In defense of DAP and PNoy’s lump sum (2)

28 October 2013

In last Tuesday’s column (PJ, October 28) I made mention of various groups and personalities opposing and demanding the abolition of the DAP, as well as the lump sum funds both in the GAA and those  classified as non-budget funds.

Various reasons are given for their opposition, among them the DAP’s being unconstitutional and illegal, as well as both fund items being discretionary, unequitable, and the danger of its being abused by a corrupt President in the future.

Although I expressed my disagreement with the views of those who oppose the DAP and the lump-sum funds, I also recognize their right to have such views, and hope that they would somehow display the same attitude towards others, like myself, who disagree with them.

As I indicated earlier, I don’t think that the DAP is unconstitutional, and more so, illegal. And I also don’t subscribe to the ridiculous idea being peddled by those against the DAP (which includes the hard core PNoy haters) that the administration consciously engaged in a sinister project when it used the savings that accrued out of the under-spending in 2011, for accelerating government capital project expenses in 2012. And I have various reasons for saying this.

First of all, the government did not waste any time in explaining the background and the reasons for the DAP when its existence was being questioned. It tried its best to be transparent and its statements can be substantiated by the contents of the President’s messages to Congress for both the 2011 and 2012 National Budgets (those interested to read the said messages - to have a better perspective of the issues - can access them through the following URLs, namely, http://www.dbm.gov.ph/?page_id=632 and http://www .gov.ph/ 2011/07/26/ president-aquinos-2012-budget-message/).

The 2011 Budget message reflected the intense determination of the President to fight corruption as shown both by the controls he installed, and in his calling for the involvement of the various sectors of society in monitoring how the government funds are spent.

The said message also clearly indicated following: the then new administration’s intention to cut down the 2011 Capital outlays by 5.7% (as compared to 2010); the implementation of stringent measures in the release of funds (both of which slowed down project processing and approval); and the intention to tap PPP for the implementation of government capital projects (which barely materialized). These factors, I would say, largely caused the under-spending that resulted in the unsatisfactory 3.7% GDP growth in 2011.

Meanwhile, the President’s 2012 “Results-Focused” Budget message given to Congress on July 26, 2011 (http://www .gov.ph/ 2011/07/26/ president-aquinos-2012-budget-message/) continued to strongly manifest his desire to achieve the “…reduction of leakages, inducement of efficiencies and better selection of projects priorities…” and is reflected in the following statements lifted from the said 2012 message.

“Financial accountability studies have also convinced us to similarly tighten the gravely abused generation and use of savings. We have reformulated the General Provision in our proposed spending program that allows the use of savings [so as] to strengthen DBM oversight [function] on the realignment of funds across allotment classes, within capital outlays, and over their use for allowances like magna carta benefits.

“Hence, in the 2012 proposed Budget, we have removed the special provisions granted to the Department of National Defense (DND) and the AFP to propose realignments in their budgets to clearly signal the need to avoid these. The budget must already reflect the best of the operational plans of agencies. We only reiterate the fiscal autonomy and privilege to realign savings granted in the Constitution to Congress, the Judiciary and the constitutional offices. A more stringent reporting requirement is also proposed.”

Perhaps, after being alerted by the low GDP growth in the first 2 quarters of 2011, the need to accelerate the implementation of capital projects in the coming year was therefore included in the President’s 2012 Budget message to Congress, and such intention was reflected in the following lines.

“By Expense Class, Capital Outlays (CO) will increase by 25.4 percent to P328.6 billion, as compared to its budgetary allocation this year of P262.0 billion. In particular, Infrastructure and Other Capital Outlays have increased significantly by 33.1 percent to P255.2 billion from P191.7 billion. With this, I stress that this administration will not spend on infrastructure randomly and with much leakage: rather, in an efficient and targeted manner that supports our priority economic growth drivers.

“Infrastructure for development. Pursuing inclusive economic growth means that we must ensure sufficient investments in strategic infrastructure projects that support expansion and job creation in priority economic sectors for development.

“For 2012, we are providing for a larger infrastructure program to catalyze economic activity, reduce poverty and address climate change: P182.2 billion or 25.7 percent higher than this year. At this point, I stress that we will implement our infrastructure program in a new way, not in the corruption-laden ways of the past.”

I think that the preceding paragraphs quoting or paraphrasing relevant parts of the 2011 and 2012 Budget messages of the President to Congress more than reflect the administration’s transparency and sincerity in its effort to fight corruption and improve the country’s economic standing. And it also more than debunks that ridiculous idea being peddled by the anti-DAP personalities (and PNoy haters) about the DAP being a sinister administration project.

Actually, because the administration implemented its accelerated spending for government capital/infrastructure projects, as planned in the 2012 National Budget (and as advised to Congress), the effort resulted in GDP growth rates of 6.4% for the 1^st Quarter, 5.9% for the 2^nd Quarter, 7.1% for the 3^rd Quarter and 6.8% for the 4^th Quarter, for a 6.6% GDP growth for the year which was to my understanding was the best in the ASEAN and topped only by China’s performance.

As to the constitutionality and legality of the DAP, I think that the administration’s explanation and justification (invoking Article VI, Section 25, Sub-Sec. 5 of the 1987 Philippine Constitution, and Sections 39 & 49 of Chapter 5, Book 6 of the 1987 Administrative Code, which I accessed and am posting here for the consumption of the reader and for him/her to form a conclusion as to the legality of the DAP) is very clear, even to a legal simpleton like myself.

“Article VI, 1987 Constitution of the Republic of the Philippines Section 25, Sub-section (5): No law shall be passed authorizing any transfer of appropriations; however, the President…may, by law, be authorized to augment any item in the general appropriations law for their respective offices from savings in other items of their respective appropriations.”(http:// www.chanrobles.com/article6.htm)

“E.O. No. 292, Administrative Code of 1987, Book VI –National Government Budgeting Section 39. Authority to Use Savings in Appropriations to Cover Deficits. – 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: provided, that the creation of new positions or increase of salaries shall not be allowed to be funded from budgetary savings except when specifically authorized by law…”

“Section 49. Authority to Use Savings for Certain Purposes. – Savings in the appropriations provided in the General Appropriations Act may be used for the settlement of the following obligations incurred during a current fiscal year or previous fiscal years as may be approved by Secretary in accordance with rules and procedures as may be approved by the President: (9) Priority activities that will promote the economic wellbeing of the nation, including food production, agrarian reform, energy development, disaster relief, and rehabilitation” (http://philippinelaw.info/statutes/eo292bk6-administrative-code-of-1987-book-vi-national-government-budgeting.html).

Due to space constraints, the continuation of this article will follow as part 3 in a subsequent article. Meanwhile, comments/reactions will be appreciated and can be sent through this writer’s email (sl3.mekaniko @gmail.com) or this writer’s blog (http://mekaniko-sl3.blogspot.com).