What is the issue that the Supreme Court addressed in its resolution pertaining to the Disbursement

Acceleration Program (DAP)?

Petitioners challenged the constitutionality of DAP, which was intended by the Aquino administration to
accelerate government spending. They also questioned National Budget Circular 541 which, in effect,
characterized unreleased appropriations and unobligated or unused allotments as savings. The question
brought to the Court was whether the Executive exceeded his powers to augment items in the budget
within the executive branch of government.
When exactly did the DAP start?
The closest indication is a memorandum dated October 12, 2011 from Budget Secretary Butch Abad
seeking approval from the President to implement DAP. The memo listed funding sources that
amounted to P72.11 billion (about $1.7 billion) which could be used for other proposed priority projects
among them, National Housing Authority programs, capitalization of the Bangko Sentral, and peace
and development interventions in the Autonomous Region in Muslim Mindanao.
How was DAP supposed to be implemented and funded?
There were 3 ways identified: (1) by declaring savings from various departments and agencies derived
from pooling unobligated allotments and withdrawing unreleased approprirations; (2) by releasing
unprogrammed funds; (3) by applying the savings and unprogrammed funds to augment existing
programs, activities or projects (PAPs) or to support other priority PAPs.
Can the President transfer funds?
With limits. While the power to transfer funds from one item to another within the executive branch
existed since 1909, during the time of American Governors-General, this power was reduced to merely
augmenting items from savings. The 1987 Constitution put limits on the Presidents discretion over
appropriations during the budget execution phase (when the budget law is being implemented).

The Constitution authorizes the President, the Senate President, the Speaker, the Chief Justice, and
heads of Constitutional Comissions to transfer funds within their respective offices; when these funds
involve savings generated from appropriations also for their respective offices; and when the purpose of
the transfer is to augment items in the Appropriations Law again for their respective offices.
How is "savings" defined? How did this issue make DAP problematic?
The Court defined savings as funds that remain unspent after the completion or discontinuance of a
project. Congress provided that appropriated funds are available for a period of one fiscal year. But in a
May 20, 2013 memo, Budget Secretary Butch Abad sought omnibus authority to consolidate savings and
unused funds to finance the DAP on a quarterly basis. This shortened the period that funds were
supposed to be available for, giving rise to questions about the budget departments own definition of
savings.
How were funds under DAP spent? What are related issues?
According to the Department of Budget and Management (DBM), as of 2013, P144.4 billion (about $3.3
billion) was released to implement programs, activities, projects (PAPs). In 2011, P82.5 billion (about
$1.8) was released, while P54.8 billion (about $1.2 billion) was released in 2012. About 9% of the total
DAP applied to PAPs were identified by lawmakers.
The DBM also said that 116 PAPs were financed by DAP, each of which had existing appropriations in the
budget. The Office of the Solicitor-General submitted 7 evidence packets in support of this claim, but the
Court found that there were projects not covered by an existing appropriation for example, items
under the P1.6-billion DREAM project under the Department of Science and Technology. DREAM refers
to Disaster Risk, Exposure, Assessment and Mitigation.
Are cross-border transfers or augmentations of the budget allowed?
No. Cross-border transfers refer to the movement of funds from one branch of government to another.
These are allowed only within respective offices thus the use of DAP funds to augment funds of the
Commission on Audit (for its IT infrastructure program and the hiring of litigation experts in the amount
of P143.7 million, or about $3.2 million) and the House of Representatives (for a legislative library and
archives building/e-library in the amount of P250 million, or about $5.6 million) violate the Constitution.
What is the operative fact doctrine and why is it relevant to DAP?
In effect, it says let it be, because the consequences resulting from DAP could no longer be undone. For
instance, the positive results of DAP funding could include roads, bridges, homes for the homeless,
hospitals, classrooms.
Not applying the operative fact doctrine would require the physical undoing and destruction of these
infrastructure a considerable waste. The application of the doctrine, however, does not exonerate the
proponents and implementors of the DAP unless it is established that they acted in good faith.