GOVERNMENT underspending immediately after President Benigno Aquino 3rd assumed office in the second half of 2010 laid the foundation for justifying the economic stimulus package that is the Disbursement Acceleration Program (DAP), which was created in late 2011.
Malacañang spokesman Edwin Lacierda on Monday admitted that the DAP was implemented on the basis of the weak gross domestic product (GDP) posted in the fourth quarter of 2010. But he failed to mention that the weak economy was primarily caused by government underspending.
“I think [that the basis for coming up with the DAP was the decline in the GDP]. [You may recall that in the last quarter of 2010], I think we had a GDP growth of only three-point-something,” Lacierda said in a news briefing in Malacañang.
He added that the government initially thought of creating the DAP after the GDP figure came out in the early part of 2011.
“[The] GDP of the last quarter came out January of the next year,” Lacierda said.
His statements bolstered suspicions that Malacanang deliberately withheld funds for public infrastructure to paint a weak economy and justify the creation of the acceleration program.
“This only goes to show that there really was bad faith from the very beginning because the weak fourth-quarter GDP in 2010 was the government’s own doing. There was government underspending so the economy slowed down,” said Bagong Alyansang Makabayan (Bayan) secretary general Renato Reyes, a petitioner against DAP at the Supreme Court (SC).
“We were deceived, made to believe that there was a need for a stimulus program when in fact, they made it all up,” he pointed out.
A National Statistical Coordination Board (NSCB) report on the first-quarter GDP in 2011 noted the ill-effects of underspending on the economy.
“Underspending by the government and the slowdown in global trade constricted the economy to a lower growth in the now 2000-based GDP of 4.9 percent in the first quarter from the election-stimulated 8.4 percent last year,” the NSCB said.
A separate report by the Senate Economic Planning Office (SEPO) in March 2012 also blamed the frail economy in 2011 on “severe government underspending.”
“The Philippine domestic economy shrank to 3.7 percent in 2011, after a stellar growth of 7.6 percent in 2010. Growth was mainly undermined by the severe state underspending as well as the frail external environment,” the SEPO report said, indicating that low public spending had lingering effects on the economy.
SEPO’s economic report is done semi-annually. The office provides up-to-date information on the state of the economy to senators and other officials of the Senate.
On Monday, The Manila Times reported that the administration began “sowing the seeds of DAP” as early as November 2010, or five months after Aquino assumed office.
“Looking back, it is possible that it was the Aquino government that caused the conditions of underspending as early as 2010 by not releasing appropriations, letting the problem persist till 2011, so they will have a reason for introducing a stimulus program called the DAP,” Reyes said.
“[They] would address the underspending they themselves created. By this time, huge funds would already be centralized under the President. If such were the case, that would be bad faith,” he added.
Bayan cited two Department of Budget and Management (DBM) memos issued on October 12, 2011 and December 12, 2011 that showed that Aquino was laying the basis for DAP just a few months after he assumed office.
In the documents, the President declared as “savings” some P21.544 billion in unreleased appropriations for “slow-moving projects and programs for discontinuance” as early as November 25, 2010.
Aquino also gave the Department of Budget and Management the authority to use funds under the DAP for “priority projects.”