President Rodrigo Duterte has used a portion of his office’s confidential funds for COVID-19-related efforts, Malacañang said on Thursday, August 27.

“Tawag lang po diyan confidential pero ito ho’y pondo na pwedeng gastusin ng Pangulo kapag mayroon pong pangangailangan at marami na po siyang nagastos sa kanyang confidential fund para sa COVID, para sa mga namatay na sundalo, para sa namatay dahil sa COVID,” Presidential Spokesperson Harry Roque said during a virtual press briefing.

(It’s just called confidential but the President can spend this fund when there is a need and he spent a lot of his confidential funds for COVID-19, for soldiers who died, for those who died due to COVID-19.)

Roque said this in defense of Duterte’s proposed confidential and intelligence funds for fiscal year 2021 to 2022.

In the 2021 national budget proposed by the Duterte government, the Office of the President is asking for P4.5 billion in confidential and intelligence funds (P2.25 billion each), the same budget they got for 2020.

But unlike the 2020 budget, the 2021 budget is being prepared during the coronavirus pandemic, which is expected to last until next year, at the least. The government promised a 2021 budget that was “recalibrated” to address the effects of the health crisis.

Roque said the beauty of a lump sum fund like confidential funds is it can be used by the Chief Executive for whatever needs have to be addressed.

“Ang kagandahan po ng confidential fund kasi whether or not it’s included in a line item, puwedeng gastusin ng Presidente, but it is still subject to audit,” said Roque.

(The beauty of confidential funds is that, whether or not an expense is included in a line item budget, it can be spent by the President, but it is still subject to audit.)

Confidential and intelligence funds are red flags for advocates of government transparency and accountability since the offices that spend them are not required to produce receipts or publicly disclose expenses due to their sensitive nature. 

Can Duterte use confidential funds for COVID-19?

Commission on Audit (COA) guidelines lay out specific uses for confidential funds, which includes a line that allows its use for other expenses “that may be authorized by the GAA or other special law/s.”

This is stated in COA’s Joint Circular No 2015-01, which it issued alongside the Department of the Interior and Local Government, Department of Budget and Management, Department of National Defense, and Governance Commission for GOCCs.

Otherwise, confidential funds can only be used for the following:

• purchase of information “necessary for the formulation and implementation of programs…relevant to the national security and peace and order”
• rental of vehicles related to confidential activities, as well as rentals and incidental expenses related to the maintenance of safehouses
• purchase or rental of supplies “that cannot be done through regular procedures without compromising the information-gathering activity concerned”
• payment of rewards to informers, subject to conditions before approval
• activities to uncover/prevent illegal activities “that pose a clear and present danger to agency personnel/property…done in coordination with the appropriate law enforcement agencies”

Confidential funds cannot be used to pay for salaries, benefits, compensation, or overtime pay of government officials and employees “except when authorized by law.” It also can’t be used to shoulder the construction or acquisition of buildings or housing structures.

Any release of confidential funds should be “supported with documentary evience of payment,” submitted to the Intelligence and Confidential Fund Auditing Unit in a sealed envelope signed by the special disbursing officer.

A plan should have also been prepared on how confidential funds are to be used. The same ciruclar states confidential fund allocations” shall be supported with a Physical and Financial Plan indicating the proposed amount allocated for each program, activity and project.”

Back in 2019, when the government first proposed P2.5 billion confidential funds for Malacañang, then-Presidential Spokesman Salvador Panelo couldn’t explain the increase but said it was “common sense” to assume they were to enable Duterte to “secure the nation.” (READ: Are Duterte’s multi-million-peso intel funds achieving their purpose?)

For the 2019 budget, the DBM said the confidential and intelligence funds would be used for Duterte’s “war against drugs, criminality, and corruption.”

However, critics back then had said that such funds would be more appropriately lodged with law enforcement and security agencies, not Malacañang. – Rappler.com