Where did DAP funds go?


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Where did DAP funds go?
Trace where the money went in this visual presentation

MANILA, Philippines – The Aquino administration believes that its special spending program intended to boost the economy, the Disbursement Acceleration Program (DAP), yielded positive results and addressed government underspending. Critics, however, called the DAP the President’s “pork barrel,” a reference to the funds that numerous legislators reportely misused in an elaborate multi-billion-peso scam.

Some camps have even sought the impeachment of President Benigno Aquino III because of the program.

Either way, the controversial spending program involved billions of pesos that went to “high-impact, high-priority” projects. Funds for DAP came from both government savings and unprogrammed funds.

However, on July 1, 2014, the Supreme Court ruled parts of the program unconstitutional – including the government’s manner of pooling savings, the realignment of funds to other branches of government, and the allotment of funds to projects not listed in the national budget or General Appropriations Act.

Weeks later, the Department of Budget and Management (DBM) reported through its website the 116 projects that benefited from DAP. It also said that DAP funds amounting to P144.38 billion* (around $3.36 billion), were released in 6 different tranches or batches from 2011 to 2013.

DBM also posted details on the releases to various departments and agencies for each project.

Allocations by department 

Among the Cabinet departments, the Department of Public Works and Highways (DPWH) got the biggest DAP release, with a total of P33.36 billion (about $776 million) or 23% of DAP funds. The bulk of it was allocated to various priority infrastructure projects nationwide.

Details in the DBM’s report, however, were incomplete. Allocations to some DPWH projects were tagged as “various infrastructure including local projects” and “various infrastructure including local roads,” but what exactly these projects are or where these are implemented have yet to be disclosed.

Coming in second is the Department of Agriculture (DA), with P6.15 billion ($143 million), or 4.3% of DAP funds. Most of DA’s projects involve rural development, irrigation, and financial assistance for livelihood programs.

In third place is the Department of the Interior and Local Government (DILG), with P5.08 billion ($118 million) or 3.5% of DAP funds. The DILG requested funds for projects that would benefit the Philippine National Police (PNP) and local governance performance management programs.

Next in line was the P4.42 billion ($103 million) or 3% of DAP funds that went to the Department of Social Welfare and Development (DSWD) which was used mostly for anti-poverty and community development projects.

The Department of Education (DepEd) got a total of P4.14 billion (around $96 million), or 2.9% of the total releases. Of the amount, P4.07 billion was released for the second phase of a public-private partnership (PPP) project for school infrastructure.

The Department of Health (DOH) and the Department of Labor and Employment (DOLE) used their allocations for financial assistance projects. DOH requested funds to help indigent patients, while DOLE’s projects were mostly for training programs and scholarships of the Technical Education and Skills Development Authority (TESDA).

TESDA scholars that benefited from DAP were mentioned in the 5th State of the Nation Address (SONA) of President Aquino on Monday, July 28.

Economic, GOCC support

A total of P30 billion ($698 million) or 21% of the total DAP funds were released to the Bangko Sentral ng Pilipinas (BSP, or the Central Bank of the Philippines) for equity infusion, as mandated by law. An equity infusion is an investment in, or capitalization for a corporation.

Two other government-owned or controlled corporations (GOCC) also received equity infusions from the government through DAP to strengthen their capital bases. The Home Guaranty Corporation (HGC) got P400 million ($9 million) for credit insurance and mortgage guaranty operations, while the Trade and Investment Development Corporation (Tidcorp) received P570 million ($13 million).

The Bureau of Customs (BOC) was also given P2.8 billion ($65 million) to settle its obligations to the Philippine Deposit Insurance Corporation (PDIC).

The BSP led the list of GOCCs that received budgetary support through DAP, which amounted to a total of P56.48 billion ($1.3 billion) or 39% of total DAP funds. Rounding up the top 5 are:

  • National Housing Authority (NHA) – P11.06 billion ($257 million), mostly for resettlement and relocation projects
  • National Electrification Administration (NEA) – P2.06 billion ($48 million)
  • Light Rail Transit Authority (LRTA) – P1.87 billion ($43 million)
  • Philippine Health Insurance Corporation (PhilHealth) – P1.53 billion ($36 million)

Health facilities such as the Philippine Heart Center, Lung Center of the Philippines, National Kidney and Transplant Institute, and the Philippine Children’s Medical Center also got funds from DAP.

Most of the sixth and last batch of DAP projects were meant for rehabilitation efforts in areas hit by Super Typhoon Yolanda in November 2013. P3.71 billion ($86 billion) of DAP funds were released to 6 GOCCs for this purpose.

Local projects

DAP also allocated a combined P12.09 billion ($281 million or 8.37% of total funds) to local government units (LGU) for various projects.

Recipient cities and municipalities across the country were specified by the DBM in their report. But, as in DPWH allocations, details on specific projects in each town or city have yet to be reported.

Of interest is development assistance for a project in the province of Quezon. The P750 million ($17 million) released for the project was actually a compromise settlement with the province. The National Power Corporation was not able to pay its real property tax liabilities in connection with its energy facility in the town of Pagbilao.

The funds from DAP were used for Quezon’s priority projects, including rural electrification, the DBM reported.

Besides these LGUs, the Autonomous Region in Muslim Mindanao (ARMM) also got a total of P8.39 billion ($195 million) from DAP for the “Comprehensive Peace and Development Intervention” project. The amount was released to 11 agencies.

Separately, the Office of the Presidential Adviser on the Peace Process (OPAPP) was allocated P2.07 billion ($48 million) for its Payapa at Masaganang Pamayanan (PAMANA) program.

Upgrades, modernization

Other notable projects funded through DAP were:

  • The establishment of new facilities for the Philippine Air Force and PAGASA
  • Upgrades to information technology (IT) systems in the Bureau of Internal Revenue (BIR), Bureau of Customs, and Credit Info Corporation
  • An IT infrastructure project under the Information and Communications Technology Office (ICTO)
  • The redevelopment and preservation of tourist spots in Manila and Corregidor
  • The establishment of the National Film Archive and local cinemathiques under the Film Development Council of the Philippines
  • The relocation of the offices of DILG and the Philippine Institute for Development Studies (PIDS)

Cross-border transfers

However, there were projects that the Supreme Court ruled unconstitutional. These were “cross-border” projects, which involved the movement of funds from the executive to other branches of government (the legislative or the judiciary) and constitutional commissions.

For instance, the House of Representatives was allotted P250 million ($5.8 million) to construct a legislative library and archive building. The Commission on Audit (COA) requested funds to upgrade its IT infrastructure and to hire additional litigation experts. COA was allotted P143.7 million ($3.3 million).

In addition, the DBM admitted during oral arguments on DAP before the Supreme Court that there were funds released for DAP projects that were identified by legislators.

The Supreme Court ruled that “cross-border transfers” like these violate the 1987 Constitution. (READ: Understanding the SC ruling on the DAP)

Not implemented, not approved

A total of 10 projects in DBM’s list were tagged as “not approved.” A total of P9.07 billion ($210 million) was supposed to be released for these projects.

One project in this category – the redevelopment of the Kilometer Zero in Manila worth P207 million ($4.8 million) – was not approved in the 4th tranche of DAP releases, but was later approved in the 5th tranche.

Meanwhile, 4 projects worth P9.45 billion ($220 million) were reported as “not implemented.” These include the second part of a release for the rehabilitation of the LRT Lines 1 and 2 (allotted P1.4 billion or $33 million) and the purchase of additional MRT coaches (allotted P4.5 billion or $105 million).

One project was included in DBM’s list only as a part of the disbursement strategy. DBM said that the Landowners’ Compensation project under the Department of Agrarian Reform (DAR) already had appropriations in the 2010 and 2011 national budget. 

Was DAP worth it?

Given the projects that the controversial spending program has funded, as well as the criticism the Aquino administration reaped following the SC’s decision, was launching DAP worth it?

“I think the Aquino administration has no choice but to launch DAP. Otherwise, the economy could have been seriously affected,” said Dean Antonio La Viña of the Ateneo School of Government.

For the first 3 quarters of 2011, before DAP was implemented, the country’s gross domestic product (GDP) rate was only at 3.6%, dipping from 7.6% in 2010.

The DBM reported that the government’s fast-tracked public spending helped in boosting the country’s economic growth. Following DAP’s implementation, the GDP rate was pegged at 6.8% in 2012, and 7.2% in 2013.

DBM even cited a 2012 World bank report stating that DAP “contributed 1.3 percentage points to GDP” in the 4th quarter of 2011. La Viña however said DAP was not the problem, but some acts and practices under it. (READ: ‘SC should clarify liability for DAP’)

“What the administration should have done is the legal due diligence to make sure everything they did was within the constitution. It’s not rocket science doing that,” La Viña added. – research by Michael Bueza, visualization by Russell Shepherd and Dominic Gabriel Go/Rappler.com

* $1 = P43

See related stories:

Read more stories on the DAP here.

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