SC: Public officials may be held liable for DAP

by Ina Reformina, ABS-CBN News

Posted at Jul 03 2014 02:07 AM | Updated as of Jul 04 2014 06:36 AM

MANILA - Government officials behind the constitutionally infirm Disbursement Acceleration Program (DAP) may be held liable for the release and utilization of public funds under the stimulus package, ruled the Supreme Court (SC).

In its 92-page decision, dated July 1, penned by Associate Justice Lucas Bersamin, and officially released on Wednesday, the high court said "authors, proponents, and implementors" of the DAP may be charged before the proper tribunals, and may only escape liability once able to show good faith in the program's implementation.

While invoking the doctrine of operative fact which sustains the effects of a law or executive act later declared void, the high court said this only applies to programs and projects that had already been completed, as well as their beneficiaries, not on the public officials.

During the high court's deliberations, Associate Justice Arturo Brion stressed this argument.

"[T]he doctrine of operative fact can apply only to the PAPs that can no longer be undone, and whose beneficiaries relied in good faith on the validity of the DAP, but cannot apply to the authors, proponents and implementors of the DAP, unless there are concrete findings of good faith in their favor by the proper tribunals determining their criminal, civil, administrative and other liabilities," the decision read.

This means that any showing of bad faith, or any abuse on the part of officials in the implementation of the DAP proven before an appropriate tribunal, will not spare them from liabilities.

In striking down the DAP as unconstitutional, and the budget department's Circular No. 541 that authorized the withdrawal of unobligated and unutilized funds to fund the program, the high court said these violate the doctrine of separation of powers enshrined in the 1987 Constitution, as well as Sec 25 (5), Art VI of the Constitution which prevents the transfer of funds from one branch of government to another.


Based on evidence submitted by the Office of the Solicitor General (OSG) to the high court during the pendency of the 9 petitions that challenged the legality of the DAP, it was shown that Pres. Aquino authorized the realignment of public funds cross-border, such as the transfer of funds from the executive to the legislative departments, as well as to two constitutional commissions: the Commission on Audit (COA), amounting to P143 M; Commission on Elections (Comelec), upon request; and the House of Representatives (HOR), amounting to P250 M.

Also based on the First Evidence Packet the OSG submitted to the high court on Jan. 28, 2014, President Aquino approved all 166 projects and programs funded under the DAP in the entirety of its effectivity between 2011 and 2013.

President Aquino "approved and duly signed" "seven memoranda issued by the DBM through [budget Sec. Butch Abad], inclusive of annexes, listing in detail the 166 DAP identified projects," as stated in the decision.


By 2013, the same year it was aborted for "having served its purpose in pump-priming the economy," the DAP-funded projects totalled P144.4 billion: P82.5 billion released in 2011, P54.8 billion released in 2012.

A total of 9 percent of these projects were identifed by legislators.

Some of these projects and programs were not contained in the respective General Appropriation Acts (GAA), as gleaned from the matrix of all 116 DAP-funded projects submitted to the high court by the OSG.

The special allotment release orders (SARO) for these DAP-funded projects were authorized by the budget department.

It was also Abad who issued Circular No. 541 which authorized the withdrawal and use of unobligated funds of various agencies and departments as of June 30, 2012 "to fund and undertake other priority expenditures of the national government," such as the DAP-funded projects.

This was intended to pump up spending to accelerate economic expansion.

Abad explained the rationale behind the DAP after Sen. Jinggoy Estrada made the revelation of having been allotted, along with several other senators, an "incentive" of P50 million for allegedly voting in favor of the conviction of Chief Justice Renato Corona during the latter's impeachment trial.

Abad said the DAP had to be instituted after slow disbursements caused the GDP growth to slow down.


The high court acknowledged that the DAP had its benefits, especially in as far as it yielded some positive results on the economy.

"[I]t has been adequately shown as to be beyond debate that the implementation of the DAP yielded undeniably positive results that enhanced the economic welfare of the country," the decision read.

However, laws, policies, and acts must always adhere to the Constitution, the high court stressed.

In the case of DAP, the high court reminded all parties where the power of the purse lies, and how flexibilities in the utilization of public funds are limited by the Constitution as well as conditions in the appropriation laws.

"Congress acts as the guardian of the public treasury in faithful discharge of its power of the purse whenever it deliberates and acts on the budget proposal submitted by the Executive.

"Pertinently, when it exercises the power of the purse, Congress wields control by specifying the PAPs for which public money should be spent... It is the President who proposes the budget but it is Congress that has the final say on matters of appropriations," the decision read.

Aside from the decision, the high court also released the opinions of Associate Justices Antonio Carpio, Arturo Brion, Mariano Del Castillo, Estela Perlas-Bernabe, and Marvic Leonen.