Who got DAP? Everyone, says Abad

Posted at 07/25/14 8:32 AM

MANILA - Who got a piece of the P144 billion, unconstitutional Disbursement Acceleration Program (DAP)? Everyone on both sides of the political fence, according to Budget Secretary Butch Abad.

Speaking before the Senate finance committee hearing, Abad confirmed that except for former Senator Panfilo Lacson, both allies and critics of President Aquino were able to nominate projects that were funded by the program.

"Kasama sa coalition o nasa oposisyon nakatanggap po ng DAP, nakapagnumra ng proyekto," he confirmed under questioning by Senate President Franklin Drilon.

"Dito ho sa Senado, isa lang ang hindi humingi ng pondo sa DAP savings at yan po si Ping Lacson...Ganun din po pati sa minority ay napapagbigyan din po including party-list katulad ho ng Bayan [Muna] nakakatanggap din ho yun," he added.

Drilon added: "This is not a program for the allies of the President. It has something to do whether or not it is a valid request for funding for a particular project."

Abad and nearly the entire Aquino Cabinet came in force at the Senate hearing on Thursday to defend the DAP, parts of which were declared unconstitutional by the Supreme Court.

In its decision, the high court ruled as unconstitutional the withdrawal of funds of government agencies in the middle of the fiscal year and declaring them as savings, the use of the funds for projects not included in the General Appropriations Act and the cross-border transfers of funds to other branches of government such as the legislative.


During the hearing, Abad confirmed some of the cross-border transfer of funds under the DAP.

For example, he said the Commission on Audit (COA) got an additional P143.7 million appropriation from the DAP for an IT infrastructure program and the hiring of additional litigation experts. The COA is an independent body that is not under Malacañang.

Abad said COA chairwoman Grace Pulido Tan asked Malacañang for additional funds to hire more researchers to cope with the increase in audit requests.

"Until now, they were using diskettes na kwadrado. Their job will not be faster if they don't use modern IT equipment. That is what they asked and that is what we gave," he said.

Similarly, he said the DBM covered a P45 million shortfall for the construction of the House of Representatives legislative library and archive building or the congressional e-library. Construction for the building started in 2009.

He said Speaker Sonny Belmonte wrote a letter asking for additional funds after the COA asked the Lower House to finish the building before it deteriorated.

"They said we have money but we need an additional P45 million. We will return the allotment and give me a full P245 million. We saw that they needed to fix it. This was for research, for their e-library and it is important for a deliberative assembly like Congress," he said.

Abad said the requests were granted since these two offices did not often ask for additional funds.

"In extraordinary ways when the need is great, sa palagay ko naman, in the spirit of interdependence, the branches of government should help each other," he said.


Some of the lawmakers, however, questioned the wisdom of funding some of the items under DAP.

For instance, Sen. Grace Poe questioned why the DAP paid off P2.799 billion in obligations incurred by the Bureau of Customs to the Philippine Deposit Insurance Corporation (PDIC) in connection with the comprehensive import supervision scheme with the Societe Generale de Surveillance S.A. (SGS).

Finance Secretary Cesar Purisima, who is the chairman of the PDIC, said he proposed the transfer of the funds as part of the "house cleaning" of open accounts inside the clearinghouse.

The finance chief said Customs first contracted the services of SGS on the strength of a letter of guarantee from the Philippine National Bank, which was still government-owned at that time.

When the contract was discontinued, SGS collected on the guarantee from PNB which was already owned by the private sector. PNB then collected from the PDIC.

"We needed to pay that to make sure PDIC is healthy so they have resources to protect the deposits of all of us. We thought given there was excess funds, that this was something we should close the books on so we could move forward," Purisima said.

Poe, however, questioned why the national government should be held liable for the obligation that was first incurred by Customs.

Answered Purisima: "Wala na yung obligasyon sa Customs. The bank already paid the SGS so it was PDIC that needed the funds."

He added: "I can sit on that and let the next administration worry about it but now it is clean."


Abad also explained why the province of Quezon got a P750 million allocation from the DAP.

The budget chief said the local government was asking for P4 billion in taxes from a power plant after it was sold by the National Power Corporation. The plant had tax-free status when it was still under Napocor.

Since the plant was servicing not just Quezon but the entire country, the President negotiated with then Governor Danilo Suarez for a condonation of taxes in exchange for government support including the construction of farm to market roads, communal irrigation projects, rural health services and Philhealth enrollment.

The P750 million funded at least 14 programs in the province, Abad said.

Meanwhile, Public Works Secretary Rogelio Singson confirmed the province of Tarlac got a P1.976 billion allocation from the DAP. Tarlac is the home province of President Aquino.

Singson said the allocation went to national road projects (P698 million), provincial roads (P334 million), farm-to-market roads (P482 million), a bridge (P210 million) and a dike (P252 million).

All 93 projects in Tarlac funded by the DAP were completed.

Singson said the projects were proposed by the former and current congressional representatives of Tarlac, barangay chairmen and other local officials.


Cabinet officials also denied that some government programs were funded by the DAP.

For instance, Agrarian Reform Secretary Virgilio delos Reyes denied that part of the DAP went to landowners of Hacienda Luisita after the Supreme Court ruled that a portion of the massive sugar estate be placed under the government land reform program.

President Aquino's family owns Hacienda Luisita.

Delos Reyes said the DAP allocation for landowners did not go to Hacienda Luisita landowners because the Supreme Court had yet to decide with finality on the compensation in 2011.

Instead, the allocation was used as compensation for a landowner in Davao after the government lost its case before the Supreme Court.

"All landowners are given proper compensation and that is under the Constitution," he said.

Abad also denied that an additional P4.1 billion given to the Commission on Elections in 2012 came from DAP. He said the Comelec needed the money for collateral software support and maintenance, increase in traveling, training and seminar expenses, warehousing and configuration facilities for PCOS machines, synchronization of the national and local elections, software licences, and additional requirements for overseas absentee voting.

Abad explained that not all pooled savings fall under the DAP. This means that there are some projects which are funded by the savings outside of the DAP.

Government savings that were used for the DAP came from miscellaneous personnel benefit funds, capital outlays and maintenance and other operating expenses (MOOE) of different agencies.

Abad said funds for unreleased personnel services reached P36.3 billion in 2010, P35.97 billion in 2011, P42.4 billion in 2012 and P31.2 billion in 2013, totaling P145.972 billion.

Government savings also came from unused MOOE, which reached P17.75 billion in 2010, P11.8 billion in 2011, P12.6 billion in 2012 and P4.1 billion in 2013.

Finally, he said government also had savings from capital outlays including P9.5 billion in 2010, P11.9 billion in 2011, P11.74 billion in 2012 and P12.12 billion in 2013.

Total savings reached P237.507 billion. Of that amount, P144 billion was released for DAP projects.