Immediate probe on DAP-like P20 billion fund mechanism sought

“This is highly vulnerable to corruption and it also contains a mechanism similar to a provision of the Disbursement Acceleration Program (DAP) that has been declared unconstitutional by the Supreme Court.” – Kabataan Partylist Rep. Terry Ridon


MANILA – As 28 signatories representing various groups filed the first impeachment rap to greet Aquino when Congress opens on June 28th, Kabataan Partylist Rep. Terry Ridon filed on the same day House Resolution No. 1284 seeking a probe of another funding mechanism, which, he said, is similar to the controversial Disbursement Acceleration Program (DAP). This is the Grassroots Participatory Budgeting (GPB) began in 2012 and ongoing up to now till 2016 as planned.

The youth representative wants Congress to investigate the implementation of projects, activities and programs under the multi-billion Grassroots Participatory Budgeting (GPB). “This is highly vulnerable to corruption and it also contains a mechanism similar to a provision of the Disbursement Acceleration Program (DAP) that has been declared unconstitutional by the Supreme Court,” Kabataan Partylist Rep. Ridon said.

What is DAP-like in the GPB is the part that enables local government officials to cancel and replace projects already indicated in the annual General Appropriations Act (GAA), the youth representative said.

Like the DAP, the GPB has the stamp of President Aquino’s claim to “good governance.” Like in the PDAF scam, the funds are channelled to recommended projects by NGOs close to the Aquino government. A preliminary examination of how GPB operates reveals also the participation of Sec. Florencio “Butch” Abad through the budget department, and “civil society organizations” close to DSWD Sec. Dinky Soliman and Sec. Teresita Quintos Deles, Presidential Adviser on the Peace Process.

The Department of Budget and Management (DBM) defines GPB as “an approach to preparing the budget proposal of agencies, taking into consideration the development needs of cities/municipalities as identified in their respective local poverty reduction action plans that shall be formulated with strong participation of basic sector organizations and other civil society organizations.”

The main channel of these funds, the CODE-NGO, which was previously led by DSWD Secretary Dinky Soliman and Presidential Adviser on the Peace Process Sec. Teresita Quintos Deles, defines the GPB as “a game changing mechanism that allows citizens, local CSOs and local government units to contribute directly in deciding how the national budget pie is subdivided every year.” This they say they do by working in partnership with local officials from village-level and up.

Since its inception in 2012 the GPB has been implemented in three cycles according to CODE-NGO’s website, the latest is the 2015 cycle and CODE-NGO is now telling its members “to prepare for the upcoming 2016 cycle.”
Through the GPB, select local government units are asked to give a “wish list” of P15 million ($345 thousand plus) worth of projects that they want the national government to fund, Rep. Ridon said. The wish list is to be drawn through consultations with local basic sector organizations (BSOs) and civil society organizations (CSOs) peopled or led by CODE-NGO partners or members.

“GPB is people’s participation at work,” the CODE-NGO said. But according to Rep. Ridon, the participants here are mostly members only of CODE-NGO.

Deles and Soliman, in their capacities now as Cabinet secretaries, have active roles in the Aquino government’s counter-insurgency programs. The Cordillera Peoples Democratic Front (CPDF) for example, branded, in 2012, the Kalahi and CCT programs under the DSWD as “a counterinsurgency ploy and milking cow of unscrupulous politicos and agency heads at different levels (of government).” Bayan’s Renato Reyes has also pointed out that the Pamana project of OPAPP under Deles, much like the Conditional Cash Transfer program under DSWD’s Soliman, “is essentially a counter-insurgency program masquerading as a peace and development program.” The DSWD and the Office of the Presidential Adviser on the Peace Process both have control of the Kalahi funds, targeting for “anti-poverty projects” conflict-ridden areas. (Ridon said Kalahi also derives funds from GPB.)

The said caucus of NGOs denied in its website that GPB is pork barrel. They cite the process of drawing up the wish list before these are submitted to Congress and Senate for inclusion in the General Appropriations Act (GAA). At its previous name suggests, the bottom-up budgeting is the reverse of PDAF-like mechanism where congressmen and senators recommend agencies to be given block funds. In GPB, joint NGO-local government “consultation” pegs the wish list of interventions and projects, which it then submit to Regional Poverty Reduction Action Teams for review.

In 2012, the DBM-DILG-DSWD-NAPC Joint Memorandum Circular No. 3 series of 2012 also provided the policy guidelines and procedures in implementing the bottom-up planning and budgeting (previous name of GPB) for fiscal year 2014 budget preparation.

When the mechanism started, the fund under GPB reached P8.4 billion ($193.5 M) spread over 595 municipalities. For 2014, the budget under GPB soared to a total of P20.03 billion ($462 M) spread over 1,226 municipalities, almost at par with the budget for the now defunct Priority Development Assistance Fund (PDAF), said Ridon. In 2015, the government announced that the GPB will again be expanded to include all municipalities and have a budget amounting to P22 billion ($507.3 M).

Similar to DAP

“The first red flag on the GPB is that it gives LGUs the ability to cancel and replace certain programs and projects, a characteristic similar to that of DAP,” Ridon said in HR 1284. The Supreme Court struck down as unconstitutional the “funding of projects, activities and programs that were not covered by any appropriation in the General Appropriations Act.”

In National Budget Memorandum No. 121 issued on March 18, DBM stated that, “If a project [under GPB] is deemed not feasible for implementation after validation of the concerned participating agency, the project may be replaced with another project that can be implemented by the same participating agency in the same city or municipality” subject to the following conditions:

• The project has been deemed not feasible for implementation by the concerned participating agency

• The project is located in a city or municipality that was greatly affected by Yolanda (as identified in Annex A), Bohol Earthquake (as identified by the Region VII RPRAT), and Zamboanga City

• The project has been funded/implemented through another funding source(s)

Ridon said the GPB “opened a new way for the Executive Department to usurp the congressional power of the purse” in allowing the cancellation and replacement of projects already identified in the General Appropriations Act.

‘CODE-NGO monopoly not equal to broad people’s participation’

Ridon also pointed to the “apparent monopoly” of the Caucus of Development NGO Networks (CODE-NGO) in the GPB process.

Although relevant memorandum circulars pertaining to GPB call for broad participation of CSOs and people’s organizations, “about 300 CSOs belonging to CODE-NGO has almost a virtual monopoly on seats in the Local Poverty Reduction Action Team (LPRAT) of the 1,233 cities and municipalities under GPB,” Ridon said.

The LPRAT – which is tasked to identify programs and projects to be funded under GPB – is composed of local government officials, representatives of National Government Agencies (NGAs), and representatives from CSOs. The LPRAT is chaired by the local chief executive and co-chaired by a CSO representative.

“In many instances, CSO representatives in whole provinces come from only one or two CODE-NGO member organization. Such monopoly on the representation of grassroots organizations leaves room for doubt on the actual participatory character of GPB,” Ridon said.
The CODE-NGO was formed by former NGO workers who now apparently work side by side with the government through its participation in GPB.

So-called ‘Real’ NGO’s exclusionary approach

Kabataan Partylist Rep. Ridon said the “CODE-NGO’s apparent monopoly in the participation in the GPB process actually excludes other peoples’ organizations from taking part in the process.” As a result, the process “perpetuates a system of patronage politics that excludes the marginalized sectors while giving more room to those who are well-entrenched in government,” he added.

The lawmaker pointed out that during the Arroyo administration, CODE-NGO has also been implicated in a large-scale controversy involving the Poverty Eradication and Alleviation Certificates (PEACe) bonds, wherein CODE-NGO profited about P1.8 billion.

“There have been accusations that officials of CODE-NGO pocketed proceeds from the PEACe bonds, and that the consortium was able to secure this big-ticket transaction as a prize from former Pres. Gloria Macapagal-Arroyo for the group’s support in the ouster of former Pres. Joseph Estrada,” Ridon said in HR 1284.

The DSWD Secretary Dinky Soliman and Presidential Adviser on the Peace Process Teresita Deles – both of whom are receiving funds from the GPB through their agencies, according to Ridon – were also implicated in the PEACe bond scam.

Considering the virtual monopoly of CODE-NGO of projects funded by GPB, Ridon asked if Soliman and Deles’ participation does not constitute conflict of interest.

‘Vulnerable to corruption, patronage politics’

Deputy Presidential Spokesperson Abigail Valte has defended the GPB, saying CSOs do not have anything to do with regard to project implementation. But in HR 1284 filed by Ridon, it said that there is no provision in GPB disallowing CSOs from actually taking part in the implementation stage.

Not only is GPB vulnerable to corruption with the selected NGOs and partner local government standing to benefit, it can also be taken advantage by politicians with ambitions to run in 2016.

“With DILG at the helm of implementing GPB projects, some also speculate that the P20-billion budget for GPB is actually allotted for the supposed candidacy of DILG Secretary Mar Roxas in the upcoming 2016 presidential elections,” Ridon said in HR 1284.

In fact, netizens have been criticizing and posting “Epal alerts” against Sec. Roxas who has been doing rounds in LGUs in the past months personally distributing funds and inaugurating projects under the GPB.

As 2016 elections approach with signs that public funds are still being turned into pork barrel turned to patronage kitty and another stab at government position, youth legislator Ridon stressed the importance of immediately investigating this “bottom up budgeting” or GPB. (

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