Confidential Funds: Enemies of the State
The existence of confidential funds undermines transparency and accountability in the Philippine government for its lack of detailed reporting and oversight mechanisms which allows potential abuse and corruption. 
Nov 9, 20236 min read
Confidential Funds: Enemies of the State

Cartoonist: Clem Rocacorba

The confidential and intelligence funds (CFIs) have sparked controversies and flagged queries about transparency and accountability within the government. The enormous allocation and its equivalent utilization have become a subject of public concern, especially surrounding the Vice President and the Secretary of the Department of Education, Sara Duterte.

Confidential funds, often referred to as discretionary funds, are allocations in the government budget that provide public officials with flexibility and autonomy in spending for confidential and emergency purposes. These are lump sum allocations set aside in the national budget for expenses that involve surveillance and intelligence information gathering activities, as per the 2015 joint memorandum circular guidelines between the Commission on Audit (COA), Department of Budget and Management (DBM), Department of the Interior and Local Government, Governance Commission for Government-Owned and Controlled Corporations (GCG) and the Department of National Defense.

Confidential funds are designed to be used only for: (a) Purchase of information necessary for the formulation and implementation of program, activities and projects relevant to national security and peace and order; (b) Rental of transport vehicle related to confidential activities; (c) Rentals and the incidental expenses related to the maintenance of safehouses; (d) Purchase or rental of supplies, materials and equipment for confidential operations that cannot be done through regular procedures without compromising the information gathering activity concerned; (e) Payment of rewards to informers; and (f) [Uncovering and preventing] illegal activities that pose a clear and present danger to agency personnel or property, or other facilities and resources under the agency protection, done in coordination with appropriate law enforcement agencies. Intelligence funds, meanwhile, can only be used for: (a) Intelligence and counterintelligence activities that have direct impact on national security; and (b)Special projects and case operation plans as approved by the head of agency involving covert or semi-covert psychological, internal security operation, and peace and order activities, as well as programs, projects and campaigns against lawlessness and lawless elements involving intelligence activities.

The Office of the Vice President (OVP) is seeking PHP 500 million in confidential funds, while the Department of Education (DepEd) is seeking PHP150 million for expenditures in 2024. However, these have stirred dissent among members in both the House of Representatives and the Senate, who find them superfluous.

During a speech at the 122nd police service anniversary celebration of the Philippine National Police in Butuan City on Wednesday, October 4, 2023, Vice President Sara Duterte shared words about the controversial fund. She asserted that confidential funds allow her office to address unforeseen challenges, such as terrorism and organized crime. 

“Anyone who attacks or undermines funds allocated for peace and order is naturally assumed to have insidious motivations. Such actions go against the protection and well-being of our citizenry. Those who seek to compromise the security and development of our nation jeopardize the very fabric of our society and hinder our progress,” Duterte said. 

“Kung sino man kumokontra sa confidential funds ay kumokontra sa kapayapaan. Kung sino ang kumokontra sa kapayapaan ay kalaban ng bayan (whoever is against confidential funds is against peace. Whoever is against peace is an enemy of the state),” she added.

The existence of confidential funds undermines transparency and accountability in the Philippine government for its lack of detailed reporting and oversight mechanisms which allows potential abuse and corruption. 

High-profile cases of budget misuse in the Philippines have highlighted the need for stricter controls and transparency measures in government budgets and allocations. Some of the significant controversies are: The Napoles Pork Barrel Scam, also known as the PDAF Scam (Priority Development Assistance Fund Scam), came to light in 2013. Janet Lim-Napoles, a businesswoman, was accused of orchestrating a scheme in which lawmakers' discretionary funds, known as pork barrel funds, were funneled into bogus non-governmental organizations (NGOs). Similarly, the Philippine Health Insurance Corporation (PhilHealth) scandal, which has faced allegations of corruption and mismanagement in 2020, with allegations that emerged, of fraudulent schemes within the organization involving overpriced medical procedures, ghost patients, and false claims. 

We are Filipinos. Are we enemies of the state for questioning the CIF? No, we rightly raise questions about whether these funds are necessary or whether they could be better allocated elsewhere. 

The impact of the confidential fund on the daily lives of Filipino citizens is a significant concern that arises from the lack of transparency and accountability surrounding its utilization. While the exact extent of this impact may vary depending on various factors, it is essential to examine the potential consequences of the confidential fund on the lives of ordinary citizens. 

Misallocation of Resources: The discretionary nature of the confidential fund allows government officials to allocate funds without stringent oversight or public scrutiny. This could lead to the misallocation of resources, with funds being directed towards personal or political interests rather than being utilized for the benefit of the public. 

Limited Public Services: When the confidential fund is misused or allocated improperly, it can result in a shortage of resources for critical public services. This translates into inadequate healthcare facilities, overcrowded schools, poorly maintained infrastructure, and limited access to essential services. 

Widening Socioeconomic Disparities: If funds are directed towards projects or initiatives that primarily benefit a select few, it can widen the gap between the rich and the poor. This can lead to feelings of injustice and frustration among marginalized communities, hindering social cohesion and potentially fueling social unrest.

Erosion of Public Trust: When citizens perceive that public funds are being misused or misappropriated, it undermines their confidence in the government's ability to address their needs and concerns. This erosion of trust can lead to disillusionment, apathy, and a decreased willingness to actively participate in civic activities or engage in democratic processes.

Impediment to Economic Development: When resources are not effectively utilized for productive investments, economic growth may be stifled, resulting in fewer job opportunities, lower income levels, and decreased overall living standards. 

More than the issue of being wasteful, where can Confidential funds be better lodged that would make a greater impact on the lives of the Filipinos? We try to unveil the impacts of CIFs in the Education System. 

The Philippine education system faces numerous challenges that hinder its ability to provide quality education to its citizens. To address these ills, policymakers should prioritize transparency, accountability, and equitable resource distribution. By adopting appropriate measures and ensuring that confidential funds are utilized judiciously, the Philippine education system can be revitalized and empowered to provide quality education to all its citizens.

Insufficient Funding: The education sector in the Philippines often faces inadequate funding, leading to a shortage of resources, outdated facilities, and limited access to quality education. Insufficient funding hampers the ability to hire qualified teachers, provide necessary learning materials, and improve infrastructure. Increased funding to the Education System can be used to enhance the teachers’ salaries and benefits, attract qualified educators, and provide scholarships and financial assistance to students from disadvantaged backgrounds.

Quality Disparities: There is a significant disparity in the quality of education between urban and rural areas. Urban schools often have better facilities, more qualified teachers, and access to a wider range of educational opportunities. Rural schools, on the other hand, face challenges such as limited resources, teacher shortages, and inadequate infrastructure, resulting in lower educational standards.

Overcrowded Classrooms: Many public schools in the Philippines suffer from overcrowded classrooms, particularly in densely populated areas. Large class sizes make it difficult for teachers to provide individual attention to students, resulting in ineffective teaching and learning experiences.

Outdated Curriculum: The curriculum in the Philippines has been criticized for being outdated and disconnected from the needs of the job market. There is a need to align the curriculum with the demands of the modern workforce, emphasizing critical thinking, problem-solving skills, and relevant technological knowledge.

Teacher Shortages and Quality: The Philippines faces a shortage of qualified and experienced teachers, particularly in remote areas. Additionally, the quality of teacher education programs and professional development opportunities needs improvement to ensure that teachers are equipped with the necessary skills and knowledge to deliver high-quality education.

Inequitable Access: There are significant disparities in access to education based on socioeconomic status, geographic location, and gender. Children from marginalized communities, including indigenous populations, often face barriers to accessing education, such as lack of transportation, discrimination, and poverty.

High Dropout Rates: Dropout rates remain a concern in the Philippine education system. Factors contributing to high dropout rates include poverty, early marriage, lack of access to transportation, inadequate school facilities, and the need for children to contribute to family income.

Limited Technical and Vocational Education: The emphasis on academic education often overshadows technical and vocational education in the Philippines. This results in a mismatch between the skills acquired by students and the demands of the job market, leading to unemployment and underemployment.

Addressing these challenges requires a comprehensive approach that includes increased funding, curriculum reforms, improved teacher training and recruitment, infrastructure development, and targeted efforts to bridge the gap in access to education.

The issue of confidential funds requires comprehensive solutions. Enhancing transparency, strengthening accountability mechanisms, and promoting citizen participation are crucial steps towards addressing this issue. By implementing effective reforms, the Philippines can strive for a more accountable and transparent governance system, ensuring that public funds are utilized for the benefit of the Filipino people. In the end, we are not the enemies of the state. 

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