Palace urges SC to reverse DAP ruling

Posted at 07/18/14 11:12 PM

MANILA (UPDATE) - Malacanang urged the Supreme Court (SC) on Friday to reverse its unanimous ruling striking down the Disbursement Acceleration Program (DAP) as unconstitutional.

In a 52-page motion for reconsideration (MR) filed by the Office of the Solicitor General (OSG), Malacanang practically asked the high court to disregard Section 25 (5), Article VI of the 1987 Constitution, when the Palace moved that cross-border transfer of funds be declared constitutional.

The Palace insists that "the President has authority to transfer savings to other departments pursuant to his constitutional powers."

"The Constitution does not prevent the President from transferring savings of his department to another department upon the latter's request, provided it is the recipient department that uses such funds to augment its own appropriation," the MR said.

"In such a case, the President merely gives the other department access to public funds but he cannot dictate how they shall be applied by that department whose fiscal autonomy is guaranteed by the Constitution," it added.

In its July 1 decision, the high court ruled that cross-border or inter-branch transfer of funds is barred by the 1987 Constitution, citing the said provision.

The high court stressed that what is allowed by the Constitution is the augmentation of appropriated items (items in the General Appropriations Act) within the executive, legislative, and judicial branches, as well as within Constitutional Commissions.

Section 25 (5), Article VI of the Constitution states: "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."


The Palace also claimed that the high court erred in its application of the operative fact doctrine when it ruled that the DAP-funded projects "that can no longer be undone" be spared from any liability, but not the "authors, proponents, and implementors" of the DAP who need to prove good faith before the proper tribunals.

"The operative fact doctrine was wrongly applied," the MR said.

"It speaks of nothing about the liability of so-called authors, proponents, or implementors... [t]hey (DAP authors, proponents, implementors) are presumed to have acted in good faith and the court cannot load the dice, so to speak, by disabling [their] possible defenses in potential suits," it added.

The Palace also urged the high court to declare that:

- withdrawn unobligated allotments and unreleased appropriations under the DAP are savings;
- the President augmented items with appropriation cover under the DAP; and
- the use of the Unprogrammed Fund under the DAP complied with the conditions provided in the relevant General Appropriations Acts (GAAs).

In the assailed decision, the high court ruled that the following are unconstitutional:

- the withdrawal of unobligated allotments from the implementing agencies, and the declaration of the withdrawn unobligated allotments and unreleased appropriations as savings prior to the end of the fiscal year and without complying with the statutory definition of savings contained in the GAA; and

- the funding of projects, activities and programs that were not covered by any appropriation in the GAA.

The high court also voided the use of unprogrammed funds despite the absence of a certification by the National Treasurer that the revenue collections exceeded the revenue targets for non-compliance with the conditions provided in the relevant GAA.