The AFP modernization fund facts

We refer to Mr. Federico Pascual’s column in the June 21, 2011 issue of your newspaper, which referred to the AFP Modernization Program and stated that “the government made P8 billion from the Fort Bonifacio deal. But it was not made immediately clear where the P8 billion went. Former President Ramos often got angry when asked about it.”

Practically all issues related tot the AFP Modernization Fund had been raised and discussed over past years in the media and other fora. The matter was heard before the House of Representatives and the Senate and was in fact pursued relentlessly, for reasons other than bringing our the truth, by the Estrada Administration. At the end of the day, all those who alleged, without verifying the facts and records, that the AFP Modernization Fund “disappeared” during, and/or were not accounted for by the Ramos administration, were proven wrong. Sadly, except for a few real gentlemen, they did not bother to correct themselves. We often wonder as we do now, why despite the availability of verifiable data on the subject, “discerning” columnists continue to rely on the same wrong information.

Mr. Pascual must have written about the subject four or five times already to each of which we promptly responded with our “letters to the editor.” Unfortunately, these letters were never published by The Philippine STAR. (Please see sample copy of previous column with our rejoinder). In any case, we assure Mr. Pascual that FVR is not “angry” and will simply respond once again with a re-statement of the facts:

1. The amount remitted by the BCDA to the Bureau of Treasury for the AFP Modernization Program was only P5.484 billion because 64 hectares out of the 214 hectares originally covered by the proposed sale between BCDA and the buyer, Bonifacio Land Corporation (BLC) were eventually excluded. This resulted to a reduction of the total purchase price and consequently, a corresponding reduction in the AFP Modernization Program’s share. It should also be noted that the purchase price was not remitted by BCDA to the Bureau of Treasury in one lump sum but in seven tranches over a period of two years from Feb. 28, 1995 to Dec. 9, 1997. (Annex A - BCDA Summary of Distribution of Proceeds of Sale)

2. Under the AFP Modernization Act, the AFP Modernization Fund shall be managed through the AFP Modernization Act Trust Fund (AFP-MATF) to be administered by the Secretary of National Defense. In Dec. 1997, the AFP-MATF was not yet fully operational because its personnel, composed of representatives from the DBM, DOF and COA were still undergoing training. A letter of SND Fortunato Abat dated May 12, 1998 (Annex B) stated that the AFP is “in the process of establishing the AFP-MATF.” This was barely over one and a half-months prior to the assumption of office by a new President. The amount of P5.484 billion was placed by the Bureau of Treasury in Special Account No. A5514-170 earmarked for the AFP Modernization program, eventually reflected in its Journal voucher dated June 22, 2000 (Annex C).

3. Not wanting to embark on “midnight purchases” and as prudence dictated, the handling of the trust fund was left to the incoming administration. On June 1, 1998, FVR invited then incoming President Joseph Estrada to a briefing on national security, the AFP organization and AFP modernization program at Camp Aguinaldo. Among those present during the briefing conducted by AFP Chief of Staff Clemente Mariano and Maj. Gen. Benjamin Libarnes, AFP Deputy for Intelligence, were: Vice President-elect Gloria Macapagal-Arroyo and other incoming officials of the Estrada administration — Ronaldo Zamora, Alexander Aguirre, and Orlando Mercado. Among others, the incoming President was assured that there were no “midnight deals” on the AFP modernization program (copies of some news reports on said briefing are hereto attached as Annexes D, D-1 and D-2).

4. During the Estrada administration the AFP Modernization Program was given low priority. This was reflected in a letter of former Budget Secretary Benjamin Diokno to then Secretary of National Defense Orlando Mercado dated July 21, 1998, (Annex E) which stated that: “The release of the said amount as requested by the AFP cannot be effected.” This was in turn based on Diokno’s “Memorandum for the President” dated July 8, 1998, (Annex F) which stated that - “The AFP Modernization will be postponed for a better time when the financial crisis is over or the Program can be continuously pursued.”

5. On May 29, 2000, the Department of Budget and Management (DBM) issued a Special Allotment Release Order (SARO (Annex G) to the AFP for P5.4 billion.

6. On June 26, 2000, Budget Secretary B. Diokno disbursed from the AFP Modernization Fund, the amount of P49,949,000. (The covering “Notice of Cash Allocation” (NCA) is attached as Annex H). Again, on August 21, 2000, Budget Secretary B. Diokno disbursed from the AFP Modernization Fund, the amount of P59,501,000. (The covering NCA is attached as Annex 1).

7. Indeed, the level of priority that would be given by then succeeding Estrada administration is a matter beyond the control of the Ramos administration.

8. The Feliciano Commission Report has confirmed that the AFP Modernization Fund remained intact until the end of the Ramos administration.

We hope as we did hope before, that you will finally give our side proper space in your prestigious newspaper.