Palace, Bayan clash on 'good faith' defense

By RG Cruz, ABS-CBN News

Posted at Jul 04 2014 11:33 AM | Updated as of Jul 05 2014 07:34 AM

Abigail Valte and Renato Reyes. Composite Image

Bill filed by then Senator Aquino may belie 'good faith'

MANILA - Bagong Alyansang Makabayan's (Bayan) secretary general Renato Reyes squashed the Palace's invocation of good faith in implementing the unconstitutional Disbursement Acceleration Program (DAP), pointing to a bill filed by then Senator Benigno Aquino III seeking to curb former President Gloria Macapagal Arroyo's powers to impound the budget.

"Once upon a time, Senator Noynoy Aquino filed a bill opposing DAP-like practices that gave too much power to the president... It proves that he wasn't acting in good faith when he implemented the DAP. The irony here is that despite filing a bill, Aquino did exactly what GMA did when he became president. And what he did may be even worse. There's no good faith here," Reyes said.

Deputy presidential spokesperson Abigail Valte in Malacañang begged to disagree.

Valte pointed to the Supreme Court's (SC) ruling, noting that on page 65, the court ruled that DAP is not the same as impoundment of funds.

"I would obviously like to disagree. I had the occasion to go through the main decision of the Supreme Court in the Belgica case and the Supreme Court itself says that -- if I may quote: 'Withdrawal of unobligated allotments and retention of appropriated funds cannot be considered as impoundment.' It goes on to explain the definition of impoundment. So the Supreme Court itself said that DAP is not a form of impoundment."

Last Month, Aquino sought to differentiate his use of savings from Arroyo's use of savings. "Yung isa, sinigurado kaagad na either yung buong budget or significant portions thereof ay parang pinilit na savings. Yung sa amin, sa inefficiency of certain departments doon nagkakaroon ng savings at inire-reallocate para yung mabilis kumilos naman ay maihahatid na yung serbiyso sa taumbayan at the soonest possible time, at yung nahuhuli ay magkaroon naman ng pagkakataon na mas malaki yung budget niya (at) maka-catch up in the next year, okay," he said.

During the Arroyo administration, the annual national budgets were not enacted on time. This necessitated the reenactment of the previous year's budgets. However, under that scheme, funding for implemented projects became the largesse of the executive as savings.

The DAP, meanwhile, withdrew funds from unimplemented projects midyear for realignment to other uses. It also tapped unprogrammed funds.

Malacañang has repeatedly said that DAP was an exercise in good faith -- in apparent response to the ruling's doctrine of operative fact, part of which said that those behind the unconstitutional program must prove they acted in good faith.

The Aquino administration's unconstitutional DAP implemented programs and projects worth a grand total of P140.8 billion from 2011 to 2013, based on documents from the Department of Budget and Management (DBM).

A December 28, 2013 memo recommending the DAP's termination said, "by augmenting expenditure items using savings from unprogrammed appropriations and mobilizing additional revenues for unprogrammed items, DAP enabled the administration to implement programs and projects worth a total of P140.8B from 2011 to 2013."

However, the DAP microsite on the DBM website says there may be more.

"For 2011-2012, a total of P142.23 billion was released for programs and projects identified through the DAP, of which P83.53 Billion is for 2011 and P58.70 Billion is for 2012. In 2011, the amount was used to provide additional funds for programs/projects such as healthcare, public works, housing and resettlement, and agriculture, among others. While in 2012, these were used to augment tourism road infrastructure, school infrastructure, rehabilitation and extension of light rail transit systems, and sitio electrification, among others.

"In 2013, about P15.13 billion has been approved for the hiring of policemen, additional funds for the modernization of PNP, the redevelopment of Roxas Boulevard, and funding for the Typhoon Pablo rehabilitation projects for Compostela Valley and Davao Oriental."

The Philippine Daily Inquirer reported that as much as over P300 billion in extra cash was at the disposal of the Executive during the DAP implementation.

Valte could not immediately comment on this.

"That would have to be clarified by the DBM. They will be in a better position to give you information on that but I would like to point out, at this juncture, that appropriations or allotments -- what does that mean? That only means, it is an authority to spend. It's not cash. So appropriations are not directly correlated to cash. Hindi po yan perang nakaipon sa bangko. Kapag sinabi nating appropriation or allotment, authority po yan na gastusin. Hindi po yan cold hard cash," she said.

Based on DAP memos signed by Aquino and shown to media by Bayan, billions in DAP funds were earmarked for projects from 2011 to 2013 -- the same time as the impeachment of former Chief Justice Renato Corona and the midterm elections.

Among these are the rehabilitation of railways, the OPAPP's Pamana funds, the resettlement of informal settlers, additional funds for the local government units and DILG, additional infrastructure like roads in Tarlac, additional funds for the Coast Guard in securing the West Philippine Sea, construction of a detention center for high-profile detainees, and even equipment for disaster preparedness, and P6.5 billion in pork barrel in 2011.

The DBM in December 28, 2013 recommended the end of the DAP as "all economic and fiscal indicators point to the conclusion that DAP has achieved its objective as a fiscal stimulus measure."

DAP was a mechanism for government to withdraw funds from unimplemented projects midyear and realign them to better implemented projects. It is hinged on Article 6, Section 25 of the 1987 Constitution, which authorizes the president to augment the budget from savings.

There were similar mechanisms under the Corazon Aquino, Fidel Ramos and Joseph Estrada administrations -- known as the reserve control account (RCA).

The Arroyo administration discarded the RCA and replaced it with overall savings, a mechanism to augment priority programs using savings, including unreleased appropriations and unobligated allotments.

The DAP also sources funds from unprogrammed funds -- funds in the annual national budgets that would only be released if a funding source or enough revenue has been generated.

In his Senate Bill 3121, Aquino said: "Of recent times however, this presidential prerogative has been misused and abused, and has emasculated Congress' authority to check the President's discretionary power to spend public funds. In effect, the President seems to have a vast and unbridled control over the national budget. This bill seeks to increase congressional oversight and to limit executive influence over specific appropriations in the General Appropriations Act. This undertaking is urgently needed in the light of the current economic crisis confronting the whole world, the consequences of which are deemed to severely affect our country in the coming years."

DAP became controversial after it was alleged that DAP funds were used in lawmakers' projects during the time of the Corona impeachment trial.