PCIJ: DAP EXPRESS – P32B not on GAA

This is the sidebar of PCIJ: DAP EXPRESS – P32B not on GAA. Crossposted from PCIJ.

The DAP Express

P32B not on GAA

AT LEAST P32.23 billion of taxpayers’ money had been released under the Disbursement Acceleration Program (DAP) for projects and activities that had no funding cover or were not enrolled as approved expenditure items in the national budget or General Appropriations Act (GAA) for 2011 and 2012.

As far as the available documents allowed, PCIJ reviewed the list of the DAP-funded projects of the Department of Budget Management against budget items enrolled in the agency’s appropriations for 2011 and 2012 that received DAP monies.

This review focused on DAP projects that DBM had identified in official documents listing DAP-funded projects.

These DAP-funded projects without appropriations cover include:

The Bangko Sentral ng Pilipinas under Governor Amando M. Tetangco, Jr. got P10 billion in DAP funding for “first equity infusion out of PhP 40B capitalization under the BSP Law” in 2011 and P20 billion for “additional equity infusion to the BSP’s Authorized Capital Stock” in 2012. But the BSP had no appropriation in the 2011 or 2012 GAAs.

The House of Representatives, through Speaker Feliciano Belmonte Jr. requested and received P250 million in DAP monies to cover the completion of the “Construction of the Legislative Library and Archive Building/Congressional E-Library.” This item has no appropriation cover under the 2011 GAA.

The Commission on Audit under Chairperson Maria Gracia M. Pulido Tan got DAP funding of P144 million for its “IT infrastructure program and hiring of additional litigational experts” even as it had no specific appropriation for this project of COA in the 2011 GAA

The Trade and Investment Development Corporation of the Philippines (now known as Philippine Export-Import Credit Agency or PhilEXIM) under President/CEO Francisco S. Magsajo, Jr. got P570 million in DAP funding for “National Government (NG) Equity infusion” even as there was no appropriation for the agency in the 2011 or 2012 GAAs.

In 2011, the Philippine Heart Center under Executive Director Manuel T. Chua Chiaco Jr. received P357 million in DAP monies for the “upgrading of ageing physical plant and medical equipment.” While the budget of the Health Department, which PHC is directly under, includes a “development sub-specialty Center for Heart, Lung and Kidney Diseases…” for that year, PHC’s own budget indicated only one item: assistance to indigent patients suffering from heart diseases.

The Philippine Postal Corporation under Postmaster-General Ma. Josefina M. Dela Cruz, got P644 million in DAP funding for the “purchase of foreclosed property, payment of mandatory obligations, (GSIS, PhilHealth, ECC), Franking Privilege” but the Philippine Postal Corporation was not listed in the 2011 GAA. It was, however, included in the 2012 GAA with a line item budget of “delivery of mails of offices with Franking Privilege.”

The Laguna Lake Development Authority under General Manager J.R. Nereus O. Acosta got P270 million in DAP funding for “infrastructure upgrade and development program” even as LLDA had no appropriation in 2011 or 2012 GAAs. – With research by Fernando Cabigao Jr.and Rowena F. Caronan, PCIJ, July 21, 2012

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PCIJ : Part 2 of 3 – The P144-B DAP freed in a rush and projects with slow results

Here is Part 2 of 3 PCIJ Report: The P144-B DAP Express
Funds freed in a rush, projects yield slow results.


The P144-B DAP Express
Funds freed in a rush, projects yield slow results

By Malou Mangahas, Karol Ilagan, and Rowena F. Caronan
Philippine Center for Investigative Journalism

Second of Three Parts

THE GOOD, the bad, and the dead combine, in terms of projects and activities, under the Aquino administration’s Disbursement Acceleration Program (DAP), which is now wreaking havoc on relations between institutions, as well as between the government and the citizens.
Put aside the lack of transparency in details about which legislators and local officials pushed what projects, where, and for how much, under the “various priority local projects” funded by billions of DAP pesos. To date, the pace, quality, and impact of project implementation under DAP is a quizzical record.
In fact, the only thing clear is that in the administration’s rush to shore up public spending and boost the economy, the Department of Budget and Management (DBM) under Secretary Florencio ‘Butch’ Abad released billions of pesos in DAP monies to about 50 recipient agencies. But even the exact amount of money released so far and for what specific projects remain uncertain, although the supposed total amount of money released has been pegged at P144.3 billion, to fund a supposed total of 116 projects in 26 months, or from October 2011 to December 2013.
For sure, a number of DAP projects have been completed or are now in the final stages of completion. These reportedly include about 60 percent of the projects to dredge, restore, or construct creeks, seawalls, dikes, waterways, and slope protection in Metro Manila, Central Luzon, and the Laguna Lake, that altogether drew about P5 billion in DAP funds.
Yet some Cabinet officials have questioned the absorptive capacity or actual capability of DAP recipient agencies to roll out projects quickly and well. After all, DAP has meant not just more money to spend, but also more projects to implement.
The Department of Public Works and Highways (DPWH), for instance, has ended up with the biggest burden of implementing DAP-funded construction activities partly because it was asked to take on projects from agencies that had received DAP funds but could not undertake the activity needed.

Massive construction

Since 2011, there have been more and more construction-hinged DAP projects, including those that had not moved over the last two years, such as the P1.64 billion that was released to the Department of Agriculture (DA) for the construction of “irrigation, FMRs (farm-to-market roads) and Integrated Community-Based Multi-Species Hatchery and Aquasilvi Farming.”
Money for this project was released in October 2011 yet under the first tranche of DAP, but it has barely taken off ground.

The project seemed strategic and pro-poor, and its proponents proclaimed it to be a key step to the country achieving self-sufficiency in rice. Cabinet insiders say that on this basis, President Benigno S. Aquino III was thus convinced to support it with generous DAP funding in 2011.

Two years hence, the project had yet to move past its promises, prompting transfer of its implementation to the DPWH in 2013.

DPWH Secretary Rogelio ‘Babes’ Singson says that it was with great reluctance that he took on the project. Referring to it and other DAP projects passed on to his department, Singson says he could only tell the Cabinet, “Heto nga problema, gusto ninyo akong dagdagan nang dagdagan, may absorptive capacity problem na ako. Kulang na ako ng contractor, wala na akong makuhang semento (Here’s the problem, you keep on adding on to my plate, I already have an absorptive capacity problem. I’m running out of contractors, I can no longer get any cement.)”

“Nagkukuwentahan nga kami sa Cabinet (We were chatting in the Cabinet),” Singson says. “Ang sabi ko, kung ang desisyon dito pahabaan ng kulong, ako pinakamatagal ang kulong, kasi ako ang pinakamalaking implementor (I told them, if the decision here is who should be in jail the longest, that would be me because I was the biggest implementor).”

Last July 1, the Supreme Court in a 13-0-1 vote had declared certain actions that the Executive had taken under DAP to be unconstitutional.

So far, though, DPWH is plodding on with the DAP projects it has been obligated to accomplish. But the story elsewhere is more disheartening: agencies have little or no absorptive capacity or capability, projects mismatched with agency mandate and expertise, or even the sheer lack of concrete project proposals or program of work; some agencies that received DAP monies have failed to perform within its goal of rolling out high-impact, quick-disbursing, socially-responsive projects.

The results have been bad to tragic to irregular, or simply, a bundle of many delayed, cancelled, or suspended DAP projects. And because haste typically marked the release of DAP monies in the last days of 2011, 2012, and 2013, the funds released to certain agencies could not be obligated quickly enough, and the amounts had to be returned to the National Treasury.

This could well be because the distribution of DAP manna had been inordinately skewed in favor of no more than 50 agencies. This number excludes, of course, the unnamed mass of “legislators and local government officials” who had also secured significant DAP share for their still undisclosed projects.

Top DAP recipients

Government-owned and -controlled corporations or GOCCs, “legislators, local government officials, and national agencies,” and some line departments make up the top 25 agencies that cornered the bulk of the supposed P144.3-billion DAP.

On Monday, however, DBM issued a press release saying in part that, “no cash nor (sic) projects are given to legislators. Instead, what lawmakers only do is nominate projects from a list of priorities that will benefit their constituents or districts. The funds for these projects are then released to and implemented by national agencies.”

It also said that the Budget Department was “now preparing a more detailed list of projects funded through the DAP. The new list will distinguish legislator-backed projects from those housed under government departments and agencies, local government units, and government-owned or –controlled corporations.”

In any case, the top 12 recipient agencies of DAP funds were given at least P3 billion to at most P30 billion. Altogether, they cornered a total of P112.11 billion or 77.79 percent of the P144.3-billion total DAP releases.

This magic circle of 12 include, in order of DAP monies they received, the Bangko Sentral ng Pilipinas (BSP), “legislators, local government officials, and national agencies,” DPWH, National Housing Authority (NHA), Autonomous Region in Muslim Mindanao (ARMM), “local government units” or LGUs, Department of Tourism (DoT), “government-owned and -controlled corporations,” Commission on Higher Education (CHED), Department of Education (DepEd), Department of Agriculture (DA), and the Government Service Insurance System (GSIS).
These 12 and the others that make up the top 25 recipient agencies secured about P134.07 billion or 93.23 percent of total DAP funds.

The puny balance of P10.3 billion in DAP money was all that was passed around among the less blessed but bigger group of 23 other DAP recipient agencies.

Data from the Philippine Government Procurement System show that the Philippines is a mammoth bureaucracy of 1,829 national government agencies, 1,299 GOCCs, and 1,714 local government units. By these numbers, the less than 50 agencies that got DAP funding would seem like a drop in the bucket.

Double, triple

In a few rather absurd situations, some agencies were given DAP money that was more than double or triple their annual agency budgets.

CHED’s budget, for instance, was only P1.42 billion in 2012. Yet it was given P4.28 billion in DAP funds in October 2011. This was on top of big servings of pork funds that CHED manages largely for the scholarship programs of many legislators.

Under DAP, CHED received funds for the “Institutional Capacity Building of Leading State Universities/Colleges.” In particular, it was tasked to use the money “to support infrastructure and facilities upgrade for instruction, research and extension of SUCs” and “to address the challenge of providing access to quality higher education and to generate/adapt/transfer technologies for enhancing productivity, alleviating poverty and improving the country’s competitiveness.”
CHED would eventually issue implementing guidelines on how SUCs may get sub-allotments from DAP, but had to enter into memoranda of agreement with the DPWH and the Department of Social Welfare and Development to assist in implementing the projects.
As of December 31, 2012, CHED’s approved plantilla is all of 609 positions, including 258 in the Central Office and 351 in its 15 regional offices. COA said CHED has filled up only 483 positions, while the balance of 126 remains unfilled.
NHA, meanwhile, received P11.05 billion worth of DAP projects in October 2011. Its budget for 2012 was less than half that: P5.63 billion. In all, NHA – an agency under the Office of the President and whose current general manager is Chito M. Cruz, known to be a close Aquino friend – has a total manpower complement of 1,359.

Stories good and bad

Had DAP success stories been outnumbering the failed projects, the Aquino government’s “good intentions” argument may have gained more traction – and sympathy. But the opposite seems to be happening.

For example, a DAP project that could have spelled relief to over a million commuters daily was the proposed purchase of additional rail cars for the Metro Rail Transit (MRT) for P4.5 billion.

The proposal was submitted for DAP funding by the Department of Transportation and Communication (DOTC).

DBM’s official list of DAP-funded projects stated that, “the requested funds shall be used to purchase additional MRT Rail Cars (26 units of rolling stock) and the concomitant upgrading of power substations and enhancement of signaling system.”
“The purchase of additional MRT cars aims to address the frequent service interruptions that arise from overloaded and poorly maintained trains,” DBM said.
In time, however, DBM would say that the project was not implemented at all.
Another project called “rural electrification for barangays and sitios” has even been cited by President Aquino to be among the redeeming values of DAP. The National Electrification Administration (NEA) was supposed to receive P1 billion from the third tranche of DAP funding for, DBM reported, “the expansion of the sitio electrification program and barangay line enhancement project to cover an additional 100 sitios and 160 barangays.”
In its final list of DAP-funded projects, DBM said this proposal was not approved and thus not implemented.
But the DBM list also showed a second project entry for NEA. The agency supposedly received P1.26 billion of the fourth tranche of DAP supposedly to energize the remaining 1,513 sitios from the target 6,000 sitios in 2012.
Instructive cases
The annual audit reports on DAP recipient agencies that the Commission on Audit (COA) has published are most instructive about what else has gone wrong with project implementation under DAP. COA’s reports on a number of these agencies are replete with qualified and adverse observations.
Some of the more interesting examples include:
The Credit Information Corporation (CIC) received P75 million of DAP funds on October 12, 2011, the first tranche of DAP releases. DBM said, “The requested amount shall cover the operational requirements and capital expenditures of the CIC for the establishment of a comprehensive and centralized credit information system, including the establishment of a data center.”

Two years after, the project had yet to get going. In October 2013, the Securities and Exchange Commission (SEC), which supervises CIC, published through its Bid and Awards Committee Secretariat a “Request for Expression of Interest for Rebidding for the Credit Information System Project, P126 million.” The deadline for submission of bids was set on November 20, 2013.

It is yet unclear if the contract had been awarded. But this much is crystal, according to a Cabinet insider: at the time it received DAP funding, CIC had not prepared a full and cogent project proposal. Then again, it was only two months after the release of its DAP money that CIC’s staff plantilla of three persons led by President Jaime Garchitorena started operations. The CIC website states this fact: “Start of CIC Operations, Dec. 16, 2011.”

The bid notice for CIC said that the information system project would cover “credit and credit-related activities of all entities participating in the financial system such as but not limited to banks, credit card companies, microfinance lending institutions, and other private and government financial lending institutions.”

“Data from retailers, utilities, insurance companies, telecommunications companies will be included in the future,” the notice of rebidding also said.

The Technical Education and Skills Development Authority or TESDA had proposed and received on October 12, 2011 under DAP’s first tranche a total of P1.1 billion for a project called “Training Program in Partnership with BPO Industry and Other Sectors.”

DBM’s report on DAP-funded projects said “the funds shall cover the training of 65,000 near-hires for the industry of which, 70% or 45,000 will be hired. Training cost for 5,000 persons from other clientele groups and 2,000 faculty trainers who will in turn train 70,000 trainees shall also be covered. TWSP (Training for Work Scholarship Program) for Other Priority Sectors: the funds shall cover the training of 60,000 workers in priority sectors: construction, semi-conductor and electronics, agri-business and tourism.”

TESDA would receive more money as sub-allotments from several more DAP-funded projects. Together with five other departments and agencies, TESDA got portions of the funds from the P8.592-billion DAP funds released for the “Comprehensive Peace and Development Intervention” in ARMM.

This second project, DBM records said, would “cover the improvement of service delivery performance, the creation of an enabling environment for PPP (Pantawid Pamilyang Pilipino) toward equitable growth, improvement of public safety and security. The funds shall likewise be used to reform and strengthen governance capacities, reform the electoral system, and improvement of the legal framework for governance, peace and economic growth. These reforms will be implemented by various agencies.”

TESDA got more funds on September 5, 2012, under Tranche 4 of DAP releases, courtesy of a project called “Additional Funding for the Expanded TWSP.

The project fetched a P500-million DAP share for the Department of Labor and Employment and TESDA. DBM said this TWSP is “a TESDA program that aims to boost supply of skilled workers to meet industry needs.”

“Under the TWSP, workers are provided proper training on skills directly connected to existing jobs for immediate employment. The additional funding seeks to reach 13,000 scholars-beneficiaries,” DBM added.

A note in the DBM report also said that “P1.1B was released to fund TWSP under the FY 2011 DAP, which has been fully utilized by June 30, 2012.”

But TESDA Director General Joel Villanueva and COA seem to have problems with DBM’s assertion that TESDA had fully spent the P1.1 billion, among other things.

According to COA’s audit report for 2012 on TESDA, the agency had not used at least 10 percent of the fund by the end of 2012. Said the report: “An unutilized balance of 109,382,957.78… thus, realization of expected benefits for gainful employment in order to reduce poverty and building competitiveness was not met.”

COA also found a number of irregularities in the use of the fund, notably the possible attendance of “ghost scholars” in its training program.

COA had conducted interviews with some of the supposed TESDA graduates and found that at least 61 such scholars were recorded by TESDA to have attended multiple training courses, which were held simultaneously or on overlapping dates. COA also said that another 46 “scholars” had denied that they had attended TESDA training courses. Yet another 218 scholars who COA personnel tried to locate for validating interviews could not be reached through their submitted contact numbers.

Villanueva, commenting on the COA audit findings in the news media last month, blamed TESDA’s accredited schools for the “ghost scholars,” said that those who denied that they had attended TESDA seminars were probably not aware that TESDA had funded their training, and that the “scholars” who could not be contacted may have started to work abroad or changed contact numbers.

But while he indicated that not all of TESDA’s DAP-1 funds had been used, Villanueva said that at most only P30 million had been left unspent.

The National Statistics Office (NSO) was supposed to have received the bulk of the P605 million that DBM said had been released in October 2011 under DAP’s Tranche 1. This was for a project that actually listed the DBM as head agency and recipient of the DAP pesos. The money was to finance “the national survey of farmers, fisherfolks (sic) and IPS (indigenous peoples) shall be conducted nationwide.”

The project was supposed to be “an inter-agency activity that involves the DBM, DA, DAR, NSCB (National Statistical Coordination Board) and NSO to gather census data on farmers, fisher folks (sic) and other agricultural sector constituents and shall be conducted through LGU units to acquire the relevant farmer’s registry data.”

NSCB pulled out of the project reportedly because of concerns that the registry may involve breaching the confidentiality of the identity of survey/census respondents, thus breaching the code of ethics of statisticians.

DBM wound up as lead agency for the project supposedly because, a DBM official says, DA and DAR could not agree which of them should be the project leader

COA’s 2012 audit report noted that NSO had signed a memo of agreement with DBM to cover the Registry System for Basic Sectors in Agriculture (RSBSA), and for which NSO received fund transfers from DBM in December 2012.

The first such fund transfer was for P83.98 million and the second was for P200.28 million. DBM released the NCAs for both amounts on December 21, 2012, for Batch 2 of the RSBSA project.

NSO, however, received the same five days later on Dec. 26, 2012. “Considering the time constraint in the processing of payments toward the end of the year, the said NCAs were reverted,” COA said.

The sad results of DAP’s rushed processes: The reverted NCAs portfolio of NSO ballooned significantly to P270.4 million by end-2012, and Batch 2 of the RSBSA went without funding.

The Department of Science and Technology received P1.6 billion in DAP funds for the Nationwide Disaster Risk, Exposure, Assessment and Mitigation (DREAM) program.
 
DREAM consisted of five projects that were implemented from December 20, 2011 to December 19, 2013 by the University of the Philippines-Diliman (UPD), Advanced Science and Technology (ASTI), the Philippine Atmospheric, Geophysical and Astronomical Services Administration (PAGASA), and the Philippine Council for Industry, Energy and Emerging Technology Research and Development (PCIEERD).

The funds were prepared payable to the agencies on December 28, 2011 and released in January 2012. The total P1.6 billion was divided into two: “Year 1 budget cost P983,781,862 (for project implementation from Dec. 20, 2011 to Dec. 19, 2012) and Year 2 budget was P616,218,138 (Dec. 20, 2012 to Dec. 19, 2013).”
 
But COA’s 2011 audit findings noted that the release of funds was improper. For one, it said, the project funds were released even before the agencies submitted the required documents. For another, it added, some amounts remained “idle in PCIEERD” because allotments for projects that would be completed and disbursed until December 2013 were already allotted in 2011. COA’s third quibble was that some amounts “constituted circuitous transfer of project funds” (P438 million were released through PCIEERD, the monitoring agency, instead of directly releasing the amount to UPD, the implementing agency).

In its 2011 audit report, COA also questioned the P1,043,323,000 in DAP funds coursed through the Departments of Budget and Management and Interior and Local Government for three projects: Autonomous Region in Muslim Mindanao Transition and Investment Plan (P750 million), CSO Anti-Poverty Strategy and Localization and Empowerment Program (P250 million), and Special Capacity Building Project for POs and NGOs (P43.23 million).
 
COA said that the P1.043 billion had been released to “unprogrammed project/activities which were not supported by Physical and Financial Work Plan” on the specific activities to be undertaken, targeted outputs, and corresponding budget allocation. This was the reason why no obligation/disbursement was incurred during the year –contrary to DAP’s supposedly being a fast-disbursing mechanism.
Denied DAP pesos
Meantime, dozens of projects have been denied DAP funding. According to DBM data, these Registry System for Basic Sectors in Agriculture Phase 2;
Pilot-Testing of Enhanced Provincial LGU Engagement for National Community Driven Development Project;
Construction and Rehabilitation of Rural Health Units;
Tulay ng Pangulo sa Kaunlaran Pang-Agraryo (French Bridge);
Financial Support for the Gat. Bonifacio Shrine and Eco-Tourism Park;
Detailed Engineering of Goldenberg Mansion and Teus House, Malacañang;
Rehabilitation of the Watson Building near Malacañang;
Re-Acquisition of Air Rights Sold by Philippine National Railways (PNR) to the Home Guaranty Corporation (HGC) through the Department of Finance;
Incentives of Personnel Affected by the Rationalization Program in the DPWH; and
Re-acquisition of Air Rights Sold by PNR to HGC through DPWH.
– With additional research and reporting by Fernando Cabigao, Jr., PCIJ, July 2014

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PCIJ: The Story of DAP

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).

2011

January-June

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.

August 8

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.

August 31

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.”

September 13

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.

September 16

The House of Representatives approves the proposed P1.816-trillion national budget for 2012.

October 10

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.

October 11

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.”

October 12

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.

October 30

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.

November 22

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.

November 30

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.

December 12

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.

December 15

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.

December 21

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)

December 30

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.

2012

January 16
The Senate sitting as an impeachment court begins the trial of then Chief Justice Renato Corona.

May 29

Twenty senators vote to convict Corona. Three others — Senators Miriam Defensor-Santiago, Joker Arroyo, and Ferdinand ‘Bongbong’ Marcos Jr. — vote to acquit him.

June 25

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.

July 18

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.

July 30

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.

July 25

Aquino submits to Congress the proposed P2.006-trillion national budget for 2013.

August 1

The House of Representatives starts its committee-level deliberations on the proposed P2.006-trillion national budget for 2013.

September 4

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.

September 20

The House of Representatives approves the proposed P2.006-trillion national budget for 2013 on second reading.

October 1-5

The filing of Certificates of Candidacy for the 2013 midterm elections takes place during this week.

November 28

The Senate approves on third and final reading the P2.006-trillion budget for 2013.

December 4

Typhoon Pablo wreaks havoc in Mindanao, affecting more than 711,000 families and leaving over a thousand dead.

December 19

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.

December 21

DBM releases a list of identified projects and programs that would be funded by the additional P33 billion. (See Sidebar Table 5)

2013

May 13

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.

May 20

DBM requests another omnibus authority to pool savings to fund proposed projects. This is the fifth of such request by the Budget Department.

June 17

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.

July

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).

August 16

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.

August 23

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.

August 26

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.

August 29

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.

September 3

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.

September 16

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.

September 25

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.

September 26

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.

September 30

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.

October 1
 
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.

October 22

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.

October 30
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.
November 8

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.

November 19

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.

November 26

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.

December 20

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.

December 28

Abad submits a memorandum to the President co-signed Finance Secretary Cesar Purisima and Socioeconomic Planning Secretary Arsenio Balisacan recommending the termination of DAP.
2014

January 26

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.

January 28

The Supreme Court conducts the second oral argument on the constitutionality of the DAP.

February 18

The Supreme Court conducts the third and final oral argument on the constitutionality of the DAP.

July 1

In a 13-0-1 decision, the Supreme Court rules that certain “acts and practices” of the DAP are unconstitutional.

July 4
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

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