Framing DAP

THE STORY of the Disbursement Acceleration Program (DAP) has been debated using various frames.

President Benigno S. Aquino III has offered the “right vs. wrong” frame, saying that “even our most vociferous critics grant that DAP has benefited our people.”

He said he rejected the resignation of Budget Secretary Florencio ‘Butch’ Abad because to accept it was “to assign to him a wrong and I cannot accept the notion that doing right by our people is a wrong.”

To the Palace, it seems like DAP is a morality play, and good intentions should never be questioned, whatever the results.

But that frame does not, and will not seem to fly, with the Supreme Court, which voted 13-0-1 on July 1, 2014 to declare the DAP unconstitutional in part.

The high court saw some things flawed in law about DAP: the cross-border from the Executive to the other branches of government; the withdrawal of savings from items with clear appropriations cover; and the use of savings and unprogrammed funds from dividends of certain government corporations, without proper clearance and authority from the National Treasurer.

To the magistrates, it seems like DAP is simply about Constitution and law, and what must be followed in spirit and letter.

To a senior government official, DAP entails a discussion of who should or could be perfect fit for the job of budget secretary.

The budget process and DAP, the official observed, seems constantly locked in a clash of contrary interests — politics and reforms — that define the story of the Aquino administration.

It does reportedly not help at all that Abad has always worn two hats in the Aquino Cabinet — he is budget secretary but also a leading light, and perhaps the most astute of them all, in the President’s Liberal Party.

Before Aquino came to power in June 2010, the official said, the LP was so small that “it was just a Volkswagen party.” That is more truth than joke — “you could fit in all the LP members in a Volkswagen,” said the official.

But those days are long gone. In June 2010, a horde of politicians from what used to be the ruling parties under various presidents before Aquino formed a beeline to join the LP. LP is the established majority party in both the Senate and the House of Representatives, in coalition with political parties of mixed loyalties.

That DAP critics are seeing LP hands in the program — and suspecting a connection between the funds and elections — can only be expected. But DAP also has its supporters, among them an economist who says, “Actually, I’m one economist who is in favor of stimulus spending. I am not critical of DAP. It did some good.”

He explains there is indeed a need to stimulate the economy. But he says that for it to work, investment should go to more “stimulative” projects like roads, bridges or infrastructure projects that can increase productivity and capacity.

Power supply or critical or near-critical infrastructure are among the projects that should have been prioritized, says the economist.

Equity infusion, payment of insurance premiums, and landowner’s compensation, he continues, are “less stimulative,” and does not have the “multiplier effect” or real pump-priming that infrastructure projects can offer.

Queried if the DAP episode offers some lessons, he replies: “It’s in the choice of the projects. There needs to be fine-tuning. More care should have been taken.”

Two brilliant columnists offer yet other frames for debating DAP.

Solita ‘Winnie’ Monsod, who had served briefly as socioeconomic planning secretary of the President’s late mother, Cory Aquino, sees the DAP row to be rooted in systemic ills of the budget process.

In a column that ran on Saturday in the Philippine Daily Inquirer, Monsod wrote about the push-pull between Congress’s power of the purse that is vested in the Constitution, and the powers and limitations of the Executive and Congress in budget preparation, authorization, and implementation as defined in the Revised Administrative Code of 1987.

Monsod cited portions of The Philippine Human Development Report 2008-2009, particularly its chapter on “Institutions, Politics and Human Development,” co-authored by UP economics professor Emmanuel de Dios and Monsod’s daughter Toby, about how an inflexible budget could impede reforms.

It said: “All things considered, one would have to say the budget is constraining of human development and good government. For one, the budget is inflexible as regard both allocation and procedural rules, a situation which does not allow greater investment or innovation in the delivery of public services, human development or otherwise…”

The older Monsod then observed, “The DAP was an attempt to make the budget process more flexible, allowing for innovation in the delivery of public services. How? By taking away (temporarily) the unobligated appropriations of the government executive agencies, and putting them to use in faster moving programs and projects of other government agencies. Why temporarily? Because if the slow-moving agencies performed better, they would presumably get it back one way or another.”

De Dios himself recently wrote about DAP. In his column in the BusinessWorld newspaper, he said DAP at core is about politics, politicians, and citizens leveling up to a new order — following the rules.

“On the surface,” wrote de Dios, “the effect is as if one was simply ‘restoring’ order in the relations among the branches of government as intended under the Constitution….Congress is supposed to have the ‘power over the purse’ and the President’s job is simply to implement legislative priorities.”

But the Philippine government is in truth “not as neat and bundled,” he said. Legislative pork, de Dios noted, “has always existed under different names in all post-Marcos administrations and instituted in its current form under Cory Aquino’s budget ministry (a well-intended innovation by my colleague Ben Diokno).”

He continued, “Which brings us to the point: if the Supreme Court is right about what the spirit and letter of the law say, why has practice deviated from it?

Because “there are no long-lived organizations (read: political parties) capable of formulating national agendas and defining national priorities,” de Dios said, “in practice, only the President, controlling the large bureaucracy, can do that. It is then natural for the strategic function to devolve on him.”

With legislators assuring their re-election “on local-level patronage… their function is reduced to that of fiscal brokers seeking to ensure their share of the national pie… uninterested in their responsibility for their theoretical ‘power over the purse’ (except for the odd occasion it can be used to extort concessions from the executive).”

De Dios rued that “in current practice, for example, Congress hardly even knows how much ‘the purse’ contains: laws are enacted without the funding needed to implement them; budgets are passed without legislative regard for expected tax revenues, or the debt burden, or the resulting size of the budget deficit — all those things are passed on to the executive.”

“(This), of course, is a flawed, imperfect order,” said de Dios. “(Yet) it is order nonetheless — serviceable in the case of a good president, though a free ticket to abuse by a bad one.”

The Supreme Court’s ruling is a most important change trigger, he said. “If, as expected, the Court reaffirms its decision on the DAP, then — together with the abolition of ‘pork’ as we knew it — how shall Congress and the Executive henceforth relate to each other?”

“On the one hand,” mused de Dios, “the institutional dissonance will seem to have been resolved: government is then constrained to function more closely to what the Constitution envisions. On the other hand, one must ask whether political actors (not ideally, but as they exist) can fulfill the tasks assigned them by such formal rules.”

He then wrote: “Citoyens et citoyennes! We are in the midst of a revolution whose outcome is yet unknown — instigated ironically by a conservative and literalist Supreme Court.”

“In a world of institutional dissonance, an insistence on strict formal rules can be disruptive,” conceded de Dios. But he also said that “in a good scenario, all will turn out for the best. There may be a growth hiccup or two in the near term, but ultimately members of Congress will up their game and find common ground with some presidential vision and each puts his shoulder to the wheel.”

In time, he said it may even be possible for the media and the growing middle class to “become more focused on the quotidian business of politics and representation, progressing beyond their currently sporadic, scandal-driven interest.”

“In short,” de Dios said, “the insistence on rules may yet provide a bridge to the country becoming a mature representative democracy. Who knows? The political class may yet ‘level up.’” — With reporting by Malou Mangahas and Karol Ilagan, PCIJ, July 2014