POLITICAL ECONOMICS

Disbursement Acceleration Program

“DAP yielded undeniably positive results that enhanced the economic welfare of the country”

- Supreme Court

Stabilization function of the government

The Aquino Administration introduced the Disbursement Acceleration Program

(DAP) as a reform intervention to speed up public spending and to boost economic
growth. It is a mechanism to support high-impact and priority programs and projects
using savings and programmed funds. The goal of the program is to enable the
government to introduce greater speed, efficiency, and effectiveness in budget
execution.

The program tapped the power of the president over a) the use of savings to
augment deficient programs and projects; and b) the use of unprogrammed funds.

Savings are available portions or balances of items under the General Appropriations Act (GAA)
which result from: a) the completion or final discontinuance or abandonment of a program, activity, or
project; b) unpaid compensation for vacant or unfilled positions and leaves of absence without pay; or c)
the implementation of efficiency measures that enable agencies to deliver services at lower cost. Such
savings may then be used to augment funds for programs, activities, or projects which are included in the
GAA (i.e. nonexistent budget items cannot be funded).

Unprogrammed funds are standby appropriations which are authorized by Congress in the
annual GAA, and which may only be used when a) revenue collections exceed revenue targets; b) new
revenues are collected from sources not included in the program; or c) newly-approved loans for foreign-
assisted projects are secured. Such funds can be used for new programs, activities, or projects as long as
these are consistent with the purposes listed in the GAA for the use of unprogrammed funds.

The Aquino Administration sharpened the application of such powers by

prioritizing funding for programs and projects which are a) fast-moving or quick
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disbursing; b) urgent or priority in terms of social and economic development

objectives; and c) performing well and could deliver more services with additional
funds. DAP is a measure adopted by the government in an attempt to regain stability in
the economy, arising the stabilization function of the government. Stability requires
government to use budgetary policy to achieve (1) full employment, (2) price stability
and (3) appropriate rate of economic growth- to name a few.

To make economic growth, fiscal policy is a critical component. The Aquino

administration first observed that in 2011 when the public spending slowed down, the
economic growth was consequently pulled down. Through the Disbursement
Acceleration Program, the power of the president to use savings to augment deficient
programs and projects is tapped to accelerate public spending. Seemingly, DAP is fully
realized when there is an increase in government spending to stimulate the economy
and increase the level of activity within the economy.

The sample projects funded by DAP are:

i. Payment of Unremitted GSIS Premiums for DepEd

ii. Teachers TESDA Training for Work Scholarships
iii. Sitio Electrification
iv. Doppler Radar
v. Project NOAH / DREAM
vi. Construction of Roads and Bridges

As a result, the aforesaid projects funded by DAP are seen to increase level of activity
within the economy in the same way as overall employment, aggregate demand, and
production is increased. The increased public spending will have a multiple effect upon
income, output and employment exactly in the same way as increased investment has its
effect on them.

Distribution vs Stabilization
The exercise of stabilization function of the government through DAP
complemented with the distribution function of the government. The government aims
to prioritize programs or projects which have high-impact for social and economic
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development. The laid projects under DAP were mostly spent on infrastructures, health,
food etc. which majorly benefits the people with lower income. DAP implies as
maximizing the welfare of the least well-off (the most disadvantaged) in the society,
taking Rawlsian view into account upon prioritizing programs in terms of social and
economic development objectives.

Reference

Department of Budget and Management (2017) Disbursement Acceleration Program.

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