The engaging concern of the moment is the DAP (Disbursement Acceleration Program) of the Aquino administration. The Supreme Court has ruled the DAP unconstitutional.
“Two critical points.” In commenting on the DAP controversy, I highlight two critical issues that go beyond the current discussions concerning its grip on the nation’s attention.
Last week (July 23, 2014), I devoted attention to the first of these: the public expenditure system is ‘broken’ and it needs fixing.
Today, I take up the second point: fiscal flexibility is needed by all governments to do well in their work. The issue goes to the heart of how the President is empowered within the political framework.
The overarching premise of fiscal flexibility is “democracy,” that the power of the purse belongs to the elected representatives of the people. In the present context, Congress has the power and the President implements the budget. The Constitution tells us this.
“Aquino administration’s defense of DAP.” President Aquino has indicated that he will submit a petition to the Supreme Court to reconsider its decision. Given the near unanimous decision of that court, could a reversal be expected?
Of course, the President’s defiance is designed to show that this program was for the country’s good. The just delivered SONA (state of the nation) speech ignored the Supreme Court decision and simply trumpeted the administration’s achievements, presenting a confident unconcern.
Indeed, in an early speech in which he defended DAP, he asserted that he was in compliance with law, under the administrative code and that what he did helped the nation achieve its current level of success.
More specifics came out when Secretary Butch Abad of Budget appeared before the Senate committee investigating the DAP the other day.
The hearing was essentially political theater, giving the government a formal forum to explain the DAP more extensively and to defend it more fully before a generally supportive Senate.
“Fiscal flexibility is essential.” Conditions change, priorities become more urgent in some cases, and adjustments in budgeting levels and attention often are necessary.
Changing times or challenging developments require quick and pragmatic budgetary flexibility. For effective work, the Executive has to have room for maneuver.
In national government budgeting, the budget is generally and automatically spent for the intended purposes. This is for the bulk of appropriations because departments and agencies have continuing programs and serve fixed constituencies.
As an instance, salaries and maintenance activities of standard government departments take up at least 60- to 70-percent of the total budget.
Yet, delays in disbursements often end in claims against the government by suppliers being delayed releases of public money. The process is slowed down by cumbersome rules, by layers of decision-making, by a ‘broken’ system of expenditure.
Such delays end in a low absorptive capacity for expenditure. It leaves opportunities for budgetary savings. And budgetary authorities could anticipate these and yet would need the flexibility to adjust to the circumstances as they occur.
“The budget law process: PD 1177 and EO 292.” During the public hearing, the neophyte Senator Sonny Angara, pointed out, through questioning of Secretary Abad, that the current DAP is being justified under the administrative code.
Also, the senator further pointed out, still by way of questioning, that this administrative code, or EO (executive order) 292, was signed by President Cory Aquino shortly after she had assumed political power.
Moreover, this provision of law was based on PD (presidential decree) 1177, of President Ferdinand Marcos.
This comment is very relevant to the current issue of DAP and budget flexibility: it highlights the fact that fiscal reforms under martial law continue to influence present day actions and governance. Without those reforms, the budgetary process would be even more ‘broken’.
“The political framework: presidential versus parliamentary.” In fact, despite the political rhetoric used by many against martial law and the dictatorship of the period, the budgetary process in the country has been underpinned by PD 1177.
The aspects pertaining to budgeting in this law is the basis of EO 292, the administrative code. There is no shame in that.
Few of us have historical memory. The political reforms planned by Marcos during the martial law period veered toward a parliamentary system of government composed of popularly elected representatives.
This was put into effect with the Batasang Pambansa and the election of its constituent members. It is recalled too that the democratically elected Constitutional Convention of 1970 adopted a parliamentary system of government.
In fact, when martial law was lifted in 1981, a parliamentary government had taken over. Cory Aquino sought the presidency in 1986 under that system. Had it been given more time to flourish, we would have a different country today.
Who can say that the parliamentary governments as exist in many modern democracies are not democratically composed? Under the parliamentary system of government, the Executive and the Parliament are one and not distinctly separate.
The political process should take the place of checking and balancing of political forces to institute the necessary reforms in government. In the parliamentary form, there is no separation of powers between leader and Parliament.
It is also self-correcting. If the leadership is deemed wanting, the system corrects itself by replacing the leader by those holding political power. An alternative in such scenario is a change in the composition of parliament through new elections.
“Supreme irony.” But Cory Aquino adopted the 1987 Constitution that restored most of the institutions of the old republic: the current system of president, Congress, and the courts. By this decision, the parliamentary government was supplanted by the presidential.
Under the current presidential system, presidential power is separate from congressional power. Conflicts can arise on what laws are prioritized or passed and how they are implemented. And the referee, the Supreme Court, the third independent branch, can rule certain laws and acts of government unconstitutional.
But under the parliamentary system, such conflicts as we know them cannot arise!
If Noynoy Aquino were leading a parliamentary government, then, all the powers of budgeting and flexibility such as those that his government has undertaken with DAP would not be questioned by a Supreme Court. The DAP would be legal and implemented under an Executive unified with the Parliament.
My email is: gpsicat@gmail.com. Visit this site for more information, feedback and commentary: http://econ.upd.edu.ph/gpsicat/