SC postpones DAP oral arguments

Posted on December 10, 2013

THE SUPREME COURT (SC) has postponed the oral arguments on the controversial Disbursement Acceleration Program (DAP) to next year following requests from the Legislative and Executive branches to reset the debates on the controversial stimulus funds.

In a six-page order, the SC moved the oral arguments to Jan. 28, 2014 instead of today, Dec. 10.

The debates were postponed based on various motions filed by the Office of Solicitor General (OSG) for Budget Secretary Florencio B. Abad, the Senate and the House of Representatives.

"The Court took note of the uniform reason given by both chambers for the resetting, i.e., that [they] have found it necessary to be represented by counsel separate from the Solicitor General of the Philippines, and thus would need additional time to engage such counsel and for counsel to prepare for the oral arguments," the SC said in a press statement.

In turn, the SC ordered the Senate and the House of Representatives to notify the high tribunal within 10 days and let the counsels formally enter their appearances in the cases.

The Budget department was likewise ordered to submit by Jan. 21, 2014 a list of sources of funds under the DAP, its uses for each project or activity and its legal bases.

The SC, in an earlier advisory before the postponement, allotted 35 minutes for the OSG to counter the views of petitioners’ lawyers who argued the DAP is unconstitutional in the first oral arguments last Nov. 19.

Earlier, a senior high court justice also said the funds where the DAP was sourced could not be considered as savings under the national budget.

Senior Associate Justice Antonio T. Carpio said the sources of the stimulus funds do not fall under the definition of "savings" in the 2013 General Appropriations Act (GAA).

DAP funds were sourced from "realigned savings" from slow-moving projects to spur economic growth.

Its sources mostly came from dividends from Government-Owned and -Controlled Corporations (GOCCs), unprogrammed funds, and unobligated allotments.

"But they did not qualify under the definition of savings," Mr. Carpio said.

Mr. Carpio said unprogrammed funds, "by definition," cannot be considered as savings. GOCC dividends, on the other hand, are revenues and not savings.

Based on the GAA, savings can be sourced from excess funds from projects that were completed, discontinued or finally abandoned.

Mr. Carpio also noted the power to realign savings is limited only to the President, and cannot be delegated to anyone.

However, the DAP had no written document coming from the Office of the President authorizing the realignment of savings.

The basis for the stimulus funds is attributed to the National Budget Circular 541, which was issued by the Department of Budget and Management (DBM).

Further, Mr. Carpio said there was no written document pertaining to the DAP in 2011, but realignment of savings amounting to P67 billion occurred during the year. In 2012, the DBM had NBC 541, but no similar circular was issued for this year, Mr. Carpio noted.

In its comment, the OSG asked the SC to dismiss the petitions for lack of merit and to deny the stay order sought against the DAP.

The OSG argued that the DAP is a "fund management system," and not a fund as claimed by petitioners questioning its constitutionality.

"The DAP is neither a fund nor an appropriation, but a program or an administrative system of prioritizing spending. As is obvious from its name, it is a program for accelerating disbursements," the OSG stated in its consolidated comment dated Nov. 7.

Since the DAP serves as a system, the OSG argued no appropriation law was needed to form the stimulus since its use was within the President’s power as chief executive to create policies in the implementation of laws.

"The President, through the DBM, implemented the DAP in order to accelerate public spending, push economic growth and promote prudent fiscal management. This is plain executive policy-making, nothing more,"the OSG said.

DAP was also within the President’s power to augment items in the GAA from savings in other provisions within the Executive branch and also within his mandate to spend.

"Thus, operationally, it is the Executive which determines when savings actually occur," the comment said. -- Mikhail Franz E. Flores