DAP vs PDAF: the big difference

“The main issue on the Disbursement Acceleration Program (DAP) concerns questions on constitutionality; the main issue on the Priority Development Assistance Fund (PDAF) concerns the crime of plunder,” economist Felipe Medalla pointed out in a recent speech before the Philippine Chamber of Commerce and Industry. In his Inquirer column, Fr. Joaquin Bernas similarly asserts: “The accusation against the DAP is constitutional extravagance in the use of public money. The accusation against Janet Lim-Napoles (the central figure in the PDAF scandal) is criminal extravagance and corruption of the not-so-innocent.”

To paraphrase, the DAP issue is about the executive exceeding the bounds of its power; the PDAF issue is about private individuals and public officials stealing the people’s money. It is a question of constitutionality vs. criminality. This distinction must be made clear, Medalla asserts, lest the former issue be used to unduly muddle the latter and deflect attention from the need to identify and punish the plunderers. There has indeed been a tendency in recent public discussions to seemingly take both in the same light. To be sure, there is a bit of interface between the two, with suspicions that some DAP funds had gone the way of the PDAF scam’s modus operandi—that is, via fictitious projects by bogus nongovernment organizations. But the DAP came about to address a clear and urgent need, and for the most part, yielded the desired effects on the economy as a whole.

Two years ago, the government was roundly criticized for causing an economic slowdown. Upon assumption into office in the third quarter of 2010, the Aquino administration applied the brakes on government spending, particularly on infrastructure. At first, it was because it had little choice; the President lamented how his predecessor had already spent most of the budget allotted for the entire year. In the following year, the spending cutback continued, this time because government, in its push for “matuwid  na  daan,” worked to improve the quality of public expenditures and stop erstwhile massive corruption leakages. As explained by Budget Secretary Florencio Abad, government decided to cancel projects embarked on by the previous leadership that were found “wanting in economic viability and credibility.” Meanwhile, Public Works Secretary Rogelio Singson was plugging loopholes in his department’s procurement and bidding systems, slowing implementation of programmed infrastructure projects in the process.

For five consecutive quarters, beginning when President Aquino assumed the reins of government, public construction dropped consistently by as much as 58.6 percent year-on-year in one quarter. The economy grew by only 3.9 percent in 2011, down from a hefty 7.3 percent in 2010. The project cancellations earned for government the displeasure of, even legal action from, donor agencies. The resulting growth slowdown drew severe criticism from business and other economy watchers.

It was in this context that the Development Budget Coordinating Committee (DBCC), chaired by Abad and composed of government’s key economic managers, saw urgency in accelerating government disbursements to reverse the slowdown. Thus was the DAP born. In October 2011, the DBCC prescribed the following criteria for projects to be supported under DAP: (1) fast-moving or quick-disbursing; (2) urgent or high priority in terms of social and economic development objectives; and (3) well-performing programs or projects that could further expand benefits to the public with additional funds. Based on Department of Budget and Management data, among the initiatives that received major funding were health insurance for indigent families, education and training assistance for students from the poorest of the poor families, rural farm infrastructure, upgrading of hospitals, rehabilitation of the mass rail transit systems, and disaster prevention and mitigation. All told, P72.1 billion was reported to have been released under the DAP in 2011, and P54.8 billion in 2012.

Economic data indicate that the hiked spending achieved its professed goal of reigniting economic growth. By late 2011, public construction had reversed five quarters of decline, and grew by 36.4 percent year-on-year. By the first half of 2012, it had grown by 53 percent. It appears that in the effort to reverse the previous year’s self-induced overall economic slowdown, the government front-loaded infrastructure spending in 2012, with public construction growth moderating to 12.4 percent by the second half. From the subdued 3.9-percent GDP growth in 2011, the overall economy surged by 6.8 percent in 2012, building a momentum that has led it to further speed up to 7.6 percent this year so far. With a zooming 36.2-percent growth in the first half of this year, public construction continues to be a key driver of the economy’s overall growth.

Were all of the DAP funds spent well? Probably not; even the most determined government couldn’t stop graft and corruption 100 percent. Were the DAP releases used to bribe or reward favored legislators? Abad insists and offers proof that DAP releases did not discriminate among the lawmakers, whose involvement was limited to

9 percent of the DAP releases, with amounts released directly to concerned implementing agencies. Did the executive branch overstep its constitutional bounds in allocating the funds for specific projects? I will leave it to the lawyers to explain that. What I know is that the Philippine economy is now the fastest-growing economy in Asia, thanks in large part to the DAP.

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