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RECAP: Budget Sec. Butch Abad faces Senate to shed light on DAP

(Updated 4:11 p.m.) Critics called the Disbursement Acceleration Program (DAP) the presidential pork barrel. The administration meanwhile said it is a stimulus package meant to fast-track public spending and boost economy. 
Approved by President Benigno Aquino III on Oct. 12, 2011, the DAP was put up to cover high-impact budgetary programs and projects using savings and additional revenue sources.
The Supreme Court, however, declared parts of it unconstitutional.
Budget Sec. Butch Abad was invited by the Senate finance committee on Thursday to make a public accounting on how the Aquino administration spent billions of pesos in public funds released under the Disbursement Acceleration Program.

Below are the highlights of what transpired during the hearing.

9:34 a.m.: Sen. Chiz Escudero starts the ball rolling by explaining what is expected during the hearing.

9:36 a.m.: Budget Sec. Butch Abad explains DAP anew for the benefit of the general public. Since September 2013, DAP has been accused of several things, he says: Some have labeled it pork, some tagged it as bribery. He says it was meant to speed up public expenditure and catalyze economic growth.

9:42 a.m.: Abad details how DAP works and key reforms done. 

9:45 a.m.: Abad says DAP is an urgent response to an urgent problem. He adds that the Cory Aquino administration also had a mechanism similar to DAP, called Reserve Control Account. Abad says this mechanism was also used in the Estrada and Arroyo administrations. 

9:48 a.m.: Abad says the administration has informed the press of projects funded by DAP, but adds DAP is more than just a collection of press releases and news stories. 

9:51 p.m.: Abad enumerates some of the projects funded by DAP: payment of unremitted GSIS premiums of teachers; construction of roads and bridges; DREAM of Project NOAH, and the acquisition of a Doppler radar.

9:54 a.m.: Abad says the DAP was the best course of action at the time when underspending was a formidable fiscal challenge. 

9:58 a.m.: Abad says the Supreme Court's decision declaring parts of the DAP unconstitutional "may undo the progress we have achieved so far."

READ: SC decision may undo economic progress, Abad tells Senate

10:03 a.m.: Abad reiterates the DAP was implemented in good faith. He laments what a shame it is if bad faith is presumed on those who acted in the best interest of the country. 

10:10 a.m.: Escudero confirms with Abad the following figures: Total available savings as source of DAP funds is P237,508,000. Proposed projects totalled P167B. Released funds amounted to P144.3B. Abad says the figures are correct.

10:13 a.m.: Sen. JV Ejercito tells Abad "walang personalan" when he asked for Abad's resignation recently.

10:15 a.m.: Ejercito tells Abad fund allocations have to be approved by Congress. He adds that when he was city mayor (of San Juan), whenever they had savings, they had to consult the city council before they could touch it. "Bakit hindi po ganito ang ginawa n'yo? Bakit hindi po kayo pumunta sa Kongreso?" he asks Abad.

10:19 a.m.: Abad explains they have to act right away.

10:24 a.m.: Ejercito asks Abad if he has sought the President's permission for every fund release from DAP. Abad says a memo is given to the President every time.

10:32 a.m.: Abad explains the projects under DAP were not in the General Appropriations Act but these were in "Unprogrammed Appropriations."

10:38 a.m.: Abad says he cannot agree with the notion that President Benigno Aquino III was ill-advised regarding the DAP. "Nagbunga ito."

READ: PNoy not ill-advised on DAP, AbAd insists

10:42 a.m.: Sen. Antonio Trillanes IV asks Abad why many people think the DAP is unconstitutional when in fact only parts of it were declared unconstitutional by the Supreme Court. The senator suggests maybe the "other side" has a better communications strategy.

10:47 a.m.: Trillanes asks Abad if there was any stealing done in connection with DAP. Abad says this is audited and there are procedures in place if any theft is discovered.

10:56 a.m.: Regarding cross-border transfer of funds, Abad says they just respond to requests from other branches of government. He cited the House of Representatives which in the past asked for additional funds for a P245-B e-library project. 

11:00 a.m.: Abad says they will put on the Department of Budget and Management website the list of projects funded by DAP.

11:06 a.m.: Sen. Grace Poe asks Abad how they go about determining which projects are to be funded by DAP. Abad says there are 5 clusters of government that they consider when determining which projects to prioritize.

11:13 a.m.: Poe asks Abad about the P2.7B funds from DAP given to the Bureau of Customs. Finance Secretary Cesar Purisima, seating beside Abad, explains this was used to pay the debt of the BOC. 

11:17 a.m.: Poe asks Abad about the P750M funds from DAP earmarked for Quezon province. Abad explains these were used for such projects as farm-to-market roads, communal irrigation projects, Philhealth enrolment, rural health units construction, rehabilitation of district hospitals, national bridges rehabilitation.

11:24 a.m.: Poe asks DPWH Secretary Rogelio Singson where the present road projects are. 

11:25 a.m.: Drilon, for the record, asks Abad when the present Constitution was ratified. Abad says it was on Feb. 2, 1987. Drilon comments that Abad based his action on the Revised Administrative Code.

11:29 a.m.: Drilon asks Abad if senators received money from the DAP; Abad says no. Only those who have named or identified projects.

11:33 a.m.: Abad says only Senator Panfilo Lacson did not get an allocation for his projects from DAP. In the House of  Representatives, one of those who proposed projects was Bayan Muna. 

11:36 a.m.: DAR Secretary Virgilio delos Reyes clarifies the question whether part of DAP was used to pay Hacienda Luisita claimants.

11:39 a.m.: DPWH Secretary Singson makes an account of the P2 billion allocated for the agency, saying the money was spent on 93 projects. 

READ: Unfinished DAP-funded projects worry executive, Abad admits

11:45 a.m.: Abad clarifies that 70 percent of the DAP money went to infrastructure projects and 12 percent went to social services. 

11:48 a.m.: Drilon clarifies there was a DAP-like savings fund that was used by previous presidents. For instance, Cory Aquino had the so-called Reserved Control Accounts (P70.5B). Also, succeeding presidents had such practice. 

11:51 a.m.: Drilon asks Abad about the so-called cross-border transfer. Abad says that since 1992 such transfers have been done.

11:54 a.m.: Senator Loren Legarda seeks clarification on the DAP as savings. Abad says it is savings because they are not "impounding" the funds, which Abad says is contrary to the SC's appreciation of the fund as impoundment. Previous administration impounded funds as there had been fiscal deficits.

11:56 a.m.: Sen. Legarda asks about the PCOS machines. Abad says:

12:01 p.m.: Senator Nancy Binay asks if resource persons at the hearing had taken oath for what they were saying. Sen. Escudero says it is not necessary as the hearing was not a formal investigation. 

12:10 p.m.:  Binay also asks where the P237-B savings were taken. Abad says from government agencies' allocation for personnel, particularly unreleased personnel services.

12:12 p.m.: Binay asks about the Laguna Lake dredging project.

12:15 p.m.: Binay asks Abad to account for the savings since 2011 up to the present.

12:16 p.m.: Binay asks why the NAIA renovation project was discontinued if the DAP is supposed to accelerate unfinished propjects. 

READ: Nancy Binay questions withdrawal of funds for Congress-approved projects in favor of DAP

12:25 p.m.: Abad says projects were bundled, that's why some projects were delayed.

12:49 p.m.: Binay questions Health Sec. Enrique Ona what's so special about the stem cell research project which got P70M. Ona says it is not special. Binay says the P70M may instead have been used for dengue research instead. She goes on to ask about the P3B savings of the Commission on Audit when in fact there are many vacancies in the agency which have not yet been filled.

1:03 p.m.: Binay asks Abad why Comelec project was not in the list of DAP-funded projects but was given funds through savings. She asks what other projects were like the case of Comelec's. Abad promises to provide the Senate a list.

1:06 p.m.: Escudero asks Abad if they have a term for the program used to cover fund releases from savings not from DAP. Abad says it's just regular savings of the government.

1:09 p.m.: Sen. Bongbong Marcos asks Abad to give the finance committee a list of the sources of the funds used for the DAP, and how and why they were declared savings.

1:14 p.m.: Binay asks Abad why Comelec was given P4.1B. Abad says Comelec Chairman Sixto Brillantes Jr. first asked for P5.228B, the biggest chunk of which was to be used for the purchase and storage of required PCOS machines, synchronized national and local elections, and expenses connected with the overseas absentee voting and Sangguniang Kabataan barangay elections. DBM recommended the release of P4.1B, Abad explains. 

1:31 p.m.: Sen. Sonny Angara asks Abad if the process of budgeting can be transparent to preserve the trust of the people in the government. Abad agrees that public trust is important. "Sumasang-ayon naman kami sa inyo [na kailangan] ang tiwala ng taumbayan... napakahalaga na maibalik natin at maipagpatuloy ang tiwala ng tao sa proseso."

1:48 p.m.: Sen. TG Guingona asks Abad about DAP funds used for projects added to the lump sum items in the national budget. 

2:05 p.m.: Senator Bam Aquino asks if the savings of 2.6 percent was normal. Abad says it's relatively high. 

2:09 p.m.: Sen. Aquino clarifies the concept of  "good faith" and "bad faith" about the DAP. Abad reiterates they acted in good faith in implementing the DAP. 

2:22 p.m.: Sen. Ralph Recto says he does not believe the administration officials had bad faith in implementing DAP. Recto checks with Abad if the savings the government had in the past three years is indeed P237B. Abad says the figure is correct, but it also includes savings from 2010.

2:27 p.m.: Recto says he is wondering why it is only now that the DAP is reflected on the DBM website considering it had been existing for the past three years. He then asks how the P237B in savings came about. Abad says they will provide the Senate with a list, sorting it by department and by expenses.

2:47 p.m: Abad says the definition of savings is based on the General Appropriations Act. 

2:55 p.m.: Recto says he cannot see how the DAP used to pay for a customs project and to help the Bangko Sentral led to more jobs and improvement in the economy.

3:18 p.m.: Abad explains there are realignments that do not require declaration as savings. He adds that declaration of savings as augmentation must be cleared by the president. However Recto says Congress is the deliberative body when it comes to the government budget

3:24 p.m.: Recto asks Abad what in his opinion made the Supreme Court frown on cross-border transfers of funds. Abad says it's the separation of powers among the branches of government. 

3:28 p.m.: Sen. Sergio Osmeña asks, if the Supreme Court allows DAP, will this continue in the next administration? 

3:36 p.m.: Abad explains how government agencies get additional funds from DAP. He says these agencies submit proposals. 

3:44 p.m.: Osmeña says Congress has the power of the purse. He adds the Constitution allows for a budget process that has to be respected. 

3:56 p.m.: Osmeña also noted the DAP was used to finance sitio electrification when there is the Malampaya Fund. He then asks Abad to submit to the Senate a list of collections for and releases from the Malampaya Fund.

3:57 p.m.: Hearing adjourns.

—With Luis Gorgonio/RSJ, GMA News