Wednesday, July 30, 2014

PNoy: Pinoys Are Worth Fighting For

Emotional but substantive was PNoy’s SONA (State of the Nation Address).

Quoting his late father Ninoy Aquino, PNoy said in his SONA, “The Filipino is worth dying for.” Followed it with “The Filipino is worth living for.” Then, from him, “ At idagdag ko naman po: the Filipino is definitely worth fighting for,"

What indeed, is the State of the Filipino nation today?

Right off the bat, the Filipino is fortunate to have a President who is good and honest and who is determined to follow the righteous path. In the process, he is expecting and exhorting others to follow. Many did but understandably, old habits die hard. As I said in a previous column, it takes a whole generation to reform society and its people.

The Philippines now has an investment grade status. It is a rating that is yearned and envied by many countries. The grade was obtained from Fitch, Moody’s, and Standard and Poor’s – the three recognized international “raters”.  Measured against the performance of other countries and against its own past, the country’s investment grade rating is unprecedented and, historically, a record. That alone, is a sign of good things to come. The burden of high interest payment for loans is reduced, and more investments are likely to follow.

 No other than the World Bank President Jim Yong Kim has hailed the “Philippines as the next Asian “miracle” and a global model in fighting corruption, as it emerges from decades as a regional economic laggard.”

In fact, he further said President Benigno Aquino should take much of the credit for the turnaround, highlighting his ant-corruption campaign, efforts to build transparency in government and focus on “inclusive growth”.

Based on the data published by the International Monetary fund, in the years 2012 and 2013, the Philippines posted high GDP growth rates, reaching 6.8% in 2012 and 7.2% in 2013, the highest GDP growth rates in Asia, followed by China and Indonesia. The goal is to maintain such level of growth.

Battle Against Corruption

As of today, PNoy’s anti-corruption campaign has yielded some outcomes that show the government’s determination and commitment. It is following what I described in a previous column as GPS (Government Prosecution of the Sleazy).

For the first time in history, three Senators, the Mastermind of the Pork Barrel Scam (Napoles), and many other public officials are in prison for being charged with Plunder. Others are charged for lesser offenses of violation of ant-graft laws.  The expectation is that many more will be charged soon.

SONA 2014

PNoy’s SONA was 91 minutes long compared to last year’s 102 minutes. It garnered a total of 85 applauses.

The Philippine Inquirer published a summary of his SONA. I will mention some features of the report.

After the usual greetings, he thanked foreign donors for their assistance during Super Typhoon Yolanda. He cited Albay’s zero casualty during Typhoon Glenda; he praised Albay Gov. Joey Salceda. He reported the arrest of those involved in the killing of Mayor Ernesto Balolong and businessman Richard King.

He enumerated government acquisitions to modernize Armed Forces—new helicopters, country’s first landing craft utility ship BRP Tagbanua.

He reported that 1.65 million were employed from April 2013 to April 2014. He expects the completion of the Tarlac-Pangasinan-La Union Expressway until Urdaneta by this year, and until La Union by 2015. He enumerated more infrastructure projects such as:

Fix 108.8 kilometers of roads, bridges and landslide-prone areas damaged by Yolanda; and Continue to “Build Back Better” for those affected by Yolanda.

AFP modernization was, he considers, an important achievement: Two of 12 FA-50 lead-in fighter trainer jets coming in next year; the rest expected to be delivered by end of 2017; 17 refurbished UH-1 helicopters expected by September.

Other target military purchases: Brand-new 8 Bell combat utility helicopters, 2 antisubmarine helicopters, 10 AgustaWestland-109 helicopters, 2 light-lift aircraft, 3 medium-lift aircraft and radar systems, among others. The acquisition of 50,629 M4 assault rifles is also expected in the next months.

Legislating pension reform in order to gain funds to hire more policemen and buy new equipment for PNP is a priority.

On Agrarian reform: Completion of Cadastral survey by 2015 after 102 years. He will suggest legislation to extend delivery of notices of coverage.

On Bangsamoro: Working on Bangsamoro Basic Law and push for its passage.


Columnist Mel Sta. Maria reported that in a survey conducted by TV5, PNoy’s speech was received favorably by 84% of the listeners and watchers.
Even oppositionists and critics had something positive to say. In a statement, Sen. Ramon "Bong" Revilla Jr. praised Aquino for ditching macho posturing and politicking in the SONA and focusing instead on his programs.

Revilla said the President could have accomplished more in the past four years if he had adopted a similar track since taking office in 2010.
Sen. Jinggoy Estrada also praised President Aquino for spending much of his SONA enumerating completed projects and accomplishments.
Both are in prison. They must have access to TV or the Internet.
The State of the Nation cannot be aptly described unless the status of DAP controversy is also included.  What has not been cleared by the Press in its reporting to the public is that DAP itself has not been declared unconstitutional. The Supreme Court declared only certain acts and practices as unconstitutional.  The misunderstanding in these acts and practices is in the definition of “savings” and other terms used.  This is why PNoy has asked for a clearer definition by Congress so that the legislative intent would not be misinterpreted.

The President also asked for a Supplemental Budget to fund the numerous DAP Projects that are in the pipeline and which he believes are beneficial to the people.

It looks like he really believes that “the Filipino is worth fighting for."

Tuesday, July 22, 2014

DAP and the Enabling Law (Part II)

In Part I of my series on the DAP case, I described my views on the doctrine of Separation of Powers.  I argued that PNoy’s DAP could not have usurped the Congressional Power of the Purse because the latter is really a MYTH. That such power is really tilted more to the President as provided for in the budgetary process per the Constitution, the Administrative Code, and the General Appropriation Acts.  How could he usurp a power that he already possesses?  At worst, he shares it jointly with Congress.  So, to declare that certain PNoy’s acts and practices violated the doctrine of Separation Powers seems to me, legally and judicially, unsound.

The Supreme Court also ruled that certain acts and practices under the DAP violated Section 25(5), Article VI of the 1987 Constitution which states,
 “No law shall be passed authorizing any transfer of appropriations; however, the President, the President of the Senate, the Speaker of the House of Representatives, the Chief Justice of the Supreme Court, and the heads of Constitutional Commissions may, by law, be authorized to augment any item in the general appropriations law for their respective offices from savings in other items of their respective appropriations.”

This provision requires enabling law/s. There are two parts in this section:

First part: No law shall be passed authorizing any transfer of appropriations.

Second part: May, by law, augment any item in the general appropriations law for the respective offices of the President, Senate President, Speaker, Chief Justice, heads of Constitutional bodies from savings in other items of their respective appropriations.

Meaning of First part: From now on, no more law authorizing any transfer of appropriations. Existing laws that authorize such transfers and are not declared unconstitutional shall remain valid and enforceable. The prohibition regarding transfers refers only to appropriations, not savings.

The Administrative Code of 1987 is still valid, and has been cited and recognized by the Supreme Court.  The following sections refer to the use of savings:

SECTION 39. Authority to Use Savings in Appropriations to Cover Deficits. Except as otherwise provided in the General Appropriations Act, any savings in the regular appropriations authorized in the General Appropriations Act for programs and projects of any department, office or agency, may, with the approval of the President, be used to cover a deficit in any other item of the regular appropriations: Provided, that the creation of new positions or increase of salaries shall not be allowed to be funded from budgetary savings except when specifically authorized by law: Provided, further, that whenever authorized positions are transferred from one program or project to another within the same department, office or agency, the corresponding amounts appropriated for personal services are also deemed transferred, without, however increasing the total outlay for personal services of the department, office or agency concerned.

SECTION 49. Authority to Use Savings for Certain Purposes. Savings in the appropriations provided in the General Appropriations Act may be used for the settlement of the following obligations incurred during a current fiscal year or previous fiscal years as may be approved by the Secretary in accordance with rules and procedures as may be approved by the President...

Meaning of Second Part: “May, by law” – meaning requires an enabling or implementing law. Law means legislative fiat that involves the actions of Congress and the President, the political departments of the government.

From the law, the definition of savings, the pooling of savings, use of savings, augmentation, transfers and other terms should be derived. The enabling law is usually the General Appropriations Act for a given fiscal year and/or existing laws that are still in effect that may allow transfer and augmentation from one department, office, agency to another.  Such laws are Sections 38, 39 and 49, Chapter 5, Administrative Code.

SECTION 38. Suspension of Expenditure of Appropriations.—Except as otherwise provided in the General Appropriations Act and whenever in his judgment the public interest so requires, the President, upon notice to the head of office concerned, is authorized to suspend or otherwise stop further expenditure of funds allotted for any agency, or any other expenditure authorized in the General Appropriations Act, except for personal services appropriations used for permanent officials and employees.

There is nothing in the Supreme Court decision that declared Sections 38, 39, and 49, Chapter 5 of the Administrative Code of 1987 as unconstitutional.

The Supreme Court should consider the legislative intent in interpreting the law.  It should consider the President's executive powers as responsible for running the government as well as in managing the economy. And for that, the President is correspondingly empowered to use the savings, as he deems proper. Both Congress and the President are one in their definition of savings and the use of savings. This is consistent with their joint Power of the Purse.  

The Commission on Audit (COA), which measures the accountability of public officials, recognizes this when it requested the transfer of savings from the Executive so COA could augment its digital infrastructure and improve its auditing capabilities.

In fact, the Supreme Court also recognized it when en banc presided by Acting Chief Justice Antonio Carpio passed a resolution authorizing the transfer of savings to another department – the Executive.

The Supreme Court in the exercise of Judicial Review should not be indulging in Judicial Legislation that encroaches upon the prerogatives of the two political departments of the government.

I will not be surprised if the Supreme Court does a clarification amounting to modification of its decision.  Pride would probably prevent a complete reversal but who knows, the Supreme Court composed of almost the same Justices just did it only a few months ago.

Tuesday, July 15, 2014

DAP: Separation of Powers and Power of the Purse

I spent a substantial portion of my weekend reading the Supreme Court Decision on DAP penned by Justice Lucas Bersamin as well as the opinions of some of the other SC Justices. I also read views of respected legal scholars and the articles of smart investigative reporter Raissa Robles.  I woke up early so as not to miss the address of President Benigno Aquino III as he explained his administration’s position on the matter.

His explanation to the people sounded clear and convincing as he spoke using the country’s national language, Pilipino. He said his office decided to file a motion for reconsideration.

Will it prosper?  Brilliant lawyer and professor Rene Saguisag thinks that it is “legally tenable and defensible”.  But convincing 13 or the majority of the Supreme Court Justices to reverse their views will be hard. The same Supreme Court earlier declared the PDAF as unconstitutional.  It reversed previous Supreme Court rulings on PDAF or the Pork Barrel System.
The Supreme Court did NOT declare PNoy’s Disbursement Acceleration Program (DAP) unconstitutional. It only considered certain parts, “acts and practices under the Disbursement Acceleration Program (DAP), National Budget Circular No. 541 and related executive issuances unconstitutional for violating Section 25(5), Article VI of the 1987 Constitution and the doctrine of separation of powers, such as:
(a) The withdrawal of unobligated allotments from the implementing agencies, and the declaration of the withdrawn unobligated allotments and unreleased appropriations as savings prior to the end of the fiscal year and without complying with the statutory definition of savings contained in the General Appropriations Acts;
(b) The cross-border transfers of the savings of the Executive to augment the appropriations of other offices outside the Executive; 
(c) The funding of projects, activities and programs that were not covered by any appropriation in the General Appropriations Acts.
The Court further declared void the use of unprogrammed funds despite the absence of a certification by the National Treasurer that the revenue collections exceeded the revenue targets for non-compliance with the conditions provided in the relevant General Appropriations Acts (GAAs).”
In short, as far as the Justices are concerned, all other parts, acts and practices that DO NOT fall under any of the four, are CONSTITUTIONAL.
In fact it was ruled “The DAP is not an appropriation measure and does not contravene Section 29(1), Article VI of the ConstitutionThe President, in keeping with his duty to faithfully execute the laws, had sufficient discretion during the execution of the budget to adapt the budget to changes in the country’s economic situation. He could adopt a plan like the DAP for the purpose. He could pool the savings and identify the PAPs to be funded under the DAP. The pooling of savings pursuant to the DAP, and the identification of the PAPs to be funded under the DAP did not involve appropriation in the strict sense because the money had been already set apart from the public treasury by Congress through the GAAs. In such actions, the Executive did not usurp the power vested in Congress under Section 29(1), Article VI of the Constitution [that no money shall be paid out of the Treasury except in pursuance of an appropriation made by law.” (IBP Makati Continuing Legal Education)
The Supreme Court says that Section 25 (5) Article VI of the 1987 Constitution and the doctrine of Separation of Powers were violated.
I will deal with the Doctrine of Separation of Powers in this issue. I will discuss my views on the violation of Section 25 (5) Article VI of the Constitution in Part 2 of my column.
Doctrine of Separation of Powers – Power of the Purse
Section 1, Article II of the 1987 Constitution says, “The Philippines is a democratic and republican State. Sovereignty resides in the people and all government authority emanates from them.”

The sovereign people elect the President, the members of Congress, and local officials for their national and local interests. Their will and desires are expressed through the elected officials. 

In national governance, both the President and Congress are the political departments. The Judiciary do not get elected and are therefore, not expected to express the people’s desires. Members of the Judiciary are appointed by the President in order to interpret the laws taking into consideration the original and legislative intent of the source – presumably the people.
Although the powers of Congress and the President should be separate, both are expected to work together for the benefit of their BOSSES – the people. The fact is, their powers really complement each other to achieve a government of the people, by the people, and for the people.
The Power of the Purse should be a legislative power separated distinctly from Presidential powers. In fact, for so many years, the Supreme Court used it as a basis for declaring PDAF or pork barrel as constitutional. It ruled, “It was a legitimate exercise of the Power of the Purse."
This was more of a myth than reality. 
Let us consider the National Government Budgeting process as provided for in BOOK VI of the Administrative Code of 1987.
1.    The Budget Preparation phase is done by the Executive Department.
2.    The Budget Authorization or Legislation phase is supposed to be done by Congress. But constitutionally, the latter cannot increase the budget submitted by the Executive. The General Appropriations bill passed by Congress does not become law unless signed by or allowed to be so by the President.  In fact, the latter even has the power to veto the entire appropriations bill, line items or inappropriate provisions. It takes 2/3 votes to override his veto. The President’s vote is equivalent to 2/3 minus 1 of the total votes in the House and the Senate voting separately. The President can hasten the legislative process by certifying a desired measure as urgent.
3.    The Budget Execution phase is, of course, all-executive.
4.    Then the Budget Accountability that happens alongside with Budget Execution is obviously non-legislative.
Section 25 (5) Article VI of the 1987 Constitution, together with Sections 38, 39, and 49 of Chapter 5 of the Administrative Code actually confirm that the Power of the Purse as a separate legislative power is more of a myth.  Section 38 empowers the President to suspend expenditures of appropriations whenever in his judgment the public interest so requires. Section 39 authorizes the President to use savings in appropriations to cover deficits. Section 49 gives the President authority to use savings for certain purposes that include: “priority activities that will promote the economic well-being of the nation, including food production, agrarian reform, energy development, disaster relief, and rehabilitation; and repair, improvement and renovation of government buildings and infrastructure and other capital assets damaged by natural calamities.”
Former National Treasurer Leonor Magtolis Briones, a perennial critic of PNoy even confirms this reality in a meeting with Congressmen.  Congress does not really have the Power of the Purse. It is a myth!

So, why accuse the President for encroaching upon a power that he actually possesses under the Constitution, the Administrative Code, and the General Appropriations Acts? Why focus on the separation rather than the complementing of powers for the benefit of the sovereign people? 

When the President transfers savings to COA in order to purchase computers and to improve auditing efficiency, he empowers the agency not usurps its power.  When the President transfers savings to Congress to complete its eLibary project, thus improving its digital infrastructure, he empowers legislators to access data and knowledge, not encroaches upon their powers.

Reviewing the doctrine of Separation of Powers as applied to the DAP case would be a wise move!