Gov’t seeks reversal of SC ruling on DAP

Buena Bernal
Government lawyers argue that the good intent of accelerating spending for economic growth shows the administration's good faith

MANILA, Philippines – Citing “errors that led to inaccurate conclusions,” the government asked the Supreme Court (SC) to reverse its ruling declaring unconstitutional acts under the controversial Disbursement Acceleration Program (DAP).

This, despite a unanimous ruling by the High Court that 3 schemes under the program are unconstitutional. The Supreme Court ruled 13-0-1, with one abstention.

Right before the closing of the SC docket on Friday, July 18, the government – through its lawyers led by Solicitor General Francis Jardeleza – filed a motion for reconsideration seeking a review of the Court’s decision.

The filing was expected, following a July 14 televised nationwide address by no less than President Benigno Aquino III. Aquino slammed the High Court for its ruling on DAP, saying the program greatly benefited the economy.

Aquino said then: “We are now righting the wrongs in the system, so that it may work towards this goal: To uphold the interests of the people, our Bosses who handed us our mandate. Thus, to the Supreme Court, our message: Do not bar us from doing what we swore to do. Shouldn’t you be siding with us in pushing for reform?” 

The DAP is a spending program initiated by the Aquino adminstration in 2011 meant to pump-prime the economy by moving alleged government savings from slow-disbursing programs, activities and projects to fast-disbursing ones.

“DAP was a response to a fiscal emergency – underutilization of public funds. This is another uncontested fact. It was a plan to remedy a glut in public funds languishing in agencies with low levels of obligation,” the government’s motion read.

Blame on previous administration?

In their motion, lawyers for the government cited questionable appropriations of the previous administration as among the reasons for implementing the DAP.

The administration of former president and now Pampanga Representative Gloria Macapagal-Arroyo had been associated with corruption. She has been charged with plunder and is being held at state-run Veterans Memorial Medical Center. 

“Tasked with implementing a budget he did not propose and spending on projects his department heads were not comfortable with because of numerous irregularities, the President decided that the prudent course of action was to stop expenditures on certain projects until he was confident that the reforms he introduced ensured the proper use of funds,” the government’s motion read.

The government argued that there was no constitutional provision disallowing a program like DAP, and that the program had existed in some other form even prior to Aquino’s presidency.

“The mechanisms used to realize savings under the DAP have existed in one form or another throughout all administrations under the 1987 Constitution. In the absence of any specific constitutional prohibition, it is the essence of sound management to stop the flow of scarce resources from projects that are failing and not moving and to reallocate them into projects that have higher chances of success,” read the motion for reconsideration.

‘Defining savings not a constitutional matter’

In its ruling, the SC said the government cannot declare a lump sum as savings before the end of a fiscal year. This is because doing so would be contrary to law, specifically the General Appropriations Act (GAA). 

Savings as defined in the GAA are funds from unfinished projects, abandoned projects, and vacancies in government positions. Government projects, programs, and activities, however, cannot be declared uncompleted mid-year.

But government lawyers in essence argued that the judiciary, by determining what government savings are, already performed the duty of the legislative branch.

“The undeniable fundamental question with respect to the issue of savings is whether the government violated the parameters set by the relevant GAA preparatory to the President’s exercise of his constitutional authority to augment. This question is clearly not a constitutional matter – it is an ordinary species of statutory interpretation involving the proper reading of Congress’ definition of savings in the GAA,” their motion read.

Government lawyers argued that the meaning of savings is “legislatively determined.” Hence, the Court cannot tag the government’s alleged transgression as a violation of the Constitution.

“The Court’s interpretation of savings is not a statement of a constitutional rule but merely an (unnecessary) interpretation of an act of Congress. If at all, any administrative non-compliance with the Congress’ definition of savings cannot trigger a declaration of unconstitutionality,” the motion further read.

‘Not discretionary’ 

In its ruling, which the government now assails, the SC likewise declared unconstitutional cross-border fund augmentations or the use of savings of the executive department to fund projects under another branch of government or constitutional body.

Critics have criticized the government for the proceeds select senators received for their pet projects, following the ouster of former chief justice Renato Corona. The Senate acted as an impeachment tribunal at the time. 

The fund releases, which were disclosed by opposition Senator Jose “Jinggoy” Estrada, through a September 2013 privilege speech, were seen as bribes or rewards for the impeachment of Corona.

Corona was appointed by Arroyo as Chief Justice before she stepped down to make way for the duly-elected Aquino. Arroyo’s move was largely seen as a last-ditch effort to control the judiciary and protect herself, given the threat of criminal charges for her alleged corruption.

But the government lawyers vehemently denied that the DAP was meant as a discretionary fund for the president.

“Theories linking DAP to pork-barrel type discretionary spending do not account for the bureaucratic hurdles, the frequent review exercises conducted in order to identify projects for realignment and augmentation,” their motion read.

Savings were accumulated every year anyway whenever the GAA was re-enacted, they further argued.

“All that an administration bent on accumulating savings has to do is to not pass the budget on time and let the previous budget get automatically re-enacted,” the lawyers explained through the motion.

‘Good faith presumed’

The SC in its ruling likewise said the doctrine of operative fact applies to its ruling, wherein the effects of a policy declared invalid would not be reversed. This applies, however, only to acts done in good faith.  

Specifically, the SC said it would be burdensome and wasteful to reverse the positive effects of the program such as the funding of government projects that people already benefited from. 

It said, however, that public officials who knowingly acted in bad faith cannot invoke it. A competent tribunal would have to determine the public official’s “good faith” or sincere intention in implementing the program.

In their motion, government lawyers argued that the good intent of accelerating spending for economic growth shows the administration’s good faith.

Further, they argued that the DAP no longer exists. As it already served its purpose of ramping up spending and pump-priming the economy, the DAP ended in 2013.

“There was a diminishing use of the DAP, starting with the downward shift in 2012 and 2013, and a total disuse by the last quarter of 2013. This belies the claim that there was intent to accumulate savings so that the President may use them for discretionary spending,” government lawyers said. – 


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