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Aquino hijacked PCSO’s and other GOCCs’ profits

Either this administration thinks we’re all stupid, or it is dopey in interpreting the laws of the land. It may be so stupid as to announce even its illegal actions.

President Aquino and his mouthpieces have been saying in the past days the funds for his “Disbursement Acceleration Program”—which totaled P142 billion for 2011 and 2012, with an additional allocation of P15 billion this year—had come from government entities’ “savings.”

They claim that since the funds came from “savings,” therefore the administration is justified to use it in any way it pleases, since the Administrative Code of 1987 authorizes the president to “realign” such leftover funds.

This interpretation itself is disputed by constitutional experts Senator Miriam Defensor Santiago and Fr. Joaquin Bernas, who claim that what the Code means is that the President can realign—a word that obviously isn’t synonymous with “transfer”—savings only within the particular department or agency which generates such kind of funds. This after all has been the interpretation of all the past four presidents, even Cory Aquino who proposed the Administrative Code.

But even Aquino’s argument involving “savings” falls flat on its face.

A digitally manipulated depiction of Budget Secretary Abad that’s getting viral in Philippine cyberspace.

A digitally manipulated depiction of Budget Secretary Abad that’s getting viral in Philippine cyberspace.

In this administration’s press release dated October 12, 2011 (still posted at www.gov.ph), one major source of funding for the DAP was “the 2010 unprogrammed fund, to be supported by windfall dividends from Government Owned and Controlled Corporations or GOCCs, (P12.34 billion).” The explanation was repeated in its more recent posting at its website entitled “Q and A on the Disbursement Acceleration Plan.”

In short, Aquino hijacked the P12.3 billion in profits that government-owned and controlled corporations had turned over to the Treasury. That was just for 2011 though, and still unreported are the amounts for 2012 and 2013.

These were from such GOCCs as the Philippine Charity Sweepstakes Office, the Philippine Amusement and Gaming Corp. (Pagcor), Development Bank of the Philippines, and the Land Bank.

This is so patently illegal. Under the Administrative Code and the GOCCs’ charters, and emphasized by Republic Act No. 10149 or the GOCC Governance Act of 2011, these firms’ profits remitted to its principal shareholder—the State—form part of the General Fund, or the nation’s kitty. No wonder then that Aquino through his finance secretary Cesar Purisima since mid-2011 had been pressuring the GOCCs to remit as much profits as they could to the Treasury, even to the point of cutting down their expenses and operations.

But each centavo and peso of the General Fund has to be authorized by law, which is done by Congress when it enacts the annual appropriation laws. The President even has a crucial say in these laws as it is his budget department that prepares the bill, which he signs into law after the Senate and the House of Representatives approve it.

The only two major exceptions in which GOCCs’ profits are earmarked for some purpose are those of the PCSO and the Pagcor, some of which are authorized by specific laws to certain, mainly charity, funds and, for the latter, among others, for the President’s discretionary President’s Social Fund. (A third exception, though hotly debated now involve dividends from the Malamapaya gas operations, which according to one interpretation can be allocated not only for energy-related projects but for those authorized by the President based on a Marcos-era Presidential Decree.)

There is however no law authorizing the President to allocate GOCCs’ profits to the DAP.

But that was just one of the ways Aquino violated the law.

Aquino and his officials have been claiming that the President is authorized to “realign savings’, which it did to create the fund for the DAP. However, most of the funds were not really from “savings” of government units.

Some of the funds under the budget laws of 2011 and 2012 were for personnel expenses such as bonuses and agencies’ additional staffing. Budget secretary Abad simply refused to release these funds, and declared them as “savings.”

More patently illegal was that a big part of the funds for DAP were the budgets authorized by the 2011 and 2012 appropriations law, but which Abad on his own cancelled, on the flimsy excuse that these were “slow-moving.”

A clear example of this was the P1 billion in the 2012 budget law to build the Tacloban International Airport. The budget department in the middle of the year however withdrew P718 million of this because, according to a letter of the transport and communication secretary Emilio Abaya, it was being devoted to the DAP. (It was killing two birds with one stone, as it was another warning—a see-what-we-can-do-to-you message—to Leyte Representative Martin Romualdez, a leader of the opposition, who had been pushing for the airport .)

Aquino was clearly lying when he claimed that the savings were voluntary, saying, “It’s not that we forced savings out of them.”

Former senator Panfilo Lacson in a recent interview also disclosed how the so-called “savings” were illegally impounded. “All of a sudden in April or May, Abad issued a circular that by the end of June 2012 all unused funds (as authorized for the whole of 2012) for many departments would not be released anymore. These were declared as savings, and made part of the DAP funding.” This was a cheap trick on Abad’s part, since he was fully aware of the fact that government agencies’ disbursements are tied by such requirements as tedious bidding and other red tape that they could not just use their budgets in a few months.

And what kind of projects did Aquino decide would be so fast-moving that they would stimulate the economy? A few examples:

• P8.6 billion given to the regional government for projects of the Autonomous Region in Muslim Mindanao, which Aquino himself complained, in June 2012, were slow moving or were not even started yet. The ARMM government had so much money that as late as this year, its governor Hajiv Hataman was distributing checks for P10 million to the regions’ provincial governors.

• P1.8 billion for the Cordillera People’s Liberation Army and the Moro National Liberation Front ostensibly for the training in livelihood projects of their surrendering guerillas;

• P1.2 billion given to the interior and local government department, which couldn’t be used at the end of 2011, according to the COA, because the department didn’t even have a work plan on how to spend the money;

• P2 billion for the Department of Social Welfare and Development for such projects as day-care centers and its endless “supplementary feeding projects’; and,

• P13 billion–nine (9) percent of the P142 billion DAP funds released in 2011 and 2012—according to the “Q and A” post—in additional pork barrel for members of Congress, on top of their P24 billion “Priority Development Assistance Fund” under the appropriations law for that year.

And Lacierda has been insisting that media hasn’t been focusing on the DAP’s uses and not on its source of funding?

We have a president patently violating the law, not just any law but one of the most important laws of the land, the Appropriations Act, which represents the will of the nation—represented by the Congress—on how the government should spend the taxes we pay that is the main expression of our citizenship.

This is the very first time in our Republic that a President has ignored Congress and created his own budget.

Aquino even tried to keep his DAP secret. Senators—who are the most involved in scrutinizing the budget—are saying now that they had not heard of that DAP before. How could P72 billion in funds in 2011 and another P70 billion not even be mentioned or explained in Aquino’s annual budget messages for those years?

Either this president is so obtuse that he still argues that he is authorized to hijack funds to be used as he pleases, or in his hubris he thinks he could ride roughshod over Congress and the nation.