DAP Funds News: The Disbursement Acceleration Program and why it's unconstitutional

News about DAP funds are everywhere, but what really is the Disbursement Acceleration Program and why the Supreme Court says it's unconstitutional?

Disbursement Acceleration Program

The Department of Budget and Management (DBM) explains:

The Disbursement Acceleration Program (DAP) is a stimulus package under the Aquino administration designed to fast-track public spending and push economic growth. This covers high-impact budgetary programs and projects which will be augmented out of the savings generated during the year and additional revenue sources.

The DAP was conceptualized in September 2011 and introduced in October 2011, in the context of the prevailing underspending in government disbursements for the first eight months of 2011 that dampened the country’s economic growth. Such government intervention was needed because key programs and projects, most notably public infrastructure, were moving slowly.

The need to accelerate public spending was also brought about by the global economic situation as well as the financial toll of calamities in that year. While the economy has generally improved in 2012 and 2013, the use of DAP was continued to sustain the pace of public spending as well as economic expansion.

The DAP was approved by the President on October 12, 2011, upon the recommendation of the Development Budget Coordination Committee (DBCC) and the Cabinet Clusters.

Source

During a privilege speech in September last year, Senator Jinggoy Estrada exposed the DAP after saying that he and other senators received P50 million in additional funds after convicting chief justice Renato Corona in the 2012 impeachment trial.

DBM secretary Florencio Abad reportedly admitted that the additional funds were sourced through DAP, but denied that it were used as bribes.

Critics of the Aquino administration called the DAP "presidential pork barrel."

In a live telecast on October 30, 2013, President Benigno Aquino III defended the DAP, saying:

The Disbursement Allocation Program is not pork barrel. Of the DAP releases in 2011 and 2012, only nine percent was disbursed for projects suggested by legislators. The DAP is not theft. Theft is illegal.

Spending through DAP is clearly allowed by the Constitution and by other laws. DAP is only a name for a process in which government can spend both savings and new and additional revenues. Where did these funds come from? They came from our efforts to stop the connivance of some in bidding for contracts, in padding costs, overpricing, and kickbacks. They came from the proper spending of our budget. They came from good governance now seen in our GOCCs [government-owned and -controlled corporations]; just one example of this is the MWSS [Metropolitan Waterworks and Sewerage System], an agency once buried in debt, and which now remits dividends to the national government annually. Savings, above-target collections, and new revenues are the results of good governance. And because of DAP, these funds were allocated to projects that were within the proposed budget and that had a clear benefit to the country.

How does this mechanism work? Simple. There are some agencies that, for a variety of reasons, are unable to implement their projects right away; on the other hand, there are those that are very efficient in implementing their projects. When projects are stalled, naturally, we will not spend for them. We did not allow these funds to remain dormant. We looked for programs under implementing agencies that had proven themselves to be fast and efficient, and we channeled our savings into these programs—together with the additional revenue of the government. The benefits of these projects reached our countrymen faster and earlier, and we were able to spend the money allocated yearly in our National Budget more prudently and efficiently.

Several petitions against the DAP were filed at the Supreme Court since the program was made public. On June 30, 2014, the High Tribunal unanimously declared the DAP unconstitutional.

The "acts and practices" which the SC found violative of the Philippine Constitution include the following:
  • The withdrawal of unobligated allotment from the implementing agencies and the declaration of the withdrawn unobligated allotments and unreleased appropriations as savings prior to the end of the fiscal year and without complying with the statutory definition of savings contained in the General Appropriation Act;
  • The cross-border transfers of the savings of the Executive to augment the appropriations of other offices outside the Executive;
  • Funding of projects and activities and programs that were not covered by any appropriation in the GAA.
MalacaƱang insists the President's move to source DAP funds from government savings was legal. Savings, presidential spokesman Edwin Lacierda reportedly said, can be realigned under the Constitution. He declined to comment when asked by media about the SC ruling, saying the Palace was waiting for a copy of the court decision.

On Wednesday, July 2, senator Miriam Defensor-Santiago in a press conference said the DBM must be held liable for the DAP. If only to spare President Aquino from further embarrassment, the lady senator gave an unsolicited advise that secretary Abad has to resign. About a year ago, Santiago said she predicted that the SC will strike down DAP as unconstitutional.