Disbursement Acceleration Program free essay sample

The Disbursement Acceleration Program (DAP) is a stimulus package under the Aquino administration designed to fast? track public spending, and pushes economic growth. If we are to request a DAP audit, will it answer the following questions: How was the new budget items arrived at? Where did all these monies go? Which were the provinces, cities, and towns? Who were the service providers? Were they chosen thru competitive bidding? And who were the real beneficiaries? There is no rationale at all for allowing the legislators to identify projects. What happened here? Why did the executive department allow this to happen? In this sense, the Disbursement Acceleration Program should not be implemented because it does not contribute in the GDP and economic growth of the country, although it may have been partially successful, its rediscovery has drawn reaction as â€Å"Unlawful†, aside from being unconstitutional, it does not serve, neither its spending was translated to over-all increase of jobs, nor trigger a downturn in poverty incidence. Background Two years ago, the government was roundly criticized for causing an economic slowdown. Upon assumption into office in the third quarter of 2010, the Aquino administration applied the brakes on government spending, particularly on infrastructure. At first, it was because it had little choice; the President lamented how his predecessor had already spent most of the budget allotted for the entire year. In the following year, the spending cutback continued, this time because government, in its push for â€Å"matuwid na daan,† worked to improve the quality of public expenditures and stop erstwhile massive corruption leakages. As explained by Budget Secretary Florencio Abad, government decided to cancel projects embarked on by the previous leadership that were found â€Å"wanting in economic viability and credibility. † Meanwhile, Public Works Secretary Rogelio Singson was plugging loopholes in his department’s procurement and bidding systems, slowing implementation of programmed infrastructure projects in the process. For five consecutive quarters, beginning when President Aquino assumed the reins of government, public construction dropped consistently by as much as 58.  6 percent year-on-year in one quarter. The economy grew by only 3. 9 percent in 2011, down from a hefty 7. 3 percent in 2010. The project cancellations earned for government the displeasure of, even legal action from, donor agencies. The resulting growth slowdown drew severe criticism from business and other economy watchers. It was in this context that the Development Budget Coordinating Committee (DBCC), chaired by Abad and composed of government’s key economic managers, saw urgency in accelerating government disbursements to reverse the slowdown. Thus was the DAP born. In October 2011, the DBCC prescribed the following criteria for projects to be supported under DAP: (1) fast-moving or quick-disbursing; (2) urgent or high priority in terms of social and economic development objectives; and (3) well-performing programs or projects that could further expand benefits to the public with additional funds. How were funds sourced? Funds used for programs and projects identified through DAP were sourced from savings generated by the government, the realignment of which is subject to the approval of the President; as well as the Unprogrammed Fund that can be tapped when government has windfall revenue collections, e. g. , unexpected remittance of dividends from the GOCCs and Government Financial Institutions (GFIs), sale of government assets. Body The use of DAP successfully sustained the pace of public spending as well as economic expansion. The Philippine economy grew by 3. 7 percent in the fourth quarter of 2011, from 3.1 percent and 3. 6 percent in the second and third quarters, respectively. On the supply side, real GDP growth in the fourth quarter was mainly propelled by the robust performance of the services sector, as well as the strong performance of the public construction subsector. On the demand side, household and government consumption, and public sector infrastructure investments supported growth. With a 2. 9 percent growth in net primary income, gross national income grew by 3. 5 percent. (Paderanga) The Disbursement Acceleration Plan worked. Not only were we able to push the level of government spending towards the tail-end of 2011, we were also able to achieve a better-than-expected fiscal deficit level equivalent to 2 percent of gross domestic product. (Abad) President Aquino’s recent defense of his DAP (citing its â€Å"Selective Use of Statistics† to hype growth in the country) is an exaggerated interpretation of a misleading World Bank report. The World Bank’s March 2012 Philippines Quarterly Updated said that â€Å"the government’s DAP was partially successful and contributed 1. 3 percentage points to GDP growth in [the fourth quarter of] 2011. In the November 19, 2013 decision of the Supreme Court magistrates, who voted 14-0 in ruling to bar the PDAF or the legislative pork barrel, which, like the DAP, constituted lump sum funds in the national budget, we can say that DAP is unconstitutional. So, since there’s already such a ruling on the legality of lump sum appropriations, then one can clearly see that the DAP violated the Constitution, too. Associate Justice Antonio Carpio, who’s the most senior of the 14-member high tribunal, took the position that all lump sum appropriations in the budget are illegal. † The other budget rule that flows from the above is that savings have to be generated from their respective appropriations and applied only to items of their respective appropriations. General provisions in the GAA 2001, GAA 2002, and GAA 2003 uniformly provide that â€Å"In no case shall a non-existent program activity or project, be funded by augmentation from savings or by the use of appropriations otherwise authorized in the act. † Put simply, if a program, activity or project does not exist in the GAA, then it cannot be augmented from savings. Put differently, what is called â€Å"cross-border† augmentation as called by some associate justices, meaning the use of savings from one office to augment the budget of another office, is illegal. Yet, Secretary Abad admitted that DAP was used to augment the budgets of the House of Representatives and the Commission on Audit, and that savings of the Executive Department were used to augment the budget of the Commission on Elections. Fatal mistake. (Teodoro, 2013) DAP can be considered as part of the President’s vast presidential pork barrel Conclusion As a whole, the defense of DAP still fell short of justifying the organized allocation almost P 1 trillion in open fund including the supposedly abolished PDAF (Priority Development Assistance Fund), regular agency lump sums, unprogrammed funds, other savings and off budget items. That we even find ourselves in this debate is symptomatic of how broken our system of government is. It indicates a complete breakdown of controls, which puts into question our very system of government. The virulence of corruption has seriously tainted vital government institutions — among others, Congress, executive departments, agencies, government and controlled corporations and local government units. It also puts into question the existing auditing, budgeting processes, procedures and control mechanisms. With cases now being filed, our justice system will also be put to the test. The Pandora’s Box has been fully opened. And if the P10-billion Napoles pork barrel and the Malampaya funds scandals are just a tip of the iceberg, chances are, more gargantuan scams involving public funds are waiting to be uncovered. For all the moral anguish and outrage that Filipinos are going through, the silver lining here is that the pain could have a cathartic effect. Had these scandals not been unearthed, the corrupt would continue with their merry ways, wrecking more serious havoc along the way. But now, the guilty must be quaking in their feet. The fuse ignited by Benhur Luy and the other whistleblowers will definitely result in an explosion that will rack the country to its very foundations. But in the end, it will give us an opportunity to rectify our broken system of governance; and, if we learn from all of this, it is a precious opportunity to correct past mistakes to allow for a better society to emerge.