Abad allays fears over DAP projects

Posted at 08/01/14 4:33 PM

MANILA - Budget Secretary Butch Abad allayed fears that some projects funded by the now unconstitutional Disbursement Acceleration Program, like Project NOAH, will be stopped because of lack of funding.

At the same time, Abad indicated Congress may pass a law to legitimize DAP projects retroactively.

In reaction to the plight of Project NOAH employees who are supposedly not getting paid anymore because of the stop to DAP, Abad gave assurances there is funding for them.

"I think the proper person to interview is [Department of Science and Technology] Secretary Mario Montejo. This is project implementation. He would know better. Many of Project NOAH employees are project-based employees, the project being implemented is with the [Advanced Science and Technology Institute] AST. ASTI is supposed to be paying for their salaries. The reason there has been delay is because of questions since this is a DAP project," he said.

Abad said they have not received reports of more DAP projects being stopped after the DAP was struck down as unconstitutional by the Supreme Court.

"We have not received any reports except for the ones you've read about: [Department of Public Works and Highways] flood control, [Department of the Interior and Local Government] procurement activities that are being held in abeyance. They are being studied whether they can be allowed to continue because they are not affected or they should wait for clarification," he said.

DAP was funded from realigned pooled savings. Government has asked Congress to define savings to comply with the High Court's ruling on the DAP.

Abad said the definition of savings may be made retroactive to cover DAP projects.

In an off-camera meeting with some members of the media, Abad also expressed his view that the SC's ruling on the DAP did not make a dent on government spending for its projects.

He said DAP-related spending was heavy towards the last quarter of 2011 and first semester of 2012 before tapering off dramatically in first semester of 2013.

This would mean that a big chunk of the P144 billion spent for the DAP went to projects already implemented and completed during that period.

"They are likely done. Now if there’s going to be a balance, it's very likely the balance will come from latter quarter of 2012 and first semester of 2013. Balances there will be much less, maybe not even 20% of the total. It is very likely they would have been obligated by now. It's just an intelligent guess it will come in less," he said.

Abad said he is confident there is enough time to address problems in DAP projects after Congress clarifies the presidential power to use savings in a proposed law.

Apart from the use of savings, another thing that needs to be clarified is the activation of the standby appropriations or unprogrammed funds. Unprogrammed funds, while approved, can only be used depending on government’s revenues.

Right now, the government has some P25 billion in excess revenues.

Abad said making the law retroactive allows government to use funds under DAP affected by the ruling of the court.

"If Congress decides to retroact it, it will cover funds stalled by the decision. We are allowed to use them again."

"In 2011, P75.1 billion [in projects] was DAP-funded. In 2012, it was P53.2 billion. In 2013, P16 billion so I'm almost sure 2011 most if not all of [the projects] would have been completed. In 2012, half of that, bulk in first semester you’re really left with, if at all, we still have to get reports, it’s the 2nd half of 2012 which is much less then 2013. That's why I say it's going to be significantly much less."

A retroactive definition of savings also makes the passage of a supplemental budget unnecessary.

"That’s why I say if we are able to pass the law in August and make its application retroactive, we may not need to pass a supplemental budget just for this," he said.

Abad added that one other reason for the need to clarify matters on DAP is because some offices have decided to err on the side of caution and suspend DAP projects till this is sorted. For example, the Department of the Interior and Local Government has stopped buying mobile patrol cars.

This is because the SC ruling presumes that implementors did not act in good faith.

"You can be presumed to be criminally, administratively liable unless you prove otherwise that one has a more pervasive effect on bureaucracy. Whatever explanation you make, even in the clearest way you want to explain it, bureaucracy is always conservative. If you recall, Undersecretary Romeo Momo of Department of Public Works and Highways issued a memo telling all district engineers 'Don't implement DAP projects.' This was way before SC decided on DAP and that delayed infrastructure projects by months," he said.

Other projects funded by DAP continue. There is a P5 billion flood control project under the Department of Public Works and Highways and the Metropolitan Manila Development Authority.

There is also an P11 billion project for the National Housing Authority to remove settlers on waterways.

Abad told reporters that the congressional action won’t be enough. He hopes the Supreme Court will reconsider its presumption of bad faith to allay these fears.

"There are suggestions either you strike it out or you simply say: 'That's just an opinion. It doesn't go to …dispositive portion.'"

To address the slowness in disbursements, government will allow agencies to start bidding procedures by August of the preceding year. That way, when the new budget takes effect on January 1, the contract can be immediately awarded.

Bidding alone takes months.

"We allow them to increase the bids and awards committees (BAC). We’re requiring them to make BAC members full-time. We’re allowing them to outsource engineering design and feasibility studies to other agencies so they can farm out and allow them to complete," Abad said.