eagle eyes and rappler series on the disbursement acceleration program

7/26/2019 Eagle Eyes and Rappler Series on the Disbursement Acceleration Program

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Eagle Eyes and Rappler series on the Disbursement Acceleration Program (Part 1)

July 27, 2014 at 1:55am

This note compiles in chronological order all my columns and think pieces on the DAP. I am reposting them as a

group so the reader would have a bigger and more comprehensive picture of the issue. The compilation also

illustrates the evolution of my thinking on this issue. Together with my writings on the PDAF scandal, these writings

will form the core of a book I am writing tentatively entitled: "Reform and revolution: PDAF, DAP, and other budget

wars"

Hard questions on PDAF and DAP(Rappler, October 8, 2013)

On Tuesday, October 8, the Supreme Court will begin weighing in on the corruption crisis currently engulfing the

country. Rightly so.

If there is any issue that needs the intervention of the Supreme Court, the constitutionality of the Priority

Development Assistance Fund should be on top of the list. Later I will argue that the same can be said of the

Disbursement Acceleration Program (DAP).

In both cases, big questions about separation of powers, with implications on public accountability, need to be

answered, and in the end, only the Supreme Court can answer them.

The 1987 Constitution is very clear about the role of the judiciary in our republic. Article 8, Section 1 states: The

judicial power shall be vested in one Supreme Court and in such lower courts as may be established by law.

The same provision further introduces what scholars have called expanded judicial power of review: Judicial powe

includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandabl

and enforceable, and to determine whether or not there has been a grave abuse of discretionamountingto lack o

excess of jurisdiction on the part of any branch or instrumentality of the Government.

Every first year law student knows the provenance of the power of judicial review. We borrowed it from the United

States where the Supreme Court in the 1807 case of Marbury vs Madison effectively elevated itself higher, at least

interpreting the Constitution, than the executive and legislative branches. According itself this role of constitutionalumpire, according to the US Supreme Court then, was a natural consequence of being the judge of disputes.

Chief Justice Marshalls immortal words, which I require my constitutional law students to memorize, are self-

explanatory: It is emphatically the province and duty of the judicial department to say what the law is. Those who

apply the rule to particular cases, must of necessity expound and interpret that rule. If two laws conflict with each

other, the courts must decide on the operation of each. So if a law be in opposition to the constitution; if both the la

and the constitution apply to a particular case, so that the court must either decide that case conformably to the law

disregarding the constitution; or conformably to the constitution, disregarding the law; the court must determine wh

of these conflicting rules governs the case. This is of the very essence of judicial duty.

Final arbiter

In 1936, in the case of Angara vs Election Commission, the Philippine Supreme Court speaking through the gre

Justice Jose P. Laurel (who later became president) defined the power of judicial review in our system. Laurel

described the Supreme Court as the final arbiter, effectively checks the other departments in the exercise of its

power to determine the law, and hence to declare executive and legislative acts void if violative of the Constitution.

He pointed out that the Constitution has blocked out with deft strokes and in bold lines, allotment of power to the

executive, the legislative and the judicial departments of the government. The overlapping and interlacing of functio
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and duties between the several departments, however, sometimes makes it hard to say just where one leaves off a

the other begins. In times of social disquietude or political excitement, the great landmarks of the Constitution are a

to be forgotten or marred, if not entirely obliterated. In cases of conflict, the judicial department is the only

constitutional organ which can be called upon to determine the proper allocation of powers between the several

departments and among the integral or constituent units thereof.

During the martial law years, President Marcos curtailed this power and shamefully the Court frequently acquiesce

by using the doctrine of political questions, i.e., that there are controversies better left to the political branches of

government or to the people to decide and that, in such cases, the Court must stay out of the picture.

The Marcos experience is what prompted the 1986 Constitutional Commission to introduce the expanded power o

judicial review. The framers, which included former Chief Justice Roberto Concepcion (known for standing up agai

Marcos in the early days of martial law) and the countrys most prominent constitutionalist Fr. Joaquin Bernas SJ,

specifically intended this provision so that the Supreme Court will not shy away from the big questions of the day o

the excuse of political questions.

This, then, is likely to be the first question that the Supreme Court will tackle in the oral arguments on the PDAF ca

that has been filed before it. Should it even get involved as this clearly, is a matter involving Congress and the

President who have agreed to set up this budgetary mechanism called the PDAF? Is this a policy question that is

best left to the political branches or is there a constitutional principle that has been breached in the formulation of t

PDAF as well as in its execution?

Black-letter law vs operational code

This is not the first time that the Supreme Court will look at the constitutionality of the pork barrel. In the case

ofPhilippine Constitution Association v Enriquez, decided in 1994, the Supreme Court concluded that the

Countrywide Development Fund (CDF), a fund similar to the PDAF, was constitutional because the authority given

the members of Congress under it was merely recommendatory. In fact, the Court praised The CDF as a way ofequalizing the unequal.

The impression that legislators only make recommendations was not entirely accurate. We saw this in the anomali

in the CDF exposed by thePhilippine Daily Inquirer, which benefited from revelations by the late Marikina

Congressman Romeo Candazo. We see that again in the current PDAF scandal where legislators actually meddle

with implementation, among others, we know now, by endorsing favored contractors and/or NGOs.

As it deliberates on the case before it, the Supreme Court might benefit from the distinction that Professor Michae

Reisman of Yale Law School (disclosure: Reisman was my mentor in that school), makes between black-letter law

(the official policies, rules and regulations) and the operational code (how things really work).

It is likely that the PDAF, as the CDF then, would pass scrutiny if one limited itself to the black letter law. That is the

defense of the legislators who have been criminally accused: we were only endorsing NGOs; its the fault of the

agencies.

If the operational code were reviewed by looking at actual implementation, and thankfully we have the reports of th

Commission on Audit, among others, to do that systematically, the result could be different. For example, is there a

egal significance to the fact that endorsements by legislators were required before releases of funds were made?


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Patronage politics?

Even before this recent scam exploded, so many safeguards were already in place, including the Procurement Act

R.A. 9184 and many COA issuances, yet the operators still managed to circumvent them with impunity. Looking at

the reasons why this happened might be helpful as the Court decides the case.

When the PDAF scam first came to light, I proposed a 3-pronged control-entitlement test for the abolition of the po

barrel or for its authentic reform if it cannot be totally eliminated: (1) How is the project to be decided? Is it solely th

egislator's discretion? (2) Is there an entitlement to the fund? In other words, does the legislator believe that s/he h

control of the fund? (3) Does the legislator have a say on who implements the project and how it is implemented?

That is, can s/he influence who the agency/implementor/contractor will be?

A yes answer to these questions means there is no iron wall between the executive and legislative branches of

government and that patronage politics lives on.

DAP

Turning now to the legality of the Disbursement Acceleration Program (DAP), it is clear that the weight of legal

opinion is on the side of unconstitutionality. Sen Miriam Santiago, for example, has asserted that the Constitution

allows fund transfers, only if there are savings, meaning that the project was completed, and yet the appropriation

was not exhausted; but there are no savings if a project was merely deferred.

She observed that it appeared that DAP funds were taken from alleged slow-moving projects. If so, no savings we

generated, and thereforeDAP is illegal. She was seconded by former Sen Joker Arroyo who said that the

Disbursement Acceleration Program (DAP) was neither provided for under the General Appropriations Act nor in a

of the countrys laws.

Professor Benjamin Diokno, a globally recognized budget expert and himself a former budget secretary, has spokevery strongly against the DAP. In a television interview reported on by Rappler, he observed that the realignment o

savings to non-existing budget items in the General Appropriations Act resulted in the creation ofa budget within

budgetwithout Congressional action.

Rappler reported Diokno as saying, "Ito bastusan eh... Ang ginawa ngexecutive is that they sliced and diced the

budget and repackaged it and came out with a new budget which is P72-billion worth." (What the government did

was rude. The executive branch sliced and diced the budget and repackaged it and came out with a new budget

which is P72-billion worth.)

In the same interview on ANC, Fr Joaquin Bernas agreed with Diokno that savings should only be spent to augmeexisting line items in the budget. Bernas also identified the enabling conditions for realigning savings. "One, you ha

to have savings. Two, if these savings are to be transferred, they have to be transferred in the same department."

On the other side of the issue, Bernas colleague in the Ateneo Law School, Atty Mel Sta. Maria has a different tak

on the matter, saying that it is nothing else but the disbursement of funds sourced from savings of a particular item

fund a deficit in another item for the purpose of immediately accomplishing a priority activity.

According to Sta. Maria, this makes the DAP legal and constitutional, in his words: The only transfer that cannot b

made in this process is a transfer of saved-funds from one great government department to another. Hence, the
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President cannot transfer executive funds to the judiciary, the judiciary to the executive, the judiciary to the

egislature, the legislature to the executive, the executive to the legislature. To do so would be unconstitutional. But

within the executive branch, which is composed of so many departments, the President may do so pursuant to the

Constitution and the Administrative Code. In fact, the Constitution also explicitly grants the Chief Justice, the Sena

President, the Speaker of the House, the head of Constitutional bodies the same powers within their departments.

My take

I have been asked by many where I stand on this issue, whether I will go with the more senior and famous

constitutional minds such as Bernas, Santiago and Arroyo, or with Sta. Marias interpretation.

On the case of DAP disbursement decisions made purely by the executive branch, there is a color of legality

precisely because the President has the power to realign savings. However, with respect to those DAP

disbursements made upon recommendation by senators and other legislators, I will draw the line and conclude tha

these were illegal.

This is consistent with what happened to funds allocated to legislators through the PDAF and explains why again

corruption rears its ugly head in such DAP disbursements. This is again because of the inherent fault of the

egislators being allowed to cross the line with respect to implementation.

In the case of the PDAF that this was part of the approved budget and the link between legislator and funds was

clear this was understandable even if wrong. But in the case of the DAP, there is no rationale at all for allowing t

egislators to identify projects. What happened here? Why did the executive department allow this to happen?

In this sense, I have come to the conclusion that the DAP overall can be legally defended but what cannot be justifi

egally, and I think ethically, given the context of the Corona conviction, is allowing the senators to identify even mo

projects than they already did with their PDAF. That reeks ofquid pro quo. I do not think it is criminal bribery but it

does not look or smell right.

Broken system

That we even find ourselves in this debate is symptomatic of how broken our system of government is. It indicates

complete breakdown of controls, which puts into question our very system of government. The virulence of corrupt

has seriously tainted vital government institutions among others, Congress, executive departments, agencies,

government and controlled corporations and local government units.

It also puts into question the existing auditing, budgeting processes, procedures and control mechanisms. With

cases now being filed, our justice system will also be put to the test. The Pandoras Box has been fully opened. Anthe P10-billion Napoles pork barrel and the Malampaya funds scandals are just a tip of the iceberg, chances are,

more gargantuan scams involving public funds are waiting to be uncovered.

For all the moral anguish and outrage that Filipinos are going through, I see a silver lining here. The pain could hav

a cathartic effect. Had these scandals not been unearthed, the corrupt would continue with their merry ways,

wrecking more serious havoc along the way. But now, the guilty must be quaking in their feet. The fuse ignited by

Benhur Luy and the other whistleblowers will definitely result in an explosion that will rack the country to its very

foundations. But in the end, it will give us an opportunity to rectify our broken system of governance; and, if we lea

from all of this, it is a precious opportunity to correct past mistakes to allow for a better society to emerge.


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Or we could go off the cliff and never have a chance like this again.

Can the DAP be saved?(Eagle Eyes, October 22, 2013)

This afternoon, the Supreme Court once again hears a controversial case, this time on the constitutionality and

egality of the Disbursement Acceleration Program of the Aquino government. A formidable group of petitioners an

their counsels will argue the case against the DAP. These includes, among others, the Philippine Constitutional

Association, distinguished public finance experts like former Budget Secretary Benjamin Diokno and former Nation

Treasurer Leonor Briones, and individuals and groups from the progressive political coalition Makabayan. The

Solicitor General and his team of excellent lawyers will of course take the cudgels for the administration.

The stakes are higher for the Aquino administration and the country in this case, much higher, I suspect, than the

PDAF case argued a couple of weeks ago. In that case, what was at stake was simply the funding of projects of

egislators. In that case too, there was a clear legal basis in the General Appropriations Act in the PDAF

disbursements.

In the DAP, we are talking of much larger expenditures and for projects of much higher priority than the pet project

of the legislators. In addition, the DAP is not in the GAA or any law, not even in an executive or other presidential

order, and its sole justification is the constitutional provision that allows the president to augment from savings othe

appropriated items.

Turning now to its legality, as I have observed before, the weight of legal opinion seems to be for its

unconstitutionality. Senator Miriam Defensor Santiago has pointed out that the Constitution allows fund transfers,

only if there are savings, meaning that the project was completed, and yet the appropriation was not exhausted; bu

there are no savings if a project was merely deferred. She observed that it appeared that DAP funds were taken

from alleged slow-moving projects. If so, no savings were generated, and therefore DAP is illegal.

Disagreeing with Santiago, Ateneo Law Professor Mel Sta. Maria, in an opinion piece for the TV5 website, arguesthat the DAP is nothing else but the disbursement of funds sourced from savings of a particular item to fund a defic

in another item for the purpose of immediately accomplishing a priority activity. This makes the DAP legal and

constitutional. In his words: The only transfer that cannot be made in this process is a transfer of saved-funds from

one great government department to another. Hence, the President cannot transfer executive funds to the judiciary

the judiciary to the executive, the judiciary to the legislature, the legislature to the executive, the executive to the

egislature. To do so would be unconstitutional. But within the executive branch, which is composed of so many

departments, the President may do so pursuant to the Constitution and the Administrative Code. In fact, the

Constitution also explicitly grants the Chief Justice, the Senate President, the Speaker of the House, the head of

Constitutional bodies the same powers within their departments.

Fr. Joaquin Bernas SJ, in an interview with ANC, seems to agree with Santiago asserting that savings should only

spent to augment existing line items in the budget. Bernas also identified the enabling conditions for realigning

savings. One, you have to have savings. Two, if these savings are to be transferred, they have to be transferred in

the same department. Later, in his column in the Philippine Daily Inquirer, Fr. Bernas observed that the outcome

the controversy on the DAP will depend on the answer to factual questions: Did he transfer savings and where d

he put them?

I think Fr. Bernas asks the right questions that must be answered in the affirmative if the DAP is to survive

constitutional scrutiny. More concretely, I would ask: Are funds transferred in the middle of the year savings


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because of slow-moving projects constitute savings? And, were the projects augmented funded by and already

identifies the GAA?

As for me, in the case of DAP disbursement decisions made purely by the executive branch, there is a color of

egality precisely because the President has the power to realign savings. I think however that it would have been

more prudent if the President issued an executive order or other presidential issuance that established the DAP.

Without that, the administration has been able to communicate its message clearly and effectively, leaving even its

supporters confused about the DAP. In fact if the administration intends to continue with this approach in

disbursement, particularly in response to the recent disaster in Zamboanga and Bohol, then they should issue suc

an executive order. However, I would counsel that it completely abandon the term DAP as it has become so tainte

and controversial that it cannot be rehabilitated. All political analysts and communicators know that the best way to

end a controversy is to change the conversation.

As to DAP disbursements that were made upon recommendation by senators and other legislators, I believe that

these were illegal and in the case of the senators clearly improper.

In the case of the PDAF, there is a presumption of constitutionality because of the GAA and the prior Supreme Co

decisions. But in the case of the DAP, there is no legal basis at all for allowing the legislators to identify projects.

Corruption also tainted DAP disbursements because, as in the case of the PDAF, the legislators were allowed to

cross the line with respect to implementation.

As for the Senators, from an ethical point of view, given the context of the Corona conviction, allowing the senators

identify even more projects than they already did with their PDAF reeks of quid pro quo. It may not be criminal or

impeachable bribery but it definitely does not look or smell right.

Can the DAP be saved? The better question I think is should it be?

Understanding the DAP Decision(Eagle Eyes, July 5, 2014)

The Supreme Court decision declaring certain acts under the Disbursement Acceleration Program (DAP)

unconstitutional is potentially revolutionary. Combined with the decision last year on the Priority Development

Assistance Fund, where the Court declared most forms of pork barrel illegal, this latest decision could permanently

change the way the government makes decisions about budgeting and spending public funds in this country.

Because the national budget is the backbone of governance, the implications from the DAP decision are expected

be profound.

Because of its significance, I will be writing a series of columns on the DAP decision. This first column describes th

DAP and the constitutional context of its creation. Next Tuesday, I will write about the unanimous decision of the

Court, how it came about and what are its implications. This will be followed by a third column on accountability,

including whether impeachment or criminal charges are in the horizon. I will end the series contrasting two

approaches to the DAP casethat of the most senior justice of the Court, Justice Antonio Carpio, and the views o

its youngest member, Justice Marvic Leonen. Both Justices give important, valid insights on the challenges of

governance and convinced me that the country is in good hands with respect to the highest court of the land.

At the vortex of the DAP controversy is Section 29(1) of Article VI of the 1987 Constitution that firmly ordains that

[n]o money shall be paid out of the Treasury except in pursuance of an appropriation made by law. In assailing th

DAP, the petitioners argue that the DAP contravened this provision by allowing the Executive to allocate public


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money pooled from programmed and unprogrammed funds of its various agencies in the guise of the President

exercising his constitutional authority under Section 25(5) of the 1987 Constitution to transfer funds out of savings

augment the appropriations of offices within the Executive Branch of the Government. It was alleged further that

transfer of funds were made to agencies or offices outside of the Executive.

The DAP is described by the Department of Budget and Management as a stimulus package under the Aquino

administration designed to fast-track public spending and push economic growth. This covers high-impact budget

programs and projects which will be augmented out of the savings generated during the year and additional reven

sources.

According to Budget Secretary Butch Abad, the DAP is not just about the use of savings and unprogrammed fund

it is a package of reformed interventions to de-clog processes, improve the absorptive capacities of agencies and

mobilize funds for priority social and economic services.

In a 2013 speech, President Aquino mentioned that the stimulus package was successful in ensuring that progra

delivered the greatest impact in the most efficient manner. He said that the stimulus packages contribution of 1.3%

percentage points to gross domestic product.

The DAP was brought to light when Senator Jose Jinggoy Estrada delivered a privilege speech in the Senate of t

Philippines revealing that some members of the Senate had been allotted an additional P50 million each as

incentive for voting in favor of the impeachment of Chief Justice Renato C. Corona. Responding to the expose,

Secretary Abad explained that the funds released to the senators had been part of the DAP and clarified that the

funds had been released to the Senators based on their letters of request for funding; and that it was not the first t

that releases from the DAP had been made because the DAP had already been instituted in 2011 to ramp up

spending after sluggish disbursements had caused the growth of the gross domestic product (GDP) to slow down.

Secretary Abad disclosed that the funds were taken from (1) unreleased appropriations under Personnel Services

(2) unprogrammed funds; (3) carry-over appropriations unreleased from the previous year; and (4) budgets for slow

moving items or projects that had been realigned to support faster-disbursing projects. The DBM justified the fundsrelease from the DAP by citing the following legal bases, namely: (1) Section 25(5), Article VI of the 1987

Constitution, which granted to the President the authority to augment an item for his office in the general

appropriations law; (2) Section 49 (Authority to Use Savings for Certain Purposes) and Section 38 (Suspension of

Expenditure Appropriations), Chapter 5, Book VI of Executive Order (EO) No. 292 (Administrative Code of 1987);

and (3) the General Appropriations Acts (GAAs) of 2011, 2012 and 2013, particularly their provisions on the (a) us

of savings; (b) meanings of savings and augmentation; and (c) priority in the use of savings.

These disclosures precipitated the filing of nine (9) petitions assailing the constitutionality of the DAP.

DAP, not impoundment of budget(Eagle Eyes, July 8, 2013)

This is the second of a series of columns on the Disbursement Acceleration Program. Today, I focus on the

reasoning of a unanimous Supreme Court that declared some acts implementing the DAP constitutional.

Take note that the DAP itself was not declared unconstitutional. As a development policy and with the objectives it

sought to achieve, DAP could not be and was not nullified. What the Court did was to identify those acts

implementing the program that contravened the Constitution.

And why is DAP declared unconstitutional only in a partial way? I suppose the Court assumed that there were

occasions when DAP was implemented in a way consistent with the Constitution: savings were properly identified


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and they were used to augment existing appropriations within the executive branch. The truth is we will only see th

full picture after the Commission of Audit does and complete a comprehensive audit of DAP funds.

As a threshold question, did the President through the DAP exercise the power of impoundment of the budget? On

this, the Court emphatically said no. Based on the definition in Philippine Constitution Association v. Enriquez whic

refers to impoundment to mean the refusal by the President, for whatever reason, to spend funds made available

Congress and how it is defined in the General Appropriations Act (GAA) as the retention or deduction of

appropriations, the Court categorically stated that the withdrawal of unobligated allotments under the DAP cannot

characterized as impoundment because it entailed only the transfer of funds, not the retention or deduction of

appropriations.

The Supreme Court actually agreed with the Solicitor General that no law was necessary for the creation of DAP

it is neither a fund nor an appropriation, but a program or an administrative system of prioritizing spending. The Co

also acknowledged that DAP was in pursuance of the authority of the President as the Chief Executive to ensure t

aws were faithfully executed.

However, the Supreme Court struck down as unconstitutional certain aspects of its implementation, specifically fou

types of acts.

First, the Court declared unconstitutional 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 Acts (GAAs). For the Court, these were not, legally speaking, savings and therefore contravened

Section 25(5), Article VI of the 1987 Constitution.

Defining savings, in a way that will have enormous legal and practical consequences for the future, the Court

declared that savings could be generated only upon the purpose of the appropriation being fulfilled, or upon the ne

for the appropriation being no longer existent. Not following this definition would seriously undercut the

congressional power of the purse, prompting Justice Antonio Carpio to characterize Congress acquiescence DAP

equivalent to self-castration and suicide by the legislature.

Second, the Court said that the Constitution prohibited cross-border transfers of the savings of the Executive to

augment the appropriations of other offices outside the Executive. Applying a plain language approach, the Court

said such transfers, whether as augmentation, or as aid, was explicitly prohibited under Section 25 (5) of the

Constitution. Transfers to Congress, the Judiciary, and the independent constitutional commissions are included in

this prohibition.

Following the same approach, the third type of acts the Court found constitutionally infirm in the implementation of

the DAP was in the funding of Projects, Activities and Programs (PAPS) that were not covered by any appropriatio

in the General Appropriations Act was also declared unconstitutional.

Incidentally, funds that went to the senators, allegedly to sweeten their votes in the Corona impeachment, would h

been prohibited by the cross-border prohibition if they went to the Senate directly or by the rule against funding PA

for which there were no appropriation. In that sense, PDAF was better than DAP as PDAF was congressionally

appropriated and at that time presumed to be constitutionally valid.

Finally, the Court also declared as void the use of unprogrammed funds despite the absence of a certification by th

National Treasurer that the revenue collections exceeded the revenue targets for non-compliance with the conditio

provided in the relevant General Appropriations Acts.


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Senator Miriam Defensor Santiago says DAPs unconstitutionality is a no-brainer. If so, why did this glaring error o

judgment happen?

If I may offer my opinion, the DAP came about because many of these unconstitutional practices were already bein

done by the Department of Budget and Management (DBM) and by Malacaang even before President Aquino wa

elected. The reenacted budgets of the Arroyo years gave openings to the executive branch to do these with impun

and what the Aquino government did was to consolidate these practices and package it as a program without prop

egal review. I can imagine meetings within the DBM where the experienced officials would have said we have

already been doing these practices anyway. Additionally, the administration introduced the concept of pooling fund

that Justice Leonen points out made things more complicated from an accountability point of view.

In my view also, the Aquino administration might have been blinded by their conviction that they were doing the rig

thing for the economy and the people, and because of that belief, disregarded the legal technicalities. Even now, o

discerns this flawed thinking in the stubborn defense of DAP even after the Supreme Court decision, an attitude th

could bode bad for other serious decisions with complex legal issues (the Bangsamoro Basic Law comes to mind)

the remaining years of this administration.

I respectfully urge a little humility to acknowledge mistakes when they happen, as it always does in governance, so

corrections could be made. In fact, with the right legal staff work, DAP, which is conceptually an innovation that mig

have potential to solve the perennial problem of under spending by the departments, could have been crafted in a

constitutional way and the same policy objectives could have been achieved without being tainted with illegality. Bu

that, unfortunately, is water under the bridge.

The DAP decision: Lessons on politics, governance (with Christian jorge Laluna, Rappler, July 10, 2014,

edited)

With the decision in the consolidated case ofAraullo v. Aquino III, the Supreme Court had found certain acts and

practices under the Disbursement Acceleration Program (DAP) of the administration of President Benigno S. Aquiunconstitutional. The DAP itself is not constitutional as a program to accelerate spending for development.

In its wake, as seen in the news, critics have gladly seized on DAPs partial unconstitutionality to raise scenarios o

impeachment against the President, or raised calls for the resignation of Budget Secretary Florencio Butch Abad

These criticisms ride on the popular anger against pork barrel freely-disbursed lump sum allocations such as the

Priority Development Assistance Fund (PDAF) declared unconstitutional inBelgica v. Executive Secretary this tim

aimed at Malacaang rather than Congress.

We will not join the bandwagon. We do not support the impeachment of the president and we leave it up to Secret

Abad, an exemplary public official by any standard, to discern whether his resignation will benefit the country. Wetrust he will make the right decision.

In this article, we think beyond this politics of outrage, which could just be a moment or are warnings of major

upheavals ahead, and reflect on the longer term political and governance implications of the DAP decision.

A judicial challenge to an act of the executive (or the legislative, for that matter), is ultimately an act that seeks to li

an instance of the exercise of that governmental power when done right, in an effort to curb abuse and protect w

is right. In parsing DAP, in declaring some of Aquinos actions constitutional, and some unconstitutional, the Supre

Court had essentially left the Presidents prerogative to augment proper budget expenditures from proper budget

savings intact, but clearly defined what augmentation isnot.


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What augmentation is, according to theponencia, and defined in Art. VI, Sec. 25 (5) of the 1987 Constitution, and

authorized within each years General Appropriations Act (GAA), is the use of clearly-identified savings in the

expenditures of government departments and offices to augment clearly-identified, actual deficiencies within those

respective government departments and offices. What augmentation isnot, however, is to allocate what

wasnotauthorized as an expenditure in the GAA. It is not a transfer of executive department savings to legislative

ump sum allocations (cross-border augmentation) by virtue of the latters unconstitutionality, or at the very least,

because such itself violates Art. VI Sec. 25 (5).

Savings

There, too, was a problem in addressing the definition of actual savings that is the source of augmentations. To

quote from theponencia,actual savings, strictly speaking, is the money left over from GAA-authorized items which

are authorized was completed, finally discontinued, or abandoned; or because the policy targets were reached a

ower cost due to increased efficiencies; or because of vacant government positions or leaves-of-absence without

pay.Araulloheld that it did not contemplate the use of money that hadyet to be used: the controversial unobligate

allotments of slow-moving government projects; or the unprogrammed funds, which are standby appropriations

authorized in the GAA, which are available only under specific circumstances and conditions. One of DAPs errors

but a critical one, was that it considered funds otherwise not considered by law as actual savings, as actual

savings, making them available for disbursement by the President.

As withBelgica,Araulloexposes the underbelly of Philippine money politics: the roles and powers over the budget

crossing borders. With PDAF, it was the legislature getting an all-but-assured slice of the pie for legislators to spen

on their own programs as they see fit; a usurpation of executive roles. With the unconstitutional portions of DAP, it

was the Chief Executive allocating savings and unprogrammed funds to projects or programs independent of

authorized GAA allocations (including DAP handovers to legislators); a usurpation of legislative functions. It would

crude but otherwise uncomfortably close to the mark to describe a DAPed president as a mini-Congress, and a

PDAFed legislator as a mini-president.

Yet this confluence and contradiction of roles has likely subsisted in the foundations of Philippine politics-in-practic

certainly sincePHILCONSA v. Enriquezearlier ruled pork barrel as constitutional, allowing the practice to continue

with judicial leave. For all the diatribes raised against Aquino in the wake of the PDAF scandal, the truth is that, as

with his predecessors, he had inherited prior practices of Philippine government that have become so ingrained in

political culture.

Malice

Other than outright malice (which has to be proven first!), nothing else but the honest belief that pork is right (if usright) would have motivated congressmen who cried foul and threats of impeachment overBelgica. And I do belie

(despite others that claim otherwise) that what motivated the administration on the exercise of and its defensivenes

with DAP was not the malice they denounce, but a similar honest belief that the Executive could reallocate unused

money as it did, for the good of the nation.

Ironically, it was Aquinos own high standards ofdaang matuwidthat allowed the Court to resolve the DAP questio

as it did or for the question to explode into public consciousness as it did. The records of the case will reflect the

packages of memoranda and orders in relation to DAP money movements: amply documented and volunteered up

summons.


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Admittedly, and as will be elaborated later, an audit will still be necessary to uncover the full story of DAP (and the

Court did note that documents relating to DAPs conceptualization were scarce), but the evidence package offere

in Court was enough for the Justices to parse how the President exercised his powers, the bone of contention

inAraullo.

If anything, such level of documentary detail, readily presented upon order, would be evidence of good faith on the

part of the administration. Which is where our discussion now turns to the question of impeachment against Aquin

or calls for Abad to resign. Ever since last year, there has been an undercurrent of vindictiveness in the campaign

against pork. Understandable, given the scale of the scandal, and the defenses offered by all the parties under att

whether Senators Enrile, Estrada, or Revilla; or Aquino or Abad that some feel are just attempts to deflect or

delay the inevitable condemnation. And we feel that anger in critical op-eds, or the vitriol in the comment boards o

news outfits and social media.

Unconstitutional but not criminal

Yet here we must demur. Legally and morally, to condemn requires proper evidence culpable violation in case of

impeachment, or the commission of the elements of the crime charged, in case of criminal prosecution. As Profess

Randy David observed in hisInquirercolumn, reflecting on his arrest in the wake of President Arroyos Proclamatio

1017, a policy being unconstitutional does not always mean the policy-maker being criminal or culpable for that

matter.

Justice Marvic Leonen pointed it out clearly in his separate opinion: to rule that a declaration of unconstitutiona

per se is the basis for determining liability is a dangerous proposition. It is not proper that there are suggestions of

administrative or criminal liability even before the proper charges are raised, investigated, and filed.

If we keep insisting that government officials should always be held liable, especially criminally liable, for acts

subsequently declared to be unconstitutional by the Court, then all government would be paralyzed by terror, unabto exercise such powers even granted to them by the Constitution, for fear of the next prosecution (whether truly

aggrieved or politically motivated) thrown in their direction.

The Supreme Court may be the final arbiter of constitutionality, but by virtue of separation of powers, the Executive

and Legislature get first crack at interpretation of the constitutionality of their acts (contemporaneous construction

Such interpretation is still open to challenge by any aggrieved party, but a principle of law is that constitutionality is

generally presumed; its unconstitutionality must be proved. Until proven otherwise, the law grants the President or

Congress the benefit of the doubt.

Absent further evidence on malicious or culpable acts of the Administration, it is enough thatAraulloreestablishes proper budget-handling borders of the separated powers of government.

Governance

This leads us to our next set of implications: governance. As pork had become ingrained in national politics, it had

also wormed its way into governance, into the implementation of policy and the spending of money on policy. PD

again demonstrates how dependent public services, even those provided by NGOs, were on the largesse of

egislators, such that the system could be manipulated with ghost NGOs. It feeds into the patronage politics of

Philippine governance: that public services and the benefits every citizen receives, by law, from government is held


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hostage by the political elite, who can then extract staying power and the occasional graft from his constituency an

budgetary allocation.

It should be noted that the same Secretary Abad critics are now wont to hang for DAP, is the same Secretary Abad

who declared, in his Metrobank Professorial Chair lecture last year at the Ateneo School of Government, that the

budget could be a tool for citizen empowerment (particularly though inclusive budgeting reforms introduced under

watch, such as bottom-up budgeting).

Weeding governance of bad budgetary habits strengthens good and responsive governance. Subjecting governme

allocations and allotments to stricter scrutiny and controls, thanks to the restoration of the borders, will ultimately h

in restoring fiscal credibility to Philippine governance: the legislature authorizes where the money goes, the execut

releases the money to such expenditures, with the citizenry participating at the budget planning, deliberation, and

execution stages, either through their elected representatives or as citizen organizations.

Still, good governance has up to 27 years to catch up on a history of bad budgetary habits, since the restoration of

traditional political dynamics following the fall of the Marcos regime. In the short term, government and citizenry bo

will have to break some of those habits: congressionally-branded scholarships and free clinics; the basketball

courts and multi-purpose halls, that seem to be the low-hanging fruit of GAA allocations to public works.

Padrino system

There will likely be a painful adjusting period as constituents suddenly find themselves without apadrino, learning

instead political habits of interest aggregation, interfacing with representatives and bureaucrats, of leveraging polic

planning and execution to their benefit. As our colleagues have found in the G-Watch project, this learning process

more needed and more painful outside the cities, in the bailiwicks of trapo dynasties, and among a population

used tobinyag-kasal-libinginteraction with their political representatives.

Padrinosand trapo dynasties may seem more the terrain of Congress, but Abads concept of budget-as-empoweri

is sorely needed in Malacaang as well. Keynesian economics does hold that government spending does have astimulus effect on the economy Justice Leonens concurrence toAraullonoted this; exemplified by the World Ban

report cited in the majority that found DAP to have contributed 1.3% to the 2011 gross domestic product growth.

Yet a dependence on DAP as a stimulus tool may yet breed dependence on executive augmentations in the nam

of economic growth.

In the earlier-referred Metrobank lecture, Abad had rightly described the national budget as an arena of struggle

among competing interests but heretofore that struggle and those interests were assumed to be in congressiona

deliberation, not executive execution. This is the danger implied inAraullos finding that augmentations made outs

of GAA line items were unconstitutional, as were cross-border releases to Congress.

The accusation that DAP may have been used to secure the votes needed for Chief Justice Renato Coronas

impeachment, or the RH Bills passage, stings the most in this regard. True or untrue (or simply very uncomfortabl

timing), it has become highly embarrassing for the Office of the President at the least. At most, it makes the Office

the President as much apadrinoof his own constituency (e.g., Congress) as a local political lord.

Mitigating such dangers requires robust accountability.AraullocomplementsBelgicaby delineating, once and for a

the roles and functions of the branches of government in the budgetary process. It is easier to color within the lines

after all, when the lines themselves are clear.


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Accountability

Judicial decisions alone, however, will not color between the lines, so to speak. Financial accountability is the rese

of the system of checks and balances among the branches of government (whichAraulloandBelgicathankfully

clarify), and of the Commission of Audit, itsraison dtre.

It also ought to be the resolve of citizens to watch over the effective and equitable expenditure of public funds

through project monitoring, and working with government a cause our school, the Ateneo School of Government

has championed through the social accountability framework.

However, there is something Malacaang ought to do now, in the wake ofAraullo. So far, what has been made pub

by court action were the DAP-related memos and subsequent documentation of the Office of the President. As not

in theponencia, other documents remain to be revealed, such as the decision-making process behind DAPs

creation, and of course the proverbial paper trail of the money, especially once it left executive hands. This goes

double for the releases to legislators, in case it can help clarify the paper trail in the PDAF cases on file now and

ater, and to clarify which personalities or programs may benefit from the doctrine of operative fact under a good-fa

defense (as Justice Antonio Carpio cautions in his separate opinion).

We would like to repeat, however, that this exercise in accountability must not turn into an exercise of vindictivenes

Accountability based on threat (or at least threat alone), a climate of fear of the hangmans noose, will not be

sustainable. Where liabilities can be established, as Justice Leonen observed, there the proper cases may be filed

(and if the travails of the PDAF prosecution team be instructive, then those liabilities must be thoroughly establishe

But as with the Benhur Luy revelations,Araullocan help guide everyones hand in establishing a better structure o

public finance management and accountability. Fully threshing out this promise is best left to a future article, but

suffice to say thatAraulloandBelgicamitigate, if not eliminate, the risks opened up by the earlierPHILCONSAruli

The administrations habit of documentation, too, is a hopeful portent of practices to come, and a willingness ofAquino officials to further disclose the extents and consequences of DAP in the name of accountability and better

governance design. (Besides, a working Keynesian stimulus is a good achievement, especially for an administratio

earlier criticized for dragging its feet on post-Arroyo government spending.)

Admit mistakes

And to help stimulate both accountability and discussions for governance redesign, here we must submit unsolicite

but hopefully useful, advice for the administration, to tone down the self-righteous defensiveness.

Araullo, as well as Aquinos forthcoming submission of the requested evidences, already point to good faith exercisin the execution of DAP. The presidential prerogative for constitutional augmentation has not been stripped. It is

possible to look at the Supreme Court decision as a starting point for dialogue and reform. As with persons, it help

for governments to admit their mistakes as a step towards reconciliation and recovery. It also helps that the popula

be ready to dialogue with its mistaken, but cooperative, government but we have already stressed this point in

previous paragraphs.

So where does the country go from here? How does the Philippine polity go cold turkey, bear the withdrawal

symptoms from weaning itself from a dependence on pork barrel? Money, legitimately or illegitimately appropriated

and disbursed, had been used in times past to grease the wheels of legislation and execution.


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This is what Congress crowed about in the wake ofBelgica, to take away the proverbial prop upon which their

Houses stand. But the very picture of political horse-trading did not envision the exchange of money, especially t

peoples money, but the aggregation and trading of political, economic, and social interests deliberated openly, for

which the money will then be disbursed, and the reward is continued political (and practical) relevance to their

constituencies (as well as their respective salaries).

Idealistic, we know even America struggles with corrupt money politics and pork, though manifested in different

forms (e.g., earmarks).

Yet it is high time we learned the habits of modern, accountable politics. ConsiderAraulloandBelgicaa badly-need

intervention, a judicially-mandated stint in rehab that may finally give Philippine politics a chance to detoxify, shed

some bad money habits, and come clean into the 21stcentury.

As with any intervention, it would help for the intervenors to approach their addict-subject with detachment and

compassion; with sensitivity as well as resolve.

Eagle Eyes and Rappler series on the Disbursement Acceleration Program (Part 2)

July 27, 2014 at 2:01am

This note completes the compilation all my columns and think pieces on the DAP. I am reposting them as a group s

the reader would have a bigger and more comprehensive picture of the issue. The compilation also illustrates the

evolution of my thinking on this issue. Together with my writings on the PDAF scandal, these writings will form the

core of a book I am writing tentatively entitled: "Reform and revolution: PDAF, DAP, and other budget wars"

Accountability for the DAP(Eagle Eyes, July 13, 2014)

In the aftermath of the Supreme Court decision on the DAP; impeachment of the President is the cry of some; for

others, the filing of criminal charges against some officials would be the next step. For sure, the DAP will generate

much criminal litigation soon and even after President Aquinos term. Expect that President Aquino will become ou

third president in a row that will be charged with some kind of crime. I am sure it will not be plunder, though, if thecharges are to progress. Neither will plunder be applicable to Secretary Butch Abad as that crime requires proof o

personal gain. Based on the evidence we have, that element is not present here in the case of the president and th

budget secretary. Most likely, the charge that has a chance of prospering would be technical malversation, which is

defined as spending public money for public purposes other than for what those funds were intended or appropriat

But should these government officials be held accountable at all? Do we have guidance from the Supreme Court o

this matter?

Through the main decision written by Associate Justice Bersamin, the Court is actually quite clear - that even as th

DAP is nullified for being constitutionally infirm, its implementation has certain consequences that cannot be ignore

While it is true, the Court said that a legislative or executive act that is declared void for being unconstitutional

cannot give rise to any right or obligation. However, a rigid application of this rule may at times be impracticable or

wasteful. In excepting to this rule, the Court was of the opinion that the DAP, though a void law or executive act,

produced an almost irreversible result. In short, the decision nullifies the void law or executive act but sustains its

effects. This in essence is what the doctrine of operative fact means, as applied to this case.

The Court further clarified that, citing Justice Brions concurring opinion, the doctrine of operative fact can be invok

only in situations where the nullification of the effects of what used to be a valid law would result in inequity and

injustice. By implication, the doctrine can apply only to the Projects, Activities, and Programs that can no longer be

undone, and whose beneficiaries relied in good faith on the validity of the DAP. It cannot apply to the authors,
https://www.facebook.com/notes/dean-tony-la-vi%C3%B1a/eagle-eyes-and-rappler-series-on-the-disbursement-acceleration-program-part-2/681271821943754https://www.facebook.com/notes/dean-tony-la-vi%C3%B1a/eagle-eyes-and-rappler-series-on-the-disbursement-acceleration-program-part-2/681271821943754


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proponents and implementors of the DAP, unless there are concrete findings of good faith in their favor by the pro

tribunals determining their criminal, civil, administrative and other liabilities.

In his separate opinion, Justice Brion is of the opinion that good faith under this doctrine should be distinguished fr

the good faith considered from the perspective of liability. To him, where there is showing of grave abuse of

discretion, the possibility for liability for the transgressions committed inevitably arises. For his part, Justice Carpio

was more forthright in saying that liability should be imputed to those directly responsible for an illegal or

unconstitutional act as the doctrine of operative fact cannot be made to apply. In this context, Justice Brion said tha

there are indicators showing that the DBM Secretary Abad might have established the DAP and issued NBC 541

knowingly aware that it is tainted with unconstitutionality. Even then, there is unanimity that any discussion on good

faith or bad faith is premature and can only be properly threshed out in another forum.

In this respect, I believe Justice Leonens concurring opinion articulates the state of the accountability question be

Likewise, to rule that a declaration of unconstitutionality per se is the basis for determining liability is a dangerous

proposition. It is not proper that there are suggestions of administrative or criminal liability even before the proper

charges are raised, investigated, and filed. Any discussion on good faith or bad faith is, thus, premature. But, in ou

jurisdiction, the presumption of good faith is a universal one. It assures the fundamental requisites of due process

and fairness. It frames a judicial attitude that requires us to be impartial.

Although DAP may have transgressed constitutional boundaries, however I simply cannot subscribe to the view tha

criminal, civil and administrative liability should follow as a matter of course on the basis alone that it has been hel

invalid. For practical reasons, liability should not attach solely on the declaration of acts as being unconstitutional.

an official, acting in good faith and in sincere belief that he is acting within legal bounds, is held liable for an act wh

is presumed valid prior to its being declared unconstitutional, it will cause paralysis in government knowing fully we

that official acts which are later invalidated will mean criminal, civil or administrative prosecution. In effect, every

official action committed by mistake, albeit with sincere belief of its validity, will serve as a Sword of Damocles to th

actor. Of course, the opposite is true, that is, when bad faith clearly established.

Moreover, case law is replete with executive acts and congressional enactments which had been previously struck

down as being unconstitutional yet I am not aware of anyone being dismissed, nor held civilly or criminally liable

because of it. To hold DBM Sec. Abad, or the President for that matter, liable simply because they implemented an

unconstitutional DAP would be unfair. Of course where there is showing that illegal or criminal acts, say, giving brib

to the senators, have been committed using DAP funds, needless to say, the courts should make the hammer fall

where it should.

Misunderstanding the DAP decision(July 18, 2014)

Last Monday, July 14, President Aquino addressed the nation to convey his reaction to the decision by the Suprem

Court declaring some acts under the Disbursement Acceleration Program unconstitutional. Frankly, I was surprise

by the tone and tenor of the speech. Although I am all for the administration filing a motion for reconsideration, I di

not expect the veiled threat of having a third branch of governmentunmistakably Congressintervene in a clash o

the Judicial and Executive Departments.

At first reading, I interpreted that line of the President as impeachment, which is an unacceptable threat. Upon clos

reading, I realize however that there are less intrusive ways the legislature can come innew laws clarifying the

meaning of savings, for example, would be a constructive way forward without threatening the independence of the

Supreme Court. I was also subsequently comforted when, in another speech the day after, the President announc


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that out of prudence the administration was complying with the Supreme Court decision. Imagine, if he said the

opposite, the chaos and instability that would create as any decision on corruption cases, election disqualification

cases, and economic and environmental disputes will now be disputed by the losing parties who believe they are

right.

In any case, startled by the Presidents act, I revisited the Araullo vs. Aquino decisionthe main opinion and all th

concurrencesand compared my understanding of the decision with how the President characterized it. Having

done that, I have come to the conclusion that the President has been misled by someone on the implications of the

decision, if not intentionally at least in a way that resulted in a very big misunderstanding of what the decision reall

means. A big disservice was done to the country by whoever misled the President, especially if it was done for a

personal agenda.

Ironically, the President and his political opponents (now calling for his impeachment) have converged and agreed

their interpretation of the Supreme Court decision. For sure, the latter will invoke this shared understanding as they

pursue their political endsciting the Presidents own admission that the Supreme Court makes him and other

implementors of DAP liable.

There is one part of the DAP decision, however, where the President is rightly incensed. These are the lines in the

decision that seems to perversely flip the presumptions of good faith, regularity of performing official actions, and

innocence into presumptions of bad faith, irregularity and guilt. This discourse on good faith and liability, found in t

penultimate paragraphs of the DAP decision, is what we in the legal profession call obiterit was not necessary fo

the decision, it is not needed for the resolution of the issues litigated, there are certainly no finding of facts about

iability in the decision, and it is definitely not binding on any future court or proceeding. Whoever told the presiden

that this was now the rule from now on misled him and ignited his anger at the expense of our institutions and the

country.

This nonbinding offensive section of Araullo came about when the Court clarified that the doctrine of operative fact

can be invoked only in situations where the nullification of the effects of what used to be a valid law would result ininequity and injustice. It then said that, by implication, the doctrine can apply only to the Projects, Activities, and

Programs that can no longer be undone, and whose beneficiaries relied in good faith on the validity of the DAP.

Suddenly, completely out of place and without underlying premises in logic and facts, the main opinion then observ

that the doctrine of operative fact cannot apply to the authors, proponents and implementors of the DAP, unless

there are concrete findings of good faith in their favor by the proper tribunals determining their criminal, civil,

administrative and other liabilities.

I have reviewed this paragraph several times and have come to the conclusion that it is inappropriate and unfair,

certainly not legally coherent with the doctrine of operative which in fact has nothing to do with liability for official ac

I was actually taken aback at this reversal of presumptions, especially because Justice Lucas Bersamin, the authoof the main decision, is one of the best legal and judicial minds in criminal and civil procedure. I can only explain th

as an oversight resulting from having to complete the final draft of the opinion under time pressure.

Even if it is obiter and not binding, I also feel strongly against this part of the decision because it is sure to kill refor

and will be a disincentive to change and innovation. If the paragraph is retained or not clarified, it will serve as a

warning to all innovators in government, including the current and future presidents, that they should never go out

the box and must never stretch constitutional limitations even when national interests and needs require them. Tha

is so dangerous for a country that is faced with enormous and complex problems where flexibility and adaptive

management is needed.


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For this reason, I hope the Motion for Reconsideration to be filed by the Solicitor General will seek clarification of t

part of the decision, making sure it is characterized as obiter or even abandoned altogether in the final resolution o

the case. In my view, if the Court accepted such an argument, as the en banc or through concurring opinions, it is

doing so out of pressure from the President but because it is in fact the right thing to do.

As to the main substance of the DAP decision, I think that the Presidents understanding of the decision is also not

completely accurate. Rereading the DAP decision does not at all tell me that it will cause paralysis in government o

that it leaves government with few options in addressing national problems. It is certainly not true that the

government has to wait until the end of the calendar year to identify savings and to use these to augment other

appropriations. The President has so many other options during the year. In any case, the limitations imposed by t

decision can be remedied by legislation agreed to by the Congress and the Executive.

The truth is that Araullo is a unique decision in that the Supreme Court does not declare a law, an executive order,

Department of Budget and Management circular, or any other legal or policy issuance unconstitutional. Neither is a

project, activity, or program declared illegal. All the decision does is enumerate acts prohibited by the Constitution

In that sense, the Executive Department should welcome the decision as it provides clear guidance on how to mov

forward. The resolution on the Motion for Reconsideration might also be a good opportunity for the Supreme Cour

make this clear.

eagle eyes and rappler series on the disbursement acceleration program

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