malacañang for justifying the DAP even after the Supreme Court had declared it unconstitutional.

Lawmakers demanded that Budget Secretary Florencio Abad explain how the DAP funds were spent.

Some of the lawmakers claimed they did not know that DAP existed, although they admitted receiving the funds.

Even the Philippine National Police (PNP), it appears, became one of the casualties in the SC decision declaring the DAP unconstitutional.

The PNP announced it might reduce the purchase of patrol jeeps due to budget constraints.

“We are still checking the available funds. If we get lucky, we will still procure the original number (1,865) but if we don’t have enough funds, we will just buy 920 units,” said Superintendent Roel Obusan, head of the PNP’s Bids and Awards Committee.

“It depends on the funds from the DBM,” he said.

Protecting Abad

Belgica also lamented the decision of President Aquino to reject the resignation of Secretary Abad, the architect of the unconstitutional DAP.

He also rebutted pronouncements of presidential spokesman Edwin Lacierda that Abad did not waste or steal DAP funds and that 91 percent of the DAP releases amounting to over P149 billion from October 2011 to September 2013 had been spent properly.

“Only the courts can clear the accused of wrongdoings – not the Palace nor the President. These issues and charges should be resolved in the proper forum,” Belgica said.

Belgica believes that such statement from Lacierda only proves that the Palace is “protecting the accused, perpetrators, implementers and creators of the DAP from investigation and possible criminal prosecution.”

“These are attempts to make crimes impossible to punish in this nation. The Palace needs to explain nothing about the DAP because the SC already declared it unconstitutional. What it needs to do is to implement the decision of the Supreme Court and investigate and prosecute all DAP disbursements and crimes committed,” he explained.

“No man is above the law – not the budget secretary nor the President,” he further stressed.

Another DAP critic and anti-pork advocate, militant lawyer Argee Guevarra also criticized De Lima and called for her resignation.

He cited as basis the “contemptuous sight” of De Lima vigorously applauding President Aquino’s non-acceptance of the resignation of Abad.

Guevarra described it as “a tasteless act of disobedience to the Supreme Court decision, which De Lima should be upholding rather than insulting.”

“De Lima purports herself to be at the legal forefront of the fight against the pork barrel scam. But the gusto with which she applauded the President’s rejection of the Abad resignation indicated her covert role as an

accessory-after-the-fact with respect to the DAP scam,” he said in a statement. – With Cecille Suerte Felipe 

Palace may appeal SC decision on DAP By Aurea Calica and Delon Porcalla (The Philippine Star) | Updated July 9, 2014 - 12:00am

MANILA, Philippines - The government may file a motion for reconsideration of the Supreme Court (SC) decision declaring key portions of the Disbursement Acceleration Program (DAP) unconstitutional, a Palace official said yesterday.

At the same time, Secretary Herminio Coloma Jr. of the Presidential Communications Operations Office said public office is a public trust and it is up to those being criticized for the DAP to resign. He did not identify any particular official.

Coloma said the executive branch would not at this time publicly account for the billions of pesos it released through the DAP until it exhausts all legal options.

He said the government has 15 days to file an appeal.

The Office of the Solicitor General (OSG) received the SC decision on July 4.

“Under the rules of the court, the government as respondent is given 15 days from receipt of the decision within which to file a motion for reconsideration,” he said.

Headlines ( Article MRec ), pagematch: 1, sectionmatch: 1

“The government still has the opportunity to avail itself of legal remedies with respect to the decision of the court,” he added.

Coloma said the government, through the OSG, would like to frame first its legal position on the SC ruling declaring key provisions of the DAP unconstitutional before accounting for the funds that went to the program.

Described by critics as the “presidential pork barrel,” the DAP has triggered calls to impeach President Aquino.

Coloma said Malacañang will make a full disclosure of the 116 DAP-funded projects at the appropriate time.

“We want to frame first our legal position so it might be better to wait for that,” he said.

“We are still studying our legal options. So maybe it is not yet time to disclose all the DAP projects for scrutiny,” he added.

Up to Abad to quit

It is up to Budget Secretary Florencio Abad and other proponents of the controversial DAP to decide whether to resign or not, according to Coloma.

“It is a decision left for the individuals mentioned to make,” he told reporters when asked if someone should be axed over the DAP, which was earlier described by Abad as a stimulus fund to boost the economy.

Asked if President Aquino would accept any resignation, Coloma replied: “It will be up to the President to decide when that happens.”

Coloma said government officials should be aware of their moral obligation to the people that “public office is a public trust.”

“We are firm on that stand,” he said.

The Palace official said the administration remains committed to transparency and accountability.

Coloma said they are continuously trying to gauge public perception about the President and his leadership of the nation as a whole.

“We continue to monitor these issues on social media and other media platforms because at all times, we believe in accountability to the people as our bosses,” he said.

He said the executive branch is open to any investigation to be conducted by the Commission on Audit, for example, to prove that the projects funded by DAP were aboveboard.

Coloma said that the SC justices themselves have acknowledged the positive effects of DAP-funded projects to the economy.

Impeachment won’t prosper

In the House of Representatives, lawmakers will not sabotage moves to impeach President Aquino by filing a weak impeachment complaint that will prevent the filing of a stronger case against him.

Cavite Rep. Elpidio Barzaga Jr. of the majority bloc said the OSG has not recognized the separate impeachment complaints filed against the President.

Earlier, lawyer Oliver Lozano and former Iloilo congressman Augusto Syjuco filed impeachment complaints against Aquino for allegedly authorizing the utilization of billions of public funds under the DAP.

No lawmaker has so far endorsed the impeachment complaints.

The Constitution bans the filing of more than one impeachment complaint in a year against the same impeachable officer.

“I will not be filing an impeachment complaint against the President in order to prevent others who are serious of filing impeachment complaints against him,” Barzaga said.

“If I would be the one filing it, nobody will believe that I am sincere insofar as my advocacy for impeachment is concerned and you will say that I’ve been set loose by the administration,” he added.

Kabataan party-list Rep. Terry Ridon said he would endorse the impeachment complaint to be filed by youth organizations against the President.

Barzaga, however, said that any impeachment complaint against Aquino will die a natural death because the President is backed by the majority of lawmakers who believe DAP was legal.

“This is just a simple case of a fiscal policy being challenged before the high court. The President’s detractors should stop salivating at the prospect of impeachment,” he said.

‘Charge Noy in 2016’

Meanwhile, a law professor at the University of the Philippines is not supporting impeachment proceedings against Aquino, but said criminal charges must be filed against him after his term expires in 2016.

“In two years, I hope that there would be no more hospital arrests. I want to see this President behind bars,” human rights lawyer Harry Roque said.

He said an impeachment complaint will just be a waste of taxpayer’s money.

According to him, the unconstitutionality of the DAP could be a basis for the filing of a criminal complaint against the President and other proponents of the stimulus fund.

“(The) mere breach of the Constitution is a violation of their oath of office, which is criminal under the existing anti-graft and corrupt practices act,” Roque said.

He urged the high tribunal to rule on the unconstitutionality of the Malampaya Fund to ensure that no pork barrel exists in the government.

For its part, the Bagong Alyansang Makabayan (Bayan) yesterday slammed Malacañang’s defense that the implementation of DAP-funded projects was done in good faith.

“The executive branch had created the conditions for government under-spending so that it could justify a so-called stimulus program where funds will be pooled and placed at the discretion of the President,” Bayan secretary-general Renato Reyes said.

“The administration wanted to control billions of pesos of funds all along. They created the conditions for under-spending as early as 2010, five months into Aquino’s presidency. Then in 2011, when the GDP slowdown was being felt, they launched the DAP, which centralized savings and allowed the President to utilize the funds as presidential pork,” he added. – With Paolo Romero, Janvic Mateo, Rhodina Villanueva

Aquino hits SC, insists DAP is legal(3rd UPDATE) In a televised address, President Benigno Aquino III criticizes the Supreme Court decision on DAP and says the government will ask justices to reconsider their verdict

Carmela Fonbuena

Published 6:42 PM, Jul 14, 2014

Updated 2:49 PM, Jul 16, 2014

MANILA, Philippines (3rd UPDATE) – Smarting from a defeat at the Supreme Court, a combative President Benigno Aquino III faced the nation on Monday, July 14, and criticized the Philippines' top justices for ruling against his administration's spending program.

"My message to the Supreme Court: We do not want two equal branches of government to go head to head, needing a third branch to step in to intervene. We find it difficult to understand your decision," the President said, referring to the Court's decision on July 1 declaring key executive moves under the Disbursement Acceleration Program (DAP) as unconstitutional.

He maintained that Malacañang did not violate the law in implementing DAP and that his administration will appeal the verdict before the High Tribunal.

The President said the decision was "unreasonable," likening the situation to a motorist arrested for parking in a "no parking zone" because he had to rush to save the life of an accident victim.

The situation might be worse, the President said. "I am after all being arrested for parking in an area that up to now hasn’t yet been declared a no-parking zone. Is this reasonable?"

Aquino was defiant. He maintained that DAP was necessary to correct flaws in the budget system and to fast-track government's priority projects.

He cited as an example how DAP funded the urgent relocation of informal settlers to safer places. Under the regular budgetary system, Aquino argued it could take up to 2 years to meet all the requirements, including bidding and procurement.

"My conscience cannot bear this. I cannot accept that our countrymen will be exposed to danger because I let the process of bringing them assistance be unduly extended. Let us remember: The National Treasury belongs to our citizens," he said.

Fight with Sereno Court

The speech was Aquino's first open fight with the Sereno Court. The Court is led by his handpicked choice, Maria Lourdes Sereno, who replaced Renato Corona in August 2012.

Corona's impeachment trial culminated in a guilty verdict in June 2012 and his removal as chief justice. A senator who voted "guilty" later disclosed that he received at least P50 million (about $1.15 million) from the Department of Budget and Management (DBM) as an apparent bribe for his vote. It turned out the DBM used DAP for that release.

Sereno concurred with the majority decision on DAP. Aquino's 3 other appointees, including former UP Law Dean Marvic Leonen, also voted to declare 3 schemes under DAP unconstitutional.

Supreme Court decisions are published so they can be read and understood carefully.

— Marvic Leonen (@marvicleonen) July 14, 2014

The Court previously voted in favor of the President's key legislative program, the Reproductive Health law.

This time, however, the President complained that the High Court did not consider the government's legal defense of DAP.

"We were surprised to find that the Supreme Court decision did not take into account our legal basis for DAP. How can they say that our spending methods are unconstitutional when they did not look into our basis?," Aquino said. He cited Section 39 of the Administrative Code.

In explaining their decision, however, the SC justices cited Article 6, Section 25 (5) of the 1987 Philippine Constitution, which authorizes the President, the Senate President, the Speaker, the Chief Justice, and heads of Constitutional Comissions to transfer funds “within their respective offices.” (READ: Understanding the SC ruling on DAP)

In their verdict, the justices declared uconstitutional the following executive acts done under DAP:

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

Funding of projects, activities, programs not covered by appropriations in the General Appropriations Act

"There are those who say that this decision might be a personal vendetta against me—that I am being dared to act in the same vindictive manner against them. All I can say—as the President, as the father of this country—is that we need temperance and forbearance—we must comply with due process," Aquino said.

'DAP is not PDAF'

It's the 2nd time Aquino delivered a televised address to defend DAP. He addressed the controversy on October 30, 2013 ahead of the SC hearing on the budget scheme. He asked the people to focus on the pork barrel controversy instead.

Aquino lamented comparisons between DAP and the Priority Development Assistance Fund (PDAF), which was also declared unconsitutional by the High Court. "Excuse me. DAP is different from PDAF. With PDAF, the corrupt funneled government funds into fake NGOs, money then allegedly divided among themselves. It’s clear that with DAP the people’s money was never stolen—the funds were used for the benefit of Filipinos. And not for later, not soon; but—now: Programs that could be implemented immediately were implemented immediately," he said.

The misuse of PDAF was exposed last year and led to the imprisonment of 3 senators and alleged scam mastermind Janet Lim Napoles.

DAP allowed Malacañang to move around savings, unprogrammed funds, and allocation for "slow moving" projects identified in the budget law to Malacañang's priority projects. The Supreme Court declared it unconstitutional for usurping Congress's power of the purse.

'SC ruling delays government projects'

The SC ruling will delay government projects, he argued. He announced that the government will file a motion for reconsideration and called on the Justices to see DAP his way.

"We are now righting the wrongs in the system, so that it may work towards this goal: To uphold the interests of the people, our Bosses who handed us our mandate. Thus, to the Supreme Court, our message: Do not bar us from doing what we swore to do. Shouldn’t you be siding with us in pushing for reform? Let us, therefore, end this vicious cycle that has taken our people hostage," Aquino said.

Exposed by Estrada

The DAP is the biggest issue to hurt the 4-year-old Aquino administration, which has been counting on the popularity of Aquino to rub off Manuel Roxas II, the prospective presidential candidate of the Liberal Party. (READ: Why there's no giving up on Mar Roxas)

DAP was exposed in September 2013 following allegations of opposition Senator Jinggoy Estrada of a supposed P50-million “bribe” for senators who voted to convict removed Supreme Court Chief Justice Renato Corona. It was Estrada's senator's counter-attack as he was accused of benefiting from the multi-billion pork barrel scam allegedly masterminded by Janet Lim Napoles. (READ: Jinggoy: P50M for each convict-Corona vote and Senators: There was P50M, but not for Corona conviction)

The alleged “bribe” was sourced from the little-known budget scheme.

Budget Secretary Butch Abad offered to resign following the SC decision but Aquino rejected it. The administration continues to defend DAP in spite of the court ruling.

Usurping Congress power

Enforced in 2011, DAP was meant to ramp up government spending by allowing Malacañang to move around funding from “savings,” “unprogrammed funds” and supposedly “slow-moving” projects to its priority projects. (READ: Timeline: The rise and fall of DAP)

DAP’s critics questioned it before the Supreme Court. The central issue was whether or not Malacañang was usurping Congress’s power over the purse.

The Supreme Court agreed with DAP’s critics. The vote was unanimous even as justices recognized DAP’s “positive” results, citing a World Bank study on its benefits to the economy. (READ: SC: 3 DAP schemes unconstitutional) - Rappler.com

Understanding the SC ruling on the DAPWhat are the main points and highlights of the Supreme Court decision on the controversial Disbursement Acceleration Program?

Chay F. Hofileña

Published 3:30 PM, Jul 14, 2014

Updated 9:51 AM, Jul 17, 2014

MANILA, Philippines – On July 1, 2014, the Supreme Court ruled on the controversial Disbursement Acceleration Program (DAP).

Voting 13-0-1, excluding retired justice Roberto Abad, the High Court ruled 3 schemes under the DAP unconstitutional. Justice Lucas P. Bersamin penned the main decision, with 6 Justices writing separate opinions – Antonio Carpio, Presbitero Velasco Jr, Arturo Brion, Mariano del Castillo, Estela Perlas-Bernabe, and Marvic Leonen. (Read the ruling and separate opinions here.)

Justice Teresita de Castro inhibited from the voting, while Velasco, who was on official leave, gave his vote to Chief Justice Maria Lourdes Sereno.

The High Tribunal ruled as unconstitutional the following:

the creation of savings prior to the end of the fiscal year and the withdrawal of these funds for implementing agencies

the cross-border transfers of the savings from one branch of government to another the allotment of funds for projects, activities, and programs not outlined in the General

Appropriations Act

Here are highlights of the 92-page ruling in Question and Answer format:

What is the issue that the Supreme Court addressed in its resolution pertaining to the Disbursement Acceleration Program (DAP)?

Petitioners challenged the constitutionality of DAP, which was intended by the Aquino administration to accelerate government spending. They also questioned National Budget Circular 541 which, in effect, characterized unreleased appropriations and unobligated or unused allotments as savings. The question brought to the Court was whether the Executive exceeded his powers to augment items in the budget within the executive branch of government.

When exactly did the DAP start?

The closest indication is a memorandum dated October 12, 2011 from Budget Secretary Butch Abad seeking approval from the President to implement DAP. The memo listed funding sources that amounted to P72.11 billion (about $1.7 billion) which could be used for other proposed priority projects – among them, National Housing Authority programs, capitalization of the Bangko Sentral, and peace and development interventions in the Autonomous Region in Muslim Mindanao.

How was DAP supposed to be implemented and funded?

There were 3 ways identified: (1) by declaring savings from various departments and agencies derived from pooling unobligated allotments and withdrawing unreleased approprirations; (2) by releasing unprogrammed funds; (3) by applying the “savings” and unprogrammed funds to augment existing programs, activities or projects (PAPs) or to support other priority PAPs.

Can the President transfer funds?

With limits. While the power to transfer funds from one item to another within the executive branch existed since 1909, during the time of American Governors-General, this power was reduced to merely augmenting items from savings. The 1987 Constitution put limits on the President’s discretion over appropriations during the budget execution phase (when the budget law is being implemented).

The Constitution authorizes the President, the Senate President, the Speaker, the Chief Justice, and heads of Constitutional Comissions to transfer funds “within their respective offices”; when these funds involve savings generated from appropriations also for their respective offices; and when the purpose of the transfer is to augment items in the Appropriations Law again for their respective offices.

How is "savings" defined? How did this issue make DAP problematic?

The Court defined savings as funds that remain unspent after the completion or discontinuance of a project. Congress provided that appropriated funds are available for a period of one fiscal year. But in a May 20, 2013 memo, Budget Secretary Butch Abad sought omnibus authority to consolidate savings and unused funds to finance the DAP on a quarterly basis. This shortened the period that funds were supposed to be available for, giving rise to questions about the budget department’s own definition of savings.

How were funds under DAP spent? What are related issues?

According to the Department of Budget and Management (DBM), as of 2013, P144.4 billion (about $3.3 billion) was released to implement programs, activities, projects (PAPs). In 2011, P82.5 billion (about $1.8) was released, while P54.8 billion (about $1.2 billion) was released in 2012. About 9% of the total DAP applied to PAPs were identified by lawmakers.

The DBM also said that 116 PAPs were financed by DAP, each of which had existing appropriations in the budget. The Office of the Solicitor-General submitted 7 evidence packets in support of this claim, but the Court found that there were projects not covered by an existing appropriation – for example, items under the P1.6-billion DREAM project under the Department of Science and Technology. DREAM refers to Disaster Risk, Exposure, Assessment and Mitigation.

Are “cross-border” transfers or augmentations of the budget allowed?

No. Cross-border transfers refer to the movement of funds from one branch of government to another. These are allowed only within respective offices – thus the use of DAP funds to augment funds of the Commission on Audit (for its IT infrastructure program and the hiring of litigation experts in the amount of P143.7 million, or about $3.2 million) and the House of Representatives (for a legislative library and archives building/e-library in the amount of P250 million, or about $5.6 million) violate the Constitution.

What is the operative fact doctrine and why is it relevant to DAP?

In effect, it says let it be, because the consequences resulting from DAP could no longer be undone. For instance, the positive results of DAP funding could include roads, bridges, homes for the homeless, hospitals, classrooms.

Not applying the operative fact doctrine would require the physical undoing and destruction of these infrastructure – a considerable waste. The application of the doctrine, however, does not exonerate the proponents and implementors of the DAP – unless it is established that they acted in good faith. – Rappler.com

Highlights: Carpio's separate opinion on DAP(UPDATED) The most senior magistrate in the High Court writes: 'This Court cannot allow a castration of a vital part of the checks-and-balances enshrined in the Constitution, even if the branch adversely affected suicidally consents to it'

Michael Bueza

Published 6:37 PM, Jul 15, 2014

Updated 9:47 AM, Jul 17, 2014

MANILA, Philippines (UPDATED) – “The road to unconstitutionality is often paved with ostensibly good intentions,” wrote Supreme Court (SC) Associate Justice Antonio Carpio in his separate opinion on the controversial Disbursement Acceleration Program (DAP).

Parts of the program, meant to address government underspending and stimulate economic growth by realigning unused funds to fast-disbursing ones, were declared unconstitutional by the Supreme Court – voting 13-0-1 – on July 1, 2014.

Carpio, the SC’s most senior magistrate, concurred with the High Court’s main decision, and offered further explanation as to why certain parts of the DAP violated Section 25(5), Article VI of the 1987 Constitution. (READ: Understanding the SC ruling on the DAP)

He voted to declare unconstitutional 4 acts and practices under the DAP and National Budget Circular (NBC) No. 541 of the Department of Budget and Management (DBM). Here are highlights of his opinion:

(1) Cross-border transfers – The transfers of appropriations from the executive department to the legislative department and constitutional commissions

During oral arguments, Budget Secretary Florencio “Butch” Abad said the House of Representatives and the Commission on Audit (COA) requested the executive department for additional funds for their respective projects – thus the fund transfers. Carpio, however, wrote the constitutional prohibition on cross-border transfers is clear: the President, the Senate President, the Speaker of the House of Representatives, the Chief Justice, and the heads of constitutional bodies “are only authorized to augment any item in the general appropriations law for their respective offices from savings” obtained from other items of their respective appropriations.

Addressing Solicitor General Francis Jardeleza’s point that President Aquino made available to the COA, the House of Representatives, and the Commission on Elections (Comelec) the savings of his department only upon their request for funds, Carpio said: “The Constitution clearly prohibits the President from transferring appropriations of the executive branch to other branches of government or to constitutional bodies for whatever reason. Congress cannot even enact a law allowing such transfers.”

Taking note of the DAP funds amounting to P6.5 billion used to augment the Priority Development Assistance Fund (PDAF) or the pork barrel of lawmakers in 2011, he said, “Clearly, the transfer of DAP funds... to augment the unconstitutional PDAF is also unconstitutional because it is an augmentation of an unconstitutional appropriation.” The PDAF was itself declared unconstitutional in November 2013.

Quoting former SC Justice Teodoro Padilla, Carpio wrote, “The fundamental policy of the Constitution is against transfer of appropriations even by law, since this ‘juggling’ of funds is often a rich source of unbridled patronage, abuse and interminable corruption.” It also “impairs the independence” of constitutional bodies.

(2) The release of uncommitted funds for “maintenance and other operating expenses” (MOOE) as savings, and their transfer to other items in the General Appropriations Act (GAA or the national budget)

Savings, as defined in the GAA, refer to portions or balances from any programmed appropriation “free from any obligation or encumbrance.” This means there is no contract that requires payment out of these funds. Savings include funds that are still available after the completion or final discontinuance or abandonment of work, activity or purpose for which the appropriation was authorized. For example, a half-way completed bridge is destroyed by an earthquake and is discontinued because remaining funds are inadequate to complete construction of the bridge. These funds can be considered savings. Abandonment refers to activity or work that cannot be started because say, a month or two before the end of a fiscal year, there is no more time to conduct public bidding that would commit funds. These funds set aside for this discontinued activity also constitute savings.

The government, however, invoked Section 38, Chapter 5, Book VI of the Administrative Code, which authorizes the President to “suspend or otherwise stop further expenditure of funds allotted for any agency” or any other expense authorized in the GAA. Section 38 was used as the basis for NBC 541, which authorized the withdrawal of uncommitted funds of agencies with low levels of obligations as of June 30, 2012 (the middle of the fiscal year) to augment or fund “priority and/or fast moving programs/projects of the national government.”

Carpio contended that the power granted to the President by Section 38 of the Administrative Code – in the event he orders a suspension of a project, for example, because of suspected anomalies – results in only a temporary discontinuance of the work. Thus funds remain committed and cannot qualify as savings.

As for MOOE appropriations, Carpio said these are divided into 12 monthly allocations. Excess or unused MOOE funds are deemed savings only at the end of each month. Uncommitted MOOE appropriations from previous months can be pooled as savings and realigned or transferred, but “MOOE funds for future months are not savings and cannot be realigned,” said Carpio.

“As of June 30 of a fiscal year, there are still 6 months left to obligate the funds. Six months are more than enough time to conduct public bidding to obligate the funds,” he wrote. Appropriations for future MOOEs also cannot be considered savings.

(3) The release of uncommitted funds for capital outlay as savings, and their transfer to other items in the GAA

As for capital outlay appropriations, Carpio said that the two-year life span of these funds as stated in the GAA “cannot be shortened by the President,” unless they are “savings” as defined by the GAA.

Capital outlays can be committed anytime within the two-year period, as long as there is sufficient time to conduct public bidding.

(4) The release of uncommitted funds as savings and their transfer to items or projects not found in the GAA

Carpio cited the Sanchez v. Commission on Audit case, which provided two requirements for a valid transfer of appropriations: “the existence of savings, and the existence in the appropriations law of the item, project or activity to be augmented from savings.”

Other unlawful acts

Carpio agreed with the other justices in voiding the use of unprogrammed funds in the GAA without the certification of the National Treasurer that revenue collections for the fiscal year had exceeded that year’s revenue target.

He also objected to the idea of a “presidential power of impoundment” or the authority to “cancel, prevent or permanently stop” an expenditure provided in the GAA once it becomes law. Carpio said the President can only veto “specific line items” in the GAA when the proposed budget is submitted to him for approval. But once it becomes law, “the President can no longer veto or cancel any item in the GAA or impound the disbursement of funds authorized to be spent in the GAA.” Impounding funds in effect reverses the will of Congress.

He pointed out it is surprising for the majority in the Senate and the House of Representatives to support the DAP and NBC 541 when these “actually castrate the power of the purse of Congress. This Court cannot allow a castration of a vital part of the checks-and-balances enshrined in the Constitution, even if the branch adversely affected suicidally consents to it.”

Doctrine of operative fact

Only those “who relied in good faith on the law or the administrative issuance” can invoke it. Those who acted “in bad faith or with gross negligence” cannot invoke the operative fact doctrine.

To illustrate his point, Carpio wrote that “if DAP funds were used to build school houses without anomalies other than the fact that DAP funds were used, the contract could no longer be rescinded, for to do so would prejudice the innocent contractor who built the school houses in good faith.”

In contrast, “if DAP funds were used to augment the PDAF of members of Congress whose identified projects were in fact non-existent or anomalously implemented, the doctrine of operative fact would not apply.” – Rappler.com

Highlights: Brion's separate opinion on the DAPJustice Brion is perhaps the most pointed in saying Budget Secretary Butch Abad 'might have established the DAP knowingly aware that it is tainted with unconstitutionality'

Reynaldo Santos Jr

Published 9:00 AM, Jul 17, 2014

Updated 11:40 AM, Jul 17, 2014

MANILA, Philippines – When the Supreme Court voted 13-0-1 on the controversial Disbursement Acceleration Program (DAP) on July 1, at least 6 Justices wrote their separate opinions – Antonio Carpio, Presbitero Velasco Jr, Arturo Brion, Mariano del Castillo, Estela Perlas-Bernabe, and Marvic Leonen.

Their opinions added more context to the Court’s unanimous decision that declare unconstitutional some parts of the program, meant to address government underspending and stimulate economic growth by realigning unused funds to fast-disbursing ones. (READ: Understanding the SC ruling on the DAP)

We earlier published the highlights of the opinion written by Carpio, the most senior magistrate in the High Court. We’re also featuring the separate opinion of Brion, who was perhaps the most emphatic in saying that the Court cannot presume good faith in the application of the operative fact doctine.

He was very pointed when he wrote that given the evidence shown them, the actions of Budget Secretary Florencio "Butch" Abad appear to "negate the presumption of good faith that he would otherwise enjoy in an assessment of his perfomance of duty." Brion also wrote that there are "indicators" showing that the Budget Secretary "might have established the DAP knowingly aware that it is tainted with unconstitutionality."

Still referring to Abad, he specified, "As a lawyer and with at least 12 years of experience behind him as a congressman who was even the Chairman of the House Appropriations Committee, it is inconceivable that he did not know the illegality or unconstitutionality that tainted his brainchild....Armed with all these knowledge, it is not hard to believe that he can run circles around the budget and its processes and did, in fact, purposely use this knowledge for the administration's objective of gathering the very sizeable funds collected under the DAP."

Brion concurred with the Court’s decision, and explained further why the DAP is unconstitutional and why it needs to be struck down. Here are highlights of Brion's 62-page separate concurring opinion:

1. The principles of checks and balances, and the separation of powers integrated in the budgetary process

Brion said the 1987 Constitution describes the budgetary process as embodying the "general principle of separation of powers and checks and balances under which the Legislative, the Executive, and the Judiciary operate.” The Constitution sets specific limits for each branch: Congress is granted the power of appropriations, while the Executive is granted the power to implement the programs funded by these appropriations.

For Brion, the DAP violates the principles of separation of powers, and checks and balances for 2 reasons: (1) the DAP pools funds that can’t be classified as savings, and (2) it uses these funds to finance projects outside the Executive, or for projects with no appropriation cover.

“By facilitating the use of funds not classified as savings to finance items other than for which they have been appropriated, the DAP in effect allowed the President to circumvent the constitutional budgetary process and to veto items of the GAA without subjecting them to the 2/3 overriding veto that Congress is empowered to exercise,” he wrote.

2. The prohibition against the transfer of appropriations

Brion pointed out that the Constitution offers an exemption on its rule on the transfer of appropriations:

Section 25(5), Article VI: No law shall be passed authorizing any transfer of appropriations; HOWEVER, the President, the President of the Senate, the Speaker of the House of Representatives, the Chief Justice of the Supreme Court, and the heads of Constitutional Commissions may, by law, be authorized to augment any item in the general appropriations law for their respective offices from savings in other items of their respective appropriations.

However, he magnified the catch in this exemption: “a transfer of appropriations may only be exercised if Congress authorizes it by law.”

Also, at least two requisites must be satisfied to make a valid transfer: (1) there must be savings in the programmed appropriation of the transferring agency, and (2) there must be an existing item, project or activity with an appropriation in the receiving agency to which the savings would be transferred.

Brion added that savings cannot be used to augment non-existent items in the GAA. He explained: “Where there are no appropriations for capital outlay in a specific agency or program, for example, savings cannot be used to buy capital equipment for that program. Neither can savings be used to fund the hiring of personnel, where a program’s appropriation does not specify an item for personnel services.”

3. The special conditions for the release of the Unprogrammed Fund in the 2011 and 2012 GAAs

Brion agrees that the DAP facilitated the unlawful release of the Unprogrammed Fund in the 2011 and 2012 GAAs, based on the Special Provision No. 1 that is mentioned in both GAAs:

Release of Fund. The amounts authorized herein shall be released only when the revenue collections exceed the original revenue targets submitted by the President of the Philippines to Congress pursuant to Section 22, Article VII of the Constitution.

A supporting provision follows the main provision above:

PROVIDED, That collections arising from sources not considered in the aforesaid original revenue targets may be used to cover releases from appropriations in this Fund

Brion explained that this supporting provision, however, is not intended to prevail over the main provision. He said that if we are to primarily follow the argument of the supporting provision, then the main provision will become useless.

4. The application of operative fact doctrine in the DAP

Brion said the operative fact doctrine doesn’t always apply to cases that deal with constitutional invalidity. He explained that it can only be invoked when “the nullification of the effects of what used to be a valid law would result in inequity and injustice.”

This is why the operative fact doctrine can only be applied to programs, projects and works that can no longer be undone, as its beneficiaries “relied in good faith on the validity of the DAP.”

As for the authors, proponents, and implementors of the DAP, they are not covered by the doctrine because “their link to the DAP was merely to establish and implement the terms that we now find unconstitutional.” Brion said, “The matter of their good faith in the performance of duty (or its absence) and their liability therefor, if any, can be made only by the proper tribunals, not by this Court in the present case.”

Clarifications

Brion also clarified some of the claims raised by the respondents:

Prima facie demonstration of grave abuse of discretion

Brion said the respondents claim that allegations presented against DAP failed to make a case of grave abuse of discretion, as they are based mostly on mere news reports. He, however, said that these news reports contain quotes from respondents themselves, as well as DBM documents that even prove the allegations. “All of these cumulatively and sufficiently lead to a prima facie case of grave abuse of discretion by the Executive in the handling of public funds.”

The lack of audit findings does not negate grave abuse of discretion

Brion said the respondents have denied the existence of an actual case against them, since the Commission on Audit (COA) “has yet to render its audit findings to determine whether the DAP-funded projects identified in the petitions are lawful or not, thus showing that the petitions may be premature.” He, however, countered that while the COA rules on the regularity of an item in government expenses, the agency can’t rule on the constitutionality that made the expenditure possible. “This issue remains for the courts, not for the COA, to decide upon,” he wrote. – Rappler.com

The DAP decision: Lessons on politics, governanceWe submit unsolicited, but hopefully useful, advice for the administration, to tone down the self-righteous defensiveness

Dean Tony La Viña and Christian Jorge Laluna

Published 10:01 AM, Jul 10, 2014

Updated 12:03 PM, Jul 10, 2014

With the decision in the consolidated case of Araullo v. Aquino III, the Supreme Court had found the Disbursement Acceleration Program (DAP) of the administration of President Benigno S. Aquino “partially constitutional”, “partially unconstitutional.”

In its wake, as seen in the news, critics have gladly seized on DAP’s partial unconstitutionality to raise scenarios of impeachment against the President, or raised calls for the resignation of Budget Secretary Florencio “Butch” Abad.

These criticisms ride on the popular anger against “pork barrel” freely-disbursed lump sum allocations such as the Priority Development Assistance Fund (PDAF) declared unconstitutional in Belgica v. Executive Secretary – this time aimed at Malacañang rather than Congress.

We will not join the bandwagon. We do not support the impeachment of the president and we leave it up to Secretary Abad, an exemplary public official by any standard, to discern whether his resignation will benefit the country. We trust he will make the right decision.

In this article, we think beyond this politics of outrage, which could just be a moment or are warnings of major upheavals ahead, and reflect on the longer term political and governance implications of the DAP decision.

A judicial challenge to an act of the executive (or the legislative, for that matter), is ultimately an act that seeks to limit an instance of the exercise of that governmental power – when done right, in an effort to curb abuse and protect what is right. In parsing DAP, in declaring some of Aquino’s actions constitutional, and some unconstitutional, the Supreme Court had essentially left the President’s prerogative to augment proper budget expenditures from proper budget savings intact, but clearly defined what augmentation is not.

What augmentation is, according to the ponencia, and defined in Art. VI, Sec. 25 (5) of the 1987 Constitution, and authorized within each year’s General Appropriations Act (GAA), is the use of clearly-identified savings in the expenditures of government departments and offices to augment clearly-identified, actual deficiencies within those respective government departments and offices. What augmentation is not, however, is to allocate what was not authorized as an expenditure in the GAA. It is not a transfer of executive department savings to legislative lump sum allocations (cross-border augmentation) – by virtue of the latter’s unconstitutionality, or at the very least, because such itself violates Art. VI Sec. 25 (5).

Savings

There, too, was a problem in addressing the definition of “actual savings” that is the source of augmentations. To quote from the ponencia, actual savings, strictly speaking, is the money left over from GAA-authorized items which are “authorized was completed, finally discontinued, or abandoned”; or because the policy targets were reached at lower cost due to increased efficiencies; or because of vacant government positions or leaves-of-absence without pay. Araullo held that it did not contemplate the use of money that had yet to be used: the controversial “unobligated allotments” of slow-moving government projects; or the unprogrammed funds, which are standby appropriations authorized in the GAA, which are available only under specific circumstances and conditions. One of DAP’s errors, but a critical one, was that it considered funds otherwise not considered by law as “actual savings”, as actual savings, making them available for disbursement by the President.

As with Belgica, Araullo exposes the underbelly of Philippine money politics: the roles and powers over the budget-crossing borders. With PDAF, it was the legislature getting an all-but-assured slice of the pie for legislators to spend on their own programs as they see fit; a usurpation of executive roles. With the unconstitutional portions of DAP, it was the Chief Executive allocating savings and unprogrammed funds to projects or programs independent of authorized GAA allocations (including DAP handovers to legislators); a usurpation of legislative functions. It would be crude but otherwise uncomfortably close to the mark to describe a “DAP’ed” president as a mini-Congress, and a “PDAF’ed” legislator as a mini-president.

Yet this confluence and contradiction of roles has likely subsisted in the foundations of Philippine politics-in-practice – certainly since PHILCONSA v. Enriquez earlier ruled pork barrel as constitutional, allowing the practice to continue with judicial leave. For all the diatribes raised against Aquino in the wake of the PDAF scandal, the truth is that, as with his predecessors, he had inherited prior practices of Philippine government that have become so ingrained in political culture.

Malice

Other than outright malice (which has to be proven first!), nothing else but the honest belief that “pork is right (if used right)” would have motivated congressmen who cried foul and threats of impeachment over Belgica. And I do believe (despite others that claim otherwise) that what motivated the administration on the

exercise of and its defensiveness with DAP was not the malice they denounce, but a similar honest belief that the Executive could reallocate unused money as it did, for the good of the nation.

Ironically, it was Aquino’s own high standards of daang matuwid that allowed the Court to resolve the DAP question as it did – or for the question to explode into public consciousness as it did. The records of the case will reflect the packages of memoranda and orders in relation to DAP money movements: amply documented and volunteered upon summons.

Admittedly, and as will be elaborated later, an audit will still be necessary to uncover the full story of DAP (and the Court did note that documents relating to DAP’s conceptualization were “scarce”), but the evidence package offered in Court was enough for the Justices to parse how the President exercised his powers, the bone of contention in Araullo.

If anything, such level of documentary detail, readily presented upon order, would be evidence of good faith on the part of the administration. Which is where our discussion now turns to the question of impeachment against Aquino, or calls for Abad to resign. Ever since last year, there has been an undercurrent of vindictiveness in the campaign against pork. Understandable, given the scale of the scandal, and the defenses offered by all the parties under attack – whether Senators Enrile, Estrada, or Revilla; or Aquino or Abad – that some feel are just attempts to deflect or delay the inevitable condemnation. And we feel that anger in critical op-eds, or the vitriol in the comment boards of news outfits and social media.

Unconstitutional but not criminal

Yet here we must demur. Legally and morally, to condemn requires proper evidence – culpable violation in case of impeachment, or the commission of the elements of the crime charged, in case of criminal prosecution. As Professor Randy David observed in his Inquirer column, reflecting on his arrest in the wake of President Arroyo’s Proclamation 1017, a policy being unconstitutional does not always mean the policy-maker being criminal – or culpable for that matter.

Justice Marvic Leonen pointed it out clearly in his separate opinion: “…to rule that a declaration of unconstitutionality per se is the basis for determining liability is a dangerous proposition. It is not proper that there are suggestions of administrative or criminal liability even before the proper charges are raised, investigated, and filed.”

If we keep insisting that government officials should always be held liable, especially criminally liable, for acts subsequently declared to be unconstitutional by the Court, then all government would be paralyzed by terror, unable to exercise such powers even granted to them by the Constitution, for fear of the next prosecution (whether truly aggrieved or politically motivated) thrown in their direction.

The Supreme Court may be the final arbiter of constitutionality, but by virtue of separation of powers, the Executive and Legislature get first crack at interpretation of the constitutionality of their acts (“contemporaneous construction”). Such interpretation is still open to challenge by any aggrieved party, but a principle of law is that constitutionality is generally presumed; its unconstitutionality must be proved. Until proven otherwise, the law grants the President or Congress the benefit of the doubt.

Absent further evidence on malicious or culpable acts of the Administration, it is enough that Araullo reestablishes the proper budget-handling borders of the separated powers of government.

Governance

This leads us to our next set of implications: governance. As pork had become ingrained in national politics, it had also wormed its way into governance, into the implementation of policy – and the spending of money on policy. PDAF again demonstrates how dependent public services, even those provided by NGOs, were on the largesse of legislators, such that the system could be manipulated with ghost NGOs. It feeds into the patronage politics of Philippine governance: that public services and the benefits every citizen receives, by

law, from government is held hostage by the political elite, who can then extract staying power and the occasional graft from his constituency and budgetary allocation.

It should be noted that the same Secretary Abad critics are now wont to hang for DAP, is the same Secretary Abad who declared, in his Metrobank Professorial Chair lecture last year at the Ateneo School of Government, that the budget could be a tool for citizen empowerment (particularly though inclusive budgeting reforms introduced under his watch, such as bottom-up budgeting).

Weeding governance of bad budgetary habits strengthens good and responsive governance. Subjecting government allocations and allotments to stricter scrutiny and controls, thanks to the restoration of the borders, will ultimately help in restoring fiscal credibility to Philippine governance: the legislature authorizes where the money goes, the executive releases the money to such expenditures, with the citizenry participating at the budget planning, deliberation, and execution stages, either through their elected representatives or as citizen organizations.

Still, good governance has up to 27 years to catch up on a history of bad budgetary habits, since the restoration of traditional political dynamics following the fall of the Marcos regime. In the short term, government and citizenry both will have to break some of those habits: congressionally-“branded” scholarships and free clinics; the basketball courts and multi-purpose halls, that seem to be the low-hanging fruit of GAA allocations to public works.

Padrino system

There will likely be a painful adjusting period as constituents suddenly find themselves without a padrino, learning instead political habits of interest aggregation, interfacing with representatives and bureaucrats, of leveraging policy planning and execution to their benefit. As our colleagues have found in the G-Watch project, this learning process is more needed – and more painful – outside the cities, in the bailiwicks of trapo dynasties, and among a population so used to binyag-kasal-libing interaction with their political representatives.

Padrinos and trapo dynasties may seem more the terrain of Congress, but Abad’s concept of budget-as-empowering is sorely needed in Malacañang as well. Keynesian economics does hold that government spending does have a stimulus effect on the economy – Justice Leonen’s concurrence to Araullo noted this; exemplified by the World Bank report cited in the majority that found DAP to have contributed 1.3% to the 2011 gross domestic product growth.

Yet a dependence on DAP as a stimulus tool may yet breed dependence on executive “augmentations” in the name of economic growth.

In the earlier-referred Metrobank lecture, Abad had rightly described the national budget as an arena of struggle among competing interests – but heretofore that struggle and those interests were assumed to be in congressional deliberation, not executive execution. This is the danger implied in Araullo’s finding that augmentations made outside of GAA line items were unconstitutional, as were cross-border releases to Congress.

The accusation that DAP may have been used to secure the votes needed for Chief Justice Renato Corona’s impeachment, or the RH Bill’s passage, stings the most in this regard. True or untrue (or simply very uncomfortable timing), it has become highly embarrassing for the Office of the President at the least. At most, it makes the Office of the President as much a padrino of his own constituency (e.g., Congress) as a local political lord.

Mitigating such dangers requires robust accountability. Araullo complements Belgica by delineating, once and for all, the roles and functions of the branches of government in the budgetary process. It is easier to color within the lines, after all, when the lines themselves are clear.

Accountability

Judicial decisions alone, however, will not color between the lines, so to speak. Financial accountability is the reserve of the system of checks and balances among the branches of government (which Araullo and Belgica thankfully clarify), and of the Commission of Audit, its raison d’etre.

It also ought to be the resolve of citizens to watch over the effective and equitable expenditure of public funds through project monitoring, and working with government – a cause our school, the Ateneo School of Government, has championed through the social accountability framework.

However, there is something Malacañang ought to do now, in the wake of Araullo. So far, what has been made public by court action were the DAP-related memos and subsequent documentation of the Office of the President. As noted in the ponencia, other documents remain to be revealed, such as the decision-making process behind DAP’s creation, and of course the proverbial paper trail of the money, especially once it left executive hands. This goes double for the releases to legislators, in case it can help clarify the paper trail in the PDAF cases on file now and later, and to clarify which personalities or programs may benefit from the doctrine of operative fact under a good-faith defense (as Justice Antonio Carpio cautions in his separate opinion).

We would like to repeat, however, that this exercise in accountability must not turn into an exercise of vindictiveness. Accountability based on threat (or at least threat alone), a climate of fear of the hangman’s noose, will not be sustainable. Where liabilities can be established, as Justice Leonen observed, there the proper cases may be filed (and if the travails of the PDAF prosecution team be instructive, then those liabilities must be thoroughly established).

But as with the Benhur Luy revelations, Araullo can help guide everyone’s hand in establishing a better structure of public finance management and accountability. Fully threshing out this promise is best left to a future article, but suffice to say that Araullo and Belgica mitigate, if not eliminate, the risks opened up by the earlier PHILCONSA ruling.

The administration’s habit of documentation, too, is a hopeful portent of practices to come, and a willingness of Aquino officials to further disclose the extents and consequences of DAP in the name of accountability and better governance design. (Besides, a working Keynesian stimulus is a good achievement, especially for an administration earlier criticized for dragging its feet on post-Arroyo government spending.)

Admit mistakes

And to help stimulate both accountability and discussions for governance redesign, here we must submit unsolicited, but hopefully useful, advice for the administration, to tone down the self-righteous defensiveness.

Araullo, as well as Aquino’s forthcoming submission of the requested evidences, already point to good faith exercised in the execution of DAP. The presidential prerogative for constitutional augmentation has not been stripped. It is possible to look at the Supreme Court decision as a starting point for dialogue and reform. As with persons, it helps for governments to admit their mistakes as a step towards reconciliation and recovery. It also helps that the populace be ready to dialogue with its mistaken, but cooperative, government – but we have already stressed this point in previous paragraphs.

So where does the country go from here? How does the Philippine polity “go cold turkey”, bear the withdrawal symptoms from weaning itself from a dependence on pork barrel? Money, legitimately or illegitimately appropriated and disbursed, had been used in times past to grease the wheels of legislation and execution.

This is what Congress crowed about in the wake of Belgica, to take away the proverbial prop upon which their Houses stand. But the very picture of “political horse-trading” did not envision the exchange of money,

especially the people’s money, but the aggregation and trading of political, economic, and social interests deliberated openly, for which the money will then be disbursed, and the reward is continued political (and practical) relevance to their constituencies (as well as their respective salaries).

Idealistic, we know – even America struggles with corrupt money politics and pork, though manifested in different forms (e.g., “earmarks”).

Yet it is high time we learned the habits of modern, accountable politics. Consider Araullo and Belgica a badly-needed intervention, a judicially-mandated stint in rehab that may finally give Philippine politics a chance to detoxify, shed some bad money habits, and come clean into the 21st century.

As with any intervention, it would help for the intervenors to approach their addict-subject with detachment and compassion; with sensitivity as well as resolve. – Rappler.com

So the public may know…and decideIndeed, not even the most irrational detractor can diminish the economic gains and investment upgrades that the country attained only under this administration, partly due to the polemic DAP

Yoly Villanueva-Ong

Published 12:01 PM, Jul 12, 2014 Updated 12:01 PM, Jul 12, 2014

Woodrow Wilson once said, “If you want to make enemies, try to change something."

No one can attest to the veracity of this statement better than President Aquino and DBM Secretary Butch Abad.

“When we assumed office in 2010, we were confronted with inefficiencies and bottlenecks in the bureaucracy – the delayed implementation of priority programs and projects and inefficient disbursements among others – so that growth contracted for three quarters in 2011.

"With this, we introduced the Disbursement Acceleration Program (DAP) as a reform intervention to accelerate public spending and boost the economy. This program made way for the remarkable improvement in government expenditure making a significant improvement in GDP growth which rose to as high as 7.6% last year,” explained Abad.

Indeed, not even the most irrational detractor can diminish the economic gains and credit rating upgrades that the country attained only under this administration, partly due to the polemic DAP.

As early as December 2013, the economic team composed of Secretary Abad, Finance Secretary Cesar Purisima and NEDA Secretary Arsenio Balicasan recommended the termination of DAP as written in a memo to the President.

“All economic and fiscal indicators point to the conclusion that DAP has achieved its objective as a fiscal stimulus measure. We thus recommend for His Excellency’s consideration, the termination of DAP as well as the vigorous implementation of budgetary reform measures to ensure the irreversibility of reforms.”

Three major reform measures were recommended to strengthen transparency, accountability and efficiency in public spending. These are: the GAA-as-Release Document, Performance Informed Budgeting, and the Cashless and Checkless Regime.

Florid media reporting gives the misimpression that the entire DAP was declared unconstitutional. But as published in Rappler:

SC declared 3 schemes unconstitutional:

1. 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

2. Cross-border transfers of savings of the executive department to offices outside the executive department

3. Funding of projects, activities, programs not covered by appropriations in the General Appropriations Act

So before volunteering an opinion, impeaching President Aquino, or screaming for Butch Abad to resign or be thrown in jail, make it a point to read Former Chief Justice Artemio Panganiban’s column, The DAP decision (July 6, 2014).

“…Acts done in good faith pursuant to a law or executive act that is later declared unconstitutional would remain valid and enforceable. It also applies when the nullification of such acts would result in an injustice. In short, unconstitutionality has prospective effects only.”

Then read Raisa Robles’ well-argued piece, “President Aquino’s dead mom, President Cory, may yet save her son from jail over DAP (And why there are grounds for the Supreme Court to review its decision on DAP).”

Raissa asks, “Could the Supreme Court be wrong?...The DAP is unconstitutional if you only look at the 1987 Constitution and Chapter 5, Section 38 of the Administrative Code of 1987 – which is what the justices did.

"The DAP becomes constitutional if you look at the 1987 Constitution AND Sections 38 and 49 of Chapter 5 of the Administrative Code of 1987….But NOT ONE of them mentioned nor discussed Chapter 5, Section 49....Because of this, they unanimously ruled that the pooling of funds under DAP and certain cross-border DAP projects violated the Constitution.”

Raissa points out that the Administrative Code is not a mere Executive Order. It has the status of a law as given by the Constitution.

SECTION 49. Authority to Use Savings for Certain Purposes. – Savings in the appropriations provided in the General Appropriations Act may be used for the settlement of the following obligations incurred during

a current fiscal year or previous fiscal years as may be approved by the Secretary in accordance with rules and procedures as may be approved by the President:

9.) Priority activities that will promote the economic well-being of the nation, including food production, agrarian reform, energy development, disaster relief, and rehabilitation.10.) Repair, improvement and renovation of government buildings and infrastructure and other capital assets damaged by natural calamities;

Finally, let us contemplate Franklin D. Roosevelt’s admonition, “I ask you to judge me by the enemies I have made.”

Who are the enemies of PNoy and Butch Abad?

The list is long but the usual suspects are as perennial as they are familiar. The most rabid attackers come from the left-leaning party list groups Bayan Muna (recipients of PDAF and DAP) and its spawn Kabataan. It was also the prime movers of the leftist political wing, National Democratic Front (NDF), that brought the issue to the Supreme Court. The rallies, heckling and protest stunts are all care of this block. Why are they so anti-Aquino? Their failed senatorial bets in 2010 were not accepted in the slate, is one reason.

Then there are the unhappy politicians as represented by the devilishly striking spokesperson, who changed allegiance early on; the supporters of the 3 senators and the former president currently in jail for the non-bailable crime of plunder; the former budget secretary and national treasurer who tirelessly speak out on TV to point out the flaws of this government. (One was accused of involvement in a multimillion textbook scam; the other was said to be after an elusive post.)

There are the disgruntled elements in the Supreme Court who got bypassed, the mordant joker who actually authored the Administrative Code of 1987, and finally the “jukebox media” who play up whatever angle was paid for.

Who is serving our country better and is more deserving of our support? It’s our call. – Rappler.com