Sara’s Confidential Funds As Davao Mayor Bigger Than Some Allotments For Social Services – Former DOF Official
Former Department of Finance Undersecretary Cielo Magno said it is important to scrutinize how public funds are spent by government officials for accountability.
UPDATED: Allocations for Davao City’s social services paled in comparison to confidential funds during Vice President and Education Secretary Sara Duterte’s time as mayor, former Department of Finance (DOF) Undersecretary Cielo Magno bared on Monday, Oct. 2.
In an interview with “Sa Totoo Lang” on One PH, Magno said these findings were based on the Commission on Audit’s (COA) Annual Audit Reports (AAR), and the DOF-Bureau of Local Government Finance’s (BLGF) Statement of Receipts and Expenditures (SRE) per local government unit (LGU).
Under the SRE, social services are: education, culture and sports/manpower development; health, nutrition and population control; labor and employment; housing and community development; and social services and social welfare.
“I wanted to see, how is Davao City’s spending pattern if they have huge allocations for confidential funds? How much do they spend for social services?” Magno, a returning professor at the University of the Philippines School of Economics, said.
Based on data, Magno pointed out that Davao’s spending for social services was first outpaced in 2017, Duterte’s first full year as mayor. The city government’s education budget was at P135.43 million, or P158.57 less than the P294 million confidential funds at the time. The budget for health was P34 million lesser, or P260.82 million.
In 2017, there was also a P150-million or 104 percent increase in confidential funds under Duterte’s first full year. In 2016, part of the P144 million confidential funds came via former president and Duterte’s father, Rodrigo.
Labor and housing budgets in 2017 were at P2.95 and P6.35 million, or P291 and P287 million less than the confidential funds, respectively. Only P95.59 million was allotted for social services, or P198 million less than the year’s confidential funds.
In 2018, confidential funds increased to P420 million or 43 percent from 2017. During the same year, Davao's education budget rose to P320.81 million, but still P99.19 less than the confidential funds.
Their health sector’s budget was cut from P260.82 million to P254.24 million – P165.76 million lower than the confidential funds.
Labor and housing budgets saw an increase in 2018, but they were at a measly P3.4 million and P8.58 million, respectively. Social welfare allocation was also doubled at P187.12 million, but the confidential funds still dwarfed these figures.
By 2019, confidential funds were at P460 million. Despite an increase, Davao’ education budget still trailed at P416.98 million, while the city’s health budget was at P370.31 million.
While less than P460 million, the two sectors recorded a 30 and 46 percent increase, respectively.
The year 2019 also saw a P402.03-million allocation for housing and community development, P57.97 million less than the confidential funds, while P201.36 million was earmarked for social welfare and P3.74 million for labor, a non-priority.
Confidential funds remained at P460 million in 2020. During the first year of the pandemic, the health sector’s budget was less than P72.6 million compared to the confidential funds, or P387.40 million. Budget for education was cut to P291.01 million.
For the first time since 2017, at least one sector received more funds. In 2020, the housing sector received a P508-million budget, P48 million more than the P460 million confidential funds.
Labor and employment remained a non-priority in Davao City with a P5.99 million allocation.
Amid the COVID-19 pandemic in 2021, Davao’s health sector received a P570.27-million budget, while housing and community development received P511.67 million allocation. For the first time, two sectors had more budgets than confidential funds.
During the same year, the education sector also received its biggest allocation under Duterte with P447.55 million, or P12.45 million less than the confidential funds. The city’s social welfare services received a P262.79-million allocation in 2021, while its labor services were only given a P7.47-million allocation.
In 2022, Davao’s health services received a P1.33-billion budget, around P870 million more than the P460 million confidential funds. Housing and community development likewise overtook the P460 million, with its P590.33 million allocation.
During the same year, Davao’s social services sector received a P304.58-million budget, while their education sector had a decreased P343.57-million budget. Labor and employment had a measly P7.11-million allotment.
“So it’s really important that we look at these things,” Magno said.
Duterte is under scrutiny after audit reports when she Davao mayor resurfaced. With a P2.7 billion total, Davao City had more confidential expenses than Quezon City, (P435 million), Makati (P1.4 million), and Manila (P478 million) from 2016 to 2022.
The three were COA’s top three richest LGUs based on their 2021 Annual Financial Report.
In a post on X (formerly Twitter), Magno clarified that comparisons for confidential funds were made individually per sector. If totaled, she said more money was spent on social services over the confidential funds.
“The CF (confidential funds) are bigger than most of the individual expenses under social services. If aggregated, SS (social services) spending was bigger than CF,” she said on Wednesday, Oct. 4.
On aggregate, social services spending from 2016 to 2022 was about P9.3 billion, compared to the P2.7 billion total in confidential funds during the period. But as Magno pointed out, individual comparisons showed respective allocations for the five social sectors were almost consistently lesser than confidential funds during Duterte’s time as Davao mayor.
Red flags
Magno acknowledged during her interview with "Sa Totoo Lang" that LGUs need confidential funds, especially for peace and security. Ideally, confidential funds are for such purpose, Magno explained.
Under the COA and Department of Budget and Management’s (DBM) Joint Circular No. 2015-01, confidential funds “should not exceed 30 percent of the total annual amount allocated for the LGU’s peace and order and public safety plans (POPS-Plan).”
“Unfortunately, we cannot determine if they are really used for peace and security, because when the COA audits the confidential and intelligence fund, only a certification is required,” Magno said in Filipino.
“No receipts or attachments…it’s unlike regular government expenditure where you show surveys, proof that an item is the cheapest, and receipts to prove you spent the budget on those…so that’s what makes the confidential fund very tricky,” Magno added.
Magno noted that for Davao at least, confidential funds are unlikely in compliance with the law. She explained that on average, confidential funds make up four percent of the total operating income of the LGU.
According to Magno, total operating income includes the transfer and assistance LGUs receive from national government agencies.
She added the confidential funds also take up 10 percent of taxes paid by Davao City residents.
But while Davao received heaps of confidential funds, Magno noted it does not apply to every LGU. For example, she noted Quezon City only allocates about 75 million to 100 million for confidential funds. Unlike Davao, Magno explained Quezon City spends more on their social services than confidential funds.
“As citizens, it is important to hold our officials accountable. Not just at the national level, but even for the local level, because the services they will provide…will be based on how they spend their constituents’ money,” Magno stressed.
