Abad: SC decision on DAP will no longer hold once Congress redefines savings

(Updated 2:19 p.m.) The Supreme Court's decision disallowing the declaration of savings in the middle of the year will be rendered useless once Congress redefines savings, Budget Sec. Florencio Abad told lawmakers on Wednesday.

At the budget briefing of the Development Budget Coordinating Committee at the House of Representatives, Abad said Malacañang wants Congress to redefine savings because Palace officials "do not think the Supreme Court appreciates very well the task of budget execution."

When asked by Bayan Muna party-list Rep. Neri Colmenares if the high court's decision on the controversial Disbursement Acceleration Program (DAP) will no longer hold once lawmakers passes a law redefining savings, Abad said yes.

"The Constitution mandates that the Congress define what savings is, not the Supreme Court," he said.

The practice of declaring savings before the end of the year was one of the acts under DAP that the Supreme Court declared unconstitutional as it violated the definition of savings in past appropriation acts.

Savings

According to the high court, the Aquino administration had violated the 1987 Constitution when it collected "savings" from executive offices and distributed them to lawmakers to fund projects not approved in the budget.

The Supreme Court ruled that savings could only be declared at the end of each fiscal year when the purpose of funds has been satisfied, or when the need for such funds had ceased to exist.

The decision pitted that Supreme Court with Malacañang and has resulted in at least two impeachment complaints against President Benigno Aquino III and widespread calls for the resignation of Abad.

Malacañang has repeatedly said that the DAP was undertaken in good faith to boost the country's economic performance. The President likewise rejected Abad's resignation offer.

Following the Supreme Court decision, the Executive changed the definition of savings in the proposed 2015 national budget to mean portions of allocations that "have not been released or obligated" due to "discontinuance or abandonment of a program, activity or project for justifiable causes, at any time during the validity of the appropriations."

Rigidities

On Wednesday, Abad said the Supreme Court’s decision has created “some rigidities” that bar the Executive from dealing with contingencies such as the abandonment of a government project.

He said that as the country’s chief executive officer, the President needs to have some leeway in declaring when unprogrammed funds should be declared as savings since it will be virtually impossible for government agencies to implement and complete certain projects within the year if savings are only allowed towards the end of the year.

This, he said, may cause vital government projects to drag on for years.

“The average procurement period for infrastructure projects is six months, sometimes it can even be as long as a year. If a project is obligated sometime in November, procurement will take six months, which would then mean its implementation may begin at the second quarter of the following year. Since implementation takes six months to one year, a project may be completed [after] three years, not one year,” Abad said.

Contrary to his critics’ claim that Aquino has become more powerful because of his wide discretion over which funds could be declared as savings, Abad said Aquino has in fact ceded “a lot of powers” by requiring agencies to disaggregate their budgets.

Aside from this, Aquino has also ordered scrapping Special Allotment Release Orders (SAROs) and budget matrices, and the adoption of a performance-informed budgeting system that requires agencies to be more transparent about the progress and outcome of their projects.

“If you look at the reforms that the president is implementing, you’d see that he’s ceding a lot of authority in the name of efficiency and transparency,” Abad said. — KBK/RSJ, GMA News