Senate President Franklin Drilon. INQUIRER FILE PHOTO/ JOAN BONDOC
MANILA, Philippines–Senate President Franklin Drilon on Tuesday said the government’s economic managers have to deal with the “chilling effect” of the Supreme Court decision on the Disbursement Acceleration Program (DAP) by ensuring that government expenditures will not decline even as they comply with the ruling.
Drilon, speaking at the Senate hearing on the proposed P2.606 trillion 2015 budget, warned against underspending as he said the DAP ruling had caused some departments to be reluctant to spend, for fear they might face court cases for doing so.
The high court has invalidated several activities under the DAP, a mechanism under which the administration “pooled” savings and unspent funds and reallocated these to high-impact and priority projects.
Also illegal
Other acts that the high court ruled illegal were the cross-border transfer of savings and the use of funds that did not fall under the government’s definition of savings.
Drilon noted that government expenditures only grew by 2 percent in the first quarter of 2014, compared to 10 percent in the same period last year, and raised the issue about the reluctance to spend.
“You cannot discount the fact that the bureaucracy is now concerned about spending given the decision of the Supreme Court on the DAP. They’re concerned cases might be filed against them because of the decision on the DAP. Whether you’re right or not, the DAP had a chilling effect on the government’s expenditure program,” he said.
Government spending is necessary because it contributes to economic growth, he said.
According to Drilon, the country’s economic managers must ensure that the government will continue to spend on important programs while being faithful to the court’s ruling, particularly when it becomes final. Malacañang has a pending motion for reconsideration on the decision.
“Let’s comply once it becomes final, but the challenge to the economic managers is to accelerate public spending so that it can contribute to the expansion of the government,” he said.
Budget Secretary Florencio Abad, meanwhile, cited figures showing an increase in government expenditure. He said figures from June this year showed a 44 percent increase in government spending because it was able to release the funds needed to pay Philhealth bills. And the government is now catching up, he said.
Abad also explained that because of the natural calamities that hit the country in latter part of 2013, including Super Typhoon “Yolanda,” many approved regular programs could no longer be implemented, hence declining first quarter figures.