Business World, 5 November 2013


The Philippine Constitution allows the use of “savings” to augment any item in the general appropriations law for their respective offices — the President for the Office of the President, the Senate President for the Senate, the Speaker for the House of Representatives, the Chief Justice of the Supreme Court, and the heads of Constitutional Commissions.

A major puzzle in the Disbursement Acceleration Program (DAP) controversy is the source of P72.2-billion “savings” — later expanded to P85.5 billion. This puzzle will be clarified or further obfuscated when the cases questioning the constitutionality of the DAP are finally heard by the Supreme Court on Monday, Nov. 11. But that is not the focus of this article.

The focus of this article is on the item or items in the general appropriations law of 2011 that were augmented. Where the items new or existing? The act of augmentation is unconstitutional if the item or items augmented were new, meaning not specified in the general appropriations law (GAA). If the item augmented does not exist, it cannot be augmented. Put differently, by definition, it is not possible to augment a non-existent item.

Sadly, there is no formal legal issuance creating the DAP. But I suspect that somewhere in the bowels of Malacanang, there exists a Memorandum for the President that originated from the Department of Budget and Management (DBM) seeking presidential approval for the creation of the DAP.

On the surface, however, a press release was issued by the DBM announcing the creation of the DAP. The announcement stated some of the uses of the DAP.

In many cases, the appropriations of an agency were augmented by huge amounts. The question is: how were the equivalent “savings” generated? For example, the National Housing Authority (NHA) budget was augmented by P11.05 billion which leads to the question: how much “savings” did NHA generate from its the authorized appropriations? Another example: The Department of the Interior and Local Government (DILG) budget was augmented by P7.25 billion. Where did its savings come from? The list could go on and on.

Clearly, the augmentation for many agencies came not from their own savings but from DAP — a huge receptacle of all “savings” from all authorized appropriations (agency and special purpose funds). The DAP is a colossal laundering machine where all “savings” are cleansed, dried, pressed, and then reissued as new authorities to spend for programs, projects and activities that have not gone through prior congressional review.

Interestingly, the DAP was not an item in the 2011 GAA. and since the DAP did not exist in the general appropriations law, it stands to reason that it cannot be augmented.

Printed below is a table showing the DAP approved amount versus actual spending as of end 2011. It was published as Annex 4.1 in the World Bank’s Philippines Quarterly Update: From Stability to Prosperity for All, March 2012.

The Table is incomplete and rather broad, but is a good starting point for a thorough analysis of the DAP. In order to get the detailed and complete information, the Supreme Court may ask the DBM to produce copies of all the Special Allotment Release Orders (SARO) released via the DAP. The SARO is a specific authority issued by the DBM to identified agencies (offices, government corporations, local government units) to incur obligations not exceeding a given amount during the specified period for the purpose indicated.