Palace: Confidential funds sent to OVP were used for new satellite offices
MANILA, Philippines — Millions worth of confidential funds acquired by the Office of the Vice President through budget adjustments in 2022 were used for new satellite offices, the Office of the Executive Secretary said.
A statement by the OES on Tuesday gave a breakdown of the P221.424 million that the Office of the President transferred to the OVP in 2022 for “maintenance operating and other expenses items.
Of this amount, P125 million were confidential funds for "newly created satellite offices," the OES said, while P96.424 were for financial assistance / subsidies.
“Vice President Sara, who was newly elected then, needed funds for her new programs for the remaining period of 2022. The president supported this initiative and released the funds, with the favorable recommendation of DBM,” the OES added.
The OES said that there is enough legal basis to support the OP's decision to release the P221 million lump sum to the OVP in 2022, which was charged against government contingent funds.
In particular, the OES said the fund release was done “pursuant to Special Provision No. 1 under FY 2022 Contingent Fund,” wherein the president can approve releases to “cover funding requirements of new or urgent activities” of government agencies.
President Ferdinand Marcos Jr. “saw the need to release the fund in support of Vice President Duterte’s initiative, upon the recommendation of the Department of Budget and Management (DBM),” the OES said in its statement.
The OVP did not have a budget for confidential expenses in the 2022 General Appropriations Act. But a redacted transparency report released by the Commission on Audit in 2023 showed it had acquired P125-million allocation for confidential expenses for that year.
This has prompted Makabayan bloc lawmakers to allege that there were irregularities in how the OVP obtained the lump sum as confidential funds can only be inserted through general appropriations.
Since July, Vice President Sara Duterte has repeatedly emphasized that these funds had "nothing irregular or unauthorized" about them but has refrained from disclosing what the funds were used for.
However, minority lawmakers at the House have criticized Duterte for refusing to answer their questions related to how she spent and will plan to spend her office’s confidential funds.
The House terminated the OVP’s budget deliberations in less than 15 minutes last week out of “parliamentary courtesy” to Duterte.
Satellite offices rushed
A report by state auditors in 2023 found that the OVP did not fully comply with the country's procurement laws when it rushed to purchase new equipment for its satellite offices in 2022.
The OVP resorted to making purchases through reimbursement due to its decision to immediately open its satellite offices even if it did not yet have enough equipment to operate, COA noted.
These satellite offices were launched on July 1, 2022 — the first day of Vice President Sara Duterte’s term.
The OVP procured P668,197 worth of equipment for the offices and paid through reimbursement of officials' personal cash, COA said.
Although state auditors noted that the OVP purchased items with the lowest price in the market, its failure to comply with Republic Act 9184 and its implementing guidelines “defeats the purpose of the Procurement Law, which is to standardize and to improve transparency in the procurement process.”
During the OVP’s budget briefing last week, Duterte said that one of their notable achievements was the creation of 10 satellite offices and two extension offices in key areas in the country.
These satellite offices are spread out across the country and serve as extension offices of the OVP's public assistance and disaster response programs.
Editor's note: We corrected this story to clarify that the P125 million in confidential funds were used for the newly created satellite offices, as stated by the Office of the Executive Secretary. We have removed the word "build" for accuracy.
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