HERE’S a test case for the newly created Presidential Anti-Corruption Commission (PACC): the unlawful release of P38.807 billion from the proceeds of the Malampaya
natural gas project officially reported by the Commission on Audit (COA) last October to President Duterte. A copy of the report was also submitted earlier to the office of Budget Secretary Benjamin E. Diokno on August 31, 2017.
As of June 30, 2013, a total of P173.280 billion was received by the government as its share from the net proceeds of the operations of the Camago-Malampaya gas plant in Palawan, and of this amount, the Department of Budget and Management (DBM) released a total of P38.807 billion, or 22.41 percent of the amount, to various national government agencies, government-owned and -controlled corporations and the Provincial Government of Palawan between January 20, 2004, and May 21, 2012.
The DBM secretaries under former President Gloria Macapagal-Arroyo were the late Emilia Boncodin (from January 23, 2001, to July 8, 2005), Romulo Neri (from July 19, 2005, to February 15, 2006), Rolando Andaya Jr. (February 15, 2006, to February 24, 2010) and Joaquin Lagonera (in acting capacity from March 8, 2010, to June 30, 2010).
Serving as budget secretary under former President Benigno S. Aquino III’s term was Florencio B. Abad from June 30, 2010, to June 30, 2016.
The fund releases “were not intended for energy resource development and exploitation programs and projects of the government,” a COA Special Audit Team (SAT) composed of Grace de Castro, overall team leader; Maria Luisa Gutay and Michelle Ceras, co-team leaders; and Ray Christopher Pio Roda and Pater Jigo Boado, members.
The SAT reported three major findings based on violations of the fund releases.
The table provided in the SAT report showed the following implementing agencies (IAs) that received the biggest amounts of fund:
the Department of National Defense (Armed Forces of the Philippines-General Headquarters)— P7.268 billion;
- the Department of Finance (DOF)-Bureau of Treasury (BTr) (National Power Corp.)—P6.624 billion;
- the Department of Agriculture—P5.824 billion;
- the Department of Public Works and Highways (DPWH) (Office of the Secretary)—P2.99 billion;
- the Department of Interior and Local Government (DILG) (Philippine National Police [PNP])—P2.14 billion;
- the DOF-BTr (National Electrification Administration)—P1.922 billion;
- the DOF-BTr (National Housing Authority)—P1.399 billion;
- the Department of Agrarian Reform—P900 million;
- the DPWH-Regional Office 1—P759.362 million;
- the Department of Health (DOH)—P745.926 million;
- the Department of Energy (DOE)-Provincial Government of Palawan—P560 million; and
- the DOE—P550 million.
The team said the rest of the IAs identified in the report received well below P500 million.
“The DBM failed to properly evaluate and establish the basis for the release of Malampaya funds to 62 IAs due to the absence of the mandatory documentary requirements prescribed under existing laws, rules and regulations, which contributed to the irregular disbursement of public funds,” the audit team said.
Lack of mandatory documents
Based on the report, P36,287, 503,000 of the total P38.807 billion funds were released to 62 government IAs through 184 special allotment release orders (Saros).
The COA said the fund releases were made by the DBM despite the absence of the mandatory documents, such as formal request from the IAs, approval from the Office of the President, endorsement from the DOE and DBM evaluation reports.
The COA said fund releases totaling P7.103 billion covering 15 Saros were made by the DBM “without first establishing the propriety of the projects to be funded and the reasonableness of the amount being requested by the IAs.” The 15 Saros were released between 2004 and 2009 under the term of Arroyo.
The COA report showed that P5.824 billion of the fund went to the DA; P900 million to the DAR; P745.926 million to the DOH; P200 million to the DOE; P100 million to DOE-Second District of Palawan; and P100 million to DOE-First District of Palawan
“In the absence of specific documentary requirements, the DBM does not have an idea on whether the project was necessary or not. This clearly manifested that the DBM released the funds without thorough evaluation,” the COA report read.
Illegal fund releases
The COA said Saros amounting P2.171 billion were released by the DBM “for purposes other than those for which the funds were approved for release by the President.”
The COA said the fund releases were in clear violation of Section 8 of Presidential Decree 910 signed by the late President Ferdinand E. Marcos on March 22, 1976, which states that a special fund shall be used “only to finance energy resource development and exploitation.”
The COA report said this specific provision of the law was not strictly observed, particularly on 24 fund releases made from 2004 to 2009, to wit:
- P584 million released to the DILG-PNP for “procurement, transport, storage and distribution of supplies and materials, including maintenance of equipment and
facilities;” - P375 million released to the DILG-PNP for “conduct of operations and other related confidential activities against dissidents, subversive lawless elements and organized crime syndicates;”
- P293.63 million released to the DILG-PNP for “procurement, transport, storage and distribution of supplies and materials, including maintenance of equipment and facilities…to enable the PNP to respond immediately in times of natural
calamities;” - P185.39 million released to the DND-AFP for “internal security operations—air and ground combat services;”
- P160 million released to the DILG-PNP for “conduct of intelligence and counterintelligence
activities;” - P114.8 million released to the DILG-PNP for “conduct of operations and other related confidential activities against dissidents, subversive lawless elements and organized crime syndicates”; and
- P100 million released to DOE for “Coron waterfront development project.”
“Clearly, the specific purpose for which the fund was released…was no longer aligned with the purpose for which the fund release was approved by the President,” the COA pointed out.
To reach the writer, e-mail cecilio.arillo@gmail.com.