Senators yesterday took turns in questioning Budget Secretary Florencio “Butch” Abad on the source of funds for the controversial Disbursement Acceleration Program (DAP) and how these were utilized to pump-prime the economy.
Upon questioning, Abad revealed that some P239 billion in government savings was pooled and placed under the DAP. Of this amount, P167 billion in projects were proposed to President Aquino, of which only P157 billion was approved. Of the approved amount for DAP projects, only P144 billion was released.
DAP DEFENDER — Department of Budget and Management Secretary Florencio Abad, the brains of the Disbursement Acceleration Program (DAP), gestures as he defends Malacañang’s disposition of government savings before the Senate yesterday. (Bob Dungo, Jr.)
DAP was first exposed after the conviction of then Chief Justice Renato Corona by the Senate impeachment court. In a privileged speech, Sen. Jinggoy Estrada revealed that the Aquino administration gave tens of millions of pesos in funds to 20 senators who voted to convict Corona. Estrada was among those who voted to convict Corona.
Abad would later come out to deny that the funds were meant to “reward” the senators who voted to convict Corona. He said the funds came from DAP to finance projects they nominated.
At the Senate hearing, Abad expressed fears that the Supreme Court’s decision to strike down several acts of the DAP as unconstitutional would adversely negate the progress the Philippines has already achieved.
JV FAULTS DBM
But Sen. Joseph Victor “JV” Ejercito said this controversy that has put the executive branch on the defensive could have been averted had the Department of Budget and Management (DBM) submitted the funds under the program as a supplemental budget to Congress, which has the constitutional mandate to appropriate government funds.
Ejercito added that since the DAP was supposed to stimulate the weak economy in 2012 because of underspending in 2011, why was some of the funds under the economic stimulus program coursed through lawmakers and not directly to infrastructure projects such as airports and railways since foreign direct investments (FDI) to the Philippines compared to other Southeast Asian countries were very low?
“Why did you not submit a supplemental budget (containing the P144-billion DAP funds) to Congress since most of the House members are your allies? Baka matakot di ma-approve kaagad or the process (of law-making) is slow?’’ Ejercito asked.
The executive branch, through the DBM, decided to use these savings as DAP because of the slow process of passing laws in Congress, Abad explained.
Ejercito, citing Sen. Sergio R. Osmeña III’s earlier statement, said the DBM must have been simply lazy to submit a supplemental budget or simply took Congress for granted.
“Good faith?” Ejercito asked, apparently to stress the defense of Malacañang that its use of “savings” was done in good faith.
Ejercito likewise did not buy the claim of Abad that his action was based on Article 38 of the Administrative Code that gives authority to the President to suspend or stop projects based on national interest.
He stressed that the Constitution is the supreme law to which other laws, including the Administrative Code, must conform.
Ejercito’s questioning focused on the use of savings or funds for slow-moving projects of government agencies or departments, the funneling of DAP funds to lawmakers, and the unlawful “cross-border” use of funds.
SOLONS ASKED FOR DAP FUNDS – ABAD
On the funneling of DAP funds to legislators, Abad said the “savings’’ were used because of a backlash of underspending in 2011.
Many had suggested that these funds should have been used to help the impoverished sector of the population, Abad added. He also said that lawmakers also told the executive branch they need DAP funds because they have their constituencies to take care of and whose needs do not reach Malacañang.
LAWMAKERS CAN ONLY SUGGEST
“They (politicians) can suggest the projects. They recommend projects that could be funded (by national government) to be implemented by implementing agencies. There is no money given to lawmakers whose only privilege is to recommend projects,” Abad added
When Ejercito stated that those who misused “savings” violated Article 220 of the Revised Penal Code (technical malversation), Abad denied violating the law insisting that the executive branch relied on the Administrative Code.
Asked by Ejercito whether the code is more powerful than the Constitution, Abad replied that there is no conflict because the code should have been revoked or amended had it conflicted with the Constitution.
NANCY QUESTIONS CANCELLED PROJECTS
Sen. Nancy Binay, another member of the minority bloc, questioned Abad on the withdrawal of funds for Congress-approved projects in favor of DAP.
She cited for instance the funds for the rehabilitation of the Ninoy Aquino International Airport Terminal 1, some of the country’s lighthouses, and seaports.
But Transportation and Communications Secretary Joseph Emilio Abaya defended the government move, saying the NAIA 1 rehabilitation plan was shelved after structural problems that needed to be addressed first were discovered.
He said that since the Department of Public Work and Highways “did not have any expert who can certify a performance-based design, so we procured a consultant who could perform performance-based design.”
Binay also questioned the cancellation of the repair of airport comfort rooms. But Abaya said the repair did not push through after the DOTC realized that it would be better to procure materials in bulk.
The construction of lighthouses and seaports were delayed due to problems with the road right-of-way, Abaya added.
This prompted Binay to ask: “Yung mga proyekto na sina-submit ay hindi naman pala tunay na napag-aaralan kung may issues pa. (If there are issues, then there must have been no extensive studies on the projects.) Why ask for a budget?”
Speaking before Senate probers at the Senate Finance Committee hearing on the DAP controversy, Abad stressed the need for the Aquino government to continue the economic stimulus program, which he said the executive department launched to solve the “unique fiscal challenges” the administration faced in the first two years of their term.
‘SC RULING TO UNDO PROGRESS ACHIEVED’
“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 at the Senate hearing.
“What a shame if we now presume bad faith of those who have in fact acted in the country’s best interests. At no other period in our recent history has the Philippine bureaucracy achieved so much in so little time, thanks to innovative governance,” the Cabinet official pointed out.
“The Philippines did not become one of Asia’s best-performing economies by playing it safe. We did not become global pioneers in government transparency and openness by playing it safe. We did all these through the bold and single-minded pursuit of innovation and reform under the leadership of President Aquino,” he added.
And though the Supreme Court did not recognize the integrity and soundness of the government’s fiscal program, the executive branch, Abad said, will find ways to address the issues raised by the SC when they craft the proposed 2015 national budget or the General Appropriations Act (GAA).
PALACE SETBACK
“While the High Court’s ruling represents a setback for the executive, it will not paralyze us into inaction,” Abad said.
“Already, we are finding ways to address the issues raised by the Supreme Court in the course of our preparations for the 2015 Budget. Within the DBM, we’re looking at sharpening and tightening budget operations and policies so we leave no room for inefficiency or ambiguity,” added the Cabinet official.
“We are also beginning to codify budget operations, besides committing ourselves further on reforms we’ve already established,” he added.
But at the hearing, Abad admitted the administration is now anxious over the unfinished projects that were funded under the DAP.
Until now, he said, the executive is currently debating what to do with the DAP-funded projects that have yet to be completed.
“We are trying to check how many of these projects have yet to be completed. The bureaucracy is now worried over these unfinished projects. We still need to consult with legal experts on what should be done with these projects,” he said in response to Escudero’s inquiry.
President Aquino and Abad recently drew flak for defending the DAP mechanism which the administration insisted was done to pump prime the country’s sluggish economy.
Aquino had also earlier rejected Abad’s resignation and defended the official from public criticisms.
Abad attended the hearing and was accompanied by other Cabinet officials. Those who went to the committee hearing included Finance Secretary Cesar Purisima, Social Welfare Secretary Corazon “Dinky” Soliman, Public Works Secretary Rogelio Singson, Health Secretary Enrique Ona, Defense Secretary Voltaire Gazmin, Agrarian Secretary Virgilio delos Reyes, Tourism Secretary Ramon Jimenez, Labor Secretary Rosalinda Baldoz, Commission on Higher Education (CHED) Chairperson Patricia Licuanan, Metropolitan Manila Development Authority (MMDA) chairman Francis Tolentino, Malacañang spokesman Edwin Lacierda and his deputy, Abigail Valte, and the head of the Presidential Legislative Liaison Office (PLLO) Manuel Mamba and National Economic and Development Authority (NEDA) Director General RC Balisacan.
Abad also submitted to the Senate finance panel, chaired by Senator Francis “Chiz” Escudero, the complete list of all projects facilitated through DAP from 2011 to 2013.
The list identifies the name of every project implemented through the program, as well as the implementing agency, SARO details, the programs, activities, projects augmented, and their respective status.
Administration senators, meanwhile, took turns in commending the benefits of DAP.
Senate President Franklin Drilon, for one, argued that legislators only “nominated” projects for DAP and that the DBM only relied on the provisions of the Administrative Code.
Since the Administration Code has never been cited unconstitutional, Drilon perceived that the DBM did not violate the Constitution but only what is stipulated under the General Appropriations Act (GAA).
D.A.P. AT A GLANCE
P239 B “savings” pooled
P167 B proposed projects
P157 B approved projects
P144 B actual funds released