Te Sidebar from Part 1 of the PCIJ story on DAP.
The story of DAP
By Rowena F. Caronan and Karol Ilagan
Philippine Center for Investigative Journalism
IT TOOK a peeved senator, who was being accused of corruption, for the public to be inadvertently introduced to what is now known as DAP or the Disbursement Acceleration Program.
Yet almost a year after Senator Jose ‘Jinggoy’ Ejercito Estrada – now in jail for alleged plunder – gave his privilege speech that led to the revelation about DAP, little remains clear about the controversial program.
In large part, this is because of the apparent propensity of the Aquino government to be stingy with details about it. PCIJ itself has had a request for specific data on DAP pending with the Budget Department for the last nine months; by most indications, the wait is not about to end anytime soon.
In the meantime, PCIJ has attempted to build the history of DAP in the last three years by tracking its disbursements, as well as identifying significant political events that coincided with key movements in the program. To come up with the timeline, which may help provide some clarity about DAP, PCIJ referred to the July 1, 2014 Supreme Court ruling on the constitutionality of the program, as well as to various news reports and issuances from various government offices (particularly the Department of Budget and Management).
The Philippine economy grows at an average rate of 3.9 percent, below the five- to six-percent forecast, according to reports of the National Statistical Coordination Board (NSCB). The figure represents a slowdown from the 8.2-percent growth in 2010 when election spending boosted the economy. Government underspending, mostly in infrastructure projects, which began in 2010, and the unfavorable world economic environment, is pulling down the country’s economic growth.
President Benigno S. Aquino III is criticized for the economic slowdown on account of policies that focused on reducing deficit, as well as the introduction of careful screening of government contracts, that has apparently led to implementation delays. While the measures are touted to improve fiscal balance, they have not helped the economy to absorb external shocks from political tensions in the Middle East and North Africa, an earthquake and tsunami in Japan, and the recessions in the United States and Europe.
The first half of 2011, however, has the legislative branch making swift moves that are deemed to align with or favor the administration’s plans.
On March 22, for instance, the House of Representatives would vote to impeach then Ombudsman Merceditas Gutierrez on grounds of her alleged inaction on the fertilizer fund scam, National Broadband Network-Zhing Xing Telecommunications Equipment Inc. (NBN-ZTE) deal, “Euro generals” scandal, Mega-Pacific deal, and the Philip Pestaño case. The Ombudsman’s low conviction rate is also cited as another reason to have her impeached.
The fertilizer fund scam supposedly involved former President Gloria Macapagal-Arroyo. Arroyo would be cleared in this case by the Ombudsman in May 2014. She and her husband, however, would remain respondents in a graft case related to the NBN-ZTE deal.
Gutierrez, meantime, would announce her resignation from office on April 29, 2011, subsequently cancelling the impeachment trial that was supposed to take place at the Senate.
Also on March 22, the House approves House Bill No. 4146, a measure seeking to synchronize the Autonomous Region in Muslim Mindanao (ARMM) elections with the May 2013 polls. This thereby postpones the ARMM elections originally scheduled to take place on August 8, 2011.
On June 6, the Senate passes Senate Bill No. 2756, the counterpart measure seeking to postpone the August 8, 2011 ARMM elections.
Three weeks later, on June 30, President Aquino signs into law Republic Act No. 10153, which synchronizes the next ARMM polls with the May 13, 2013 midterm elections. R.A. No. 10153 likewise allows the President to name officers-in-charge to serve in ARMM until June 30, 2013.
On July 26, Aquino submits to Congress the proposed P1.816-trillion budget for 2012. This was considered to be Aquino’s first official budget after having assumed office in the middle of 2010.
In an interview after the Development and Budget Coordination Committee (DBCC) briefing for senators on the 2012 proposed budget, Senator Franklin M. Drilon expresses concern over government underspending, which experts say could hurt growth targets. “I am glad that the DBCC is aware of this and they are exerting extra effort in order that there can be more spending, there can be more public infrastructure spending,” Drilon says. “This is really something that must be looked at carefully, especially given the recession in the U.S.” The senator notes that the DBCC had agreed “to make more accurate assessment,” but not necessarily to revise growth targets, in two months.
DBCC at this time is composed of Budget and Management Secretary Florencio B. Abad, Socioeconomic Planning Secretary Cayetano W. Paderanga Jr., Executive Secretary Paquito N. Ochoa Jr., Finance Secretary Cesar V. Purisima, and Bangko Sentral ng Pilipinas Governor Amando M. Tetangco Jr. Arsenio M. Balisacan would later replace Paderanga in May 2012.
In his outlook for the third and fourth quarters of 2011, Paderanga hints at an “accelerated spending plan” that DBM has in the works.
Paderanga says in a press release, “We want to optimize fiscal spending’s contribution to growth. As such, the accelerated spending program aims to fast-track government disbursements in the second half of the year, in order to shore up the level of economic activity. For instance, recognizing the low utilization and absorptive capacity of its departments and agencies, the government focused on fast moving expenditures to beef up its spending.”
In separate press releases, Senators Drilon and Edgardo ‘Ed’ J. Angara, chair and vice chair of the Senate Committee on Finance respectively, urge the Department of Public Works and Highways (DPWH) to boost infrastructure development to stimulate growth.
Drilon says DPWH should accelerate its implementation of infrastructure projects. Angara, meanwhile, stressed the importance of “stimulative spending” at a time of “imminent crisis.”
On the same day, the Supreme Court issues a temporary restraining order against the implementation of Republic Act No. 10153, a law postponing the scheduled August 8, 2011 elections in ARMM.
The House of Representatives approves the proposed P1.816-trillion national budget for 2012.
DBM, in documents submitted later to the Supreme Court, admits to making actual disbursements of P67,722,280,000 of the P72.11-billion DAP on October 10, 2011. (Note: These documents were cited in the concurring/dissenting opinion that Associate Justice Antonio T. Carpio would write about DAP in July 2014.)
The release of the first tranche of DAP funds would happen two days before DAP was actually launched or introduced through a Memorandum for the President that Secretary Abad issued on October 12, 2011.
In a press release, then Senator Ed Angara says, “Why are we hoarding so much public money? Money unspent, is money useless –a useless asset when there is so much urgent necessary infrastructure and public works crying out for prosecution and implementation.”
Abad seeks the President’s approval to implement the Disbursement Acceleration Program through a memorandum containing a list of fund sources for P72.11-billion worth of projects supposedly aimed to speed up disbursements.
In his statement introducing DAP, Abad says President Aquino has instructed his government to execute additional projects to bolster economic growth for 2011 because the disbursement performance had not been enough that August.
Drilon, meanwhile, had earlier remarked that he was doubtful of “the ability of the government to accelerate spending” given its performance in the last eight months of 2011.
A DBM disbursement performance report released for this month says some P26 billion worth of disbursements in October had been attributed to DAP. The report also identifies nine projects that received allotments under the DAP. (See Sidebar Table 1)
DBM also acknowledges in the report that delays brought about by realignments and careful project identification and planning had caused major backlogs in the fiscal program. But it qualifies that these were necessary to ensure the quality of spending. “With these developments, the government remains positive that public sector spending will continue accelerating in the coming months and that the prudent expenditure management exercised by departments/agencies in executing their budgets will reap longer-term fiscal and economic benefits,” the Budget Department says.
Voting 18-1, the Senate approves the 2012 budget proposal on third reading. Only then Senator Joker Arroyo opposes the approval, as he raises concerns against lump-sum appropriations. “The function of Congress is to check the excesses of the executive, I do not think we have done our job,” a Sun Star report would quote Arroyo as saying.
In its November 2011 Assessment on Disbursement Performance report, DBM says it has released allotments for four projects worth P19.2 billion under the DAP. (See Sidebar Table 2)
The Budget Department would later explain in its December 2011 report that the “bulk of the releases from the Unprogrammed Fund went to NHA for the AFP/PNP housing project (P3.5 billion), Iloilo resettlement project, and North Triangle Relocation Project.” It would also say that these projects were funded by the windfall collection of Government Financial Institutions (GFIs) dividends remitted to the Treasury in January 2011.
DBM requests an “omnibus authority to consolidate 2011 savings/unutilized balances and its realignment to fund additional projects totaling to P13.4 billion” as supplement to current DAP funds. By end of December, DBM would state in a press release that it had disbursed P7.6 billion and released allotments worth P3.5 billion from the P13.4 billion additional fund. In total, DAP would now be worth P85.51 billion.
Also on December 12, the House of Representatives impeaches Supreme Court Chief Justice Renato Corona on grounds of alleged graft and corruption, culpable violation of the Constitution, and betrayal of public trust.
A GMA News report would later say that 188 of 284 House members signed the verified complaint against the chief justice. This allowed the complaint to be transmitted directly to the Senate without undergoing House committee deliberations.
President Aquino signs the P1.816-trillion national budget for 2012. The 2012 General Appropriations Act includes the P39.5-billion conditional cash transfer program, the administration’s main anti-poverty measure.
DBM admits to actual disbursements of P11,004,157,000 under DAP by this date, according to Carpio’s separate opinion in the Supreme Court ruling on DAP. Total actual disbursements under DAP amounts to P78.73 billion, including the disbursement in October 2011.
These figures, however, would differ from those in a January 9, 2012 DBM press release in which the Budget Department announced total actual disbursements of P61.36 billion by the end of December 2011. (See Sidebar Table 3)
In the same press release, DBM would also identify the 18 programs and projects as part of the P13.4-billion DAP. (See Sidebar Table 4)
DBM’s disbursement performance report as of December 2011 identifies the following allotment releases under the DAP for Maintenance and Other Operating Expenses:
Financial subsidy given to LGUs that are endorsed by the Department of the Interior and Local Government (DILG) as recipients of the Seal of Good Housekeeping (P5.2 billion); and
Funding for improvement of disaster planning and response through the Department of Science and Technology’s (DOST’s) Nationwide Disaster Risk Exposure, Assessment, and Mitigation (DREAM) program (P1.6 billion).
Total actual disbursements in December 2011 amount to P78.73 billion, including the P67.72 billion in October and P11 billion on December 21, 2011. But this figure would differ from DBM’s press release on January 9, 2012 and which would announce that as of December 31, 2011, actual disbursements amounted to only P61.36 billion.
The Senate sitting as an impeachment court begins the trial of then Chief Justice Renato Corona.
Twenty senators vote to convict Corona. Three others — Senators Miriam Defensor-Santiago, Joker Arroyo, and Ferdinand ‘Bongbong’ Marcos Jr. — vote to acquit him.
DBM requests an omnibus authority to pool savings and to fund proposed projects. DBM would also admit to actual disbursements of P21,564,587,000 under the DAP on June 27, according to Carpio’s separate opinion. Total actual disbursements under DAP now amount to P100.29 billion.
Abad issues National Budget Circular No. 541 or the “Adoption of Operational Efficiency Measure – Withdrawal of Agencies’ Unobligated Allotments as of June 30, 2012.” The circular provides that “all released allotments in FY 2011 charged against R.A. No. 10147 which remained unobligated as of June 30, 2012 shall be immediately considered for withdrawal.”
The withdrawn allotments, the circular says, may be reissued for the original programs and projects of the agencies concerned from which the allotments were withdrawn, realigned to cover additional funding for other existing programs and projects of the agency, and used to augment existing programs and projects not considered in the 2012 budget but expected to be started or implemented during the current year. The last condition shall be subject to the approval of the President.
According to DBM’s Assessment of Disbursement Performance for July 2012, another Disbursement Acceleration Program is planned for implementation during the year and this would be based on the extent of appropriations that remain unobligated to date.
Aquino submits to Congress the proposed P2.006-trillion national budget for 2013.
The House of Representatives starts its committee-level deliberations on the proposed P2.006-trillion national budget for 2013.
For the third time since 2011 DBM requests an omnibus authority to pool savings and to fund proposed projects.
DBM also admits to actual disbursements of P2,731,080,000 under the DAP by Sept. 5, according to Carpio’s separate opinion in the Supreme Court ruling on DAP. Total actual disbursements under DAP now reach P103 billion.
The House of Representatives approves the proposed P2.006-trillion national budget for 2013 on second reading.
The filing of Certificates of Candidacy for the 2013 midterm elections takes place during this week.
The Senate approves on third and final reading the P2.006-trillion budget for 2013.
Typhoon Pablo wreaks havoc in Mindanao, affecting more than 711,000 families and leaving over a thousand dead.
President Aquino signs the P2.006-trillion budget for 2013.
In the meantime, DBM for the fourth time requests an omnibus authority to pool savings and to fund proposed projects. DBM would also admit to actual disbursements of P33,082,603,000 under the DAP, according to Carpio’s separate opinion. Total actual disbursements under DAP now amount to P136.1 billion.
DBM releases a list of identified projects and programs that would be funded by the additional P33 billion. (See Sidebar Table 5)
The 2013 mid-term elections are conducted. The senatorial polls coincide with the local elections and the general elections in the Autonomous Region in Muslim Mindanao.
Twelve senators would be elected, half of whom would be re-electionists and the other half newcomers bearing familiar surnames. The winning re-electionists include Senators Francis ‘Chiz’ Escudero, Lorna Regina ‘Loren’ Legarda, Alan Peter Cayetano, Aquilino ‘Koko’ Pimentel III, Antonio Trillanes IV, and Gregorio ‘Gringo’ Honasan II. Senators Benigno ‘Bam’ Aquino IV, Nancy Binay, Joseph Victor ‘JV’ Ejercito, Juan Edgardo ‘Sonny’ Angara, Cynthia Villar, and Grace Poe likewise would take their oath of office.
DBM requests another omnibus authority to pool savings to fund proposed projects. This is the fifth of such request by the Budget Department.
DBM admits to actual disbursements of P4,658,215,000 under DAP, according to Carpio’s separate opinion. By this time, DAP disbursements total P140.8 billion.
The Philippine Daily Inquirer publishes a series of reports on the Priority Development Assistance Fund (PDAF) based on accounts of whistleblower Benhur Luy. The reports say businesswoman Janet Lim Napoles and at least five senators allegedly elicited money of the PDAF. Luy is a cousin and former aide of Napoles.
Inquirer’s reports lead to an investigation on the pork-barrel scam by the Department of Justice (DOJ) and the National Bureau of Investigation (NBI).
COA publishes its special audit on the use of the Priority Development Assistance Fund and Various Infrastructure including Local Projects from 2007 to 2009.
COA identifies adverse findings on the use and management of the pork barrel that excessive grants of PDAF to some lawmakers and the release of funds to dubious nongovernmental organizations and projects.
COA’s special audit triggers a Senate investigation on the pork-barrel scam. Earlier, the Senate had announced that it would not conduct a probe because of the pending investigation being carried out by the DOJ and NBI.
A week after the release of the COA special audit on PDAF, President Aquino announces the supposed abolition of the pork-barrel system. Yet instead of being a lump-sum item in the budget, the P25.44-billion PDAF would later be re-aligned to six key agencies in the 2014 national budget. Except for DPWH, each agency would have a bigger PDAF to implement in 2014. The agencies would also focus on only one type of project.
Protesters trooped to Rizal Park in Manila calling for the abolition of PDAF. The rally dubbed as the “Million People March” would be considered the first and biggest demonstration yet during the Aquino administration.
The Senate Blue Ribbon Committee starts its hearings on the pork-barrel scam. Businesswoman Janet Lim Napoles, whistleblower Benhur Luy, former Technology Resource Center director Dennis Cunanan, and Ruby Tuason would be among those who would attend and testify during the Senate hearings.
In a letter signed by DPWH Assistant Secretary Dimas S. Soguilon, the DPWH updates Presidential Adviser on Peace Process Teresita Quintos Deles on the status of implementation of the three projects under Payapa at Masaganang Pamayanan (PAMANA) Program for 2012, which had been funded through the DAP. (See Sidebar Table 6)
The PAMANA Program was established to extend development interventions to communities affected by conflict. It is being managed by the Office of the Presidential Adviser on the Peace Process.
The National Bureau of Investigation recommends before the Office of the Ombudsman the filing of charges of plunder and malversation of public funds against 38 individuals. The list includes businesswoman Janet Lim Napoles, Senators Ramon ‘Bong’ Revilla Jr., Jinggoy Estrada, Juan Ponce Enrile, and two former members of the House.
In his privilege speech, Estrada reveals that some senators, including himself, had been allotted an additional P50 million each as “incentive” for supposedly voting in favor of the impeachment of Chief Justice Renato C. Corona. (See Sidebar Table 7)
On the same day, DBM requests another omnibus authority to pool savings to fund the rehabilitation plan for the areas affected by Typhoon Pablo amounting to P10.534 billion. The amount is to be sourced from the 2012 and 2013 pooled savings from programmed appropriations and revenue windfall collections during the first semester, making up the 2013 Unprogrammed Fund.
DBM admits to actual disbursements of P8,489,600,000 under DAP by this date, according to Carpio’s separate opinion. DAP disbursements now reach P149.25 billion. This is the last DAP disbursement before the program would become controversial.
Abad issues a statement explaining that the funds released to the senators were part of DAP, a program designed by DBM to ramp up spending to accelerate economic growth.
The budget secretary says DAP funds are usually taken from unreleased appropriations under personal services, unprogrammed funds, carry-over appropriations unreleased from the previous year, and budgets for slow-moving items or projects that had been realigned to support faster-disbursing projects.
In a statement, Commission on Audit Chair Maria Gracia M. Pulido-Tan says that in response to Senator Miriam Defensor Santiago’s letter request, the COA was already looking into the DAP releases, particularly those issued projects identified by legislators.
“From the initial reports of our audit clusters, there are at least two agencies found to have received DAP allocations from legislators. The corresponding audit reports shall be released in due course.”
October 7-November 8
Nine petitions assailing the constitutionality of DAP and issuances related to it are filed before the Supreme Court.
The House of Representatives approves the P2.268-trillion proposed national budget for 2014. The budget proposal is rid of the PDAF lump sum, which is instead realigned to the budget of six implementing agencies.
Addressing the nation in a televised speech, President Aquino hits back at critics equating the controversial Priority Development Assistance Fund or the pork-barrel system with DAP.
“The Disbursement Allocation Program is not pork barrel,” says Aquino. “Of the DAP releases in 2011 and 2012, only nine percent was disbursed for projects suggested by legislators.” He says that spending through DAP is clearly allowed by the Constitution and by other laws, as well as argues that it is only a name for a process wherein government can spend both savings and new and additional revenues.
Aided by a slideshow, Aquino tries to explain what DAP is and its supposed “real, tangible” benefits to Filipinos. He cites some of the projects funded by DAP such as Project NOAH of the Department of Science and Technology, Training-for-Work Scholarship Program of Technical Education and Skills Development Authority, construction of infrastructure in Mindanao and other areas, and payment of Government Service Insurance System premiums for DepEd employees, among others.
Typhoon Yolanda devastates parts of Central Philippines. Yolanda (international codename: Haiyan) would be recorded as the strongest and most destructive typhoon to hit the country, killing over 6,000 people and damaging P85.89 billion worth of properties.
The Supreme Court conducts the first oral argument on the constitutionality of the DAP.
On the same day, the Supreme Court en banc votes to declare as unconstitutional the use of the pork or PDAF. It reverses three prior rulings that upheld the role and power of Congress over the use, allocation, and disbursement of pork for the pet projects of senators and congressmen.
The Senate approves on third and final reading the P2.264-trillion proposed national budget for 2014. The Senate version is P3.2 billion less than the amount originally proposed in the Executive’s Budget Proposal.
President Aquino signs the P2.264-trillion national budget for 2014. To speed up budgetary releases, the DBM adopts the General Appropriations Act as release document in 2014. Agency budgets, excluding lump-sum funds, special purpose funds, and automatic appropriations, are considered released as allotments when the 2014 GAA takes into effect.
Abad submits a memorandum to the President co-signed Finance Secretary Cesar Purisima and Socioeconomic Planning Secretary Arsenio Balisacan recommending the termination of DAP.
The Philippine government and the Moro Islamic Liberation Front sign the Annex on Normalization, paving the way for the signing of the Comprehensive Agreement on the Bangsamoro.
The Supreme Court conducts the second oral argument on the constitutionality of the DAP.
The Supreme Court conducts the third and final oral argument on the constitutionality of the DAP.
In a 13-0-1 decision, the Supreme Court rules that certain “acts and practices” of the DAP are unconstitutional.
DBM releases a press release in response to a report claiming that P352.7 billion was made available at the disposal of the executive for DAP projects. According to the DBM press release, a total of P136.75 billion — P65.59 billion form the 2011 budget and P71.16 billion from the 2012 budget — was made available for DAP projects. DBM further notes that the total amount actually used from the fund was P114.58 billion. – PCIJ, July 2014