MANILA -– Department of Budget and Management (DBM) Secretary Florencio Abad on Thursday explained that the Disbursement Acceleration Program (DAP) was created to spur economic activities after government’s low spending resulted to an alarming 3.1 percent economic growth in the middle of 2011.
”The DAP was urgent response to an urgent problem where low government expenditures poses significant threat to the country’s economic development,” Abad explained during the Senate probe on DAP.
In his Powerpoint presentation before the Senate committee on finance, Abad said the gross domestic product (GDP) skidded from a high of 8.9 percent in the second quarter of 2010 when election was held to an alarming 3.1 percent towards the third period of 2011.
”Low spending level in 2011 showed us that we had to do more to move expenditures faster and prevent the economy from slippin further,” Abad said.
”The situation was hardly an encouraging one. After careful consideration, we thought it was best to use funds in various places such as in agencies where DBM releases were not used to use money for fast moving projects that would have an immediate effect on the country’s economy,” he added.
Abad said by implementing DAP, the government’s intention is ensure that funds are properly used “so that social services and public goods are delivered to the people specially the poor as swiftly as possible.”
The Supreme Court, however, declared the so-called cross-border transfer of funds along with other certain acts under the DAP as unconstitutional.
Other DAP’s acts declared illegal by the higher court were the declaration of savings from unreleased appropriations; augmentation of a project that has no item in the national budget; and the use of unprogrammed funds without certification from the national treasurer.
Abad assured that the DAP was implemented under the ‘Tuwid na Daan’ (straight path) policy of President Benigno S. Aquino III.
”When the President assumed office in 2010, the administration embarked on an aggressive campaign — one that continues to these days of bringing greater transparency, accountability and openness to the Philippine bureaucracy,” Abad said.
”A comprehensive house cleaning of sorts was thus in order. Government agencies were tasked to review their processes and transactions,” he added.
Aside from DAP, Abad said other key reform measures of the Aquino administration are the zero-based budgeting, early enactment of the national budget, and disaggregation of lump sum funds.
Abad said the generation and use of savings to accelerate government expenditures is not a new practice, adding it started even during the time of the President’s mother, former President Corazon Aquino.
”This way of using savings continued on in the (Fidel) Ramos, Joseph (Estrada) administration and under (Gloria) Arroyo administration, the practice was dubbed the use of overall savings,” he explained.
”Historically speaking, cross-border transfer of savings from one branch of government to another or to fiscally autonomous agencies where not uncommon. For the last 22 years, savings have been used to augment the budget of Congress, judiciary and other constitutional bodies independent from all three branches of government,” he said.
Abad maintained that all of those acts before the SC declared some parts of DAP unconstitutional “were in good faith.”
He said the creation of DAP was based on Section 38 of the Administrative Code of 1987 which provides “whenever in his judgment the public interest so requires, the President upon notice to the head of office concerned, is authorized to suspend or otherwise stop further expenditure of funds allotted for any agency, or any other expenditure authorized in the General Appropriations Act, except for personal services appropriations used for permanent official and employees.”
”The SC did not declare DAP unconstitutional. Only some acts and practices made through it. The declaration of savings under DAP was based on the principle of ‘use it or lose it,” Abad said.
The Section 39 of the Administrative Code also authorizes the President to use savings in appropriations to cover deficits while Section 39 provides power to President to use savings for economic activities, repair and renovation of public buildings, and payment of valid prior yeaer’s obligation of government agencies.
Contrary to the critics’ claim that the DAP was not made known to the lawmakers, Abad said the program was presented to Congress in October 2011 during the deliberations of the proposed 2012 national budget.
Abad said even the Supreme Court acknowledged that DAP yielded “undeniably positive results that enhanced the economic welfare of the country.”
”But DAP is more than just a collection of press release and news stories. It’s positive effect on economy and the lives of ordinary citizens is certain and far ranging,” Abad said.
Abad said the DAP has brought dramatic improvement in the country’s GDP, rising from 3.1 to 6.8 percent in 2012 and soared higher by 7.23 percent in 2013.
Abad said out of the total P237 billion savings, over P144 billion have been released through DAP to which 37 percent were used to support economic services, 34 percent went to infrastructures, and 21 percent to social services such as education and health.
”These figures are fairly impressive but the public perhaps should be more interested in finding out how the DAP benefited the Filipino people because we implemented DAP without pomp and circumstance,” Abad said.
In the interest of transparency and accountability, Abad submitted to the committee a copy of complete list of all projects facilitated through DAP from 2011 to 2013.
He said the list identifies the name of every projects implemented through the program, as well as implementing agencies, SARO (special allotment release order) details, the program activities and projects augmented and their respective status.
Despite the SC decision to declare illegal certain acts of DAP, Abad assured the Aquino administration through the DBM will continue to open spaces for wide ranging budget reforms.
”We will still endeavor towards standards of government expenditures that we ourselves set in DAP where the government funds quickly and efficiently are spent for utilization of public funds is guided by the principle of transparency, accountability and citizen empowerment and where every peso spent by the government goes exactly where it should to the Filipinos own benefits,” Abad assured.
Abad said the executive department has filed a motion for the Supreme Court to reconsider its decision on DAP.
A total of P1.1 billion of the DAP funds have been released to the different projects identified by the 19 senators in 2012.
Senate President Franklin Drilon said he himself identified the Iloilo Convention Center as the recipient of the P100 million DAP funds released under his name.
”We did not personally receive the DAP funds. We only identified the projects,” Drilon said during the Senate inquiry attended by 12 other senators.
Senators present include Teofisto Guingona III, Joseph Victor Ejercito, Nancy Binay, Ferdinand Marcos Jr., Ralph Recto, Grace Poe, Antonio Trillanes IV, Juan Edgardo Angara, Paolo Benigno Aquino IV, Loren Legarda, Aquilino Pimentel III, and Francis Escudero.
Escudero chaired the public hearing being the chairman of the Senate committee on finance.