Wednesday, July 16, 2014

Good faith or arrogance?

So much has been said about good faith as a valid defence to President Aquino’s illegal redistribution of government funds under the Disbursement Acceleration Program (DAP) which was recently declared unconstitutional by the Philippine Supreme Court. This promises a long and continuing government intramural between the executive and judicial branches, for as long as the Aquino administration insists that the DAP was conceived with good intentions and that it benefited those for which the impounded savings were spent.
Will Budget Secretary Florencio Abad resign or stay? Aquino tells him to stay put.
The main problem with good faith as an excuse is that it was never intended to be a defence for illegal behaviour. Where it was borrowed, primarily from the law of contracts and obligations, good faith is meant to be a precondition or an implied term in any contract between parties, such as the sale of goods or in negotiations of commercial transactions. It is the general presumption in contract law that parties to a contract deal with each other in good faith, honestly and fairly to temper inequalities in their relationship – the end in view is to preserve the right of the parties to receive the benefits of the contract.
The principle of good faith or the duty to act in good faith is frowned upon in most common law jurisdictions, unlike in civil law regimes where it is generally accepted although its application in contract determinations has also created certain legal uncertainties. But that is not the subject of this blog, however.
How the covenant of good faith in contract law can easily be transposed to the affairs of government is therefore a challenging conundrum. It could be the rationale for the Supreme Court in avoiding this issue. Instead, the high court looked at previous precedents and invoked the doctrine of operative fact, that the consequences of a declared unconstitutional law or executive act cannot always be erased or disregarded. In other words, while a law could be nullified on constitutional grounds, it effects however may be sustained. Why? Because it would pose a big burden for the government to undo what has been done, and equity alleviates this burden.
Imagine if the President and his entire cabinet can seek refuge every time under the cloak of good faith for all their actions, it would be like bestowing papal infallibility to this cabal. They would be emboldened to do whatever they wish for they could never do wrong. It’s also like imposing a Machiavellian sense of justice, that the end justifies the means, which is not the sort of moral standard government officials must observe.
Having said that, it is however clear that the President cannot use good faith as defence for his or his staff’s mistakes in the execution of laws or government programs. Perhaps, the President should revisit his oath of office. In taking his oath he has sworn to preserve and defend the Constitution and revisiting it might have a calming effect on his feelings of vindictiveness and resentment toward the Supreme Court’s decision in striking down the DAP.
In defending the Constitution, the President must also recognize that all laws or decrees like the Administrative Code he has been dangling, although not inconsistent with the fundamental law of the land, have only secondary importance.
The President’s allies in Congress are now contemplating scrapping the Judiciary Development Fund (JDF), apparently in response to the high court’s rebuke. Arguing that the JDF is a form of judicial pork barrel, the President’s allies are also insinuating a lack of transparency in the accounting and reporting of the said fund by the Supreme Court Chief Justice. If the true motivation was to diminish the integrity of the Supreme Court, perhaps the President’s allies should take a step back and consider the constitutional ramifications of their counter threat. The Constitution guarantees fiscal autonomy for the judiciary and any attempts to dilute it will again be struck down as unconstitutional, if not an infantile response to the Supreme Court’s reproach of the President.
In striking down the DAP, the Supreme Court did not find the President guilty of a criminal act. There was therefore no need for childish tantrum. The Supreme Court merely nullifies the DAP, which, by the way, the President’s Solicitor General has argued is moot since it was no longer being implemented. Why would then the President decide to speak on nationwide television to unleash his attack against the Supreme Court under the guise that he was merely reporting to his “bosses,” the Filipino people?
Time to show your true colours, President Aquino asks supporters to wear
yellow ribbons to show their support for his administration.

President Aquino’s latest public behaviour betrays the vindictiveness and ignorance of a child in the body of a grown man.
As leader of his country, the President should realize that ours is a representative democracy where the people have agreed to delegate their power to the institutions of government as envisaged by the fundamental law of the land. While it is true that the people are the real “bosses,” the President is not supposed to run to them for help whenever another co-equal branch of government chastises his illegal actions. Unless the President is invoking the constitutional right of the people to initiate legislation by initiative or referendum. Or perhaps, if he is mobilizing the people to a nationwide revolution or another people power to abolish the government and install a better one. But that certainly is not the case, not for this President who is simply hanging on to the legacy of his more popular parents in restoring democracy in the country after twenty years of political repression and dictatorship.
His argument that the DAP was good for the people, albeit being unconstitutional, is also a false message because reality does not support it. The DAP was supposed to perk up government spending to stimulate a laggard economy. Whether it was accomplished could probably mitigate the finding of illegality by the Supreme Court – the doctrine of operative fact.
But reality bites and it is scathing and harsh.
President Aquino and his officials claimed that the DAP stimulated the economy in 2011, with DAP spending contributing to 1.3 percentage points in the growth of the gross domestic product in the last quarter of 2011. The World Bank however disputed the GDP growth, pointing that the 1.3 percentage gain in government consumption and public construction was not due to DAP alone.
Another Philippine think-tank organization estimated the real contribution of DAP-related spending to economic growth to likely one-fourth of a percentage point in the fourth quarter of 2011 and less than a tenth of a percentage point for the whole year.
In defending the controversial implementation of the DAP, President Aquino told businessmen and the World Bank that the Philippine economy grew under his watch and warned that the Supreme Court rebuke of the DAP may reverse this progress.
Truth be told, the Aquino government failed to install significant structural reforms in the real economy to spur any improvement. This is no different from the earlier hype over the Philippines’ credit rating upgrade which was used by the current administration to distract from the country’s real economic woes like rising inequality and unemployment.
In grossly exaggerating the true impact of the DAP on the economy, the President is now resorting to making the Supreme Court’s decision a scapegoat to explain the current economic slowdown. And if there is truth to the allegations that portions of the DAP were lost to corruption, such as the alleged payment of bribes to members of Congress in return for the impeachment of former Supreme Court Chief Justice Renato Corona, this would further undermine the President’s argument that the DAP was a good program because it benefited the economy and improved the general welfare of Filipinos.

Seemingly lost in the controversy surrounding the Supreme Court’s decision to invalidate the DAP, and previously, the Priority Development Assistance Fund (PDAF) or the pork barrel for members of Congress, is the Malampaya Fund  which is commonly referred to as the Presidential Social Fund. The Malampaya Fund, which consists of royalties paid to the government by the operators of the Malampaya Gas Project in Palawan, is not subject to congressional oversight and could be the mother of all pork barrels, much bigger than the PDAF and DAP combined. Since 2001, the government has received a whopping US$1 billion annually in royalties.

President Aquino must be worried by now about his legacy, if any, which is slowly being eroded by his failure and inability to accept responsibility for the shortcomings of his administration. If there’s any consolation, he still has two more years to salvage his sinking presidency. But if the President continues to stubbornly defend the debunked DAP only to heighten an unnecessary confrontation with the judiciary, he would just be validating a Filipino psychic’s prediction that he will be ousted from power amid growing public discontent, with the possibility of spending jail time for charges of corruption.

Such a comical twist to the President’s mantra of daang matuwid.

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