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Palace defends Duterte's 'very disciplined' spending on foreign trips

MANILA, Philippines – While the cost of President Rodrigo Duterte's foreign trips is triple that of his predecessors, Malacañang gave assurances that the Chief Executive is "very disciplined" when it comes to such expenses.

"The President is very, very clear, he's very disciplined about expenses," said Presidential Spokesman Ernesto Abella on Monday, June 19, in an interview with Rappler.

"There's very strict accounting regarding that matter…In fact, there is always a finance officer coming along in all those trips," he added.

A Rappler report found that the government spent P386.2 million on 17 of Duterte's 21 foreign trips in his first year as President.

This amount is around triple what former president Benigno Aquino III spent in his first year, factoring in the dollar-peso exchange rate at the time. The amount is more than 4 times what former president Gloria Macapagal-Arroyo spent in her first year.

Duterte went on 21 foreign trips in his first year in power while Aquino went on 8 foreign trips.

Given that Duterte's number of trips is more than double Aquino's, Abella was asked if the present administration makes efforts to save on expenses during these travels.

"I will find out about that but definitely part of the trips is really investing and making sure we are able to gain back our interest in investments," said Abella.

The spokesman was initially abrasive when asked by Rappler for comment. He even covered this reporter's camera as he was being asked questions.

During the interview, Abella emphasized that Duterte's trips have resulted in billions in pesos worth of deals. He cited previous computations by Finance Secretary Carlos Dominguez III that for every peso the Duterte administration has spent on foreign trips, it gets back P1,000 in deals. (READ: Duterte bringing home $24B worth of deals from China and LIST: Deals Duterte brought home from Japan)

Dominguez, last January, praised Duterte for "single-handedly" raising "the highest amount of foreign development assistance ever." The finance chief had announced then that the President's China and Japan trips raised P890 billion in official development assistance (ODA).

However, Dominguez said in the same press conference that the ODA comes in the form of financial loans from foreign governments, with low interest rates and long terms to pay.

Dependent on factors

Rappler also pointed out in its article and to Abella that the deals Duterte has brought home come in various levels of commitment – from actual binding contracts, to memoranda of understanding, to letters of intent. 

Socioeconomic Planning Secretary Ernesto Pernia has said that entering into these loan agreements is dependent on several factors, not least of which is the passage of the comprehensive tax reform package crafted by Duterte's economic advisers. 

The President certified the tax reform bill as urgent last May. While the House of Representatives approved it on 3rd and final reading on May 31, the Senate said it would not pass Malacañang's version of the measure.

In a May 30 Palace briefing, Pernia had said the Philippines would have to "go slow" on entering into such agreements to ensure a balance between "spending, indebtedness, and capacity to pay and service the debt."

"We'll have to go slow on, you know, accepting or entering into ODA, you know, agreements with China," he said.

Thus, instead of implementing all promised infrastructure projects, the government may be constrained to implement "just one or two."

Alarm bells have also been sounded on possible pitfalls of entering into financial agreements and loans with China and its state-run companies. (READ: 'Shady track records' hound PH-China infra firms)

To allay such concerns, Dominguez has said questionable companies will not be allowed to participate in auctions for infrastructure projects.

Loan agreements typically entail conditions to the benefit of the country offering the loan. For instance, there are often clauses that the project must be implemented by a company owned by that government.

While the benefits from these deals are by no means assured for the public, the government has already spent hundreds of millions of pesos on the President's foreign trips. – Rappler.com

Pia Ranada

Pia Ranada covers the Office of the President and Bangsamoro regional issues for Rappler. While helping out with desk duties, she also watches the environment sector and the local government of Quezon City. For tips or story suggestions, you can reach her at pia.ranada@rappler.com.

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