In a Twitter post Monday night, stock guru John Mangun made a particularly biting observation of the fallout—or rather, the instantaneous, violent explosion of public outrage—from President B.S. Aquino’s defiant “defense of DAP” speech:
“I care nothing about your politics. I do care about your political stability. [signed]Señor Foreign Investment.”
In case you missed it, political stability is, at least for the time being, merely a nice memory in this country, destroyed in just under 20 minutes by an arrogant and stubbornly misinformed amateur dictator who had the unmitigated gall to inform his country that its political framework can be intentionally misinterpreted and prostituted to his intentions, and that because he is the President and you are not, you must assume those intentions are both an honorable and correct solution to the problem to which they are being applied.
To summarize, the DAP was a secretive spending program developed by Budget Secretary Florencio “Butch” Abad sometime in late 2010, wherein unused budgets of government departments would be impounded and redistributed by executive order; according to information released by the Department of Budget and Management (DBM) immediately after the President’s speech Monday evening, the fund amounted to P167.06 billion over three years, 2011 through 2013, and it was used to finance 116 different projects. In November 2013, Senator Jose “Jinggoy” Estrada, under charges for a completely different corruption scandal, revealed the existence of the DAP to the public in a privilege speech in the Senate; shortly afterward, but not before a number of petitions against it had been filed at the Supreme Court, the Administration announced they had ended the program.
Nonetheless, the Supreme Court, by a 13-0 vote (with one Justice abstaining) on July 1 ruled the DAP unconstitutional on three grounds: That impounded funds were not “savings” as defined by the Constitution; that funds could not be realigned outside the departments for which they were first budgeted, nor from one branch of government to another; and that creating and funding projects not covered by the General Appropriations Act constituted usurpation of the authority of Congress.
The President’s response, coming two entire weeks after the ruling, was to openly declare in a nationally televised address that his Administration believed the Supreme Court ruling (a unanimous decision whose explanation covered 244 pages) was wrong, and therefore, would be ignored, and to threaten unspecified punitive action against the Court if they did not reverse the ruling when the government filed an appeal.
To try to convince the Philippine public that the funds were put to good use, an accounting of where the money purportedly was used was provided by the DBM, which instantly raised more questions than it answered. The programs which had their budgets attenuated to fund the DAP were not revealed, nor was any information provided as to whether the projects listed under DAP disbursements were actually completed. And of the P167 billion total, at least P55 billion is of dubious credibility: P5.46 billion for “landowners’ compensation” under the agrarian reform program despite there being a formal appropriation for the purpose in the GAA; P8.592 billion for unspecified programs in the Muslim areas of Mindanao; P1.88 billion for unspecified programs by government-owned corporations; at least P8.275 billion for unspecified projects under the Department of Public Works and Highways; P17.585 billion for projects requested by local government units or legislators—a usage specifically declared unconstitutional in another unanimous ruling prior to the DAP decision, this one against the Priority Development Assistance Fund; and a P13.611 billion balance, the disposition of which has not been disclosed.
In other words, P167 billion ($3.88 billion) in expenses not legally authorized by the Congress or any existing law were incurred by Executive caprice, and of that amount P55 billion (or roughly $1.28 billion) or more may have simply evaporated; and when the legally prescribed solution to prevent such irregularity is applied, the President not only ignores the law, he makes it a point to announce he considers it wrong and not applicable to him. And it is not a case wherein the President is making an argument that the Office of the President should be given more leeway in managing government funding, but President Aquino specifically.
That, of course, is a very dangerous situation politically, but is almost as bad from an economic perspective as well. Under the Administration whose leader believes his spending decisions are infallible, funding for disaster preparedness and flood control was cut back in 2011 and has yet to be completely replaced—a fact that is more than a little obviously annoying to the some 14 million living or working around Metro Manila who have endured the effects of Typhoon Glenda this week. The Aquino Administration’s poor budget planning has led to a costly, unplanned rice importation deal, completely undoing the effects of moderate progress toward increased production over the past couple years. Infrastructure projects have stalled; in fact, as the Ibon Foundation pointed out in an analysis earlier this week, implementation of the DAP actually led to slower government spending, which, in turn, has begun to have a braking effect on the country’s GDP growth rate.
And of course, it also means that any investment will, apparently, only proceed according to the President’s undefined opinion of it. And that’s only if neither of the other two branches of the government who Aquino has attempted to emasculate, the military, the still-potent Catholic Church, nor the public at large does not step up to challenge his assumption of unassailable personal authority; if that happens it will create, at least for a time, a period in which no real decision-maker will be leading the country.
Over the past four years, President Aquino has collected—deservedly or not—a considerable stockpile of goodwill from the world economic and political communities, who listened to the carefully-crafted, say-all-the-right-things rhetoric about good governance and fostering inclusive growth, matched it to positive economic indicators, and decided this was a government that might be on the right track. In 20 minutes on Monday evening, B.S. Aquino managed to cast all that aside, and grind his boot heel on the remains for good measure. If he does not suddenly wake up and realize that he swore an oath to uphold the Constitution—which seems very unlikely—then the rest of this country will have to act fast to push him back onto the straight path he once claimed to have invented.