MANILA, Philippines — Confidential funds — particularly those of the offices of President Ferdinand Marcos Jr. and Vice President Sara Duterte — are once again raising eyebrows as opposition lawmakers flag the large sums in the proposed 2023 budget.
For the Office of the President, Marcos is asking for P4.5 billion in confidential and intelligence funds — much like his predecessor Rodrigo Duterte, who also asked for the same amount in his last budget.
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Meanwhile, the Office of the Vice President (OVP) under the younger Duterte is asking for P500 million in confidential funds. Her predecessor Leni Robredo did not ask for any.
Copies of National Expenditure Programs since 2006 available on the website of the Department of Budget and Management show that the president and vice president’s offices under previous administrations typically got confidential funds but at more modest amounts.
For example, in the last budget submitted under the presidency of Gloria Macapagal-Arroyo, her office asked for P600 million in confidential and intelligence funds, which amounts to around P930 million when adjusted for inflation.
Even more modest were the confidential and intelligence funds requested by Benigno Aquino III, who in his last budget asked for only P500 million in total, amounting to just a little under P600 million in today’s money.
Likewise, confidential funds for the OVP under previous administrations were miniscule or even non-existent compared to what Vice President Duterte is asking for in the 2023 budget.
What are confidential and intelligence funds?
A 2015 joint circular between the Commission on Audit (COA), Department of Budget and Management (DBM), Department of the Interior and Local Government, Governance Commission for Government-Owned and Controlled Corporations (GCG) and the Department of National Defense laid down guidelines on confidential and intelligence funds.
Confidential and intelligence funds are lump sum allocations set aside in the national budget for expenses that involve surveillance and intelligence information gathering activities.
As its name suggests, confidential funds are for confidential expenses related to surveillance activities in civilian government agencies that are intended to support their mandate or operations.
Similarly, intelligence funds are for intelligence expenses related to information gathering activities of uniformed and military personnel and intelligence practitioners that have direct impact on national security.
What can confidential and intelligence funds be used for?
According to the 2015 joint resolution, confidential funds can only be used for the following expenses:
- Purchase of information necessary for the formulation and implementation of program, activities and projects relevant to national security and peace and order
- Rental of transport vehicle related to confidential activities
- Rentals and the incidental expenses related to the maintenance of safehouses
- Purchase or rental of supplies, materials and equipment for confidential operations that cannot be done through regular procedures without compromising the information gathering activity concerned
- Payment of rewards to informers
- [Uncovering and preventing] illegal activities that pose a clear and present danger to agency personnel or property, or other facilities and resources under the agency protection, done in coordination with appropriate law enforcement agencies
Intelligence funds, meanwhile, can only be used for the following expenses:
- Intelligence and counterintelligence activities that have direct impact on national security
- Special projects and case operation plans as approved by the head of agency involving covert or semi-covert psychological, internal security operation, and peace and order activities, as well as programs, projects and campaigns against lawlessness and lawless elements involving intelligence activities
Confidential and intelligence funds cannot be used for:
- Salaries, wages, overtime, additional compensation, allowance or other fringe benefits of officials and employees who are employed by the government in whatever capacity or elected officials, except when authorized by law
- Representation, consultancy fees or entertainment expenses
- Construction or acquisition of buildings or housing structures
Who gets confidential and intelligence funds?
National government agencies (NGAs) can get both confidential and intelligence funds, while local governments and GOCCs can only get confidential funds.
The source of confidential and intelligence funds for NGAs come is the General Appropriations Act or the national budget that has passed the scrutiny of Congress and signed into law by the president.
On the other hand, confidential funds for GOCCs come from their corporate operating budget as authorized by the GCG and the DBM, while confidential funds for local governments are sourced from annual appropriations ordinances.
How are confidential and intelligence funds audited?
Due to the nature of these funds, auditing them could be quite difficult as the COA is left to trust whatever NGAs, local governments and GOCCs submit for them to countercheck.
But the 2015 joint circular provides that NGAs, local governments and GOCCs should prepare a physical and financial plan supporting their request for confidential and/or intelligence funds containing the estimated amount per project, activity and program.
What's next?
Opposition lawmakers have raised concerns over the utilization of these lump sum amounts which some have even likened to “pork barrel,” which was declared unconstitutional by the Supreme Court in 2013.
The offices of Marcos and Sara Duterte have defended these allocations, saying they are necessary for programs relating to national security.
But some lawmakers like Rep. Edcel Lagman (Albay) are not convinced.
“The OVP is not a surveillance agency and has no jurisdiction over matters of national security,” Lagman said in a statement on Monday.
Lagman and other opposition lawmakers plan to realign the confidential and intelligence funds from these offices, which will prove to be a gargantuan challenge in a legislature dominated by a supermajority of Marcos allies.