Redefining 'Savings' in the National Budget Post-Dap: A Case Study (and Cautionary Tale) of Hyper-Presidentialism in Public Finance

Abstract

On 01 July 2014, the Supreme Court declared the Disbursement Acceleration Program (DAP), President Benigno S. Aquino’s multi-billion peso “economic stimulus” program, unconstitutional. In its aftermath, Congress – with the explicit support (if not direct inducement) of top executive officials – set about finding ways to work around the Supreme Court’s ruling. Since the Supreme Court’s invalidation of the DAP was anchored on, among various other grounds, the finding that said program involved the unlawful declaration and utilization of savings as defined in the law, Congress initiated the redefinition of the concept of “savings” in the General Appropriations Act (GAA) or the National Budget. This re-conceptualized definition of “savings” will be introduced for the very first time in the coming fiscal year 2015. Being a significant departure from the concept of “savings” that have historically been adopted in all GAAs since the post-EDSA era, it warrants close scrutiny.

In this paper, I argue that the DAP (and, by extension, the redefinition of “savings” in the 2015 GAA that was adopted to resuscitate the invalidated DAP), is symptomatic of the tendencies of the Philippine political system to concentrate power in the hands of the President vis-à-vis Congress and the judiciary. This phenomenon is called “hyper-presidentialism,” characterized by Presidential “overreaching” into spheres of governance not constitutionally assigned to the executive department, in the face of inadequate checks-and-balances and “political pushback” from the legislative and judicial departments.

Using, as a case study, efforts to adopt a “post-DAP” redefinition of “savings” in the 2015 GAA, I argue that despite the “watering down” of the House of Representatives’ original proposal (as reflected in the ratified Bi-Cameral Conference Committee version), similar attempts to re-conceptualize “savings” in a manner that diminishes Congress’ well-established “power of the purse” will most likely be replicated in the future, given the prevailing hyper-presidential tendencies of the political system. I conclude that hyper-presidentialism disturbs the delicate balance between co-ordinate branches of government that should ideally act as a safeguard against improper spending of public funds. Hyper-presidentialism should, therefore, be controlled, especially in the field of public finance, where the ill effects of mishandling of power over public finds are most acute.

Keywords: public finance, budget, hyper-presidentialism, separation of powers