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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From PCIJ: The P144-B DAP Express A maze of good, bad, open, opaque projects

Here is Part 1 of 3 of PCIJ’s piece on DAP.

The P144-B DAP Express
A maze of good, bad, open, opaque projects
By Malou Mangahas
Philippine Center for Investigative Journalism
First of Three Parts

“Good intentions are not good enough.”

That, according to Public Works and Highways Secretary Rogelio ‘Babes’ Singson, is the lesson from the sorry episode that was the Disbursement Acceleration Program or DAP.

The Supreme Court on July 1 voted 13-0 to declare DAP unconstitutional in part because of the amounts that crossed over to other branches of government, the withdrawal of funding for items enrolled in the national budget, and the transfer of funding to items not enrolled in the national budget.

Until a fortnight ago, DAP was a concept not quite clear to even some Cabinet members themselves.

Half a dozen interviewed by PCIJ agreed unanimously, too, that the High Court’s ruling raised valid points but should not have crossed over also to questioning “good faith” on the part of the Executive.

What apparently started as a mere budget management tool soon evolved into “a big pool of funds” or a virtual special purpose fund that did not exist as a line item in the General Appropriations Acts for 2011, 2012, and 2013.

Under DAP, the Department of Budget and Management (DBM) under Secretary Florencio ‘Butch’ Abad released a supposed total of P144.38 billion in taxpayers’ money for supposedly 116 projects from October 2011 to December 2013.

DBM itself could not seem to get its numbers right, however. Various official DBM statements place the DAP funds that had been disbursed to be anywhere from P136 billion to P144 billion to P149 billion, for a significant variance of P5 billion to P13 billion.

A smorgasbord

In truth, DBM’s list of “DAP-funded projects” is a virtual smorgasbord of specific projects to be implemented by single agencies allotted relatively smaller amounts, as well as unspecified “various priority local projects” or “various priority infrastructure projects” given billions of DAP pesos.

Two to four agencies were assigned to implement the latter through transfers or sub-allotment of funds covered by a web of inter-agency memoranda of agreement. In these cases, accountability for fund spending and project implementation had been shared, and thus diffused, among the agencies.

This vague category of DAP “projects” include those that DBM said had been “requested by legislators, local officials, and national agencies.”

But 10 months after the DAP row broke in September 2013, DBM has yet to disclose the full details of which lawmaker or agency had proposed what types of projects, where, and for how much, with lump-sum fund cover under DAP.

(Since October 16, 2013 or nine months ago, PCIJ has filed repeated requests with DBM sets of data and documents relevant to an inquiry into DAP. Last week, all that DBM did was give PCIJ copies of documents about DAP that it had actually released and published earlier.)

A third or about P40 billion of the P144.3-billion total DAP kitty went to equity infusion and payment of insurance claims – including P30 billion for the Bangko Sentral, P8.6 billion for the Bureau of Customs, and the rest for the Metropolitan Manila Development Authority, Philippine Health Insurance Corporation, Department of Education, and Philippine Postal Corporation.

This amount, the apparent “fat” in DAP, could likely have only low and slow potential to instantaneously trigger what DBM said was DAP’s raison d’etre: “high-impact, quick-disbursing, socially responsive” projects.
?DAP fat & meat

Net of the P40 billion, the P144.3-billion DAP monies would be reduced to P104 billion in real spending on programs, activities, and projects.

To be sure, a few, small DAP projects are simple, urgent interventions with apparently clear and immediate public-service impact, such as the acquisition of medical equipment and the renovation of public hospitals, as well as the purchase of equipment for weather-forecasting and flood control.

Yet still, about a third or P35.54 billion of what might be called the meaty part of DAP went to broad and vague “various priority projects” that entailed retail, scattered, and possibly inefficient, spending of tax monies.

For instance, farm-to-market roads, flood control projects, capacity-building and skills training activities, and a “Registry of Basic Sectors in Agriculture”, among other projects funded by DAP, have met with mediocre to bad results, as well as qualified and adverse observations from the Commission on Audit (COA).

Some DAP projects had not been implemented or bidded out at all over a year after DBM had released the funds, remain only partially implemented, had supposedly been attended by “ghost” beneficiaries, are locked in agency disputes over actual amounts of fund transfers, or because the yearend had passed, the funds had to be reverted to the National Treasury.

Cabinet officials interviewed by PCIJ are unanimous: The pooling of savings under DAP for realignment or augmentation of funds for certain agencies and projects had always been de rigeur practice of all past administrations.

What went wrong only was that DBM turned it into a pool of funds and christened with a name that is almost in perfect rhyme with the much-maligned PDAF (Priority Development Assistance Fund) or pork barrel.

The confusion continued when, in the view of certain agencies, what they got in fact were internally generated savings that they had surrendered to the Treasury and for which they had sought authority to realign or use to augment internal agency activities.

Internal savings

This much was the case with the DPWH and the Bureau of Internal Revenue (BIR), according to their agency heads.

DPWH’s Singson and four other Cabinet officials said they belatedly realized that the additional funds they got from DBM came under the umbrella of DAP, and had been sourced not just from their own agencies’ savings.

By his estimate, Singson said his department received at most P33 billion in additional funds from October 2011 to mid-2013 but stressed that this represented savings that DPWH had generated through competitive bidding of projects and from funds allotted to slow-moving projects that he had proposed to be “deobligated” or suspended.

Singson adds that until recently, he had no inkling that his department’s savings from its own budget allocation had been pooled under DAP.

“May dumating from savings namin (We received some from our savings),” Singson says. Galing sa savings namin ’yun. Nagulat din ako, DAP pala (We assumed it was from our savings. I was also surprised that it was DAP).”

“DAP, PDAF, nakakalito (it’s confusing),” Singson continues. “Until the end, I was arguing with Butch (Abad). He said the DPWH received P39 billion in DAP funds. I said only P29 billion. We agreed on P33 billion.”

A Cabinet undersecretary posted in Malacañang says he was just as surprised that DAP had evolved into a big kitty of funds, even if it was not enrolled as a distinct expenditure item in the GAA. “Two things went wrong,” says the undersecretary. “The funds that crossed over and they gave it a name.”

Another undersecretary echoes this, replying when asked what he thought went wrong with DAP: “The cross-over funds and the name.” A third undersecretary also comments that naming the pool of funds DAP was a big mistake. “They did not have to call it DAP,” says the official. “All presidents had done that, realign and augment budgets for certain agencies or projects.”

Commissioner Kim Jacinto Henares of the Bureau of Internal Revenue (BIR), though, remarks, “Masyadong obsessed tayo sa name.”

Although she also says two things might have gone wrong with DAP, her version differs slightly with that of the undersecretaries: “The withdrawal of allotment (for items enrolled in the national budget) and cross-border funding.”

The latter, she says, includes the P143.7 million that the Commission of Audit received for its IT project and the hiring of additional lawyers, as well as the P200 million that Speaker Feliciano Belmonte Jr. sought and secured for the completion of the Legislative Library and Archives Building of the House of Representatives.

BIR itself was a DAP beneficiary, supposedly receiving P758.4 million in DAP monies for its information technology project under the “National Program Support for Tax Administration Reform (NPSTAR), Centralization of Data Processing and Others (To be Synchronized with GIFMIS Activities).”

But Henares says that what she knew was that she had generated savings in her own agency budget. “Alam ko savings ng agency ko ’yun (To my knowledge, those were my agency’s savings),” she says. “I requested a realignment.”

Whether or not what BIR received was DAP money matters less, she says.

How COA met DAP

COA Chairperson Maria Gracia M. Pulido-Tan, for her part, tells PCIJ that soon after she was appointed in April 2011, she saw the need to hire new lawyers and assist COA field auditors with IT equipment. This prompted her, she says, to seek Malacañang’s assist. “I did not know it was DAP,” Pulido-Tan says of the amount COA received.

She says COA auditors on ground came to know about DAP only in mid-2012 after seeing Special Allotment Release Orders (SAROs) listing DAP as fund source for certain projects. In several audit reports for 2011 and 2012 on agencies like the DBM, Department of Agriculture, Department of the Interior and Local Government, Technical Education and Skills Development Authority (TESDA), the Autonomous Region in Muslim Mindanao (ARMM), and government-owned and –controlled corporations, COA had actually raised red flags about DAP spending patterns.

“It was in mid-2012 when we started seeing SAROs bearing DAP,” Pulido-Tan says. “There are so many lump-sum funds already and then DAP comes in. They seem to want to make life harder for auditors.”

Apart from PDAF and DAP, COA undertakes annual financial audit of sundry lump-sum “Special Purpose Funds” that are lodged with DBM and the Office of the President.

The Budget Department disburses “Special Purpose Funds for LGUs” that include, among others, the Internal Revenue Allotments (IRA), “Shares in the Utilization and Development of the National Wealth”; Gross Income Taxes paid by businesses and enterprises within the ECOZONES; Tobacco Excise Taxes; Value-Added Taxes; Calamity Fund; Pension Gratuity Fund, et cetera. “All of these funds are administered by the DBM,” COA reports state.

The Office of the President, meanwhile, administers and authorizes the release of other lump-sum funds, including the multi-billion-peso President’s Social Fund and Contingency Fund.

How much really?

Across a 26-month period from October 2011 to December 2013, DBM’s Abad released “DAP” monies in six tranches for projects listed in five memoranda that he asked President Benigno S. Aquino III to sign and approve.

The President did as requested, allowing Abad to release supposedly P144.3 billion in DAP funds for a supposed list of “116 projects.”

But the unsolved puzzle is exactly how much in total DAP monies had been actually disbursed or released by DBM from October 2011 to December 2013.

In various press statements and official documents, Abad and DBM had put the total DAP fund releases during the period variably at P136.75 billion, P144.38 billion, and P149.25 billion – for a significant variance of up to P13 billion.

In the “For the Record” list of DAP projects that was posted online on July 14, 2014 in the Official Gazette, a DBM report signed by Abad said DBM had proposed projects for DAP funding worth P167.06 billion but actually released P144.38 billion and retained a balance of P13.61 billion, as of “OP (Office of the President) Approval date of June 14, 2013.”

In a memo to the President dated Dec. 28, 2013 in which Abad and two other secretaries recommended the termination of DAP, Abad wrote that DBM had released “P75.1 billion in DAP funds in 2011; P53.2 billion in 2012; and P16 billion in 2013.”

The three amounts add up to “actual releases as of Dec. 28, 2013” of total DAP releases of P144.3 billion, or about the same value enrolled in the Official Gazette posting.

Smaller, bigger totals

Earlier, however, DBM had submitted documents to the Supreme Court that enrolled a bigger total amount of DAP fund releases.
?Based on various “information packets” that the DBM gave the High Court, Senior Associate Justice Antonio T. Carpio, in his separate opinion on DAP, wrote that “the DBM admits that under the DAP, total actual disbursements” until Sept. 26, 2013 had reached “P149,252,523,000.”

A DBM official told PCIJ that DBM’s Bureau of Technical Services had actually submitted other documents later to correct the wrong figures that it had sent earlier to the Supreme Court. It is not clear though if Carpio and the other justices had been informed that DBM had made corrections in its submitted data.

Yet still, the bigger P149-billion DAP releases were supposedly made across a shorter period of time, ending on Sept. 26, 2013.

The smaller P144-billion DAP releases were supposedly made across a longer period, ending Dec. 28, 2013.

Three days after the Supreme Court ruling came out, Abad himself gave the smallest figure.

In a press statement on July 4, 2014, Abad chided the news media for getting its DAP data wrong. He said, “The reported total of P352.7 billion made at the disposal of the Executive branch through DAP in just two years is grossly inaccurate.”

According to Abad, “DBM records as of December 31, 2013 show that only a total of P136.75 billion – P65.59 billion under the 2011 National Budget (R.A. 10147) and P71.16 billion under the 2012 National Budget (R.A. 10155) – was made available to fund high-impact priority projects under the DAP for the mentioned years.”

Abad continued that, “the total amount actually used from this available fund, which was P114.58 billion, is even much lower than the P352 billion reported (in the media).”

He did not quote DAP releases made in 2013 but if his Dec. 28, 2013 memo to the President in which he wrote that P16 billion DAP funds were released in 2013 is any reference, yet another amount of total DAP fund releases would emerge.

And that would be P152.75 billion in DAP monies released from 2011 to 2013, according to figures cited in Abad’s press statement and Abad’s memo to the President.

Interestingly, the figures on DAP releases by year that appear in the two documents do not match either.

Abad’s July 4, 2014 press statement cited DAP fund releases at “P65.59 billion under the 2011 National Budget (R.A. 10147) and P71.16 billion under the 2012 National Budget.”

Abad’s December 28, 2013 memo to the President said DBM had released “P75.1 billion in DAP funds in 2011; P53.2 billion in 2012; and P16 billion in 2013.”

Fiscal stimulus measure

Based on DBM’s own reports, DAP is a mixed basket of clear, concrete projects given relatively smaller funding that were bundled with vague, insubstantial activities and programs allotted lump-sum billion-peso funding.

The latter set of activities cornered nearly half of all DAP funds, allowing for variably low to no guarantees of impact, transparency, and accountability.

Abad and Aquino have explained that through DAP, the government wanted to give priority funding to high-impact, fast-moving, socially responsive projects, in order to shore up public spending and boost economic growth.

But the lump-sum funds tucked under DAP that went to projects supposedly requested by still unnamed legislators and local officials seemed to have worked like the much-maligned PDAF that the Supreme Court had declared in October 2013 to be unconstitutional.

In DAP’s case, the apparent haste that marked the release of DAP funds apparently left little room for the typically tedious process of doing project feasibility studies, program of work, or even disclosure of project specifications that are among the hallmarks of open and transparent budget planning and execution that, ironically, DBM under Abad had championed since 2011.

Yet still, DBM had defended DAP to be “a fiscal stimulus measure” and “a package of reform interventions to address the inefficiencies and leakages in government spending and to stimulate economic growth.”

The “fiscal stimulus measure” soon evolved into “a pool of funds” that, Abad has said, supported “proposed additional projects that have been chosen given their multiplier impact on economy and infrastructure development, their beneficial effect on the poor, and their translation into disbursements.”

Lump-sums galore

The DBM list of DAP-funded projects featured, too, not actual projects but broad activities or programs (i.e. LGU Support Fund, Various Infrastructure Projects, projects for “capacity development”) that drew much bigger lump-sum funds.

These lump-sum amounts represent at least a fourth of total DAP funds released by DBM across a 26-month period.

PCIJ’s review of DBM’s DAP projects list reveals that at least P35.54 billion of the total P144.37 billion DAP monies were spent on various local projects, details of which are not all fully disclosed.

The P35.54 billion excludes as yet the P6.49-billion support fund provided to local government units to supposedly cushion the impact of the 4.8-percent decrease in the 2012 IRA.

Half of the lump-sum amount or P17.31 billion went to projects “requested by legislators, local government officials, and national agencies” that DBM has yet to itemize.

In total, “legislators, local government officials, and national agencies” were assigned 12 percent of DAP projects, the second largest portion of DAP total funds. Abad had earlier said that only nine percent of DAP projects were identified by lawmakers.

The largest, single DAP allotment that was released in two tranches was the P30-billion equity infusion in the Bangko Sentral ng Pilipinas (BSP). The New Central Bank Act of 1993 mandated a P50-billion recapitalization for the BSP.

DBM said that since 1996, national government had not allotted P40 billion of the amount. Through its DAP funding, DBM said BSP will “expand its rediscounting facility and help stimulate economic activity by enhancing the delivery of credit to productive sectors of the economy, including micro, small, and medium enterprises.”

The balance of P17.95 billion that went to lump-sums under DAP went to more lumped local projects through the Payapa at Masaganang Pamayanan Program (PAMANA), Comprehensive Peace and Development Intervention for ARMM, various projects through government corporations, and development assistance to the province of Quezon.

Projects related to housing and resettlement of informal settlers, as well as roads, bridges, and flood control, took P11.07 billion and P16.3 billion, respectively.

Steady flow for LGUs, solons

DBM made sure that projects “requested by legislators, local government officials, and national agencies” secured a steady flow of DAP funds. In at least several tranches of DAP releases, these unspecified projects got DAP monies:

P6.49 billion for “Other various local projects” that “shall fund priority local projects nationwide requested by legislators, local government officials, and national agencies.” This item was approved under the first tranche of DAP or “DAP 1” on October 12, 2011.

P1.88 billion for “GOCCs: Other various local projects” that “shall fund priority development projects nationwide in the areas of municipal ports, FMR (farm-to-market roads), local roads and bridges, livelihood, nutrition development, and electrification through certain government-owned and -controlled corporations.” This item was approved under “DAP 2” on December 21, 2011.

P8.06 billion for “Other various infrastructure projects” that “shall fund other priority local projects nationwide requested by legislators, local government officials, and national agencies.” This item was approved under “DAP 3” on June 27, 2012.

P2.76 billion for “Other various local projects” that “shall fund other priority local projects nationwide requested by legislators, local government officials, and national agencies.” This item was approved under “DAP 5” on December 21, 2012.

P4.45 billion for “GOCCs/DPWH/LGUs: Priority Local Projects Nationwide” that “shall fund priority projects nationwide, including recovery, reconstruction, and rehabilitation projects due to calamities.” This item was approved under “DAP 6” on June 14, 2013.

P6.49 billion in “LGU Support Fund” that DBM said was “pursuant to the President’s directives, the amount will help local governments cushion the impact of the 4.8-percent decrease in the 2012 IRA (Internal Revenue Allotment) over the 2011 levels due to abrupt decreases in national internal revenue collection in 2009.” This item was approved under DAP 1 on Oct. 12, 2011. – With reporting and research by Karol Ilagan, Rowena F. Caronan and Fernando Cabigao Jr., PCIJ, July 20, 2014

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His Life With Macoy: Ferdinand Edralin Marcos

He sat there looking a the screen wondering how could this happen? Political Resiliency or the Restoration of Power to a country’s leader is nothing new. In England did was not the Stuart Family restored after the Cromwell’s death or the Medici’s exile and return to Florence. With the restoration of the Stuarts the body of Cromwell was dug up, hang and quartered for the crime of Regicide. So yes political comeback was nothing new but political revisionism followed only after the restoration. Not so in the case of the Marcoses of the Philippines. Perhaps it is the sign of the times. In the Age of Information it is easy to post or change records – like with what happened recently in the Marcos articles in wikipedia and the posts through out social networking sites. And this caused a great deal of controversy online, aggravated by Ateneo having the Imeldam the Iron Butterfly descend upon them as a honorary guest of an event. And he sat there amazed because he lived during those times, he was a Martial Law baby.

Sons and daughters should not pay for the sins of their father. But we should also not forget the sins and crimes of the father.

His first memory of Marcos and Martial Law was a TV screen devoid of everything but cartoons. They were playing cartoons all day long when Martial Law was declared. He learned later that the newspapers and radio stations were shut down except for Hans Menzi’s Manila Bulletin. People were detained from industrialists named Concepcion and Lopezes to newspapermen like Louie Beltran and Max Soliven. The biggest political prisoners were Senator Benigno Aquino and Senator Pepe Diokno. Both were sent to prisons outside of Manila, not a hospital nor special detention centers.

His second memory of Marcos and Martial Law was the man himself. The baritone voice. The man in barony. The man who when he spoke to the nation got all four television and all radio stations to focus on him. The man who described the old society as corrupt and ushered in the New Society to make the Nation Great Again. The man who was not ashamed to show how healthy he was and even skiing somewhere in the Philippines: The Philippines Strongman. He was FM, he was the Apo and he was Macoy.

His third memory of Macoy was you hated or loved him there was no middle ground. Those who opposed him hated him. Those who supported him loved him. Those he jailed without benefit of a warrant and sometimes a court hearing hated him. Those who benefited from his projects loved him. Those who were sacrificed for this projects did not fear him. There is no fear for the dead. Those who saw him confiscate the property from the oligarchs cheered him. Those who had their property taken and were forced to give concessions to Macoy hated him. Those who saw how he took over those businesses and gave it to his family and friends – began to question his sincerity, Crony Capitalism came to be, a white paper xeroxed or photocopy began to circulate around … did he just displaced the old oligarchs and created new one with himself as the biggest Oligarch?

The fourth memories of Macoy was of course the stories and anecdotes. Macoy’s shooting of his father’s political rival while he was brushing his teeth – Nalundasan. His subsequent trial, defines and pardon from Chief Justice Laurel. Why did this happen? Some say it was because Laurel when he was young was in a similar predicament and the family had to sell their mountain property to get his freedom – that mountain property eventually became Tagaytay. Some even say that Laurel was impressed by Macoy’s legal brilliance that he thought it would be a waste to see such talent jailed. Other memories in this group also included dinner and party conversations about Macoy being psychic; Macoy only ate food cooked by his mother Dona Josefa; and the scandal resulting from his affair with Dovie Beams and their bedroom recordings – some believed recorded by Beams herself or the boys from the United States Central Intelligence Agency. Most news were spread by gossip and talk, there was no other alternative the newspaper and tv stations were basically just singing praises for Macoy. Still you could not stop the people from talking:

Marcos and General Ver were in Hell. For their punishment Satan placed them in Gehenna’s
Quicksand. Of the two Ver was the one sinking faster. Marcos was in fact not sinking at all. This prompted Ver to shout.”Sir, I knew you did more crime and bad things while we were alive, but you are not sinking at all! What?!!”

Marcos looked at him and admonished him,”Do not shout, be quite, you might be walking up Imelda, I am standing on her. Shhhhhh!

The fifth memories of Macoy came from boxes of yellow newspaper – slowly burning in time. There were articles about Oplan Jabidah and even Oplan Sagittarius. Coupled with talk of the Rolex 12 – men who had planned Martial Law with Marcos. All together this painted a very mixed picture of Macoy. During his inauguration after winning against Alejo Santos the chorus sang Handel’s Messiah: “And He shall reign for ever and ever.” Everyone in the sala was dumbfounded.

Macoy was mixed bag. A political sphinx lording over the Philippines but even Sphinxes get old.

Macoy’s reign did not last forever. His age and failing health (which he hid from the public) and the assassination of Ninoy led to his downfall. A snap election against the Widow of Ninoy, Tita Cory, desertion of his Armed forces, the Edsa Revolution and the Americans spiriting him to Hawai and not Paoay led to his exile in Hawaii. One of the last images of the dying Strongman was him on a bed being crooned by Imelda with the song Dahil Sa Iyo. Macoy returned to the country a preserved corpse like Evita Peron, on perpetual display in Ilocos Norte.

He saw Marcos once up close.It was during one of those citizen military events at the Rizal Stadium. He was part of the honour guard. Before Macoy came his security in short sleeved barong inspected the spring fields. It was redundant, the firing pins were removed … I suppose we could have clubbed him. Then the black limousine came, at least he thought it was a limousine – one of those american cars – black, wide and shut. Imelda came out first and then Macoy. She was taller than him. Macoy stood before us and gave a snappy salute and proceeded to the grand stand. And that was the only time.

Looking back now in his mind one thing that could not be denied by anyone was that Macoy was probably one of the intelligent leaders this country ever had. He did good and he did bad. He built roads and had several programs of government. Read the Amnesty International Reports, talk to people who were jailed or people whose family disappeared. Try to look at the White Paper that detailed the wealth of Macoy and his cronies. He killed free speech. His imposition of Martial Law politicised the Armed Forces, leaving seeds of Adventurism and would-be Napoleans waiting to pick up the crown of the Philippine Republic from the gutter. Ironically, a politicised Armed Forces led to his eventual ouster and left us with a legacy of coups and putsches.

Macoy was a complex man. His accomplishments and his sins are his own. These are not the accomplishment and sins of his sons and daughters. They do not pay for the sins of their Father. However, It is also to remember our country’s dealing with Macoy.

Looking back he though the outcome would have been different if instead of sending Macoy to exile in Hawaii, try him here in the Philippines. And win a conviction.

Despite the propaganda online he remembered something he read a long time ago: Those who fail to learn from history are doomed to repeat the same mistakes.

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