DAP is not PDAF

The Priority Development Assistance Fund (PDAF) is detested because the law creating it is unconstitutional; it authorizes lawmakers to implement laws in violation of the doctrine of separation of powers. Worse, the PDAF fosters corruption and has, in fact, been used as a scam to siphon public funds to fake nongovernment organizations to undertake ghost projects. Hence, it must be banished, and the scammers punished.

What is DAP? What about the Disbursement Acceleration Program or DAP? Is it identical to and detestable like the PDAF? No, the DAP is not the same as the PDAF. Legally speaking, it is not pork barrel. It is not a lump-sum appropriation in the national budget (General Appropriations Act or GAA). Neither is it disbursed only upon the direction of lawmakers to executive agencies and NGOs chosen by them.

Per Budget Secretary Florencio Abad, “the DAP is a stimulus package under the Aquino administration designed to fast-track public spending and push economic growth.” On Oct. 29, fellow Inquirer columnist Ciel Habito wrote: “Economic data indicate that the hiked spending achieved its professed goal of reigniting economic growth… The Philippine economy is now the fastest-growing economy in Asia, thanks in large part to the DAP.”

I defer to the above economic evaluation of the DAP. Let me just focus on some relevant legal principles to help readers understand it.

Abad said the DAP is sourced from (1) “savings” or unspent appropriations and (2) “unprogrammed funds” which are “windfall revenue collections,” like large dividends from government corporations and financial institutions (SSS, GSIS, Landbank, etc.), and proceeds of the sale of government assets and of new loans.

Savings as a source. Abad further explained that the President, via the Department of Budget and Management, “realigned” unspent appropriations (or “savings”) in the executive branch and used these to “augment” existing appropriations also in the executive branch. The “augmented” items are collectively called the DAP. Simply then, the DAP is really an accumulation of budget savings.

This transfer of savings from one budget item to another finds basis in Art. VI, Sec. 25 (5) of the Constitution which states “[T]he President, the President of the Senate, the Speaker of the House of Representatives, the Chief Justice of the Supreme Court, and the heads of the Constitutional Commissions 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.”

Note that the Constitution allows augmentation only if it is authorized “by law.” Accordingly, Abad pointed to the Administrative Code (AC) as that law. Specifically, the AC states that “savings” may be used to settle 13 types of obligations, the most crucial of which are “priority activities that will produce the economic wellbeing of the nation, including food production, agrarian reform, energy development, disaster relief, and rehabilitation.”

In another section, the AC also says that “any savings in the regular appropriations authorized in the [GAA] 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…”

In yet another section, the AC authorizes the President “to suspend or otherwise stop further expenditures of funds allotted for any agency…”

Another set of laws, the GAAs for 2011, 2012 and 2013, allows the President (and other heads of government) “to augment any item in the [budget] from savings in other items…”

The term “savings” refers to “portions or balances of any programmed appropriation … free from any obligation or encumbrance” due to (1) the completion or discontinuance of the activity for which the appropriation was made, or (2) personnel vacancies or unused leaves of absences, or (3) completion of projects or targets at lesser cost than planned.

Unprogrammed funds. The President’s budget proposal to Congress contains revenue targets. When fund sources not originally included in such targets are collected in the course of the year, the 2011, 2012 and 2013 GAAs authorized the President to use these funds to finance unprogrammed projects included in the budget.

That the DAP is not the same as the PDAF may be the reason the Supreme Court did not issue a temporary restraining order immediately, unlike in the PDAF cases in which a TRO was instantly issued. But even if the DAP is not the same as the PDAF, is the DAP nonetheless unconstitutional on other grounds? I won’t answer this question now, lest I preempt the oral argument on Nov. 19.

Let me just say that the legality of the DAP, in my humble view, hinges on whether the AC and GAA provisions cited by Secretary Abad (and their implementation) will pass the constitutional test that no public money may be spent without congressional authority, and that savings may be transferred from one budget item to augment another budget item already existing in the same GAA. Augmentation cannot be used to create a new item or to fund a new project not previously authorized by law.

Also, a transfer may be made from one budget item to another in the same branch of government only. Finally, legislators may recommend projects, but only for those already authorized by law and only if the recommendations do not bind the executive agencies.

Lack of space prevents me from writing more. But I hope the above will help readers understand the DAP’s legal issues.

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