Diokno: Andaya ‘conflict of interest’ charge illusory, numbers wrong

Budget Secretary Benjamin Diokno on Friday said charges of conflict of interest made against him by House Majority Leader Rolando Andaya Jr. in connection with billions of pesos worth of infrastructure projects in the Bicol region were groundless and deceptive.

Andaya on Thursday said a company owned by Diokno’s in-laws in Sorsogon and their alleged “dummies” had cornered all the P10-billion infrastructure projects in the province.

He repeated his claim that Diokno himself padded the Department of Public Works and Highways (DPWH) 2019 budget by as much as P75 billion.

The Camarines Sur representative on Friday added a possible plunder case against the budget chief.

“His accusations are illusory. The numbers are wrong and the narrative he’s selling is not grounded on facts,” Diokno said in a statement.

Regarding the budget padding allegation, Diokno said the DPWH originally proposed a P652-billion budget, not P488 billion as Andaya claimed during the Dec. 11, 2018, “question hour.”

He said the Department of Budget and Management (DBM) initially approved a budget of P480.2 billion but later added P75.5 billion to fulfill a government commitment to spend at least 5 percent of the gross domestic product for infrastructure.

Approved by Congress

In line with the Duterte administration’s 2019 national expenditure program (NEP), the resulting budget of P555.7 billion was approved by the Cabinet on July 9, 2018, he said. The amount was about 15 percent less than what the DPWH originally asked for.

The NEP contains the details of the government’s proposed programs that need funding. It is submitted to Congress alongside the budget proposal to aid legislators in deliberating on the appropriations.

During a House inquiry on “questionable” practices of the DBM held in Naga City on Thursday, Andaya said Aremar Construction Corp., owned by Diokno’s in-laws, and several other companies he described as the company’s “dummies,” grabbed the entire P10 billion worth of infrastructure projects in Bicol  last year.

Documents obtained by the Inquirer showed that Aremar itself got government contracts in Sorsogon worth P551 million in 2018.

Evidence against Aremar

On Friday, Andaya said bank transaction receipts, including one for a deposit of P11 million to Aremar’s account with Land Bank of the Philippines, showed that the company received more than P50 million as its share in an alleged flood-control scam.

“With this development, the evidence against Aremar has reached the plunder point,” he said in a statement.

Andaya said the House rules committee would ask the Bureau of Internal Revenue for official documents related to tax payments made by Aremar and its incorporators.

“We will see if their tax payments matched the income that enter their bank accounts. If this income will not reflect in their tax payments, Aremar will have another problem. Not only the possibility of plunder but also tax evasion,” he added.

Limits of DBM mandate

Diokno explained that it was the DPWH that filled out its budgetary allocation with a list of specific projects.

“The mandate of the DBM is limited to setting the budget ceiling and evaluating agency proposals by program (not by project because that is the role of the implementing agency),” he said.

Diokno said the DBM could not have “favored” any contractor as it does not participate in awarding contracts or in project implementation.

The DBM just sets the budget ceiling for the line agencies and evaluates their programs to determine whether they were aligned with government priorities, he added.

As for the alleged “anomalous” allocation of funds for flood control under the proposed 2019 NEP, Diokno said DBM was not involved in the details of the proposed projects of the DPWH.

Not privy

He said that in its 2019 budget proposal, the DPWH allocated P132.5 billion for flood control. But the administration’s NEP for 2019 set aside only P114.3 billion, “well below its initial funding request for flood control structures,” he said.

The DBM also was “not privy to the breakdown of DPWH projects per district,” Diokno added.

“It is the DPWH, as an implementing agency, that determines the specific project listing for the projects under each program and region,” he said.

In his statement on Friday, Andaya said, several contractors in Bicol, who could be potential whistleblowers, expressed their willingness to cooperate with the House investigation.

‘Solid evidence’

“They voluntarily offered to provide solid evidence confirming our initial findings that contractors related to Secretary Diokno are using dummies to get multimillion government contracts,” he said.

Andaya has been alleging that Diokno had a conflict of interest in the Bicol infrastructure projects because his daughter, Charlotte Justin, is married to Romeo Sicat Jr., who is the son of Sorsogon Vice Gov. Ester Hamor, the wife of Aremar’s “biggest stockholder,” Casiguran Mayor Jose Edwin Hamor.

In a statement on Thursday, Hamor said he had divested his interests in the company in favor of his sister, Grace Hamor-Yu, and his daughter from a previous relationship, Maria Minez Hamor, when was elected mayor in 2016, two years after Aremar was incorporated. His daughter is now the majority owner of the company, he added. —WITH A REPORT FROM JEROME ANING