Did the Philippine Red Cross cross any line?

MANILA, Philippines — In the past month, plenty of debates have focused on the Philippine Red Cross (PRC) — an organization that we often see in the news conducting rescue operations, rehabilitation efforts, and bloodletting events.

Unlike positive portrayals of the past, however, recent coverage of the organization has been largely negative.

Amid the Senate investigation on the government’s procurement of allegedly overpriced COVID-19 medical supplies led by Senate blue ribbon committee chair Richard Gordon, the administration has upped its tirades against the (PRC).

President Rodrigo Duterte has accused Gordon, who is concurrently serving as chair and chief executive officer of the PRC, of using the nonprofit as his milking cow.

The president has also called upon the PRC to open its books to the Commission on Audit (COA). It is against this backdrop that we will examine PRC along with its unique structure, obligations under the law, and role during the pandemic.

Sui generis

Any discussion regarding the regulation of the PRC is bound to elicit confusion. After all, the PRC occupies a unique space in the Philippine bureaucracy.

The PRC is what is referred to in the Geneva Convention as a National Society — a protected component of the Red Cross movement. Unlike other private and nongovernmental organizations, the PRC is directly regulated by international humanitarian law. This entitles it to benefits, such as state protection in all circumstances — in times of both peace and armed conflict.

At the same time, the PRC is not a government entity. In fact, the Philippine Red Cross Act of 2009 officially recognized the role of the PRC as a voluntary, independent, and autonomous nongovernmental society that only serves as an auxiliary to the authorities of the Republic of the Philippines in the humanitarian field.

The Supreme Court has confirmed this unique nature of the organization in the landmark case of Liban vs Gordon. The petition in the case sought to remove Gordon from his Senate seat on the basis of the constitutional provision barring senators of the republic from assuming other government positions. At the time,  Gordon was also serving as chair of the PRC.

The court ruled in favor of Gordon, saying that there can be no violation of the provision considering that his post in the PRC is not a government post. According to the court, the PRC “is neither a subdivision, agency, or instrumentality of the government, nor a government-owned or -controlled corporation or a subsidiary thereof.”

It also said that the structure of the PRC is sui generis being neither strictly private nor public in nature.

Audit

This characterization becomes all too important as we delve deeper into the issue of whether the COA has jurisdiction over the PRC. The COA is an independent constitutional body that is mandated to, among others, settle all accounts pertaining to the revenue and expenditure of the government, or of any of its subdivisions, agencies, or instrumentalities.

The administration has argued that the COA may audit even nongovernmental entities, such as the PRC. It points to the constitutional provision that gives the COA the jurisdiction to conduct a post-audit on “nongovernmental entities that are receiving subsidy or equity, directly or indirectly, from or through the government.”

However, while the said provision is operative, its application to the PRC is doubtful.

To begin with, the terms “subsidy” and “equity” have acquired technical meanings in Philippine law. Notably, while the PRC has admitted to receiving funds from agencies, such as Philippine Health Insurance Corp. (PhilHealth), the Bangko Sentral ng Pilipinas, and the Philippine Charity Sweepstakes Office, none of these funds appear to have been given as subsidies or equities. Rather, they take the form of either contractual payments or donations.

Does this mean then that nongovernmental entities like the PRC could escape the COA audit entirely?

The answer is no.

As decided in the recent case of Bayani vs COA, although the COA’s audit jurisdiction generally covers public entities, “its authority to audit extends even to nongovernmental entities insofar as the latter receives financial aid from the government.”

This appears consistent with a statement given by COA Chair Michael Aguinaldo during a legislative hearing that while the COA does not have jurisdiction to audit the PRC, it may audit payments received by the PRC from PhilHealth. However, Aguinaldo added that, in this scenario, it is actually PhilHealth that is audited and not the PRC.

It also bears noting that both the Administrative Code of 1987 and the Auditing Code of the Philippines give the COA the power to audit nongovernmental entities that are receiving funds from the government, under a visitorial authority. Nevertheless, these laws also limit such audits to funds or subsidies coming from or through the government.

This system of check and balance allows the COA to perform its duty of safeguarding public funds without unnecessarily burdening nongovernmental entities, such as the PRC. Under its limited jurisdiction, the COA could effectively ascertain if the PRC is spending public funds properly. This includes the authority to validate if the PRC complied with reportorial requirements and other conditions attached to the transfer of public funds.

However, the COA cannot indiscriminately open PRC’s books in search of irregularities, as the administration suggests. This would be tantamount to a fishing expedition.

COVID-19 response

As part of the fundamental principles and state policies enshrined in the Constitution, the state is mandated to encourage nongovernmental organizations that promote the welfare of the nation. Surely, the PRC has done its fair share in promoting the country’s welfare.

The organization’s history is seemingly intertwined with the country’s own, having served not only as a witness but as a responder to major catastrophes in the Philippines, including the Mt. Pinatubo eruption in 1992, Typhoon Ondoy (international name: Ketsana) in 2009, and the Bohol earthquake in 2013.

More importantly, the PRC has been at the forefront of delivering health services during the COVID-19 pandemic. When the pandemic began, the PRC was among the first organizations to provide personal protective equipment to healthcare workers, traveling residents and “at risk” members of the population.

It has also conducted much of the COVID-19 testing in the country, having accounted for 25 percent of the tests done by the end of 2020. This includes the less invasive saliva RT-PCR testing, which the PRC pioneered in the country with the help of scientists from the University of Illinois and the University of the Philippines. More recently, the PRC has helped increase the country’s vaccination capacity, having vaccinated more than 200,000 individuals through its own vaccination centers.

Due process

It is important to note that while these achievements are admirable, they do not excuse the PRC from complying with our laws. Indeed, if any of its health services is confirmed to be defective, if any of its financial records is found to contain badges of fraud, or even worse, if any of its officers is adjudged guilty of abusing his or her position to engage in acts of corruption, then the PRC should be held accountable.

However, in much the same way that the PRC is bound to respect and obey the laws of the republic, it also stands to benefit from the safeguards preserved by our laws, particularly the right to due process. If there is an allegation that the PRC committed any wrongdoing, the proper thing to do is to subject the PRC to the legal process — not to stifle it through public threats.

Cooperation

Thus far, the country has reported over 2.5 million COVID-19 infections, with more than 38,000 resulting in death. Meanwhile, only 20.8 million of the country’s total population of 109 million have been fully vaccinated.

In light of these, the president recently admitted that it may take the country two to three more years to return to normal. Right now, we need all the help we can get. And setting politics aside, one cannot deny that the PRC — along with its army of volunteers who continue to serve amid criticisms, unfounded or not — provides a huge chunk of this help.

—CONTRIBUTED

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The author is a senior lecturer at the University of the Philippines College of Law, where he teaches constitutional law and obligations and contracts. He holds a master of science degree in human rights, earned in 2019 from the London School of Economics and Political Science (Chevening scholar) and a master of laws degree with certificates of specialization in law and technology and in Public Law and regulation at the University of California, Berkeley [Asia-Pacific scholar] earned in 2017. The author is likewise the co-founder and managing partner of Cerilles & Fernan Intellectual Property Law (CFIP Law).

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