After DAP, Congress to clarify meaning of savings

Ayee Macaraig

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Varying interpretations on the meaning of 'savings' have formed part of the differences in opinion between the executive branch and the Supreme Court

LESSON LEARNED. Senate finance committee chairman Francis Escudero says the Senate will put clearer definitions of "savings" in the 2015 budget as a lesson from the DAP controversy.

MANILA, Philippines – The Senate wants to craft clear definitions of “savings” in the national budget following the controversy over the administration’s spending program.

Senate finance committee chairman Francis Escudero said this is one of the reforms the chamber is eyeing after the Senate inquiry into the Disbursement Acceleration Program (DAP).

During the hearing on Thursday, July 24, Senate President Franklin Drilon pointed out that the “varying interpretations” on the meaning of savings formed part of the differences in opinion between the executive branch and the Supreme Court.

The court declared key acts under the DAP unconstitutional, including the withdrawal of funds without complying with the definition of savings contained in the General Appropriations Act (GAA) or the budget law. The Court said that the GAA for 2011, 2012 and 2013 defined savings as money that can only be generated “upon the purpose of the appropriation being fulfilled, or upon the need for the appropriation being no longer existent.” 

“We will clarify the definition of savings, where and how it can be used, and the requirement to return to Congress to get a supplemental budget if needed, and third, we will create penalties for violating provisions in the budget because now, there are no actual provisions in the budget regarding these acts,” Escudero said after the hearing.

The Senate held its third hearing on the DAP, asking Budget Secretary Florencio Abad to explain how the funds were pooled, spent, and why there were transfers from one branch to another, which the high court also declared unconstitutional.

Abad clarified in the hearing the amounts related to the DAP following months of conflicting reports on how much the stimulus program was worth. Quoting Abad, Escudero said the figures were as follows:

  • Total savings at the end of 2010 – P237.5 billion ($5.48 billion)*
  • Proposed DAP projects – P167 billion ($3.86 billion)
  • Approved DAP projects – P157 billion ($3.63 billion)
  • Actual releases to DAP projects – P144.3 billion ($3.33 billion)

In the last part of the hearing, Senators Ralph Recto and Sergio Osmeña III said they believed in the goal of the DAP to boost economic growth, and the thrust of the Aquino administration to implement worthwhile projects.

Yet the two also cautioned Abad about the legal boundaries the court ruling imposed.

“I trust the Aquino administration, but if we allow this to continue to happen, maybe in a future administration that wants to waste money, we will be in danger,” said Recto. “It is just scary that the definition used by other administrations can be abused.”

Abad responded that this was an “important consideration.”

Osmeña also had a similar message: “There are certain things the Constitution mandates that we do and you are supposed to respect. We have the power of the purse. When you start realigning things without the approval of Congress, that’s really against the Constitution.”

“Where there’s no elbow room is when you start funding projects not in the GAA,” Osmeña said.

COA to be called to testify

Escudero said his committee will hold another hearing in less than two weeks after the State of the Nation Address on July 28.

When asked about the absence of a representative from the Commission on Audit (COA) in the Thursday hearing, Escudero said the committee lacked time but is open to summoning the agency in the following hearing to find out whether or not DAP funds were properly used.

Still, Escudero conceded that, as of now, there is still no assurance that the money was lost to graft because implementing agencies implicated in the corruption scandal involving lawmakers’ Priority Development Assistance Fund (PDAF) were included in the complete list of projects under DAP. These are the Technology Resource Center (TRC) and the National Livelihood Development Corporation (NLDC).

“In that list are allocations for TRC and NLDC, which are suspects, government agencies also used in the PDAF scam so it will be better for us to see if there are other releases related to that. We are not sure that each peso was spent wisely,” Escudero said.

Escudero added that Abad also has to clarify why the car of COA that the DAP funded were not included in the list provided by the Department of Budget and Management. The revelation came out during the line of questioning of Senator Nancy Binay to Abad. Abad justified this by saying the amount for the car was just “small.”

“Even I am confused there. Only the IT program and hiring of additional personnel are in the list. That’s not how budgeting works. You have to put each item there. And personal services are distinct from capital outlay used to buy cars. Even he (Abad) is confused with the records he is giving us. They said they will reconcile it,” Escudero said.

On the issue of alleged bribery to senators who voted to convict former Chief Justice Renato Corona, Abad reiterated to reporters that this did not happen.

“As Senate President Drilon said, no money is given to legislators. These are projects that they endorse and say where it will go,” Abad said. 

Abad stressed that in the October 2011 presentation to the Senate finance committee, he explained what DAP was about.

When asked why he did not know about DAP despite Abad’s briefing, Escudero was candid.

“DAP only became an issue when there was a case and the Supreme Court declared it unconstitutional. I was not yet the chairman of the committee on finance in 2011. I was not attending hearings then. I only participated on the floor,” he said.

‘Rigidity to reforms’ 

Echoing President Benigno Aquino III, Abad said the Supreme Court decision will affect how the government executes its reform measures.

“In a way, it adds rigidity to our ability to introduce reforms. You know in reforms, we sometimes push boundaries. Sometimes there are gray areas you venture into. I hope the role of the law will be to help reforms push the economy forward.” 

Escudero said though that the administration has to prepare for the likelihood that the Court will reject the administration’s appeal of its unanimous 13-0 decision. 

Abad and Escudero also responded to netizens’ comments that the hearing seemed to be done in defense of the administration. The secretary said it is up to people to judge how the inquiry was conducted but he was just answering questions. 

Escudero brushed the criticism aside. “Damned if we do, damned if we don’t. If we don’t hold a hearing, they will say it’s a cover-up. If we push through, there are these kinds of comments. You can’t please everybody.” –

*US$1 = P43.33 

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Nancy Binay grills Abad: DAP hijacks fiscal independence

Aquino Senate allies help admin defend DAP

Abad: SC ruling may undo economic progress

Abad, Cabinet in full force to defend DAP  


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