House looks into 'missing' P30B infra fund

By Jess Diaz, The Philippine Star

Posted at Mar 04 2014 02:37 AM | Updated as of Mar 04 2014 10:50 AM

MANILA, Philippines - The House of Representatives opens an inquiry today into the reported "missing" P30 billion in infrastructure funds during the Arroyo administration.

Invited to the initial hearing were Public Works and Highways Secretary Rogelio Singson, Chairman Grace Pulido-Tan of the Commission on Audit and Ramon Allado of the Philippine Contractors Accreditation Board (PCAB).

The committee on good government and public accountability, chaired by Pampanga Rep. Oscar Rodriguez, is conducting the inquiry, which was prompted by Resolution 592 authored by Eastern Samar Rep. Ben Evardone.

In his resolution, Evardone said it was Singson and his people who uncovered the missing infrastructure funds.

He said the public works officials have “admitted discovering releases of agency funds amounting to at least P30 billion, allegedly spent and left unaccounted for by the previous administration, including a 2008 P100-million 12-kilometer road construction project in the town of Mataas na Kahoy in Batangas, which remains unfinished.”

“The contractor, a certain Edwin Gardiola, has allegedly failed to submit accomplishment reports to the DPWH on projects worth about P6 billion,” he said.

Evardone also questioned the accreditation system of the public works department and PCAB.

He said one of Gardiola’s construction firms, which he identified as JSG Construction named after the contractor’s wife Judy, had only a “B” license but was awarded contracts for “Triple AAA” contractors.

At the very least, the accreditation system and standards are “confusing,” he said.

He said it was important for the House to know where the missing funds went, since it is the chamber that has principal responsibility for allocating taxpayers’ money.

Rodriguez said he himself is interested in finding out what really happened to the huge amount of infrastructure funds that was reportedly disbursed by then President Gloria Macapagal-Arroyo but could not be accounted for.

He said he received information that even in his home province, where Arroyo also comes from, as well as in Leyte and other provinces, there were billions in such funds that were misused.

He said the funds were literally washed away, since they were allocated for river and canal clearing and dredging projects.

When President Aquino assumed office in June 2010, his officials discovered that Arroyo released P10.61 billion in pork barrel funds to her congressional allies two months before the presidential elections in May that year. The funds were intended for infrastructure projects.

Upon the request of then newly installed Budget Secretary Florencio Abad, Singson ordered his regional directors, project directors and managers, and district engineers to “withdraw” the funds for the congressmen-recipients’ projects.

In a letter to Singson, Abad said the P10.61 billion was part of a total of P30.32 billion lawmakers had inserted in the 2010 DPWH budget.

He indicated that Arroyo violated her own “conditional veto message” that she sent to Congress as part of her approval of the P1.54-trillion 2010 budget.

He quoted the pertinent part of Arroyo’s veto message, which provides that the “release of the increased items of appropriations is subject to the identification by Congress of new revenue measures in support thereof.” The 15th Congress did not pass any revenue bill.

“This veto message is in line with the policy of keeping the (budget) deficit within the projected level for FY (fiscal year) 2010. As of end June 2010, the fiscal performance showed that the actual deficit of P196.7 billion exceeded the deficit target by P51.6 billion,” Abad said in his letter.

“In this regard, the release of P10.61 billion without the corresponding revenue measures identified by Congress will have the effect of bloating the deficit. However, if we are to maintain the deficit level with the release of said amount, this will lead to suppression of DPWH lump-sum funds of same amount, which in turn will lead to non-implementation /deferment of projects,” he said.

“Given these scenarios, there is a need to withdraw allotments that have not been obligated yet. Further, kindly review those that were already obligated and explore the possibility for their cancellation to enable this department to withdraw the unobligated allotments,” he said.

In his directive to his field personnel, Singson made it clear that the DPWH would have to sacrifice its own projects if funds released by Arroyo for projects funded by congressional insertions were not recalled.

Abad subsequently told The STAR that they were not able to recall Arroyo’s “midnight” releases. The DPWH has been trying to trace where the money went.