GENERAL SANTOS CITY, July 8, 2014 – All print and online news media have reported that the Supreme Court had declared unconstitutional the Disbursement Acceleration Program and National Budget Circular No. 541 (DAP). But retired Chief Justice Artemio V. Panganiban, in his Philippine Daily Inquirer column, With Due Respect, last July 6, clarified that the DAP was not “plainly declared unconstitutional” — only four “acts and practices” under it.
Panganiban explained (1) how government money from five sources is budgeted annually under the General Appropriations Act; (2) how public expenditures are allotted; (3) what “saving” and “unprogrammed funds” are and how they occur; (4) the aims of the DAP in pooling unexpended funds, in using them and the economic benefits derived as noted by the World Bank; (5) the provisions of the Constitution as rules in spending public funds; and (6) the exception to the rules according to Article VI, Section 25(5) of the 1987 Constitution.
He said that the “bulk of DAP funds may have been pooled in strict adherence to this exception” but the Court found the “four acts and practices” unconstitutional and explained why — which we quote in full below supplying the “bold types”:
(1) Only “actual savings” may be transferred from one budget item to another item in the GAA. Savings are “actual” only when “(a) the PAPs (projects, activities or programs) for which the appropriation had been authorized was completed, finally discontinued, or abandoned; or (b) there were vacant positions and leaves of absence without pay; or (c) the required or planned targets, programs and services were realized at a lesser cost because of the implementation of measures resulting in improved systems and efficiencies.” (p.59)
Thus, the “acts or practices” of transferring funds “prior to the end of the fiscal year,” which did not meet any of those three instances, were deemed unconstitutional.
(2) Augmentation can be made only for items allocated “for their respective offices,” that is, within the same branch or office. Thus, the “act or practice” of transferring savings from the executive to the Congress, or to the Comelec, or to the COA, being “cross-border” transfers, were declared unconstitutional.
(3) The funding of PAPs that are not covered by any appropriation in the GAA is also unconstitutional because augmentation can be made only from one existing item to another existing item in the budget. The President cannot use budgeted funds for PAPs not found in the GAA.
(4) Unconstitutional also is the use of unprogrammed funds in the absence of a legally required certification by the national treasurer that the revenue collections exceeded the “total of the revenue targets.”
Coming from the former Chief Justice, the explanations put in clearer perspective the media reports. However, with due respect, the media are not wrong in saying that the Court has declared the DAP unconstitutional. The “four acts and practices” are the essential elements or parts of the National Budget Circular No. 541, which is the DAP. The essential parts equal the whole; if these are unconstitutional, so is the whole.
However, Panganiban’s column implies: The DAP as an instrument of economic development is laudable. The “four acts and practices” are not unconstitutional, per se; it’s the abuse in their implementation that led the Court in declaring them unconstitutional. In not “plainly” declaring the DAP unconstitutional, the Court must be suggesting that the DAP, guarded from abuse, may continue as a program for economic development.
What may be done?
From our viewpoint, let Congress enact a law creating the DAP. The National Budget Circular No. 541 may be used as the main reference together with the “don’ts” in the Court Decision. The law should prohibit the use of the DAP for political patronage and restrict it mainly for economic development,
What had ruined the DAP was its use for political patronage even if the amount involved was much more less than that used for economic stimulus. It’s ironic that while the World Bank lauded the DAP for strengthening economic growth, the administration critics saw it as pork barrel and took it to the Supreme Court.
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