MANILA, Philippines – President Ferdinand Marcos Jr.’s budget chief wrote to the House of Representatives, claiming that the contingent funds (CF) given to the Office of the Vice President in 2022 – a chunk of which became the OVP’s confidential funds – were “released,” not “transferred.”

Department of Budget and Management (DBM) Secretary Amenah Pangandaman’s attempt to clarify in technical terms appears to be in response to criticisms that the process amounted to a violation of the Constitution.

That is even though a financial report downloadable from the OVP website classifies the fund as a “transfer.”

First, what does the Constitution say?

Basically, the Constitution says a government agency cannot simply transfer funds to another government agency since the power to appropriate public funds lies in Congress.

There are only a few times when it is allowed, like through a process called augmentation, when there are existing line items in the budget that are deficient and need additional funding.

What did Pangandaman tell Congress?

Pangandaman’s letter dated September 11 and addressed to House appropriations chairperson Zaldy Co said that there was no “transfer” of funds that took place, since contingent funds are not under the Office of the President.

She argued that contingent funds can be “released” as provided by Special Provision No. 1 of the Contingent Fund of the 2022 General Appropriations Act – the law on last year’s budget.

“The contingent fund is intended to fund multifarious projects that are necessary but were not anticipated during budget preparation and legislation,” Pangandaman said.

There was a P7-billion contingent fund in 2022, intended to fund “new or urgent activities” of the government that need to be implemented or paid during the same year.

In a statement on Thursday, September 14, House appropriations chairperson Zaldy Co’s office said the letter he received from Pangandaman “assures Congress that the Office of the President didn’t subvert the House’s power over the purse when it released contingency funds to the office of Vice President Sara Duterte late last year.”

However, based on the summary of appropriations of the OVP for the last quarter of 2022, the contingent fund it received from DBM was an “adjustment (transfer to/from, realignment),” contrary to Pangandaman’s explanation.

How much did the OVP receive in 2022?

Duterte previously admitted she requested additional funds in 2022.

DBM records show it granted Duterte an additional P221.4 million, including P125 million, sourced from the contingent fund last year.

The DBM said the OVP’s confidential fund was for good governance and social services projects, including:

• the safe implementation of various projects and activities of the OVP across its satellite offices for the last quarter of FY 2022
• the conduct of its official engagements and functional representation in international and local events
• the implementation of various projects and activities relevant to national security and peace and order
• the implementation of the same with proper security and safety protocols for the benefit of the institution

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Why is this controversial?

This is controversial because when Duterte assumed the vice presidency in June 2022, her office was not supposed to have confidential funds, because the office was just handed over the budget of her predecessor Leni Robredo, whose office did not request such confidential funds.

The transfer of the funds also did not become public knowledge until the audit report on the OVP came out in mid-2023.

Confidential funds are intended for surveillance activities in civilian government agencies, and it remains a question why Duterte’s office would need the money immediately.

Duterte also faced budget deliberations in Congress, but she was granted parliamentary courtesy in both House and the Senate, which meant that opposition lawmakers had no chance to interrogate her.

She also engaged in a public word war with female opposition lawmakers critical of the OVP’s budget, but she only resorted to blanket denials to allegations that the confidential funds were used inappropriately. – Rappler.com