Eliseo J. Salvador Jr.

Concept Paper on Disbursement Acceleration Program and Priority Development Assistance Fund in relation with Article 6, Section 29 of the 1987 Constitution

Araullo et al vs Aquino et al..

Facts of the case:

When President Benigno S. Aquino III assumed into office, he noticed the slow and sluggish economy of the Philippines. Also, the World Bank advised the administration that it should have a stimulus plan to jump start the economy. Department of Budget and Management (DBM) Secretary Florencio Abad came up with a program named Disbursement Acceleration Program (DAP) aimed to jump start the ailing economy of the country.

Sec. Abad sees this as a remedy to speed up funding of government projects. Through said program, the executive can realign funds from slow moving projects to priority projects instead of waiting for next years appropriation. Said withdrawal of funds from slow moving projects will be declared as savings, thus, it will be relloted to other priority projects.

The said scheme indeed stimulate the countrys economy, in fact the Supreme Court noted that portion of the countrys growth can be attributed to DAP.

In September 2013, Senator Jinggoy Estrada made an expose in the senate that several senators received an incentive from impeaching Chief Justice Renato Corona. Sec Abad claimed that the money came from DAP and it was the senators themselves who requested for it.

The government is maintaining its stand that DAP is constitutional and should be allowed to be put in practice.

Issue:1. Whether or not the DAP violates the principle no money shall be paid out of theTreasury except in pursuance of an appropriation made by law (Sec. 29(1), Art. VI, Constitution).

2. Whether or not the DAP realignments can be considered as impoundments by the executive.

3. Whether or not the DAP realignments/transfers are constitutional. Whether or not the sourcing of unprogrammed funds to the DAP is constitutional.

4. Whether or not the Doctrine of Operative Fact is applicable

Held:1. No, the DAP did not violate Section 29(1), Art. VI of the Constitution. DAP was merely a program bytheExecutive andisnotafundnorisit anappropriation. Itisaprogramforprioritizing government spending. As such, itdid not violate the Constitutional provision citedin Section 29(1), Art. VI of the Constitution. In DAP no additional funds were withdrawn from the Treasury otherwise, an appropriation made by law would have been required. Funds, which were already appropriated for by the GAA, were merely being realigned via the DAP.

2. No, there is no executive impoundment inthe DAP. Impoundment of fundsrefers to the Presidents power to refuse to spend appropriations or to retain or deduct appropriations for whatever reason. Impoundment is actually prohibited by the GAA unless there will be an unmanageable national government budget deficit.Nevertheless, theres no impoundment in the case at bar because whats involved in the DAP was the transfer of funds.

3. No, the transfers made through the DAP were unconstitutional. It is true that the President are allowed by the Constitution to make realignment of funds, however, such transfer or realignment should only be made within their respective offices. Thus, no cross-border transfers/augmentations may be allowed. But under the DAP, this was violated because funds appropriated by the GAA for the Executive werebeing transferred to the Legislative and other non-Executive agencies. Further, transfers within their respective offices also contemplate realignment of funds to an existing project in the GAA. Under the DAP, even though some projects were within the Executive, these projects are non-existent insofar as the GAA is concerned because no funds were appropriated to them in the GAA. Although some of these projects may be legitimate, they are still non-existent under the GAA because they were not provided for by the GAA. As such, transfer to such projects is unconstitutional and is without legal basis.

On the issue of what aresavingsThese DAP transfers are not savings contrary to what was being declared by the Executive. Under the definition of savings in the GAA, savings only occur, among other instances, when there is an excess in the funding of a certain project once it is completed, finally discontinued, or finally abandoned. The GAA does not refer to savings as funds withdrawnfrom a slow movingproject. Thus,sincethe statutory definitionofsavingswasnotcompliedwithundertheDAP, there is no basis at all forthe transfers.Further, savings should only be declared at the end of the fiscal year. But under the DAP, funds are already being withdrawn from certain projects in themiddle of the year and then being declared as savings by the Executive particularly by the DBM.

4. No. Unprogrammed funds from theGAA cannot beused as money source for the DAPbecause under thelaw, such fundsmay only beused ifthere isa certification from theNational Treasurer to the effect that the revenue collections have exceeded the revenue targets. In this case, no such certification was secured before unprogrammed funds were used.

5. Yes. The Doctrine of Operative Fact, which recognizes the legal effects of an act prior to itbeing declaredas unconstitutional bythe Supreme Court,is applicable.TheDAP has definitely helped stimulate the economy. It has funded numerous projects. If the Executive is ordered to reverse all actions under the DAP, then it may cause more harm than good. The DAP effects can no longer be undone. The beneficiaries of the DAP cannot be asked to return what they received especially so that they relied on the validity of the DAP. However, the Doctrine of Operative Fact may not be applicable to the authors, implementers, and proponents of the DAP if it is so found in the appropriate tribunals (civil, criminal, or administrative) that they have not acted in good faith.

REFLECTION:

As the Supreme Court declares, the Priority Development Assistance Fund (PDAF) and the Disbursement Acceleration Program (DAP) is unconstitutional as it contravenes with Article 6, Section 29 of the 1987 Constitution which states that No money shall be paid out of the National Treasury EXCEPT in pursuance of an appropriation made by law.

The government is arguing for its legality and in fact there is a proposal in Congress to redefine the meaning of savings.

Firstly, let us know the difference between DAP and PDAF. DAP as the Department of Budget and Management (DBM) says, it is a program designed to accelerate economic movement in the country by injecting government funds to the economy to boost it.

DAP is usually taken in:

1. Unreleased appropriations under Personnel Services;2. Unprogrammed funds;3. Carry-over appropriations unreleased from the previous year; 4. Budgets for slow-moving items or projects that had been realigned to support faster-disbursing projects.

While PDAF is commonly known as Pork Barrel were given to the member of the legislature to be used in their chosen projects.

The Supreme Court declared the unconstitutionality of PDAF on the following grounds:

1. The system has violated the principle of separation of powers;2. It has similarly violated the principle of non-delegability of legislative power (on two counts);3. It has flouted the prescribed procedure of presentment and, in the process, denied the President the power to veto items;4. The system has equally impaired public accountability; and5. It has likewise subverted genuine local autonomy.In a nutshell, PDAF and DAP as I personally perceive it, is a manipulation or machination employed by the legislature to have an extra fund to be use in their constituent for re-election purpose.The power of the purse is delegated to the legislature by the Constitution and the President must not allot government funds for his chosen projects without appropriation from Congress since this is in effect and act of Congress surrendering its power of the purse to the executive branch of the government.

However noble the intent, it should must and always follow the procedure lay down by the law for at the end we are government of laws and not of men.