Pork Barrel Scam

5 things you need to know about PNoy’s Disbursement Acceleration Plan (DAP)

Screenshot 2013-10-02 21.55.08

1. Disbursement Acceleration Plan (DAP) is a government stimulus package.

It was meant to address the government’s low-level spending. Did it work?

The World Bank in March 2012 stated in their quarterly report on the Philippines: “The government’s Disbursement Acceleration Plan was partially successful and contributed 1.3 percentage points (ppt) to GDP growth in Q4”

In 2012, the National Statistical Coordination Board reported: 6.6 GDP. As of the 2nd quarter of 2013, the economy posted 7.6 GDP.

2. The Department of Budget and Management realigned unreleased appropriations from 2010, and 2011 plus windfall revenues from government-owned and controlled corporation dividends.

3. As of December 2011, the government announced that it had already spent 85% of DAP.

As of March 2012, the World Bank reported that 53% of DAP were released to National Government Agencies, and 37% to Government Controlled and Owned Corporations as well as 10% to local government units.

4. Former Budget Secretary Ben Diokno is questioning the propriety of DAP. What did Former Budget Secretary Diokno say about DAP in 2011? Here’s this article from Malaya’s business section:

“With only 10 weeks remaining of the year, the P72-billion acceleration program will barely have an impact on the country’s growth target.

“With 10 weeks to go before the end of the year, and the slow-moving bureaucracy, I expect that, at best, only one-tenth of the proposed outlay will be spent this year, the rest will be spent next year,” said Benjamin Diokno, University of the Philippines economist.

Diokno said that 10 percent of P72 billion, or P7.2 billion, won’t make much difference in a P10-trillion economy.”

5. So why were Senators involved? Budget Secretary Florencio Abad said on DAP releases in 2012: “2012, most releases were made during the period October-December, based entirely on letters of request submitted to us by the Senators.”

Image credit: Screenshot of World Bank’s Table 4.1, Philippines Quarterly Update (March 2012)

ProPinoy Exclusive: COA Chairperson answers some of your questions on PDAF Scandal

ProPinoy caught up with COA Chairperson Grace Pulido Tan and asked her about COA’s work in the pork barrel scandal, what we can expect next, and some plans underway to make government auditing a community effort. Read on!

PP: If COA conducts annual audits, why were these fraudulent projects not caught earlier? Why did it take a special audit under your direction to investigate these anomalies?

Pulido-Tan: The yearly audit of agencies is more in the nature of a compliance or financial audit, the main focus of which is to determine whether the financial statements are in conformity with generally accepted accounting principles. In the process, certain deviations or questionable transactions may be uncovered and reported, but the audit is not as extensive or in depth as a special audit. A special audit, on the other hand, is focused on a specific program of government and involves several agencies involved in the program, like the recent PDAF special audit. This kind of audit is more extensive and in-depth, and the auditors assigned for audits like this are more highly trained and skilled. The PDAF special audit was started in May 2010, before my time; it was completed in July 2012. Writing the report and getting the comments of the covered agencies took another year, hence it was released only in July 2013.

PP: In a previous interview, you mentioned uncooperativeness from the DBM resulted in some errors in the special report. Is this common when conducting an audit?

Pulido-Tan: In any audit, we rely on certain reports and information given by agencies, like the DBM, specially on matters within their functions and authority, like releases from the budget. We have the right to presume that official duty has been regularly performed. Nonetheless, we also have procedures to validate these reports, but we also need other documents which the DBM could not give us despite repeated requests. It is not uncommon for agencies to be uncooperative, because in an audit, vulnerabilities are usually uncovered. Sometimes, it is not a matter of being uncooperative; it could simply be a cavalier attitude towards record keeping and accountability on the part of the agencies. Not everyone takes these things seriously.

PP: Can you describe COA’s process of contacting the NGOs and beneficiaries concerned? What is the best effort applied by COA?

Pulido-Tan: COA exerted all efforts to contact and reach the NGOs, and this is standard procedure. We sent letters, rarely any responded. We went to their given addresses. Some we found, many we did not. It’s either the addresses were fictitious or located in residential areas or turned out to be occupied by different persons.

PP: Some legislators denied their signatures in projects the COA was auditing. Is this common? Were their records falsified, or does the evidence suggest that the lawmakers (p59-60) were indeed involved in the scheme?

Pulido-Tan: It is not for us to make a determination whether their signatures are fake. We simply state that in our report. It is a matter of defense for them, a rather common one.

PP: Can the COA report itself be used to file charges? What can government and ordinary citizens do to file substantial charges against the implicated persons and entities?

Pulido-Tan: The Report can be the basis of further investigation. This is what the IAAGCC (Inter Agency Anti Graft Coordinating Council) is now doing. The IAAGCC is composed of the Secretary of Justice, the Ombudsman and the COA Chair, the “three furies” as news reports call us. The role of the COA is to turn over and present our source documents on which our report is based for the evaluation of the OMB and DOJ Sec. This is called the fact-finding phase of the investigation. They are the ones who will decide if cases should be filed and against whom.

PP: What are COA’s next steps after releasing this report?

Pulido-Tan: We shall continue to do our work as faithfully and well as we can, without fear or favor, and assist the OMB and DOJ Secretary in the investigation and build-up of cases.

PP: You were recently at a World Bank forum unveiling the COA’s Citizen Participatory Audit (CPA). How can such the process be strengthened and rolled out to involve the public in auditing the PDAF? Are there plans to institutionalize the CPA?

Pulido-Tan: The CPA is a new program we launched last year, to involve citizens in actual audit of certain projects that impact their day-to-day life in a real way. We have piloted it on flood control, garbage collection systems, disaster aid, basic health care in every barangay, and availability of schools and classrooms. We are in the process of institutionalizing it and hopefully, we can do it for PDAF- funded projects as well.

PP: What other reforms need to take place within the COA itself so that we can be assured of transparency, accuracy, and integrity beyond PNoy’s administration? How can the public be reassured that COA is acting independently?

Pulido-Tan: Beefing up our manpower complement with the best, brightest and most upright; continuously improving their capabilities thru targeted training and workshops; properly rewarding them for their hard work and protecting them from harassment; computerizing our processes so reports are more informative and timely.

Every pork you take

You belong to that crowd who went to Luneta for the MillionPeopleMarch: your face red with rage, you cried “Scrap the pork!” You went home sobered up by the experience, but wanted to do more and make pork-busting a sideline career – what do you do?

I don’t have a complete list of “Do’s”, but I have in mind a few hints that I thought might help.

You know it all started as a PDAFscam, with corruption as the issue; focus shifted to pork, then broadened to cover the so-called presidential, P-Noy pork. Pork barrel is a 25 -billion peso item in the budget under the label Priority Development Assistance Fund or PDAF. In theory, senators and congressmen may identify projects of their choice and charge its costs against the Fund following a prescribed set of rules and guidelines. If pork barrel is generic, PDAF is the brand.

The issue morphed from PDAF to pork because some people found the brand bad and saw it fit to condemn the whole generic lot. Anyway, President Benigno C. Aquino III has dropped the label and issued a new set of rules and guidelines. Protesters want more: they want the whole pork caboodle out, no less.

P-Noy pork is native, home-cured pork. In its original sense in the US, the “pork barrel is a popular metaphor for projects and favors for legislators’ districts.” When its sense broadens to include projects for senators, the label changes to “earmarks”. Back here we lump them under the single pork label, but still in reference to Congress.

Some experts thought: pork is virtually a discretionary fund; the Executive has sole discretions over some hefty lump sum funds; ergo, these funds must be pork, too. The simplistic logic tends to mislead.

The budget is a forecast, and forecasts do fail, giving way instead for the unpredictable to happen (calamities, crises, wars, human errors, etc.) You allow for them through lump sum items. Hence, lump sums per se are not bad, even if they are discretionary.

Instead of using simplistic logic, protesters need to specify which item is “pork” and why.

If you know your issues, you would know what you want to happen or see in place, and why. This is your stand on the issue and it depends on where you sit.

On pork, you have at least two choices: scrap or reform.

The “scrap” call means removing the 25 billion peso pork item and the P-Noy pork items from the budget and distributing the funds to other line items, preferably under certain national agency budgets. It stems, implicitly, from an awesome amount of mistrust – of senators and congressmen, of P-Noy. It reserves its trust for national agency officials who were appointed by those it happens to mistrust.

Whether by design or by happenstance, this call has the effect of putting PNoy in a damned-if-you-do-damned-if-you-don’t situation, and driving a wedge between the Executive and the Congress.

Pork is the Executive’s unofficial leverage in the legislature. You use it to push for your agenda through a body whose members are otherwise focused on pursuing their individual agenda. You use pork to build coalitions that will steadily stand behind your policies. You take away all pork and you leave the Executive in a paralyzing standoff with Congress, or worse, as Senate President Franklin Drilon warned, “you place him at its mercy.”

Against the backdrop of an agitated mass demanding quick good performance, scrapping the pork amounts to an act of political self-roasting. So, if P-Noy is your political enemy, “Scrap all pork!” may make the most sense to you.

Here I find the political group Bayan as a good example. But the reverse is not true: you may be an ally to P-Noy and still shout “Scrap!” – which makes the least sense to me. In a game where reciprocity is the norm, this move amounts to a defection. I have in mind the Akbayan Partylist. “Scrap!” in fact is the most widely taken stand among the active non-organized crowd, stemming less from analysis than sheer anger alone.

Reform measures tend to find less adherents during times of ferment than radical calls. It must be why pork reform is the least popular stand. It means the pork item in the budget will stay (let alone P-Noy’s). But since it takes corruption as the core issue, it demands the putting into place of policy, participatory, procedural and like other reform measures.

There has been a burgeoning list of items for reform that are real, triggered precisely by the PDAF scam. Those in the know have started exploring alternatives to PDAF, with promising yields. Information exchange via social media helps in shaping and drawing out the wisdom of crowds.

What comes into clearer focus in the light of all this is crowd access to government information: a strong push for the approval of the Freedom of Information bill is in order. We hope to sing these lines with Sting someday:
Every breath you take
Every move you make
Every bond you break
Every pork you take
We’ll be watching you

Galang is a governance and development specialist, and a fellow of Action for Economic Reforms (www.aer.ph).