Falsehoods about the DAP and economic growth

Bulatlat perspective


bu-op-icons-benjieWhen the Supreme Court ruled that essential provisions of and acts implementing the Disbursement Acceleration Program are unconstitutional, the Aquino government could have just accepted the decision and reiterate its claim that the DAP was done in good faith to save itself from being prosecuted for it. But the Aquino administration did more than that: President Aquino threatened the Supreme Court with a deadlock between the two co-equal branches of government, while Congress and the Commission on Audit attacked the Judicial Development Fund.

President Aquino and Budget Sec. Butch Abad have been in a propaganda offensive lambasting the Supreme Court decision and extolling the supposed contributions of DAP to the country’s economic growth and to services for the people. In the process, it has been spreading falsehoods about the DAP’s ‘contributions’ to the economy and the country’s economic growth as well.

Ibon Foundation made an excellent analysis showing why the DAP is not what the Aquino government claims it to be. First, the amount involved in the DAP is too insignificant to make an impact on the economy: it is “6.9% of total government spending in 2011, 4.1% in 2012 and 0.6% in 2013.” In terms of the GDP is “just 0.81% of GDP in 2011, 0.54% of GDP in 2012 and 0.08% of GDP in 2013.”

The US stimulus package was 20 to 30 percent of Federal government spending then, constituting 4-6% of the GDP. “Stimulus packages in other countries in 2009 were also similarly large or larger, such as: Malaysia (7.9% of GDP), China (4.8%), Spain (4.5%), Germany (3.4%), Thailand (2.8%), Korea (2.7%), Indonesia (2.5%) and Japan (2.2%).” (Ibon Foundation)

In a forum, Sonny Africa, economist and executive director of Ibon Foundation, said the claim of the Aquino government that the DAP contributed 1.3 percentage points to the GDP is not true. What contributed to the GDP growth is not the DAP but the whole government spending and public construction.

Second, a cursory glance of the list of DAP projects released by the government shows that the allocations are not even targeted to stimulate the economy but were rather used as pork barrel funds such as to augment the PDAF of legislators, and for various projects that were favored by the president. The other big chunk of allocations, according to Ibon Foundation, was for financial transfers and payments.

There were also allocations for construction or improvements of new government offices and facilities. The impact of these expenditures and projects to the economy is doubtful. Added to this, Ibon Foundation pointed out, the Aquino government has no clear criteria for DAP allocations to ensure that it would contribute to stimulating the economy.

Neither did the DAP benefit the people in terms of social services. In fact, the most basic social services such as health and education are even being privatized. The P1 billion from DAP, which was allotted to health, was spent on equipment for there NCR-based hospitals that are being privatized, and P8.9 billion for education was used to pay big corporations that participated in the construction of school buildings and classrooms under the Public-Private-Partnership program of the government. Bulatlat.com’s own research revealed that the Aquino government even seized P10 billion from the Department of Education and declared it as “savings” to augment the DAP.

Was the DAP used to relocate the urban poor who are living in danger zones to safe places, as President Aquino claims? Those who were relocated do not think so.

Perhaps it was used to forcibly evict them and to throw them to remote areas with no livelihood opportunities and basic social services. Worse, the relocations areas are not even safe.

President Aquino and Budget Sec. Butch Abad are also claiming that the Supreme Court decision declaring the DAP as unconstitutional would reverse the supposed gains of the economy and even put it in a “state of paralysis.” This is another falsehood.

First of all, it is not all government spending that is being outlawed, it is only the DAP and the usurpation of the President of the power of the purse of Congress. If the Aquino government thinks that the General Appropriations Act, which is being approved by Congress, is insufficient, the question is: Who prepares the budget to be approved and enacted into the GAA in the first place?

Is it not the Department of Budget and Management that consolidates the budgets submitted by national government agencies? Is it not the President who formally submits the budget to Congress through a budget speech?

Second, as Ibon Foundation correctly pointed out, the supposed economic growth did not begin with the implementation of the DAP in 2011. Neither did it start only when the Aquino administration took over Malacañang. The country’s GDP growth started when the country began recovering from the 1998 Southeast Asian financial crisis during the Estrada administration. It could be remembered that the Arroyo administration boasted about the country’s supposed economic growth during its embattled years when it was confronting issues of electoral fraud and corruption.

The Aquino administration could not blame the Supreme Court decision for the slowdown of economic growth. It is already slowing down since the last quarter of 2013. The GDP growth for the first quarter of 2014 has slowed down to 5.7 percent.

The belligerent way by which the Aquino administration has been defending the DAP makes one wonder, what is in it for President Aquino? Why is President Aquino using threats and deception just to defend the DAP? Is President Aquino merely being arrogant and acting like a spoiled brat? Is he and his allies directly benefiting from the DAP?

Of course in the political system that the country has, the ability of the president to dispense funds increases his power to “persuade” other officials to follow his wishes. The previous Arroyo administration was able to use the PDAF to buy the loyalty of legislators to block moves to impeach her. If suspicions are correct, President Aquino was able to use the DAP to have former Chief Justice Renato Corona impeached.

Lest we forget, the 2016 election is fast approaching and it is time to start building campaign kitties.(https://www.bulatlat.org)

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  1. Help yourself to another sour grape.

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