Senate to probe SC use of WB loan

MANILA, Philippines—On the eve of the impeachment trial of Chief Justice Renato Corona, Senate finance chair Franklin Drilon called for an investigation into the alleged misuse of a $21.9-million World Bank loan to the Supreme Court.

Drilon, of President Aquino’s Liberal Party, filed a resolution directing the Senate oversight committee on public expenditures to look into the circumstances surrounding the World Bank’s Judicial Support Reform Project (JRSP) loan to the Supreme Court, particularly into reports the funds were mismanaged and disbursed in a manner contrary to the agreement between the two institutions.

The World Bank’s Board of Executive Directors approved the loan on Oct. 2, 2003, to finance the JRSP, which sought to enhance the Judiciary’s efficiency and integrity. According to reports, the Bank is now demanding a refund of $199,900, covering “70 payments” deemed “ineligible” or unauthorized under the terms of the JRSP by Jan. 31.

Drilon charged that financial arrangements like the JRSP loan “constitute a future financial drain on the already limited monetary resources at the disposal of the government.”

‘Need to monitor’

“There is a need to closely monitor the management and disbursement of such funds and institute improved safeguards in future general appropriation measures to prevent undue dissipation of the already limited government monetary resources,” his resolution read.

“The power of the purse as exercised by Congress carries with it the power to institute safeguards to curb wanton and negligent spending on any branch of the government,” Drilon explained.

“Whether the funding source comes from taxes or foreign loans, it is the duty of Congress to ensure that every centavo is responsibly spent,” he added.

“There are reports the World Bank recently rendered an opinion to the effect that since mid-2010, progress in attaining the development objectives of the JRSP and its implementation had been rated ‘unsatisfactory,’ with the fiduciary environment pertaining to the project deteriorating to a point that the JRSP had been rated ‘high risk’ on project management, project procurements and financial management decisions,” the resolution said.

“The World Bank allegedly noted that several procurements of goods were undertaken without prior agreement and in some cases, even against the approval of the bank, resulting in the present situation wherein further expenditures must be undertaken only with the prior agreement of the bank, in writing, and reflected in the agreed procurement plan,” it added.

However, Drilon added, the World Bank reportedly raised some concerns later on how the project was implemented and expressed serious reservations about how the funds were disbursed.

Credit worthiness

In the resolution, Drilon noted that the World Bank “reportedly stressed that the lack of appropriate segregation of duties of key Supreme Court officials involved in the project broke the control environment, increased fiduciary and reputational risks and led to irregular or inappropriate procurement and expenditure decisions.”

“The circumstances, if found true, could prejudice the standing and credit worthiness not only of the Supreme Court, but the national government as a whole, before such international financial institutions like the World Bank, and curtail the inflow of much-needed loans and other monetary assistance,” the resolution further said.

Earlier, Ramon Esguerra, a spokesperson for Corona’s legal team, denounced the barrage of “black propaganda” by administration officials in the run-up to the impeachment trial. “It’s very unfair,” he said, adding that it was the high court as a whole, and not Corona alone, that should respond to the accusation.

Malacañang has been stepping up the attacks. Budget Secretary Florencio Abad yesterday said  the government’s bid to get international support for its judicial reforms may be affected following the scathing World Bank report.

“It will imperil our ability to continue to get support for our judicial reform efforts,” Abad said.

He said he was “sure” that with the WB report, other agencies funding the JRSP would be “seriously thinking about how their funds are being managed.”

He described as “unusual” the use of “strong and sharp language” in the WB report.

In a phone interview, Abad said the budget office got the report before the new year. He added that it was “surprising” to hear some court officials say   they were not aware of the WB report.

Transparency in spending

Over government-run radio dzRB on Sunday, deputy presidential spokesperson Abigail Valte echoed Abad, saying that all the branches of government should be transparent in their spending habits, “especially if these were loans and the people would eventually have to pay for them.”

“This is something we want to avoid. It doesn’t mean that if you have fiscal autonomy, you should have a total disregard for the use of public funds,” Valte said.