‘Don’t blame SC for weak growth’

Sereno tells Palace ruling on DAP can’t be a factor

MALACAÑANG should not blame the Supreme Court decision declaring the acts and practices under the Disbursement Acceleration Program unconstitutional for the economy’s lackluster performance in the third quarter, Chief Justice Maria Lourdes Sereno said Friday.

She defended the high court ruling on the DAP, which the Executive branch on Thursday claimed resulted in slower government spending that resulted in a lower growth of the gross domestic product.

On Thursday, the Philippine Statistics Authority said economic growth in the third quarter unexpectedly slowed to 5.3 percent compared to 6.4 percent in the previous quarter, the weakest pace since 2011 as government spending fell, diluting the gains from private consumption and industrial production.

The figure was lower than the 7-percent expansion in the same quarter last year and below all the estimates of 24 economists in a Bloomberg survey.

Budget Secretary Florencio Abad blamed the slowdown on the high court’s ruling against the DAP.

But Sereno rejected the Palace’s insinuation that the slower growth in the third quarter could be partly attributed to the new “spending protocols” arising from the declaration that the DAP is unconstitutional.

Data from the Philippine Statistics Authority showed a 2.6-percent decline in public spending from a year earlier.

However, Sereno said the Supreme Court’s decision on DAP had nothing to do with the GDP growth rate.

“I see it as a theory and it will remain as that,” Sereno told reporters during the launching of the Justice Zone Project by the Justice Sector Coordinating Council at the Quezon City Hall.

She was one of the 13 SC magistrates who voted to strike down as unconstitutional salient provisions in the controversial DAP. They ruled that the acts and practices under the DAP violated the constitutional doctrine of separation of powers as well as the provision prohibiting the inter-branch transfer of appropriations.

The high court specifically declared as illegal the withdrawal of unobligated allotments from implementing agencies and their use as savings before the end of a fiscal year.

The Court also declared as unconstitutional the cross-border transfers of savings of the Executive to augment the funds of agencies outside the department, as well as the funding of projects and programs not covered in the General Appropriations Act.

The tribunal also voided the use of unprogrammed funds despite the absence of a certification by the national treasurer that the revenue collections exceeded the revenue targets.

Budget Secretary Florencio Abad had earlier said that the high court’s ruling on the DAP may have sent  a chilling effect across the bureaucracy’s expenditure practices and thus resulting in cautious government spending.

Public construction in the third quarter contracted from a double-digit growth of 19.1 percent to -6.2 percent due to the lags in the submission of documentary requirements for spending by government agencies. The agriculture sector also held down the economy when farm output dropped by 2.7 percent.

Growth in the third quarter was driven by manufacturing, trade, real estate, renting and business activities and construction.

The slowdown in the sub-sectors such as financial intermediation and contractions in agriculture and public administration “tempered the pace of growth.”

Despite the slower growth, Balicasan said the Philippines was still among the fastest-growing economies in the region. The Philippines aims to increase its GDP by 8.5 percent when President Aquino’s term ends in 2016.

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