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World Bank backtracks on DAP

The Aquino administration is not above lying through its teeth, but one of its biggest fabrications is its claim that the Disbursement Acceleration Program (DAP) was beneficial to the Philippines economy.

It was President Aquino who first tried to fool us with this lie when in his prime time televised speech in October, he said: “DAP also played an important role in our economic resurgence. According to the World Bank, DAP contributed 1.3 percentage points to our GDP [gross domestic product growth in the fourth quarter of 2011.”

But Aquino’s claim was based on the World Bank’s “Philippine Quarterly Update March 2012,” which even the Supreme Court believed.

Subsequent reports of the World Bank realized that its economists were fooled. Its July 2012 update pointed out that in the first place, the DAP meant only “mere realignment of funds” and secondly, that the DAP’s amounts were “miniscule (at less than 0.01 percentage points) relative to the size of the economy.” Succeeding WB reports, especially its annual updates on the Philippine economy, didn’t even mention DAP.

Instead, the World Bank would attribute growth in the past years to usual steady stream of OFW remittances and, to some extent to the fact that government changed its attitude that infrastructure projects must be evaluated with a fine-tooth comb to be sure it’s not ridden with corrupt intentions even with delays costly to the economy.

To realize the stupidity of Aquino’s claim that the DAP stimulated the economy, consider this: DAP’s P136 billion (as per the latest figure) released from 2011 to 2013 is smaller than the P169 billion sales revenue of Philippine Long Distance Telephone Co. in one year. San Miguel Corp’s in 2012 is five times the total DAP, at P700 billion. (However, DAP money certainly would be gargantuan as bribes to members of Congress.)

The fact is that Budget Secretary Florencio Abad clumsily tried to present DAP as his version of President Gloria Arroyo’s P330 billion Economic Resiliency Plan (ERP), which Aquino’s chief economic planner Arsenio Balisacan in several academic papers praised as having mitigated the impact of the 2009 global financial crisis. Was it Balisacan who advised Abad to cloak DAP as a stimulus fund?

But the difference is that Arroyo’s ERP was a real stimulus program to counteract the 2008-2009 global financial crisis, considered the worst since the 1920s US Depression. The P330 billion in stimulus funds were released in a very short period of time, over eight months in 2009 during the financial crisis. Compare this with Aquino’s P136 billion released over two years.

More importantly, most of the funds released by Arroyo were used for infrastructure. This resulted in an immediate economic stimulus effect.

Another difference between the two: Arroyo’s fund release was constitutional and approved by the legislature, unlike Aquino’s secret and unconstitutional DAP.

As the World Bank also pointed out, the DAP merely realigned the budget to Abad and Aquino’s pet projects. This is in sharp contrast to the former president’s stimulus program that added P200 billion to the 2009 budget, even risking a bigger fiscal deficit.

P6.5 billion as additional pork barrel
Aquino meanwhile withdrew and put into his DAP kitty P6.5 billion of the budgets approved by the 2011 and 2012 Appropriations Laws for the public works, agriculture and transportation departments. This money could have gone into repairing roads, bridges, drainage systems, and other public works to help stimulate the economy, not to mention ease the burden of Filipino commuters.

What did Aquino do with the P6.5 billion that should have gone to infrastructure? He gave them to legislators as additional pork barrel. This is in addition to the P44 billion they already allocated to themselves through the appropriations laws.

Many of the DAP allocations didn’t involve releasing funds to the local economy, as in the case of P20 billion for the central bank’s additional capital and the P5 billion payment by the education department of its unpaid insurance premiums to the GSIS.

I tallied P34 billion, out of the P144 billion (or P136 billion, depending on the date Abad reported how much it was) DAP kitty as indisputably turned into bribe money for Congress to remove Chief Justice Renato Corona in 2012 and to build up political support for the 2016 elections.

This administration keeps saying that DAP was undertaken in good faith. How can Filipinos believe this when they tampered the Philippine Constitution?

For example, Abad “amended” the Constitution in his memorandum to Aquino December 12, 2011 to justify the DAP, which the Solicitor General stupidly presented in the hearings before the Supreme Court.

Abad claimed in his memo that the DAP is “pursuant to Section 25 (5) of Article 5 of the 1987 Constitution—The President may by law be authorized to augment any item in the general appropriations law from savings in other items of appropriations.”

But what does that section of the Constitution actually say?

“No law shall be passed authorizing any transfer of appropriations; however, the President, the President of the Senate, the Speaker of the House of Representatives, the Chief Justice of the Supreme Court, and the heads of Constitutional Commissions may, by law, be authorized to augment any item in the general appropriations law for their respective offices from savings in other items of their respective appropriations.” (Emphasis added.)

Different PH Constitution
Abad deleted that crucial phrase “to augment any item for their respective offices.” Didn’t it cross Abad’s mind that the Supreme Court justices will check the actual text of that provision in the Constitution?

This is the first time really I’ve heard of a high-ranking official argue something by invoking a provision in the Constitution that he deliberately changed. What does that say of Abad’s true character or his motives in proposing the DAP?

Professional liar Edwin Lacierda keeps saying that all the hullabaloo over DAP is a difference of opinion between this administration and the Supreme Court in interpreting the Constitution. He lies again: Aquino and Abad appear to have a different Constitution, one they made up.

An account in Justice Antonio Carpio’s concurring opinion of how the Solicitor General (most probably because of Abad’s insistence) thought they could fool the Supreme Court even borders on the comic.

According to the provisions of nearly all budget laws, the “Unprogrammed Funds” that Abad and Aquino hijacked and put in their DAP kitty, could be used only if government revenues exceeded the revenue targets submitted by the President to Congress.

It was Justice Carpio who asked for proof that the government revenues for 2011, 2012, and 2013 had exceeded its targets.

Aquino’s officials submitted certifications by finance department officials, four of them covering those years. But what they presented were data for government-owned corporations, whose dividend incomes did exceed targets.

In Carpio’s concurring opinion, you could almost hear him saying, as you read between the lines, “Ginagago niyo ba kami?” Dividend incomes of state firms are just a small component of total government revenues, which are mainly from taxes and duties.

The reason of course why Aquino’s officials tried to mislead the Court by submitting certifications on state firm’s dividends is that total government revenues for each of the three years fell below the targets, which meant that it violated the budget laws for Aquino and Abad to use these “Unprogrammed Funds.” (That actually is a misnomer. These funds are allocated for priority projects, such as important infrastructure and government employees’ benefits, but can be used only if revenues exceed targets.)

Carpio also pointed out another illegality there: Except for very few firms, part of whose income are earmarked for purposes set by their charters, dividends of state firms by law go to the General Fund, the uses for which are determined by the budget laws for each year. Aquino therefore could not use those dividends at his whim.

Isn’t their in “good faith” claim, when they were—knowingly—telling utter lies, the kind only hardened criminals and con artists make?

This Post Has One Comment

  1. MS. D

    i salute u for having a good column… this country really needs people like u… more power and GOD bless..

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