Neda: DAP accelerated 2012, 2013 growth

Categories: Business Updates

Date Posted: 25 Jul 2014

The Philippine economy would have posted a slower growth in 2012 and 2013 had not been for the funds released through the controversial Disbursement Acceleration Program (DAP), according to the National Economic and Development Authority (Neda).

In the Senate Finance Committee hearing on Thursday, Socioeconomic Planning Secretary Arsenio M. Balisacan Jr. disclosed that the DAP added 1.69 percentage points and 1.19 percentage points to the expansion of the gross domestic product (GDP) in 2012 and 2013, respectively.

This means, Balisacan said, the Philippine economy would have only registered a growth of 5.11 percent in 2012 and 6 percent in 2013 without the DAP. The actual growth in 2012, with the DAP, was 6.8 percent and in 7.2 percent in 2013.

“We evaluated the program as a whole. We looked at the projects whether they are final expenditure of government or public infrastructure or program of government because they are different. If we look back to 2011, 2012 and 2013 and assess the impact of the program, we will be able to show that although this program was started in 2011, the big impacts happened in 2012 and 2013 because of the lag time for implementation,” Balisacan said.

However, civil-society groups like SocialWatch Philippines, which was among the petitioners against the DAP, believed that government officials such as Budget Secretary Florencio Abad should be held accountable for the DAP.

The group believed that Abad and President Aquino were the architects of the DAP. The group added that Abad, himself, declared during the Supreme Court hearings that Budget Circular 541, the official document which established the DAP, was crafted upon the instruction of the President.

“Our petition focuses accountability on the secretary of the Department of Budget because the circular was crafted by his office and signed by him. Do we hold the President accountable for the actions of his Cabinet? However, what is obvious is that the President has publicly defended the DAP. It is the responsibility of the Executive to defend the constitution. Has the constitution been defended? No. DAP offends the Constitution,” Former National Treasurer and SocialWatch Philippines Lead Convenor Leonor Magtolis-Briones said.

“We’re going to examine the decision in detail but several issues are clearly unconstitutional; the separation of the branches of government, cross-border transfers of funds, funding of items not in the General Appropriations Act, the use of unprogrammed funds, and how ‘savings’ were defined and declared,” she added.

Private think tank Ibon Foundation debunked the government’s claim that DAP spurred growth.

Sonny Africa, executive director of Ibon, said, DAP, in which the government has allocated P150 billion, could not be considered as an economic stimulus “quantitatively and qualitatively.”

“There was no additional budget or fund, unemployment and poverty are at record highs; it did not spur economic activity,” he said.

Ibon held a news briefing in Quezon City on Thursday at the same time Abad appeared at a Senate public hearing to defend DAP.

According to Africa, the DAP has no impact even in rural areas where some P5 billion had been spent, not for farmers, but for land owners’ compensation, including the Hacienda Luisita formerly owned by Aquino’s family in Tarlac, he said.

At a glance, some of the DAP projects listed by the Department of Budget and Management (DBM), he said are even questionable, citing for instance the “It’s More Fun in the Philippines” public-relations campaign and the beautification for the World Economic Forum and Asia Pacific Economic Cooperation hosting, which received an allocation of P1 billion.

The said project involved a global media campaign and “window dressing” for the events to be held next year, in which spending was for advertisements outside the country, he said.

The P9 billion allocated for public-private partnerships and the Commission on Higher Education, Ibon said, was for immediate payments to big business groups for school buildings and on higher education.

The group listed some of the questionable projects that were allocated with huge amount of money through DAP. These include the P17-billion “legislative pork” for “priority local projects nationwide requested by lawmakers, local government officials and national agencies; Executive Pork [P35 billion], which was allotted for various priority or other infrastructure projects, support fund, performance challenge fund, for local government units, peace and development works in armed conflict areas and capacity building for non-governmental organizations and people’s organizations; and P40 billion for Bangko Sentral ng Pilipinas.

IBON also question the P8 billion spent for government offices and equipment; new equipment and systems; the military, police and coast guard and government media and film support; P13 billion for the public works department and other agencies, including P2 billion for Tarlac roads, which involved infrastructure spending for a rail transport, roads and bridges, water and rural electrification; P6 billion for irrigation, agrarian-reform communities, credit and mechanical dryers, by the departments of Agriculture and Agrarian Reform; P1 billion for corporatized hospitals and contractual nurses; P11 billion for National Housing Authority spending mainly for on-site development and resettlement; P3 billion for business-process outsourcing (BPOs) and government hires which involved spending on direct government hiring, training for BPOs, workers and labor standard compliance.

Africa said in order for government spending to be considered a stimulus, it should create jobs and livelihood and boost economic activities, with the end view of alleviating poverty.

“Their defense of DAP was obviously meant to justify its use,” he said.

(With Jonathan l. Mayuga)


Written by: Cai U. Ordinario


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