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Top Philippine Court Partially Voids Aquino’s Stimulus Package

Photographer: Jes Aznar/Bloomberg

President Benigno Aquino, who completed his fourth year in office yesterday, had approved the stimulus package in October 2011 to spur economic growth. Close

President Benigno Aquino, who completed his fourth year in office yesterday, had... Read More

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Photographer: Jes Aznar/Bloomberg

President Benigno Aquino, who completed his fourth year in office yesterday, had approved the stimulus package in October 2011 to spur economic growth.

The Philippine Supreme Court voided parts of President Benigno Aquino’s 144.4 billion-peso ($3.32 billion) stimulus package in a landmark ruling that may leave him open to lawsuits seeking his impeachment.

In a decision today, the court declared as illegal some parts of the president’s Disbursement Acceleration Program, which fast-tracked infrastructure spending in the three years through 2013, while giving some perks to certain lawmakers.

“The ruling could subject Aquino to suits alleging culpable violation of the Constitution at the House of Representatives,” Ramon Casiple, executive director of the Institute for Political and Electoral Reform in Manila, said by telephone. “I don’t think any of these lawsuits will prosper unless Aquino loses control of the House or Senate,” he said.

Aquino, who completed his fourth year in office yesterday, had approved the stimulus package in October 2011 to spur economic growth. The program ended earlier this year, having met its goal of achieving economic growth of an average 7.4 percent gross domestic product growth in the first three quarters of 2013, Budget Secretary Butch Abad said in January.

Several civic groups including the Integrated Bar of the Philippines sued the government last year, arguing that the stimulus program, dubbed the presidential pork barrel, violated Congress’ exclusive power to appropriate funds.

Infrastructure Spending

Under the DAP, infrastructure spending had recovered from a 29 percent decline in 2011 to grow 34 percent by the end of September 2013, Abad said. The state also enforced projects worth 144.4 billion pesos by the end of last year, he said.

The court today ruled the executive branch violated the separation of powers under the constitution by transferring its savings to other offices, and by funding projects outside the General Appropriations Act. It also nullified the use of unprogrammed funds without a certification from the national treasurer to show they are savings.

The court in November stripped lawmakers of their discretionary power to allocate funds for infrastructure and development, known as pork-barrel budgets, ruling the practice illegal. It also barred the president from using his social fund to finance priority infrastructure development projects.

Aquino pledged to stamp out pork-barrel budgets last August after thousands of people turned to social media to criticize the system. Civic groups took to the streets on June 12 to seek the removal of politicians embroiled in the scandal, which threatens to tarnish Aquino’s anti-corruption credentials.

Authorities arrested Senators Bong Revilla and Jinggoy Estrada last month after they were indicted for allegedly stealing 224.5 million pesos and 183.8 million pesos of their discretionary budgets respectively. Senator Juan Ponce Enrile was also charged.

The arrests followed the November ruling that also sought the prosecution of officials and private citizens who benefited from the pork-barrel scam, estimated at 10 billion pesos.

“The court appears silent on whether certain officials should be charged, which shows the ruling is unlikely to create a political upheaval,” Casiple said. “Aquino must have used the accelerated spending in good faith, and he can always try to stimulate the economy within the constitutional limits.”

To contact the reporter on this story: Norman P. Aquino in Manila at naquino1@bloomberg.net

To contact the editors responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net Rina Chandran, Andrew Davis

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