Aquino fears economic ‘paralysis’ over DAP ruling

Rappler.com

This is AI generated summarization, which may have errors. For context, always refer to the full article.

Aquino fears economic ‘paralysis’ over DAP ruling
President Benigno Aquino III says he bears no 'ill will' against the Supreme Court over its DAP ruling and hopes it would reconsider its unanimous decision

MANILA, Philippines – President Benigno Aquino III said on Tuesday, July 15, that the Supreme Court ruling on the Disbursement Acceleration Program (DAP) will have a “chilling” effect on the economy and the rest of the country, citing the short-term and long-term impact of the decision. 

Speaking at the Daylight Dialogue on the good governance challenge at the Palace Rizal Hall, the President presented a potentially grim picture of economic growth paralysis or even reversal, following the SC decision deeming as unconstitutional certain executive actions under the DAP.

“The Supreme Court decision is deeply unsettling, not only because our honorable justices failed to take into consideration all our legal bases for DAP, but also and more importantly, because their ruling will have a chilling effect on our economy –and consequently on millions of Filipinos,” he said in his speech.

Aquino cited the “difficult decision” of Autonomous Region in Muslim Mindanao Governor Mujiv Hataman who, like him, had to suspend the implementation of all projects implemented under DAP in his area.

These projects include health centers, agricultural facilities, and other social services intended to benefit a region that had long battled inequality and poverty, he said.

“The situation in ARMM reflects the potentially devastating effect that the Supreme Court decision will have across the Philippines,” he said.

The President said that with the suspension of programs funded under the DAP, the government would have to look for other funds for the projects, which would mean seeking a supplemental budget from Congress which he described as “an already-lengthy process that may even be extended by obstructionists and oppositionists.”

“In the short-term, the decision will have the effect of once again slowing down government spending. In the long-term, it removes our flexibility to act effectively in response to changing market conditions, and seize, or even create opportunities in doing so. It condemns us to a spiral of inefficiency, uncertainty, and lack of confidence,” he said.

‘Growth paralysis, reversal’

Aquino said it would be unfortunate for the Philippine economy to be halted in its growth track since it had “come so far” – from an average gross domestic product growth of 2.8%  from 1990 to 1999, 4.5% from 2000 to 2009, to 6.3% from 2010 to 2013.

“They say that for a country to lift itself out of poverty, it is necessary to have a growth rate consistent at 7% or more. We are getting there. Unfortunately, the effects of the Supreme Court decision run the risk of putting our country’s development in a state of paralysis—or worse, reversing the massive progress we have already made. This is not acceptable,” he said.

The President said that he found it “difficult” to accept the SC decision  “when I know that we are right, and more importantly, that doing nothing means depriving so many Filipinos of opportunities to grow and prosper.”

“I find it difficult to accept the decision of the Supreme Court, when it goes against the benefit our countrymen. In fact, I believe that any reasonable person confronted with the same dilemma would come up with the same solution – or even a better refinement of what we did,” he said.

Aquino added: “I cannot support any ruling that severely limits government’s capacity to serve its people in the quickest manner possible. I am certain that this audience – composed of development experts and leaders of industry – can agree with me.”

The President stressed that he had no “ill will” against the Supreme Court, which is why the government will file a Motion for Reconsideration on its ruling.

“Let me make it clear: I bear no grudge or ill will against the Supreme Court. That is not why we have consistently expressed our opposition to their ruling, or why we have decided to file a Motion for Reconsideration,” he said.

Aquino said that in appealing the decision, “We subscribe to the long-held belief that public office is a public trust – trust given us in the form of a mandate that we in government, whether in the legislative, executive, or judicial branches, will always work for the good of the country. In pursuing this course of action, we remain cognizant of our responsibility to find ways to uphold public order.”

He said the executive wants to work with its co-equal branches of government, which is why still remains hopeful that the SC would reconsider its unanimous decision.

“We want to work with our co-equal branches of government, in serving the Filipino people. That is why, I still hold the hope that our colleagues in the Supreme Court never forget that, as they display the legal prowess and acumen that has served them well in their long careers, these abilities must also serve their 98-million countrymen,” he said.

COA audit, DAP gains

The President gave his assurance that anyone found to have abused or misused  funds released under DAP would be held accountable, even as he maintained that only a small portion of the releases have “any issue.”

“Only a minimal portion of DAP releases have any issue. Rest assured: the Commission on Audit will ensure that, if there was any abuse or misuse of this fund, then those responsible will be held to account,” he said.

The President said that over 50% of the P144 billion ($3.23 billion*) released under DAP went to 3 “critical agencies” – the Bangko Sentral ng Pilipinas (BSP), the Department of Public Works and Highways (DPWH), and the National Housing Authority (NHA).

He said that under the program, the government finally settled the P3.46 billion ($79 million) balance of unpaid government pension premium payments – a debt incurred by past administrations – which had kept almost 800,000 teaching and non-teaching personnel in the Department of Education from receiving their benefits. 

Aquino said the New Central Bank Act of 1993 mandated a P50 billion ($1.146 billion) recapitalization for the Central Bank of the Philippines, and that since that time till now, only President Fidel Ramos ordered the infusion of an initial capitalization of P10 billion ($229.35 million), leaving a P40 billion ($917 million)-deficit until his administration.

Aquino said his administration plugged in that deficit – P10 billion under the General Appropriations Act, and the rest under the DAP, empowering the BSP to perform its functions fully, under the leadership of Governor Amando Tetangco Jr.

He said P33 billion ($756 million) went to the DPWH for the construction and rehabilitation of roads, bridges, flood control projects, and critical infrastructure that helped business, tourism, and the overall investment climate.

In the housing sector, Aquino said P11 billion ($252 million) went to NHA projects funded under the  under DAP.

These projects built 700 homes for North Triangle residents in Quezon City; 21,175 housing units, with 3,742 more units underway, for families in danger zones in the National Capital Region; 1,000 housing units for families along the Iloilo River; and 2,498 housing units for uniformed personnel of the Bureau of Fire Protection and the Bureau of Jail Management and Penology. 

He said other projects include renovated and upgraded hospitals and health centers; hiring of nurses and midwives; an expanded conditional cash transfer program; more livelihood projects; preservation of key tourism and heritage sites; improved weather forecasting abilities; improved facilities of state universities and colleges; and the Training for Work Scholarship Program. 

Aquino also cited the World Bank report released in March 2012, “Philippines Quarterly Update: From Stability to Prosperity for All,” where he said the multilateral financial instituted “stated outright that DAP contributed to economic growth.”

“It did so in the best way possible, funneling billions of pesos in savings back into the economy, through programs that would directly and immediately redound to the benefit of the Filipino people. On top of this: it also had a positive signaling effect to the private sector,” he said.

DAP vs RCA

After presenting the benefits of DAP, Aquino said the same could not be said of “DAP’s previous incarnations” or the Reserve Control Account – also called Overall Savings – used by his predecessors to respond in part to the Asian financial crisis, and the fiscal crisis, though none of them had been haled to court over it.

“I should add: these former presidents also exercised the authority to transfer appropriations or savings to other branches of government and even to Constitutional Commissions. Perhaps we are being questioned today simply because we have been truly transparent about it,” he said.

It was the second day in a row that Aquino took to task the SC for its ruling on the DAP, after his national address on the issue on Monday. The President is expected to issue more statements on the issue in the coming days, in his bid to explain the DAP to the people.

The Dalylight Dialogue was attended by World Bank President Jim Yong Kim, and participants from the national and local government, civil society, media, academe, business groups, and international development partners will attend the forum. – Rappler.com

*$1 = P43.6

Add a comment

Sort by

There are no comments yet. Add your comment to start the conversation.

Summarize this article with AI

How does this make you feel?

Loading
Download the Rappler App!