Millions of dollars in funding support appear to have been wasted

By Aries Rufo, abs-cbnNEWS.com, Newsbreak | 01/07/2009 3:11 PM


Millions of dollars in funding support appear to have been wasted as corruption in the Philippines progressively worsened in the past two years, a Millennium Challenge Corp. evaluation report showed.

The worsening status of corruption, which was noted in 2007 and 2008 by the MCC, “raises questions about the efficacy” of MCC-funded anti-corruption programs of the Ombudsman amounting to millions of dollars, the report said. The MCC is a US government-owned corporation managing the Millennium Challenge Account aimed at helping governments lick corruption.

Ironically, the increase in the level of corruption was noted just as funding support poured. In late 2006, the Philippines received a $6 million grant from the MCC because of its high percentile ranking in control of corruption indicator. The country is eligible for a total amount of $21 million from the MCC.

Before the MCC account, the Ombudsman also got a huge grant from the EU for anti-corruption programs.

But from 76th percentile in 2006, the country’s ranking dipped to 57th percentile in 2007 and 47th percentile in 2008.

In March 2008, the MCC, during an assessment, noted the slide in 2007 and it “raised concern over the fragility of the Philippines’ control of corruption score.” Just the same, the MCC declared the Philippines eligible for another round of large-scale funding from the MCC.

Such decision created an “awkward situation” for the MCC Board, the report said, as later development showed.

With the further decline in the Philippines’ score in 2008, the evaluation report said the MCC’s initial concerns “now appear to have been justified.” It further noted that the release of grant “coincided with the weakening of the corruption score.”

It was thus of no surprise when the country flunked the MCC’s fiscal year 2009 report, which denied the Philippines a new round of funding.
Aside from failing grades in control of corruption (47 percent), the country also failed in health expenditures (19 percent) and primary education (32 percent).

To be eligible for the funding assistance, developing countries must demonstrate a commitment to policies that promote political and economic freedom, investments in education and health, control of corruption, and respect for civil liberties and the rule of law.

The MCC account is not the only foreign-funded program implemented by the Ombudsman which got a failing grade. During the time of Ombudsman Simeon Marcelo, the Office of the Ombudsman got a 2.9 million euro grant from the European Union to finance the Improving Governance to Reduce Poverty program.

But our sources in the Ombudsman said that since Gutierrez came into office in Nov. 2005, the funding support has been “drastically decreased due to incompetence.” But Alistair Macdonald, head of the delegation of the European Commission to the Philippines, in an earlier interview said the EU is still set to review the programs it had funded including the anti-corruption projects in collaboration with the Ombudsman.

The slash in foreign support came as various surveys confirmed the worsening corruption. The Political and Economic Risk Consultancy survey has tagged the Philippines as number 1 in corruption in Asia while Transparency International’s 2008 perception index placed the Philippines in the bottom quarter of 180 countries surveyed.

as of 01/07/2009 3:11 PM

P900- Million Swine Scam

We should start butchering those two-legged pigs in Malacanang and their cohorts. It appears that the Department of Agriculture was the source GMA’s 2004 election campaign funds. Gloria Arroyo and her cohorts’ allegedly malversed public funds for their personal interest. Joc-joc Bolante‘s P728 M fertilizer scam allegedly used to bribe congressmen and provincial governors to support Gloria’s candidacy. Public funds were diverted to ex-Comelec commissionaire Virgilio Garcillano’s election cheating operations in favor of Gloria Arroyo. The ghost of Hello Garci political scandal keeps haunting bogus Philippine President Gloria Arroyo.


GMA’s involvement in ‘Swine Scam’ seen in EO 322

Daily Tribune 04/03/2008

Where a direct link to President Arroyo in the P3-billion fertilizer funds scam was not quite established, this time, that direct presidential link to the “Swine Scam” is definitively marked with Mrs. Arroyo’s involvement, as evidenced by Executive Order (EO) 322, which effected the transfer of the Quedan and Rural Credit Gurantee Corp. (Quedancor) from the Department of Agriculture to the Office of the President.

Noticeably EO 322 was issued on July 5, 2004.

By August, going back on her word that she would not seek the presidency in 2004, Mrs. Arroyo announced that she would be running for the top post after God had told her He wanted her to run for the presidency.

“The direct hand of Mrs. Arroyo in this Swine Scam cannot be denied, now that the EO 322 has been bared, which was clearly designed for the President to be able to skim off hundreds of millions and divert this amount, most likely to her election kitty,” Harry Roque, a lawyer and critic of the President yesterday, told the Tribune.

“That is the good news (direct linkage),” civil society lawyer Roque said. “The bad news is that since Quedancor has been transferred to the Office of the President, Malacañang can get away with this crime again, just by invoking executive privilege,” he added.

The Supreme Court, voting 9-6, upheld the President’s executive privilege even when a crime is involved.

Roque said the amounts in the hundreds of millions were likely diverted by Malacañang to fund Mrs. Arroyo’s presidential campaign in 2004, stressing that the balance was definitely spent during the election period, as shown by the Commission on Audit (CoA) report.

An even bigger amount has been suspected of having been diverted in 2005, after the EO was issued and Quedancor was ordered transferred directly under the President’s office.

Roque charged that there was P 5 billion in cash, P3 billion which was borrowed from the Land Bank and P2 billion borrowed from Equitable PCI. The collateral was government bonds which Roque said that in case of default, it will be Juan de la Cruz who will again be made to pay up.

The sum of P2.25B was reportedly intended to buy swine for distribution to marginalized farmers on credit. “Like the fertilizer scam, it was conceived and implemented in 2004, a presidential election year,”Roque stressed.

The pattern in the swine diversion scam and the fertilizer funds scam appears to be very similar, in that there were ghost deliveries noted as well as the way the hog farmers were made to sign receipts even when they never got the swine.

He added that a year after its launch, in 2005, the CoA reported that Quedancorp spent 1.66 billion but failed to account for the manner it was spent, which was roughly 60 percent of the amount equivalent to P 747 million.

This amount, he said, was classified as “unrecorded receivables.” The following year, Roque stated, CoA reported that of P1.66 billion, there was only a record that P176 million was actually received by farmers/beneficiaries. This means that P1.5 billion was already stolen, through ghost delivery.

“Moreover, field audit revealed that an almost overwhelming number of farmers were made to sign receipts for swines that they never received for sums ranging from P200 to P300 per signature,” Roque pointed out.

The CoA recommendation, from the documents obtained by Roque, showed that the agency’s recommendation was that action should be taken against those who may be found remiss in the discharge of their duties.

He said that in 2005, the CoA already reported that the collection of P755million was already doubtful. This amount classified as of doubtful collection was increased to P1.1 billion in 2006.

Roque also charged that the procurement of P1.66 billion worth of swines was done without bidding and supplied by four companies with interlocking directors and stockholders and which were not even accredited Swine Breeders Farms by the DA.

“All these companies had no track record as they were all incorporated only in 2003. None of them were accredited by the Bureau of Animal Industry

“All suppliers were paid in full in advance explaining why they all got paid a total of 1.66B when they only delivered 176M worth of swines.

“Further, there was also the ghost delivery of P47M of input supplies.

He noted that in 2006, it was also reported that there was interlocking of shareholders and directors of companies who received and the supplied the swines. Ex: Iloilo Feeds Corp, Nueva Foods and BORKS: NG family: Mary Ann Treasurer of Iloilo feeds, later became Chairman of BIRKS.

Roque also noted that Quedancorp engaged in quasi-banking without authority from the Bangko Sentral ng Pilipinas; loans incurred for Swine Program of 2.25 exceeded by P 750M ceiling that were approved by Monetary Board; Overstatement of cash inflow and outflow from Financing Activities: Proceeds:P188M, Payments P 264M; and overstatement of cash position by P195M

Roque said that P2.25B of funds from Landbank which could have been used to increase productivity of rice farmers was lost to graft and corruption on an election year and stated that the current rice crisis being experienced is due to corruption.

He named as responsible the members of the Board of Quedancorp including Agriculture chief Arthur Yap and then DA chief Cito Lorenzo.

Roque also questioned why Yap failed to act on the irregularities when Quedancor was informed of it as early as 2005. He noted an investigation was started only in 2006. By that time, he said, P1.66 billion had already been spent.

Part of the reason for the transfer, as stated in the EO was that which said that “in order to effectively oversee and implement agriculture development activities through an institutionalized and comprehensive financing and guarantee support system for the country’s agricultural sector, there is a need to transfer Quedancor from the Department of Agriculture to the Office of the President, and to reorganize the Government Board thereof” adding that under Section 31, Chapter 10, Title III, Book III of the administrative Code of 1987, the President has the continuing authority to reorganize the administrative structure of the Office of the President.

“With that EO transferring the Quedancor to the office of the President, Mrs. Arroyo can hardly deny that she knew nothing about these billions diverted,” Roque said.


Quedancor has P1.4-billion in unliquidated fund