Against rules, Ilocos Norte advances P26M cash for meds, fertilizer, construction

MANILA, Philippines – Ilocos Norte Governor Imee Marcos authorized the purchases of medicines, fertilizer, as well as construction materials and services through cash advances in 2012, violating government spending rules, documents obtained by Rappler showed. 

How the provincial government used cash advances is the subject of an ongoing probe of the House committee on good government and public accountability.

Marcos has been called to House hearings after documents showed her government used cash advances to buy 40 mini-cabs, 5 second-hand buses, and 70 mini-trucks amounting to P66.45 million from 2011 to 2012. (READ: Red flags in Imee's Ilocos Norte and P66.45M tobacco fund use

Using cash advances to purchase the said materials and services is a violation of Commission on Audit (COA) Circular 92-382, which states that all disbursements by local government units should be made in checks – except in certain cases. 

The document, issued on July 3, 1992, details the rules and regulations on accounting and auditing rules, pursuant to the Local Government Code of 1991. 

Cash advances are allowed only for salaries and wages, commutable allowances, honoraria and other similar payments to officials and employees, and petty operating expenses. 

But documents obtained by Rappler showed Marcos allowed the use of cash advances for items not specified under the circular.

These documents were also submitted to the House committee on good government and public accountability, which is leading the investigation into how Marcos allegedly misused the province's tobacco funds. 

Members of the panel, however, have not yet identified whether the P26 million in question was also sourced from tobacco funds.

COA questions transactions 

COA supervising auditor Rizalino Franco issued an Audit Observation Memorandum (AOM) to Marcos on January 8, 2013.

In the AOM, Franco said the P26 million cash advances for construction materials and services, as well as medicines and fertilizer, were “not in accordance to the provisions of COA Circular 92-382.”" data-auto-height="false" data-aspect-ratio="0.726027397260274" scrolling="no" id="doc_92930" width="100%" height="600" frameborder="0"> 

These cash advances included P2,986,244 encashed by Vilmarie Pangtad on July 17, 2012, for the marble portrait busts of Juan and Antonio Luna, Artemio Ricarte, Anastacia Tupas, Josefa Llanes Escoda, Gregorio Aglipay, Severino Montano, and Ferdinand Marcos.

Of the said amount, P1.6 million was paid to Integrated Conversion Unlimited Incorporated for the “services for the development” of Paoay Museum. The rest was paid to sculptor Salvador Joel Alonday. 

A total of P4,838,191.68 was also encashed to Joseph Castro for the installation of the precast concrete for the Paseo de Paoay on July 18, 2012. The money was paid to the House of Precast, which is based in Cubao, Quezon City. 

Another set of documents showed that on October 24, 2012, Marcos lumped together the cash advance request for various medicines worth P1,999,788 with the request for P4-million worth of foliar fertilizer. 

Ilocos Norte ended up having a certain Grace Valdez encash P5,999,788 for both the medicines and fertilizer. The medicine was ordered from the San Nicolas, Ilocos Norte-based CN Medical Distributor, while Flora’s Trading in Pangasinan supplied the foliar fertilizer. 

On November 23, 2012, a cash advance was issued to Encarnacion Gaor for the purchase of Panlaban 5EC fertilizer worth P10,475,400 from Flora’s Trading.

Lastly, a certain Noralyn Boque was issued a cash advance of P1.75 million for medicines from CN Medical Distributor." data-auto-height="false" data-aspect-ratio="0.75" scrolling="no" id="doc_77200" width="100%" height="600" frameborder="0">

Marcos defends purchases

In all 5 transactions, Marcos, provincial treasurer Josephine Calajate, and provincial accountant Eden Battulayan were signatories. 

Calajate and Battulayan were among the 6 Iocal officials who were detained by the House from May 29 to July 25 for refusing to properly testify before lawmakers during the congressional probe. They were freed after they finally admitted to signing the documents.

But Marcos said she never received the AOM, which explains why the document does not have her signature. (READ: Imee Marcos grilled over ‘gross negligence’ in tobacco fund use)

She also argued that using cash advances does not necessarily translate to anomalies. 

"Maraming sinasabi na bakit daw cash advance. Ang [paggamit ng] cash advance ay hindi ibig sabihin kinuha mo na, 'binulsa mo na…. Alam naman natin na nasa batas 'yan, na recognized mode of payment [for] specific items 'yan," argued Marcos.

(Many are saying we used cash advances. Using cash advances does not mean you will automatically steal the money.... We know the law says this is a recognized mode of payment for specific items.)

Marcos added the purchases were all liquidated. –

Mara Cepeda

Mara Cepeda writes about politics and women’s rights for Rappler. She covers the House of Representatives and the Office of the Vice President. Got tips? Send her an email at or shoot her a tweet @maracepeda.