EXPLAINER: Office of the President’s confidential, intel funds

Michael Bueza

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EXPLAINER: Office of the President’s confidential, intel funds
With the Duterte administration's ongoing war against illegal drugs, how will these funds come into play?

MANILA, Philippines – The proposed budget of the Office of the President (OP) for 2017 came under close scrutiny recently because of what was observed to be a remarkable increase compared to 2016. (READ: What’s in the proposed 2017 national budget?)

The allotment for confidential and intelligence funds increased by 400%, from only P250 million ($5.2 million) in 2016 to a proposed P1.25 billion ($26.1 million) for 2017.

With the Duterte administration’s ongoing war against illegal drugs, how will these funds come into play?

Lump-sum funds

Both are lump-sum funds allocated every year to national and local government executives.

Confidential funds (CF) are used for “surveillance activities in civilian government agencies that are intended to support the mandate or operations of the said agency.”

Meanwhile, intelligence funds (IF) are for “intelligence information-gathering activities of uniformed and military personnel and [of] intelligence practitioners that have direct impact (on) national security.”

Both definitions are contained in Joint Circular No. 2015-01 of the Department of Budget and Management (DBM), Department of the Interior and Local Government (DILG), Department of National Defense (DND), the Commission on Audit (COA), and the Governance Commission for government-owned and controlled corporations (GOCC).

What data says

In previous years, CF and IF allocations under the OP never went beyond P1 billion.

The biggest allotment in the last 10 years was in 2010, when P651 million was set aside for confidential and intelligence expenses. Of the amount, P500 million was allotted to the Presidential Anti-Organized Crime Commission, P1 million to the National Telecommunications Commission, and the remaining P150 million to the OP itself as part of its expenses for general management and supervision.

In the last 4 years of the administration of then president Gloria Macapagal-Arroyo, the combined CF and IF budget was around P650 million. Under former president Benigno Aquino III, the budget for CF and IF was constantly set at P500 million, except for 2011, when it was at P400 million.

For 2017, however, the combined CF and IF allotment is only 12.48% of the total OP budget, which is lower by at least 2.8 percentage points compared to previous years.

In an email to Rappler, the DBM Media Office said that these confidential and intelligence funds would be used “mainly for President Rodrigo R. Duterte’s war against drugs, criminality and corruption.”

“The increased efforts of the President naturally requires an increase in resources,” it added, with a comment that in the past, the annual budget for these funds “was disbursed without any visible results.”

The DBM also said that the CF and IF are subject to review by the Commission on Audit.

For her part, former COA chief Grace Pulido-Tan said that auditors would rely on the reports and documents that the agencies, including the OP, submit.

Because of the nature of these funds, details of where they actually go may not be fully disclosed to the public. (WATCH: Confidential, intel funds difficult to audit – ex-COA chair)


Nonetheless, Joint Circular No. 2015-01 provides for guidelines regarding the use of these funds.

According to the said circular, 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”

Meanwhile, intelligence funds can be used only by uniformed, military personnel and intelligence practitioners in these cases:

  • intelligence and counter-intelligence activities that have direct impact (on) national security
  • special projects and operations, as approved by the head agency, involving “covert or semi-covert psychological, internal security operation, and peace and order activities”, as well as programs or campaigns “against lawlessness and lawless elements involving intelligence activities”

The CF and IF cannot be used to pay salaries and other benefits, representation or consultancy fees, or for the construction/acquisition of buildings or houses.

The disbursement or release of these funds must be supported by documentary evidence of payment and a certification (signed under oath) of the officer accountable for these funds. The documentation for CF and IF expenses would then be handled separately and differently by COA personnel for security reasons.

Allocation, release

Allocations of these funds should be accompanied by a Physical and Financial Plan where the amounts for each related program or activity are indicated.

The CF and IF of national agencies are contained in the national budget passed by Congress. Their use of CF is subject to approval by the concerned Cabinet secretary or head of agency. But the release of intelligence funds must be approved first by the President.

Local goverment units (LGU) that have peace and order as a primary concern are also entitled to have confidential funds, but not intelligence funds. The CF’s release and use should be approved by two-thirds of the LGU’s peace and order council. Additional CF would have to be approved by the DILG.

GOCCs may likewise have confidential funds upon clearance with the Governance Commission, but their release and use are subject to approval by the President.

Quarterly report

The CF expenses should be contained in a quarterly accomplishment report. Security procedures to protect classified information would have to be observed.

National agencies must report to the President, both leaders of Congress, and to the Cabinet secretary concerned. Meanwhile, LGUs report to the DILG.

GOCCs report their CF expenditures to the President (through the Governance Commission) and to both leaders of Congress.

National agencies that spent intelligence funds would also have to report quarterly to the President. – Rappler.com

* $1 = P47.83


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Michael Bueza

Michael is a data curator under Rappler's Tech Team. He works on data about elections, governance, and the budget. He also follows the Philippine pro wrestling scene and the WWE. Michael is also part of the Laffler Talk podcast trio.