Aquino Seeks to Reverse Ruling on Philippine Stimulus

Philippine government lawyers urged the nation’s top court to reverse a ruling that annulled parts of President Benigno Aquino’s 144.4 billion-peso ($3.3 billion) stimulus package that boosted the nation’s economy.

The country’s executive branch has the power to reallocate and speed up the release of public funds, as it did by fast-tracking infrastructure spending in the three years through 2013, the lawyers said.

“The President and his alter egos, in implementing a decidedly successful program, deserve to be afforded the traditional constitutional presumptions that apply to most other forms of public actions, especially the presumption of good faith,” the Office of the Solicitor General said in a 52-page pleading.

The Supreme Court voted 13 to zero with one abstention to partially void the stimulus program on July 1, saying it encroached on congress’s final say on spending. Aquino has said the ruling would have a “chilling effect” on the economy as he tries to boost growth that slowed to 5.7 percent in the first quarter, the weakest since 2011.

The July 1 ruling runs the risk of “putting our country’s development in a state of paralysis -- or worse, reversing the massive progress we have already made,” Aquino said in a speech on July 15.

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’s exclusive power to appropriate funds. The president’s Disbursement Acceleration Program, or DAP, was also controversial because it gave perks to certain lawmakers.

Court Ruling

The court ruled the executive branch violated the separation of powers under the constitution by suspending certain projects and moving the remaining budgets to other agencies. It also barred the president from funding projects outside the budget law, and nullified the use of standby funds without certification from the national treasurer to show they are savings.

In their pleading, state lawyers said that when Aquino assumed office in 2010, he had to stop some projects initiated by his predecessor that were found to be anomalous, which slowed public spending and hampered economic growth.

The DAP allowed the president to “stop the flow of scarce resources from projects that are failing and not moving and to reallocate them into projects that have higher chances of success,” Solicitor General Francis Jardeleza said.

The program ended earlier this year, having met its goal of achieving economic growth of an average 7.4 percent gross in the first three quarters of 2013, Budget Secretary Butch Abad said in January.

Public Works

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

More than 17 billion pesos or about 12 percent of DAP went to projects identified by lawmakers, local government officials and national agencies, according to a copy of a document posted on the budget department’s website.

“The president has authority to transfer savings to other departments pursuant to his constitutional powers,” government lawyers said. The court must also recognize the “designed minimal role of the Supreme Court on these matters,” they said.

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