Aquino govt Dengvaxia procurement may have defied Supreme Court

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ANTONIO P. CONTRERAS

THE Aquino administration spent P3.5 billion to purchase the Dengvaxia vaccine in 2016, and it would appear that particular expense was not listed in either the 2015 or 2016 General Appropriations Act (GAA). We have to ask where the money came from.

Rappler reported that the funds were supposed to be sourced from sin tax revenues. But as it turned out, and as revealed by current Budget Secretary Benjamin Diokno, the money was taken out of the savings in the budget for miscellaneous personnel benefit funds, which was created as a budget item specifically earmarked to fund the salaries and compensation of newly hired employees of the executive branch. This revelation was reported by Business World last October 13, more than a month before the unraveling of the fiasco triggered by the admission by Sanofi, the vaccine manufacturer, regarding Dengvaxia’s possible adverse effects.

One can only surmise that those savings were for the fiscal year 2015 considering that decisions were made to purchase the vaccine in December of that year. In fact, the timeline suggests that the process was rushed, with the decision to proceed with the purchase given an imprimatur on December 22, 2015, and a week later on December 29, the DBM issued a special allotment release order (SARO).

At the time, the fiscal year was already on its last week, and the budget approval process for 2016 had already been completed. The decision to proceed with the purchase of Dengvaxia was thus an executive decision without the benefit of any congressional appropriation. Under our system, it is Congress that appropriates funds for government initiatives, such as any public health program like dengue immunization.


Thus, it appears that what transpired was a reincarnation of the Disbursement Acceleration Program (DAP) which President Aquino, through Budget Secretary Butch Abad, had been implementing since 2011, but which the Supreme Court ruled unconstitutional in two decisions in 2014.

Relevant to the Dengvaxia issue is whether President Aquino can transfer funds from savings acquired from unspent miscellaneous personnel benefit funds and use the money to augment the budget of the DoH to finance an anti-dengue vaccination campaign, for which there was no budget cover in either the 2015 or 2016 GAA.

The Supreme Court ruled that while the President can realign the budget within the executive branch, such should be governed by the provisions of the GAA operating at the time the expense was approved. While the final purchase of the vaccine was consummated in 2016, the money used for that purchase must have come from the 2015 budget savings. It would have been a violation of the court’s ruling on DAP to source the savings from the 2016 budget, considering that the purchase was made early during the first quarter of the fiscal year. Hence, the amount could not have been legally defined as savings for 2016.

While President Aquino, then budget secretary Abad, and then health secretary Garin can argue that the money was technically savings from 2015, and hence could be legally realigned within the executive department, the court had imposed another condition. Such realignment must be to augment an existing item in the 2015 GAA. The SARO was issued in December 29, 2015, and it would have been imprudent for Abad to release a SARO without available funds, or to anticipate that such savings would be incurred in the budget for 2016 for an expense item that costing a whopping P3.5 billion.

The court’s condition about the necessity of a line item in the budget as a valid object for augmentation could not be clearer when it ruled in the motion for reconsideration filed in relation to its DAP ruling: “…there must be an existing item, project or activity, purpose or object of expenditure with an appropriation to which savings may be transferred for the purpose of augmentation. Accordingly, so long as there is an item in the GAA for which Congress had set aside a specified amount of public fund, savings may be transferred thereto for augmentation purposes.”

The P3.5 billion was downloaded to the Philippine Children’s Medical Center (PCMC), a government health facility, and not to the already existing DoH Dengue Prevention and Control Program under the National Center for Disease Prevention and Control (NCDPC). This goes into the finer point of whether the augmentation was compliant with the court’s ruling where savings can only be realigned to existing budget items, considering that while PCMC is an existing health facility, it did not have an anti-dengue program.

Furthermore, section 72 of the general provisions of the 2015 GAA specifically provided that the priority uses of savings will be compensation and personnel benefits, as well as the implementation of priority programs, activities or projects covered in the budget for the year.

One has to ask if the anti-dengue program of the NCDPC was a priority in the 2015 GAA, and if so, why the President did not augment its budget, instead of that of the PCMC.

The court recognized that development programs are within the power of the Executive to initiate. And certainly, an anti-dengue vaccination program is a valid expenditure. But the court also ruled that we are a government of laws, and that any allotment, transfer and augmentation using public funds have to be legal and constitutional.

The process of realigning of funds from savings from a personnel-related item to augment the budget of a hospital that doesn’t have or is not involved in any anti-dengue initiative raises a lot of questions. Considering the undue haste that attended the release of the SARO, and the fact that there were scientific issues against the vaccine, we may be looking at a P3.5 billion scandal that defied not only science but also the Supreme Court.

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