Senators flag P13.7 billion in unliquidated AFP funds ‘parked’ in PS-DBM, PITC

The headquarters of the Department of National Defense in Camp Aguinaldo. (Photo from the Facebook page of the DND)

[Updated @ 12:51 a.m., Nov. 17, 2021]

MANILA, Philippines — Senate Minority Leader Franklin Drilon and Sen. Panfilo Lacson quizzed the Department of National Defense (DND) on Tuesday over P13.7 billion in “parked” military funds under two procurement bodies that remained unliquidated.

[Editor’s Note: An earlier version of this report put the amount at P10 billion, which was the figure given by Drilon. This edited version puts the figure at P13. 7 billion, with reflects the addition of the P3.7 billion figure given by Lacson.]

During the Senate plenary debates on the DND budget, senators learned that there is a total of P13.7 billion in unliquidated balance from fund transfers made by the Armed Forces of the Philippines (AFP) to the Procurement Service of the Department of Budget and Management (PS-DBM) and to the Philippine International Trading Corp. (PITC) in previous years.

READ: Senators question DENR fund transfers to PS-DBM, PITC

“Going to the PS-DBM, the report of COA [Commission on Audit], as of Dec 31, 2020, unliquidated funds of the AFP with PS-DBM is roughly P5.2 billion,” Drilon said.

For his part, Lacson, also citing a COA report, said the Philippine Army transferred a total of P15.9 billion to PITC, of which P8.5 billion was unliquidated.

“There is a cumulative amount of P8.523 billion from 2007 to 2020 total unliquidated balances of the Philippine Army budget parked with the PITC,” Lacson said.

This means, there is a total of P13.7 billion unliquidated balance from the AFP fund transfers — P5.2 billion in the PS-DBM as raised by Drilon and P8.5 billion as noted by Lacson.

“On top of the P5.2 billion funds of the AFP that was transferred to the PS-DBM, there’s another P8.5 billion of the Philippine Army budget that was transferred. And as we speak, that’s also unliquidated balances [transferred] to PITC,” Lacson said.

In flagging the amount transferred to the PITC, Lacson said the AFP and the DND were “more capable of procuring.”

“Since you are the procuring entities, you might be more efficient if you do the procurement yourselves instead of depositing the amounts, your fund, your budget to the PITC, which resulted in P8.5 billion of unliquidated balances,” he pointed out.

AFP modernization funds

Meanwhile, Drilon raised concern over the possibility that AFP modernization funds were among those transferred to the PS-DBM.

“How can funds for the AFP modernization be transferred to PS-DBM? I can’t imagine how our AFP modernization program funds, to the tune of P39.7 billion, were transferred to PS-DBM for the purchase of common-use equipment… these were transferred which really went beyond the mandate of PS-DBM,” he said.

The DND assured no military funds for the AFP modernization were transferred to the PS-DBM, which was established to procure in bulk common-used items for government officers such as paper and photocopy machines, among others.

“No modernization project went to the PS-DBM — only common-used supplies. The funds for the AFP modernization went to the PITC,” Sen. Ronald “Bato” dela Rosa, who sponsored the DND budget, told his colleagues, speaking in a mix of English and Filipino.

According to Dela Rosa, he was also told that the items procured through the PITC would be delivered by the end of the year.

“For the Philippine Army, P3 billion out of the P5.26 billion will be delivered by the end of this year,” the senator said, noting that the remaining amount would be reverted to the national treasury.

In the case of the Philippine Air Force, P16.60-million worth of items would be delivered this year, same with those procured by the Philippine Navy worth P1.46 billion, Dela Rosa noted.

Drilon, in ending the discussion on the matter, requested a written report from the DND to clarify the AFP fund transfers to the PS-DBM and the PITC in recent years.

ATM