EDITORIAL - Conversion

Fund conversion, according to several lawmakers, is not unique to the Armed Forces of the Philippines. The government’s budget system allows the conversion of a portion of regular appropriations into “savings” – with allocations for personnel services among the biggest sources. The lawmakers said fund conversions are done in several executive departments and even the Commission on Audit, among others.

What constitutes “savings” is vague under budget rules. The Department of Budget and Management can declare certain amounts in every agency as savings and the Office of the President can use the funds for other purposes. At the hands of a corrupt president, this broad discretionary power can be abused. Perhaps one day Malacañang will have its own version of George Rabusa who will talk about fund misuse in previous administrations.

If the president is honest, savings are used for purposes such as disaster relief and other contingencies. The legitimate use of this discretionary power is invoked whenever Congress, which is supposed to wield the power of the purse, tries to clip the presidential power through a provision in the annual national appropriation; the chief executive simply vetoes the provision.

Those trying to plug loopholes in the budget process that are exploited by the corrupt can set their sights low for now and focus on executive departments. Rabusa has provided enough details to show how millions of pesos in public funds can disappear in the AFP, turning corruption into a tradition of sorts in the Armed Forces. His story should pave the way for the passage of legislation to plug those loopholes.

Incumbent defense and AFP officials, together with several former military chiefs of staff, have clarified that they started overhauling their funding system way back in 2004. The changes were in line with recommendations made by the Feliciano Commission, which was formed after the 2003 Oakwood mutiny, and the Philippine Defense Reform program. The officials have emphasized that the reforms remain in place.

Congress can look at those reforms and see what more can be done to eliminate opportunities for corruption in the AFP. It should also craft measures that will introduce similar reforms in other government agencies. The AFP is not the only organization where public funds have been converted and misused.