Abad letter to Speaker Belmonte defines ‘savings’ in controversial DAP

Four days after President Benigno Aquino III delivered his 5th State of the Nation Address last July 28 where he asked Congress to clarify the meaning of "savings" in the controversial Disbursement Acceleration Program, Budget Secretary Florencio Abad wrote a letter to House Speaker Feliciano Belmonte Jr. explaining how savings should be defined.

Abad's letter to Belmonte, dated August 1, was only sent to members of the media on Wednesday by opposition leader Navotas Rep. Tobias Tiangco.

Attached accompanying letter was a copy of a proposed bill drafted by the Department of Budget Management (DBM) titled: “An Act Clarifying the Definition of Savings and Related Concepts and the Use and Release of the Unprogrammed Fund in the Appropriations Laws and Validating the Implementation Thereof by the Executive Branch.”

Under DBM’s proposal, savings is defined as “portions or balances of any programmed items of appropriations in the appropriation laws, identified as either a program including any activity covered under it, or project, which have not been released or obligated.”

Reasons for the non-release of the funds include: discontinuance or abandonment of a project, non-commencement of the program, and the decreased cost realized by an agency as a result of the improved implementation of programs, the letter added.

Also, it said that "savings" may likewise refer to unreleased appropriations accrued anytime during the fiscal year from unused personnel-related costs pertaining to unfiled, vacant or abolished positions; non-entitlement to allowance and benefits; leaves of absence without pay, or unutilized pension and retirement benefits arising from death of pensioners, decrease in the number of retirees or other related causes.

Moreover it said, unspent funds for programmed projects may be pooled as savings as early as the middle of the year according to the new definition of savings in the draft bill.

According to Abad's letter: “The proposed bill intends to clarify the legislative intent on what constitutes savings and the rules on augmentation, and when the Unprogrammed Fund may be utilized pursuant to the authority of Congress to legislate the foregoing concepts.”

“This will effectively clarify the effects of the Supreme Court decision in the consolidated case of Maria Carolina P. Araullo et. Al. vs. Benigno Simeon Aquino III, et. al,” the letter added.
 
Abad asked Belmonte to consider the proposal a priority bill “given its impact on the disbursement of public funds following the above-cited decision.”

The draft bill may be filed by any House member.

'Savings' questioned
 
The definition of savings has been questioned amid the controversy in the Aquino administration’s DAP.

In a unanimous vote in July, the Supreme Court declared as unconstitutional certain acts committed under DAP, such as the withdrawal of unobligated allotments from the implementing agencies and their declaration as savings prior to the end of the fiscal year and without complying with the statutory definition of savings contained in the General Appropriations Act.

But Malacañang, through the Office of the Solicitor General, had filed a motion for reconsideration asking the Supreme Court to reverse its ruling.

Retroactive, curative application

As stated in Section 7 of the DBM’s proposal, the rules on savings and augmentation will have a “retroactive and curative application” should the draft bill become a law. This means its coverage will effectively extend to DAP.

Section 7 reads: "To dispel any doubt as to this legislative intent, the provisions in this Act shall be retroactive and curative in nature. Accordingly, all previous acts relating to the definition of savings, the rules on augmentation and other related concepts, as well as the use and release of the Unprogrammed Funds made, applied, consummated, executed, undertaken, and implemented prior to the passage of this Act are hereby confirmed, ratified and validated."

Also, priority in the use of savings shall be given to the augmentation of the amounts set aside for the payment of compensation, year-end bonus and cash gift, retirement gratuity, terminal leave benefits, old-age pension of veterans and other personnel benefits authorized by law, as well as the implementation of priority projects and programs.

Avoiding criminal liability

Tiangco told reporters he is doubtful of Abad's true intentions in writing to Belmonte and submitting the DBM's draft bill, as the Budget Secretary appears to be using Congress to avoid criminal liability for implementing the DAP.

"Why will he insert a clause in the bill about the retroactive and curative effect of the definition of savings if he believes he did not do anything wrong? it appears he wrote to the Speaker to ask him to save his neck," he said.

Out of judicial courtesy, Abad should have waited for SC to hand down its final verdict on DAP before pursuing legislative remedies, the lawmaker added.

Even though the House of Representatives is controlled by the President's allies, Tiangco said he is hopeful his colleagues will not support the DBM's draft bill as its passage would be "degrading" to Congress.

"It will appear as if we don't know how to read and think if we allow this bill to pass," he said.

Belmonte defends Abad's bid

But contrary to Tiangco's claims that Abad made a questionable action by submitting a draft bill to Congress, Belmonte said, "It wasn't wrong for him (Abad) to do it, but [the proposal] is still subject to our study and acceptance."

During the presentation of the proposed 2015 national budget last July, Belmonte said defining savings will be the prerogative of Congress since it does not have a constitutional definition.

But ealier Abad said Congress may no longer need to pass a supplemental budget for 2014 if it is able to clarify the definition of savings.

For his part, Eastern Samar Rep. Ben Evardone, who recently filed a bill redefining savings, also said he does not see anything wrong if Abad proposes a new definition of the unprogrammed funds to lawmakers.

"Congress, with its constitutional mandate of the power of the purse, is only exercising this power by defining savings. It has also the inherent power to enact and amend law. This was in fact acknowledged by the SC in its decision. I think [Sec. Abad] has no intention to skirt the SC decision [by] submitting the DBM's own version of what savings means," he said in a text message to reporters.

Aquino ally Cavite Rep. Elpidio Barzaga Jr. also said Abad is free to propose to Congress a different meaning of savings as there is no law barring a Cabinet member from submitting a draft legislation. He also criticized Tiangco for assuming "prematurely" that the Budget Secretary may be criminally liable for implementing DAP.

"Sec. Abad proposed a definition of savings primarily to [enable the government] to immediately use savings for the implementation of projects and activities. It was not because he wants to be absolved of any criminal liability since he did not commit any crime," he said. — LBG, GMA News