Aquino Defends Stimulus, Braces for Top Court Showdown

Philippine President Benigno Aquino vowed to fight a judicial ruling that voided a stimulus program he said benefited people and boosted the economy, readying for a showdown with the nation’s top court.

“We did not transgress the law when we implemented the Disbursement Acceleration Program,” Aquino said in a 24-minute televised speech late yesterday in Manila. “We do not want two equal branches of government to go head to head, needing a third branch to step in to intervene.”

His comments came after two polls yesterday showed his popularity had fallen to record lows amid an outcry over the 144.4 billion-peso ($3.3 billion) program, known as the DAP. The furor threatens Aquino’s anti-corruption credentials, while any block on spending may hinder an economy that grew 7.2 percent last year, the fastest in Asia after China.

The Supreme Court on July 1 voided parts of the DAP, which fast-tracked infrastructure spending in the three years through 2013 while giving some perks to certain lawmakers, saying the plan encroached on congress’s final say on spending.

The ruling may affect growth by further slowing public spending, Christian de Guzman, vice president at Moody’s Investors Service said by phone today. Spending fell 6 percent in April and 4 percent in May, according to government data.

“The Supreme Court decision is deeply unsettling,” Aquino separately said in a speech today in Manila, and “will have a chilling effect on our economy.” The effects of the ruling “run the risk of putting our country’s development in a state of paralysis -- or worse, reversing the massive progress we have already made.”

Stock Index

The Philippine Stock Exchange Index was 0.1 percent lower at 2:50 p.m. in Manila after falling 1 percent yesterday, the biggest drop since May 29. The peso fell 0.3 percent.

“We have entered a political crisis, and the question is who will win,” Ramon Casiple, executive director of the Institute for Political and Electoral Reform in Manila, said by telephone. “The crisis could create cracks in his coalition. His allies thought he had Teflon-like popularity. That was broken.”

More than half of the stimulus plan approved in 2011 went to critical agencies such as the central bank and public works and housing departments, Aquino said today. More than 33 billion pesos was spent to repair roads and bridges, on flood control and other infrastructure projects, he said.

“I bear no grudge or ill will against the Supreme Court,” Aquino said today. The ruling would be appealed, he said. The government has 15 days from receiving a copy of the decision to file its appeal.

Popularity Rating

Aquino’s net satisfaction rating slumped by almost half to +25 in a Social Weather Stations survey conducted from June 27 to June 30, down from +45 in its previous poll in March, the company said on its website yesterday. His approval rating slid to 56 percent and his trust rating to 53 percent from 70 percent and 69 percent respectively in March, according to a separate survey by Pulse Asia Research Inc. conducted from June 24 to July 2.

“DAP is good,” Aquino said yesterday. “Our intentions, our processes, and the results were correct,” he said, adding that the funds were used “for the benefit of Filipinos. And not for later, not soon, but now.”

Aquino ran for president and won in 2010 with a pledge to rid the country of its image as one of the most corrupt in Asia. Ranked 134th of 178 nations and territories in Transparency International’s 2010 corruption perceptions index, the Philippines improved to 94 last year from 105 in 2012.

DAP Funds

Senators Juan Ponce Enrile, Jinggoy Estrada and Bong Revilla were among those who received DAP funds for various projects in 2012, according to a statement from Budget Secretary Butch Abad in September. The three are in jail awaiting trial on charges they stole part of their congressional budgets, claims they have denied.

Aquino on July 11 turned down the resignation of Abad after 15 groups filed a plunder complaint against the budget secretary. The groups including Kabataan Partylist and Youth Act Now on July 8 alleged Abad “systematically misappropriated, converted, misused, and malversed public funds” through the spending program.

The Philippine Daily Inquirer exposed the so-called pork barrel scam in July last year, sparking a government investigation that focused on businesswoman Janet Lim-Napoles as the alleged mastermind of the scheme. Lim-Napoles, who is in jail for a separate criminal case, linked at least 120 sitting and former lawmakers to the scandal in a May 26 affidavit, including some of Aquino’s allies.

In the Social Weather poll, Aquino’s net satisfaction rating peaked in June 2013 at +64, beating the first reading of +60 in September 2010 and on par with the November 2010 rating. His popularity has slipped since the “pork barrel” scandal emerged last year. His predecessor Gloria Arroyo, whose highest rating was +30 in March 2004, had a negative net satisfaction rating since October 2004 up to the end of her term in 2010.

Before it's here, it's on the Bloomberg Terminal.