FAQ ON THE DISBURSEMENT ACCELERATION PROGRAM (“DAP”) 1. What is the DAP? The controversial Disbursement Acceleration Program, also known as “DAP“, was a program initiated by the Aquino administration to supposedly stimulate the country’s economic growth by promoting government spending in the development of certain high-impact projects. 2. Where did the money come from? Each year, Congress approves the country’s budget which is composed of: an estimate of revenues and funding sources, such as: taxes capital revenues grants extraordinary income borrowings the itemized public expenditures of the government In actual practice, the annual budget is not always met. Basically what this means is that the government may actually receive more money than it expected or it may spend less money than it expected. These extra amounts or “savings” were used to fund projects under the DAP.1 3. How does a project qualify for funding under the DAP? According to the Department of Budget and Management (“DBM”), the following criteria must first be met before a Project, Activity or Program (“PAP”) can qualify for funding under the DAP: (a) the PAP should be fast-moving or quick-disbursing; (b) the PAP should be urgent and/or have priority in terms of social and economic development objectives; (c) the PAP should be performing well so that, if given additional funding, it would be able to deliver more services to the public; and (d) the PAP must be existing and form part of the budget or General Appropriations Act (“GAA”) for the year.2 4. How much money are we talking about? Per DBM records, the following total amounts were released under the DAP: 2011 = Php 83.53 billion The above amount was supposedly used to provide additional funds for programs/projects such as healthcare, public works, housing & resettlement as well as agriculture, among others;3 2012 = Php 58.70 billion The above amount was supposedly used to augment tourism, road infrastructure, school infrastructure, rehabilitation and extension of light rail transit systems, as well as sitio electrification, among others;4 2013 = Php 15.13 billion The above amount was supposedly approved for the hiring of policemen, additional funds for the modernization of the Philippine National Police (“PNP”), the redevelopment of Roxas Boulevard as well as funding for the Typhoon Pablo rehabilitation projects for Compostela Valley and Davao Oriental.5 5. DAP timeline6 2011 September The DAP was conceptualized. October 12 DBM Secretary Florencio Abad presented the first (of several) Memorandum(s)7 to President Aquino to confirm his approval for the Disbursement Acceleration Fund (DAP) for fiscal year 2011, totaling Php 72.11 billion. The Memorandum contains a list of the sources of funds as well as the projects to be funded. December 12 118 (of the 285) members of the House of Representatives voted to transmit to the Senate the Articles of Impeachment against Supreme Court Justice Renato Corona. Another Memorandum was presented to President Aquino for the granting of “omnibus authority” to consolidate the savings and unutilized balances for fiscal year 2011. 2012 May 29 The Senate, voting 20 – 3, impeached Supreme Court Justice Renato Corona. July 18 National Budget Circular (“NBC”) No. 541 was issued to implement the June 25, 2012 Memorandum. It authorized the withdrawal of the unobligated allotments so the same could be used to fund other priority expenditures of the government. 2013 September 25 In a privilege speech, Senator Jinggoy Estrada revealed that 20 senators received at least Php 50M each in additional lump-sum allocations after CJ Corona’s impeachment. September 28 DBM Secretary Abad clarified that the disbursements of the DAP funds were based on letters of request submitted by the Senators to help them in the delivery of goods and services to the public. September 30 Commission on Audit (“COA”) Chairperson Grace Pulido- Tan said that they had begun an audit of the DAP based on allegations of misuse of the funds. The audit will focus on the implementing agencies and not the individual Senators. October 1 Several lawmakers and concerned citizens filed petition(s) before the Supreme Court questioning the constitutionality of the DAP. Malacañang countered by saying that the DAP was constitutional because the President has the power to realign savings under the Constitution. October 2 President Aquino defended the legality of the DAP and challenged his critics to impeach him. October 4 Malacañang said it was “inclined” to stop releases under the DAP because the country’s economy had already improved. Hence, the purpose for which DAP was created had already been achieved. Malacanang said their decision had nothing to do with the brewing controversy involving the DAP. October 8 The Supreme Court did not grant the application for a Temporary Restraining Order (“TRO”) on the implementation of the DAP. However, it ordered the government to comment on the DAP’s constitutionality within in 10 days. October 13 Malacañang said it would wait for the result of the COA audit of the DAP before answering any questions on the fund’s constitutionality. October 14 Senator JV Ejercito filed a resolution to investigate DAP with the aim of recommending and formulating laws, policies and regulations for the proper use of savings from the different departments of government as well as the proper use of budget augmentation. October 16 The Integrated Bar of the Philippines (IBP) joined the petitioners who filed for the issuance of a TRO. October 17 Makabayan party list and leaders of anti-pork barrel groups also filed a petition before the Supreme Court to stop the implementation of the DAP. October 30 President Aquino went on national television to defend the DAP, saying that it was being used to distract the people from the PDAF scam. December 10 The Supreme Court asked the DBM to submit a list of all sources of funds as well as specific uses of the DAP. thum 2014 January 28 In his defense of the DAP, Solicitor General Francis Jardeleza argued that since the DAP already served its purpose, the issue of its constitutionality was moot and academic. February 17 Anti-pork barrel groups called for the COA to look more closely into the DAP projects and where the funds went. June 10 The Supreme Court deferred voting on the constitutionality of the DAP. July 1 The Supreme Court issued a Decision on the controversial DAP. The Court partially granted the petition(s) and ruled that certain acts and practices under the DAP were unconstitutional . 6. What acts and/or practices under the DAP were found to be unconstitutional by the Supreme Court? According to the Supreme Court, there were 4 acts and/or practices that were unconstitutional.8 Specifically, these were the following: (a) The act of transferring funds prior to the end of the fiscal year.9 Only “actual savings” may be transferred from one budget item to another item in the GAA. You can only have “actual savings”: when the purpose of the appropriation has been fulfilled; or when the need for the appropriation no longer exists. Since the DAP transferred “unreleased or unallocated appropriations”, the purpose for which they were appropriated had not yet been fulfilled. Neither did their need cease to exist. Therefore, declaring them as “savings” would be premature. (b) The act of transferring of savings from the executive branch to the legislative branch (also known as “cross-border” transfers“).10 Under Section 25(5), Article VI of the 1987 Constitution, the power to augment departmental budgets in the government applies only to items within their respective offices and not to other offices. In other words, funds appropriated for one office are prohibited from crossing over to another office even for the supposed purpose of augmenting a deficient item. Therefore, the transfer of funds from one branch of the government to another is a clear violation of the Constitution. (c) The act of funding PAPs that are not covered by any appropriation in the GAA.11 Upon examining the documentary evidence submitted by the OSG to support their argument that the 116 DAP-financed PAPs: were implemented; had appropriation covers; could properly be accounted for, the Supreme Court discovered that the PAPs were not covered by any appropriation in the pertinent GAAs. Hence, the same was declared unconstitutional. (d) The use of “unprogrammed funds” despite the absence of a legally required certification by the National Treasurer that the revenue collections exceed the total of the revenue targets.12 “Unprogrammed funds” can only be used in two instances: (i) when revenue collections exceeds its target; and (ii) when additional foreign funds are generated.13 Because the funds were used as “standby appropriations” for certain PAPs, they cannot be considered as “savings” but are a separate source of funds. In contrast to the position of DBM, the Supreme Court said that the collection of additional revenues from new sources cannot warrant the release of the “unprogrammed funds.” Therefore, the said practice was held to be unconstitutional. 7. What other DAP-related issues were raised in the Supreme Court? As we all know, the constitutionality and legality of the DAP was questioned before the Supreme Court by numerous parties. These anti-DAP proponents argued that the DAP was unconstitutional because it violated: the equal protection clause the system of checks and balances the provision on public accountability (a) Equal protection The petitioners claimed the DAP was violative of the equal protection clause because its implementation was selective since the funds that were allegedly released were not made available to all the legislators. In addition, there was no reasonable classification used in distributing the funds under the DAP. In fact, the Senators who supposedly received money were treated differently as to the amounts received. The Supreme Court ruled that they were not in a position to rule on this issue because only by the parties who supposedly suffered from the same could raise the issue. In this case, the supposedly affected legislators were not the ones who filed a case for violation of the equal protection clause. (b) Checks and balances The petitioners claimed that by allowing the legislators to identify PAPs, the DAP authorized them to take part in the implementation and execution of the GAA, a power that is inherent in the executive branch of the government. Further, because President Aquino used funds under the DAP for various PAPs which were not considered in the 2012 GAA or budget, he basically gave himself the “power of appropriation” — a power which belongs exclusively to Congress. The Supreme Court held that certain acts and practices under the DAP did violate the system of checks and balances and, in fact, infringed on the doctrine of separation of powers. (c) Public accountability The petitioners claimed that the DAP was repugnant to the principle of public accountability because the legislators relinquished the power of appropriation to the executive and even exhibited a reluctance to inquire into the legality of the DAP. The Supreme Court held that since this argument was speculative, it could not rule on the matter. If there were any constitutional infirmities, the petitioners should prove that they actually exist.14 8. What will happen to the Php 160 billion that was released under the DAP? The Supreme Court said that the doctrine of operative fact would be applicable in this case. Basically what this means is that since several of the PAPS were already operative, it would be next to impossible for the government to undo everything that had already been done. According to the Supreme Court, the doctrine of operative fact should apply: to those PAPs that could no longer be undone; and to those whose beneficiaries relied in good faith on the validity of the DAP However, the said doctrine will not apply to the authors, proponents and implementers unless concrete findings of good faith in their favor are presented. As further opined by Justice Brion, the Supreme Court does not have the jurisdiction to make any ruling on the liability of the DAP proponents. He noted, however, that given his background and experience, there were certain lapses in the behavior and actions of DBM Secretary Florencio Abad, which would belie the presumption of good faith.15 9. Where do we go from here? Heeding the call for accountability in relation to the DAP, Malacañang announced that it would endorse a full audit of the public funds spent under the DAP. Malacañang also said, however, that it was not inclined to conduct its own inquiry into the controversy because the Aquino administration already had “built-in mechanisms” for the accountability of its public officials.16 Because of all the controversies surrounding DAP, every taxpayer in the country has been demanding the release of the full details behind the DBM-instigated acceleration program. They want detailed answers to the following questions: what “high-impact projects“ were funded from 2011 to 2013? what “slow-moving projects” were discontinued by the Aquino administration? which government agency benefitted or lost funds from the DAP?17 In October 2013, the spokesperson of the DBM was quoted as saying that “the technical team in charge of compiling and verifying the DAP data was still finalizing the list to clear it of all possible inaccuracies.” DBM promised it would “release the list to all media contacts once every detail has been validated and confirmed.” In January 2014, in response to follow up requests for the full disclosure of the DAP releases, the spokesperson of the DBM was quoted as saying that they “[were] still waiting for word from the offices that could best answer [these] questions.” On 1 July 2014, the Supreme Court rendered its Decision on the DAP. Case closed. The implementation of the DAP started on 12 October 2011. 2 years and 10 months have lapsed since the implementation of the DAP commenced. Finally, on 14 July 2014 at 4:30 pm (minutes before President Aquino appeared on national television to defend the DAP) the DBM published a vague and incomprehensible “List of DAP-Identified Projects” in their website. The problem with this newly published list is that it confirms what everyone had been suspecting all along: that the controversial DAP releases were done in a secret and illegal manner. This would explain why, to this day, the DBM cannot render a full and detailed accounting as to how it spent Php 160 billion in 2 ½ years. ———– When asked to comment on the DAP, someone once said: “DAP is a bad script … with poor actors … and a lousy ending!” How right he was!
Posted on: Mon, 04 Aug 2014 01:11:45 +0000
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