To my beloved countrymen, my bosses.
I asked for this opportunity to speak to you today, to explain a few points regarding the Supreme Court decision on DAP.
First of all: What was the situation when we came in?
When we assumed office last June 2010, the 2010 budget was still in effect, and we likewise inherited the proposed 2011 budget. Of the Php 1.54 trillion set aside for the government for the whole of 2010, only Php100 billion — or 6.5 percent — was left for the remaining six months of the year. You really have to wonder: Where did the money go?
You may also remember anomalous projects like the dredging of Laguna Lake, where we were supposed to pay 18.7 billion pesos just to play with mud; or the GOCCs that gave away exorbitant bonuses to its officials and employees, even if they were already operating at a loss.
It is clear that corruption was endemic in the budgeting system of the past. We made sure to excise all of that — we cancelled anomalous projects, we corrected the governance of GOCCs, and we began to end all the sleight of hand with the people’s money.
Through Zero-Based Budgeting, only programs that would truly benefit citizens would be given funding. With this method, there is no room for continuing appropriations, which was one of the reasons we had such a complicated bureaucracy; why there were so many opportunities for corruption; and why there were programs that fed the pockets of a few, thus depriving benefits from the rest of the nation.
Although it wasn’t our intention, fixing the budgeting process stalled the public sector’s contributions to the economy. Because of underspending, our GDP went down. If we were to look at this as an irrigation system: We were left with leaky canals that let too much water out. We first had to make made sure to seal those cracks in the system so we do not waste any more water, and make the entire mechanism more effective. And because there were just too many cracks in the channels, we couldn’t bring enough water to certain crops, water they needed to flourish.
We carefully studied the situation. We discovered that there were departments that were able to implement projects quickly and efficiently using the funds given them, because they immediately streamlined their system. There were also agencies that were in the process of examining their system, with an eye toward fixing flaws, to ensure that the people’s money wouldn’t be wasted. But, naturally, time didn’t stop as all this was going on; there were agencies that understood that they wouldn’t be able to use funds appropriated for the year toward projects for the people. So the question then was: What do we do with the funds we haven’t yet touched?
Allow me to clarify the meaning of savings in government. At home, don’t we see savings as something positive? For example, if you are able to buy meat at a discount, then you can get more ingredients.
In the case of government, savings has a much more complex meaning. At times, savings are welcome, such as in the case of DPWH, where, through correct and stringent measures for bidding and procurement, we were able to save over Php26 billion. There are instances, however, when savings spell something negative for our countrymen. Every year, the Executive branch submits to the Legislature a list of priority programs, activities, and projects that need funding. Once enacted into law, the budget must be spent within the year of allocation. And if funds for certain programs are not spent, as they should have been, clearly our countrymen did not gain what they should have. Did this not redound to a disadvantage for our countrymen? What this means is that every time there are savings such as this, every time funds remain unspent when they should have been spent, our Bosses are deprived of a benefit.
Without doubt, any good leader would want to implement projects that benefit the public at the soonest possible time. I do not see any reason to delay benefits for our countrymen, especially because we have the wherewithal to alleviate their plight. It is clear that if you delay the benefits due them, you prolong the suffering of the Filipino people.
Our strategy to meet our obligations: the Disbursement Acceleration Program or DAP. This is the second matter that I wish to discuss tonight.
DAP is not a project—it is an efficient way of spending the budget; it follows the law and adheres to the mandate granted to the Executive Branch. We did this to properly allocate funds, and by so doing maximize the benefits that the people may receive.
How did DAP start? Hours before delivering my SONA in 2011, I was given a progress report by all government departments. I was taken aback by certain information given to us.
For instance: According to DepEd, out of the 8,000 school buildings that they had targeted to build, they were only able to complete 18. To be honest, DepEd had tried its best, but they faced a number of concerns — problems with land, assessment issues, as well as the complex processes in our bureaucracy. This is why, we asked them directly: Can you still meet your target in the remaining five months of the year? They responded to this candidly: ‘We are doing all that we can, but we can only build three to four thousand classrooms until the year closes. We will have to build the remainder next year.’ Thus was the story: Despite the many setbacks that the agency had to face, DepEd delivered. And now, we have eliminated what we inherited—a backlog of 66,800 classrooms.
The sitio electrification program is another project that was successfully implemented through the efficient use of savings. In 2012, our target was to energize 4,053 sitios. The budget had allotted Php3.87 billion for this. And because of the speedy and efficient implementation of this project, the National Electrification Administration requested more funds to light up an additional 2,110 sitios.
Through DAP, in 2012, Php1.264 billion were made available to electrify a total of 6,163 sitios — out of the 36,000 that we need energize.
Is it not right that funds that had been otherwise left unused were utilized for programs that had proven effective, so that targets can be met and the benefits to the people can ensue at the soonest possible time? Another advantage of this system: Projects that were temporarily suspended for a given year would not have to compete for funding with the other finished projects in the following year. This is clearly a win-win situation.
Now, let’s talk about agencies such as the National Irrigation Authority or the NIA. When I spoke at their anniversary, they proudly stated that they had doubled their performance in meeting targets for rehabilitation and reconstruction. Looking at the numbers, however, we see that for the past ten years, they’ve performed well below target—targets that they set for themselves. We all know that it’s much easier to hide corruption through repairs, rather than through new projects, where the question simply becomes: Is it there, or isn’t it? For example: Can we see the new irrigation canals, or can’t we?
The NIA’s administrator back then also explained why, after achieving an 87 percent accomplishment rate for irrigation projects in 2011, the accomplishment rate dropped to 65 percent in 2012. Their excuse: 40 percent of the projects were in Mindanao, and was thus affected by Typhoon Pablo. Let me remind everyone: Typhoon Pablo hit Mindanao in the first week of December 2012. We asked, what reasons did they have to push the completion of Mindanao projects to the last three weeks of 2012? On top of this, remember that there are fewer workdays during Christmas and New Year’s. Incredible, isn’t it? I don’t think anyone would agree with this style of management, and we can’t let such attempts to fool us pass. We’ve since replaced the said NIA administrator.
Our aim is to not prolong the implementation of projects. The Cabinet agreed, regarding their respective funds: Use it or lose it. If you cannot use the funds allotted for this year, clearly, those are savings. We are given the chance to extend, at the soonest possible time, those benefits that have immediate impact to our Bosses. In this way, benefits that may have been delayed are replaced by other benefits. Let us also remember that the government is at a deficit: We have to borrow funds for our projects. If we allow funds to go unused, then we would be paying interest for nothing. The people clearly have nothing to gain from this setup.
The Supreme Court’s decision questions our use of savings, and raises concerns on when we can use unprogrammed funds. They want savings declared only at the 31st of December of each year. If that were the case, when would the government be free to utilize these funds? Following their logic on savings, projects that could have been funded in the middle of the current year would have to be delayed until the following year.
We also have a list of projects that would only be funded if government experiences a windfall in earnings, which are referred to as unprogrammed funds. With the Supreme Court’s decision, benefits would be delayed, because it would take until March of the following year to fulfill all the requirements regarding these funds; on top of this, it would all then have to go through another four to six months of bidding and procurement. If you file a report in March, it would be September of the following year by the time all of these processes are done. All in all, almost two years would have passed before the benefits of funds would redound to the people.
What are the implications of this? We have programs for the relocation of informal settlers to safer places. In the system the Supreme Court is ordering us to bring back, it might take two more rainy seasons before we are able to relocate our countrymen. Let us remember: about twenty typhoons come our way each year. Is it right to ask those living in hazardous areas to just leave everything to prayer?
My conscience cannot bear this. I cannot accept that our countrymen will be exposed to danger because I let the process of bringing them assistance be unduly extended. Let us remember: The National Treasury belongs to our citizens.
It is not only my conscience that dictates the efficient spending of funds; various provisions of the law that is our country’s Administrative Code clearly allow for the use of savings. For example, let us now read Book VI, Chapter 5, Section 39 of the 1987 Administrative Code of the Philippines:
‘—Except as otherwise provided in the General Appropriations Act, any savings in the regular appropriations authorized in the General Appropriations Act for programs and projects of any department, office or agency, may, with the approval of the President, be used to cover a deficit in any other item of the regular appropriations…’
As you can see, this law openly gives the President the power to transfer savings to other projects. It does not limit the transfer to only one department or branch of government. In other words: We did not transgress the law when we implemented DAP. The Constitution and the Administrative Code are not at odds with each other.
In fact, we were surprised to find that the Supreme Court decision did not take into account our legal basis for DAP. How can they say that our spending methods are unconstitutional when they did not look into our basis? Even until now, Section 39 of the Administrative Code is in effect, along with its other sections.
This becomes even more worrisome when we take into account the ‘operative fact doctrine,’ which the Supreme Court also mentioned in its decision. This is simple. When a Supreme Court declares as unconstitutional any law or edict by the Executive, only those projects yet to be implemented under said law are deemed prohibited. The declaration does not include completed projects if this means stripping our citizens of benefits. This is only natural because it is not right to destroy bridges that have already been built, or to demolish houses that have already been bestowed to families of informal settlers.
Likewise, this doctrine also recognizes that implementors do not have to be held accountable as long as the edict was carried out ‘in good faith.’ But in their decision, the judges immediately presume the absence of good faith, which would then have to be proven through trial. What happened to the principle of ‘innocent until proven guilty?’
There are also those who say that DAP and PDAF are the same thing. Excuse me. DAP is different from PDAF. With PDAF, the corrupt funneled government funds into fake NGOs, money then allegedly divided among themselves. It’s clear that with DAP the people’s money was never stolen — the funds were used for the benefit of Filipinos. And not for later, not soon; but — now: Programs that could be implemented immediately were implemented immediately.
And didn’t the Supreme Court itself, the World Bank — even critics of DAP — didn’t they all admit that DAP helped improve our economy?
It is clear that the Supreme Court has much to consider that they may better clarify their decision regarding DAP; perhaps they can even identify DAP’s negative effect on the country.
We will appeal the Supreme Court’s decision. We will do this by filing a Motion for Reconsideration, which will allow them to more fully and more conscientiously examine the law.
There are those who say that this decision might be a personal vendetta against me — that I am being dared to act in the same vindictive manner against them. All I can say — as the President, as the father of this country — is that we need temperance and forbearance — we must comply with due process.
Any lawyer we might speak to will caution against this move. The Supreme Court voted 13-0 against DAP; only one abstained. The mere hope that the decision will be overturned is a monumental one. We had also been warned that pushing through with this motion might put us in greater danger.
My message to the Supreme Court: We do not want two equal branches of government to go head to head, needing a third branch to step in to intervene. We find it difficult to understand your decision. You had done something similar in the past, and you tried to do it again; there are even those of the opinion that what you attempted to commit was far graver.
Abiding by the principle of ‘presumption of regularity,’ we assumed that you did the right thing; after all, you are the ones who should ostensibly have a better understanding of the law. And now, when we use the same mechanism — which, you yourselves have admitted, benefit our countrymen — why is it then that we are wrong?
We believe that the majority of you, like us, want only the best for the Filipino people. To the honorable justices of the Supreme Court: Help us help our countrymen. We ask that you review your decision, this time taking into consideration the points I have raised tonight. The nation hopes for your careful deliberation and response. And I hope that once you’ve examined the arguments I will submit, regarding the law and about our economy, solidarity will ensue — thus strengthening the entire government’s capability to push for the interests of the nation.
Perhaps, no one will dare to doubt that we have pushed for reform these past four years. And I must ask: What is expected from those of us who are advancing reform?
We know that the system we inherited was one that did not help, or did not do enough to help, our countrymen. We are now righting the wrongs in the system, so that it may work towards this goal: To uphold the interests of the people, our Bosses who handed us our mandate. Thus, to the Supreme Court, our message: Do not bar us from doing what we swore to do. Shouldn’t you be siding with us in pushing for reform? Let us, therefore, end this vicious cycle that has taken our people hostage.
On this note, allow me to share a text message I received in the last week. It reads: ‘The politicians are making fiesta regarding DAP; but to our simple non-legalistic mind, it is like a motorist who parked in a ‘no parking zone’ because he had to rush to save the life of an accident victim, which has more value. I’m praying hard that these people will see the good of the people rather than their own ambition.’
To this I replied: I think the situation now is similar to what you mentioned, and it might be even worse. I am after all being arrested for parking in an area that up to now hasn’t yet been declared a no-parking zone. Is this reasonable?
To my Bosses, in the coming days, I, along with my Cabinet as well as some beneficiaries of DAP, will be providing more information about this important topic. I encourage all of you to read the decision of the Supreme Court, as well as their concurring and dissenting opinions, so that you may better understand what I have said tonight. For those concerned regarding the programs that had received funding but have been put on hold because we need to follow the decision of the Supreme Court, do not worry. We will return to Congress to ask for a supplemental budget to ensure that all benefits are delivered.
Finally, let me impress upon everyone: DAP is good. Our intentions, our processes, and the results were correct. Bosses, I promise you: I will not allow your suffering to be prolonged — especially if we could do what we can as early as now.
Thank you, and it is my hope that you now better understand the situation.
Text courtesy of the Philippine News Agency. Video courtesy of PCOO on Youtube.