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Without Congress’ approval, Aquino set up own P72-B pork barrel fund

It’s amazing how the pork barrel scam, initially intended to politically bury the opposition early for the 2016 elections, has boomeranged against this administration and opened up to public view its horrific can of worms.

Unveiled only in the past few days, it is a mostly unknown fund created in October 12, 2011 in order to finance the so-called Disbursement Acceleration Program. The P5 billion used for the post-trial “second tranche” of the bribe money for Congress to take out Chief Justice Renato Corona came from this fund.

Out of this, P1 billion or P50 million was released to each of the 20 senators who voted to convict Corona, for projects they would direct the use of.  Another P4 billion was disbursed to congressmen, at P15 million each, for having filed the impeachment case against Corona.

The disclosure is ironically the consequence of Budget Secretary Florencio Abad’s bungling attempt to deny the allegations of Senator Jinggoy Estrada, that President Aquino bought off the senators to convict Chief Justice Corona using the Priority Development Assistance Fund (PDAF) or the pork-barrel money. This is not true, Abad claimed. It was from the DAP Fund.

The Fund is huge, at P72-billion disbursed in the last months of 2011 and in 2012.  It is controlled by Aquino alone, unauthorized by Congress. It was in effect Aquino’s personal pork barrel fund, in the sense that he could direct its use as he wished.

There has been no Commission on Audit examination of the DAP Fund, and what is publicly known of its disbursements comes from very rare reports of government agencies using it.

What makes it suspect is that such disbursements as the P2 billion in 2012 were made for areas in the Autonomous Region for Muslim Mindanao, all practically no-man’s lands, where auditors refuse to go to.  Another P1 billion was disbursed to Tesda, whose head Joel Villanueva Aquino had been grooming, although unsuccessfully, to be a senatorial candidate in 2013.

That it could be directed to any agency or local government the President wanted is evidenced by the fact that P1 billion was given to the Department of the Interior and Local Government, which however didn’t use as it couldn’t come up with the necessary projects.

The DAP Fund was amassed from government savings in 2011. Sadly, that money could have been used as bonuses and additional compensation for the country’s underpaid 1.4 million civil servants, including 600,000 public school teachers and 200,000 military men.

Our republican system of government is purportedly designed with checks and balances.  Congress is supposed to diligently ensure that taxpayers’ money is used well through its power of approving every peso and centavo of the expenditures of government through the annual Appropriations Act. The Executive branch purportedly merely implements Congress’ priorities.

The system is even flexible enough that Congress for instance allows unaudited, confidential intelligence funds, which amounts to over P1 billion, under the President annually.   Even the PDAF had to be approved by Congress.

So how did Aquino set up his P72 billion fund that wasn’t authorized by Congress, which only he could direct the use of?

It could be a horrific story.  Consider the facts.

Having survived the Global Financial Crisis of 2009—which still resulted in a a feeble 1 percent GDP growth in 2009—the Philippine economy was on a roll, and in 2010, it posted a stellar 7.6 percent GDP growth.

However, despite the universal optimism over a new administration, the country’s GDP growth slowed down to 3.7 percent in 2011.  Why?

By all accounts, even by the official propaganda line, the slowdown was due to the government’s deliberate under-spending. The excuse Aquino and his officials gave was that major infrastructure projects had been put on hold for review, to make sure that that they didn’t contain anomalous, graft-ridden contracts.

I myself had thought that Aquino’s economic advisers weren’t that stupid so as to put the brakes on government expenditures and slow-down the economy. But they did for most of 2011.

But Aquino suddenly inexplicably set up on October 12, 2011 the so-called Disbursement Acceleration Program, which was supposed “to step up spending before the year end.” Strangely though, the launching of the DAP was low-key, and references to it have been very rare. I couldn’t find any executive order or Budget department memorandum or circular authorizing it and providing guidelines for its use.

Was there anything significant happening around October?

Yes. By September, Aquino’s camp had firmed up its plans to take out Corona, and its experience in the case of Ombudsman Merceditas Gutierrez made it clear that huge funds would be needed to bribe Congress for the project.

The PDAF for 2012 wasn’t enough, as it was already there, authorized by Congress, and its members—except for a few— would get their funds whether there was a Corona  impeachment or not. Only the timing of its release—just before the House of Representatives’ approval of the impeachment trial and the Senate vote—could be used as a bribery mechanism.

But the lawmakers would want more. This more would come from the DAP Fund.
Funds for the DAP came from the savings of the entire government bureaucracy, the result of Aquino’s deliberate policy of under-spending.

A government unit cannot keep the funds it fails to use in a particular year, since all of its expenditures are authorized by the Budget law for that year, and therefore it cannot use funds for any other purpose. Such savings are remitted back to the Treasury.

Government agencies therefore normally try to use such savings for some kind of compensation for its staff, in kind, so as to skirt government regulations. This is in the form of Christmas goodies, especially rice, or “team building” seminars that are actually junkets in resorts. The President could also invoke his powers to provide Civil Service employees a bonus at the end of the year.

However, before the agencies could even plan to use whatever savings they had in 2011, Aquino corralled their unused budget into his DAP Fund in October 2011.
In recent media interviews, Abad claimed that the basis for the DAP Fund, which Aquino has absolute control of, is the authorization given the President by law to “realign funds”.

That seems illogical, as this would make Congress useless, since one of its biggest functions is to direct the use of government funds through the Budget law it enacts each year.  Imagine if Congress allocates P10 billion for roads, and the President realigns it to build an unneeded airport.

But Aquino and Abad apparently found what they thought was some legal—but debatable —loophole that allowed them to realign savings of the bureaucracy to fund the DAP, the use of which would be totally upon the President’s discretion, as it turns out, even for bribes to Congress.

One obvious legal question though. How could Aquino put purported savings into a fund for the DAP in October, when the year in that month wasn’t over yet, and therefore the government agencies still had time to spend their authorized budgets for the year?

What Aquino and Abad did appears to be a case of malversation of funds, grounds for impeachment of the President. But that would be like charging the Ampatuans of
Maguindanao for unauthorized use of a backhoe to bury their 58 victims.

Because of Aquino’s under-spending in 2011, which generated for him the P72 billion trove, the economy grew only 3.7 percent.  It could have instead expanded double, by 7.1 percent, the average of 7.6 percent in 2009 and 6.8 percent in 2012.  That is a difference of 3.4 percentage points and economists have estimated that each 1 percent in GDP growth means 500,000 Filipinos crawling out of poverty.

Did Aquino’s under-spending in 2011 that gave him P72 billion to spend as he wished keep 1.7 million Filipinos in poverty?