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SC partly upholds striking down DAP, allows funding for off-budget items

(Updated 10:15 a.m., Feb. 4) The Supeme Court has partially granted the government's motion for reconsideration on the case involving the controversial Disbursement Acceleration Program, removing one act from the list of those previously declared as illegal and ruling that only authors of DAP projects could be held liable.

In a media briefing Tuesday, Supreme Court Public Information Office chief Theodore Te said the SC en banc lowered the number of unconstitutional acts under the DAP from four to three.

Under its new ruling, the SC allowed "the funding of projects, activities and programs that were not covered by any appropriation in the General Appropriations Act."

In its original July 1 ruling, that act was considered illegal along with these three:

- the withdrawal of unobligated allotments from the implementing agencies, and the declaration of the withdrawn unobligated allotments and unreleased appropriations as savings prior to the end of the fiscal year and without complying with the statutory definition of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

- the cross-border transfers of the savings of the executive to augment the appropriations of other offices outside the executive; and

- the portion of the DAP that allows the use of unprogrammed funds even without a certification from the National Treasurer saying that revenue collections exceeded the revenue targets due to non-compliance with the conditions provided in the relevant GAA.

In the latest ruling, the SC said that funding for programs not covered by the GAA is considered constitutional "so long as there is an item in the GAA for which Congress had set aside a specified amount of public funds."

It added that there is no requirement in the Constitution or the GAA that the subject of augmentation should be the expense category or allotment class.

The SC, however, clarified that its "modified interpretation nonetheless does not take away the caveat that only DAP projects found in the appropriate GAAs may be the subject of augmentation by legally accumulated savings."

The SC also asserted that its decision did not declare the "en masse invalidation" of the 116 DAP-funded projects.

"Whether the 116 DAP funded projects had appropriation cover and were validly augmented require factual determination which is not within the scope of the present consolidated petitions," it said.

Asked by the media if the modification could be interpreted as a "slight relaxation" of the original July 1 ruling, Te said he would rather brand it as partial modification.

The DAP became an issue after Senator Jinggoy Estrada bared that he and other senators who voted to convict former Chief Justice Renato Corona in May 2012 received P50 million each in additional funds—later found to be part of DAP funds—months after Corona's impeachment trial.

Good faith

In its original ruling, the SC invoked the "doctrine of operative fact," which states that the existence of the law or executive act is recognized prior to the determination of its unconstitutionality as an operative fact that produced consequences that cannot always be erased, ignored or disregarded.

The SC said even if acts and practices under DAP had been declared illegal, the doctrine of operative fact would dictate that all the plans and projects that stemmed or benefitted from it should not be undone, as long as they were implemented in good faith.

The SC also stressed in its original ruling that authors, proponents and implementors of the DAP could be held liable since they are not protected by the doctrine of operative fact, "unless there are concrete findings of good faith in their favor by the proper tribunals determining their criminal, civil, administrative and other liabilities."

But in its latest ruling, the court made a modification and removed the words "proponents" and "implementors," leaving only "authors" of the DAP as those who could possibly be held liable.

"The Court also decided to clarify the language it used insofar as those subject to the consequences of the operation of the Operative Fact Doctrine by removing 'proponents and implementors' and leaving only 'authors' within the ambit of its coverage," it said.

"Kung may ma-identify na author, iyon ang sinasabi ng korte na posibleng managot," Te said during the briefing.

The SC also stressed that the presumption of good faith in the implementation of DAP-related projects still stands in its latest ruling.

Meanwhile, the SC denied a separate reconsideration plea from Greco Belgica seeking to invalidate all the Programs, Activities, Projects (PAPs) under the DAP. "The PAPs under the DAP remain valid under the operative fact doctrine," it said.

‘De facto reversal’
Meanwhile, presidential spokesman Secretary Edwin Lacierda, quoting Solicitor General Florin Hilbay, called the SC decision to partially grant the executive’s plea as a “de facto reversal” of the high court’s earlier ruling on the DAP.
Lacierda also noted that the SC had cited with Malacañang in presuming “good faith” in DAP implementation.
“The presumption of good faith has been preserved and emphasized, which clarified the previous impression that the authors are presumed to be in bad faith,” he said.
The Palace official further said that the SC “has upheld the doctrine of operative fact, which declared all acts are valid until they are declared unconstitutional.”
Last year, President Benigno Aquino III publicly assailed the SC for its original DAP ruling, maintaining that his administration undertook the economic stimulus program to benefit Filipinos.

Reconsideration plea

In its motion for reconsideration filed July 18, 2014, the executive branch, through the Office of the Solicitor General (OSG), insisted that withdrawn unobligated allotments and unreleased appropriations under the DAP were considered savings, contrary to what the SC said in its original ruling.

The OSG also said that declaring that savings may only be incurred at or near the end of the year and requiring that all year-end savings must go to the National Treasury "is to operationally defeat the President's power to augment."

The OSG also claimed that the high court has no constitutional authority to set a limit on how much the President can augment an item.

In its latest ruling, the SC insisted that the withdrawal and transfer of unobligated allotments remains unconstitutional. "Whether the withdrawn allotments have actually been reissued to their original programs or projects is a factual matter determinable by the proper tribunal," it said. —KBK/NB/RSJ, GMA News