MANILA, Philippines - With nearly the entire Cabinet in tow, embattled Budget Secretary Florencio Abad faced the Senate yesterday and insisted that the law allowed the administration to implement the Disbursement Acceleration Program (DAP).
At yesterday’s hearing conducted by the Senate committee on finance, Abad said he could not comprehend the furor over the DAP, considering that the scheme was never kept under wraps as alleged by its critics.
“Not only has it been done before; we knew that we could implement DAP because the law permitted it,” Abad said.
He said the use of savings by the executive branch has been a practice in every administration since the time of Corazon Aquino.
Even the cross-border transfer of funds from one branch of government to another, which was declared unconstitutional by the Supreme Court (SC), was also something that the executive branch had been doing since 1992, he said.
“As the honorable senators must recall, we presented DAP to the Senate finance committee in October 2011 as a viable solution for accelerating government expenditures. We knew that this could be done. After all, the generation and use of savings – of which DAP is an example – is not a new practice,” Abad said.
Abad noted that the use of savings for various projects and programs was called by a different name by previous administrations and the current administration only chose to call it DAP.
Deficit management
During the first Aquino administration, Abad pointed out that the use of savings took the form of the imposition of reserves, where allocations were withheld as security against unwieldy fiscal deficit. The scheme was called the Reserve Control Account.
“This way of using savings continued on in the Ramos and Estrada administrations. Under the Arroyo administration, the practice was plainly dubbed the ‘use of Overall Savings.’ The practice of generating and using savings bore different names because each administration faced its own unique set of economic and fiscal challenges,” Abad said.
In the case of cross-border transfers, Abad noted that this has been done over the last 22 years.
“Savings have been used to augment the budgets of Congress, the judiciary and other constitutional bodies independent from all three branches of government,” Abad said.
Reiterating the statements made by President Aquino over the past week, Abad cited Sections 38 and 39 of the Administrative Code, which authorizes the President to suspend or stop the use of funds allotted to an agency, if the public interest so requires.
It also allows the use of savings to cover a deficit in any other item in the national budget upon approval of the President.
He said the administration launched the DAP in 2011 with an announcement by the Department of Budget and Management (DBM), which was even picked up by several news agencies.
Malacañang also made its own announcement of the program’s launch, he said.
A total of P237.5 billion was determined as savings by the administration in 2011 and readied for DAP.
However, Abad pointed out that the proposed projects considered for funding amounted to only P167.6 billion.
What was eventually approved by the President and released was a total of P144 billion, which was the working figure being used by the DBM for the DAP.
Abad said that 37 percent of DAP funds were used to support economic services, 34 percent went to infrastructure projects, 21 percent to social services, five percent for defense, security and disaster management, and three percent for other expenditures.
“These figures are fairly impressive, but the public may perhaps be more interested in finding out how DAP benefited the Filipino people. Because we implemented DAP without pomp and circumstance, most of the public are unaware that some of the services we’ve been delivering were made possible by DAP,” Abad said.
These include the payment of unremitted GSIS premiums for public school teachers, sitio electrification projects and Technical Education and Skills Development Authority training for work scholarships.
“The acceleration of these expenditures played a sure role in the expansion of our economy, and ultimately, in the consistent socio-economic growth that we have enjoyed over the last four years,” Abad said.
He said the administration finds disturbing the Supreme Court’s ruling that “the doctrine of operative fact and its attendant presumption of good faith cannot apply to the authors, proponents and implementers of the DAP, unless they prove otherwise.”
“More troubling is the chilling effect of those two stray paragraphs on the Aquino administration’s momentum for reform. Because if public servants are presumed to have acted in bad faith in the course of their reform efforts, we can only expect a bureaucracy that second-guesses itself before taking creative action, a bureaucracy which shakes in its boots while performing just the bare minimum of its duties,” Abad said.
“While I bow to the wisdom of the Supreme Court, I must say, with all due respect, that its decision on these issues may undo the progress we have achieved so far,” Abad said.
With legal basis
Senate President Franklin Drilon said he agreed with Abad that the DAP was implemented in accordance with law.
He also said DAP did not only benefit allies of the President.
Abad noted that every senator at the time the DAP was implemented, except for Panfilo Lacson, nominated projects for inclusion in the program.
He said that the same was true for the House of Representatives because everyone, including Bayan Muna party-list Rep. Neri Colmenares, who endorsed the impeachment complaint against the President, nominated projects under the DAP.
“It is not as if this is a program of allies of the President. It has something to do on whether or not it is a valid request for funding of a particular project,” Drilon said.
Based on the explanation of Abad, the DAP was a spending reform measure for speeding up public expenditure to catalyze economic growth.
Some questions were asked about the selection of programs and projects that were included in the DAP, such as the P40 billion that went to the Bangko Sentral ng Pilipinas and the P4.1 billion that went to the Commission on Elections.
Critics of the DAP questioned the inclusion of these because it was not clear what role they had played in stimulating the economy.
Abad said the actual amount that went to the BSP under the DAP was only P30 billion and this was part of the obligation of the national government under the Charter of the BSP.
He added that the BSP has been instrumental in the growth and stability of the economy.
As for the Comelec, Abad explained that the funds were used for the purchase of the precinct count optical scan machines, which were previously leased by the poll body.
Abad said that the Comelec did not have the budget for purchasing the PCOS machines and with the 2013 elections around the corner at the time, Chairman Sixto Brillantes Jr. warned that failure to complete the transaction could result in a return to manual counting of votes.
Wrong projects
Sen. Nancy Binay said DAP funds should have been used for regular projects such as the rehabilitation of toilets at the Ninoy Aquino International Airport (NAIA I).
Binay grilled Abad on the shelving of the P549.188-million budget for the NAIA I in 2012 which eventually ended up as part of the pooled savings that went to the DAP in the later part of the same year.
Binay also questioned the allocation of P70 million for stem cell research coursed through the Department of Health (DOH) when the amount would have benefited more if spent for the purchase of more beds in government hospitals.
Transportation and Communications Secretary Joseph Abaya and Health Secretary Enrique Ona, who were seated at the VIP gallery section, were called to the inquiry to explain the DAP allocations given to their respective departments.
For the DOTC alone, the agency’s savings reached P14.5 billion in 2011 and 2012. Abad did not rule out that the P14.5-billion savings could have been pooled as part of government savings and eventually ended up in the DAP.
Abaya said the NAIA restrooms were not recipients of DAP. He said the rehabilitation project for NAIA was scrapped when he was still congressman.
“In terms of service, there would have been many who will benefit from this project… why ask this amount from Congress? The budget of P549 million was approved and then in the middle of the year, it was scrapped,” Binay said.
“Hindi ninyo po nakikita ang pangangailangan ng mga banyo nationwide (Can’t you see the need for toilets nationwide)?” Binay added.
Sen. Ferdinand Marcos Jr. joined Binay in asking the Senate panel to direct the budget chief to submit a list of amounts impounded per agency and pooled to be part of DAP.
Misleading
Former budget chief Benjamin Diokno said Abad and Drilon were misleading the public with their claims that the previous administrations also had their own versions of the DAP.
In a statement, Diokno pointed out that the use of savings by the previous administrations was different from what the current administration is doing with the DAP.
“Abad’s DAP and past presidents’ use of savings are not the same. Having reserves does not necessarily mean savings,” Diokno said.
He said the Reserve Control Account “was used as tool for impoundment, not for funding new programs, projects and activities not in GAA (General Appropriations Act).”
“In the past, reserve control account was used for impoundment of funds for fear of unmanageable fiscal deficit,” Diokno said.
“This is not the same as generating ‘contrived’ savings and applying the same for programs, projects, and activities not authorized in the GAA,” he said.
On the issue of cross-border transfers of funds, Diokno argued that the example given by Sen. Francis Escudero about local government units providing funds to the courts situated in their respective jurisdictions do not fall into that classification.
“The SC declared cross-border transfers with respect to augmentation of SC budget from savings of other branches of government. When LGUs directly appropriate money for building court houses, procuring computers and other equipment, or for hiring contractual personnel assigned to courts, these do not constitute cross-border use of savings,” Diokno said.
Meanwhile, the DBM launched yesterday a web page dedicated to all matters relating to DAP.
The web page, (http://www.dbm.gov.ph/?page_id=9796), contains all relevant information on the Aquino administration’s spending acceleration program, launched in October 2011.
The web page provides memos and issuances, the full and complete list of DAP projects, the assessment of DAP and all press releases previously issued by the DBM about the program, among other important information.
Details include project names, their respective descriptions, as well as the proposed funding and allotment releases made to each project.
“It took us several months to collect all the DAP-related data, verify all details and figures, and ensure the accuracy of all our numbers. The DBM also had to work closely with other implementing agencies in the course of completing the DAP project list,” Abad said. - With Christina Mendez, Zinnia dela Peña