Previously, these funds were being spent at the behest of senior military officials based at general headquarters at Camp Aguinaldo in Quezon City.
Dubbed the military’s "pork barrel," the funds had reached P6.73 billion last year.
Based on Abu’s order, the more than P4.1 billion will now go straight to the Air Force, Navy and Army.
Lt. Col. Buenaventura Pascual, Armed Forces public information office chief, said the move was part of the reforms being implemented by Abu following the controversy involving former AFP comptroller, retired Maj. Gen. Carlos Garcia.
Pascual said last year, Camp Aguinaldo had a centrally-managed fund (CMF) worth P317.32 million, P258.04 million of which represented five percent of the maintenance and operating expenses of the major services.
"The CMF from the major services amounting to P258.04 million is no longer allowed," he said. "Likewise, the GHQ centrally management fund in the amount of P59.28 million last year was abolished."
Pascual said the CMF is the source of funds for past chiefs of staff for their "priority projects or activities" to include additional operational expenses for field units.
The fund was spent at the discretion of the chief of staff, he added. The CMF is also a fund source of the J-staff for "priority projects," as long as the disbursements are approved by the chief of staff, Pascual said.
However, military sources said the "contingency funds" have been a source of corruption in the Armed Forces, aside from ghost deliveries and conversion, among other anomalies.
"These funds have no programmed allotment, unlike other funds which are programmed for certain projects or activities," the source said.
"So they (the top generals) are totally in control of this money," another source said.
"Where they put it, it’s their call. Contingency funds are like pork barrel. They are spent at the pleasure of those who have control over them. In this case, it’s the Camp Aguinaldo generals."
Pascual said the devolution of the P317.32 million CMF was aimed at bringing military resources directly to the soldiers.
"The AFP reform initiatives are efforts in progress designed to improve the trust and confidence of the general public," he said.
"Likewise, it is our firm belief that all these will lead to a more professional Armed Forces that will win in combat within the limited resources made available."
Abu is also devolving the P1.628-billion Cafgu and integree funds to the Army, representing salaries traditionally supervised by the AFP deputy chief of staff for operations or J3, Pascual said.
Abu has implemented a number of other controversial measures since taking command in October last year.
Among these reforms are the abolition of the office of the AFP deputy chief of staff for comptrollership (J6), where Garcia had allegedly amassed millions in unexplained wealth.
Abu has also abolished three other J-staff positions, whose jobs overlap with other units.
He also disbanded the AFP Logistics Command and devolved the unit’s procurement function to the three major services.