President spent millions on travels, ‘donations’ and consultants in ‘06

The Office of the President spent generously last year on salaries, bonuses and benefits of its employees and consultants, but even more generously, on multiple travels at home and overseas and on unspecified “donations" and “consultancy services."

A Commission on Audit report showed that in 2006, the Office of the President spent P40 million a month on average for traveling expenses, mostly of the President, and another P35 million a month on average for “donations." Already, the combined amount of traveling expenses and “donations" used up over a third or 39 percent of Malacanang’s total expenses in 2006.

On top of this, the presidency spent an average of P44 million a month to pay the salaries and benefits of its employees.

Curiously indeed, what may be classified as “incidental expenses" and lump-sum allocations ranked among the expense items for which the Palace spent big amounts of taxpayers’ money. These included, apart from travel, “donations," “consultancy services," confidential expenses, and the creation of new offices.

The presidency, in fact, spent smaller amounts on other housekeeping expenses, including supplies and utilities.

Frequent traveler

Nearly a fourth or 20 percent of OP’s expenditures was spent on “traveling expenses" in 2006 that totaled P482 million – more than double the P210 million spent for the same expenditure item in 2005.

The bulk of the travel bill went to supporting trips abroad, amounting to P398 million, with a much-smaller portion amounting to P83 million going to domestic sorties, in 2006.

In 2005, the President went abroad four times to attend various conferences. The bill for foreign travel expenses then was P154 million.

In 2006, President Arroyo visited 13 countries. For that year, the Office of the President spent a total of P398 million on foreign travels alone, the second-biggest single expenditure that year of the OP.

Of the foreign travels, two are state visits while the rest are classified under official or working visits. The costs of a state visit are usually borne by the host country.

The figure was taken from OP’s financial statements submitted to the COA. It was not known if bulk of the foreign travel expenses is attributable to the President. The item also includes the travel expenses of other OP officials and employees. Details of the travel expenses are not available.

The figure is not likely to taper off. As of October 2007, or in just 10 months this year, the President has already made 15 state and working visits.

Table 1. OP travel expenses in 2006 and 2005

	2006	2005	Difference	Percentage of increase
Foreign	398,447,583.30	154,383,308.01	244064275.3	158.0898
Local	83,629,357.29	55,692,285.62	27937071.67	50.16327
Total	482,076,940.59	210,075,593.63	272001347	129.4778

Administrative Order 103, which Arroyo issued in 2004 and is still enforced today, suspended all foreign travels, except for ministerial meetings and scholarship/trainings that are grant-funded or undertaken at no cost to the government.

All foreign travels of presidential appointees, even those allowed by the AO, must first be cleared by the Office of the President. All agencies are also required to submit a monthly report to the Office of the President, stating the names of officials or employees who traveled abroad, the reasons for such travel, and the cost incurred by the government.

The AO also suspends all local travels, unless necessary.

Donations, consultants

Apart from travel, the COA report showed that last year, Malacañang under Mrs Arroyo has become quite a willing donor. It spent P428 million in unspecified “donations," or an average of P35 million a month, or more than a million pesos a day.

“Donations" accounted for 18 percent of the OP’s total expenses.

The COA report could not explain who or which agencies benefited, and for what purposes, these “donations" were made by the presidency.

News Research has requested the list of the beneficiaries from the office of Deputy Secretary Susana Vargas, but the request has been unattended for a month now.

After travel expenses, “donations" got the highest share of expenses under “maintenance and other operating expenses" or MOOE at P428 million or 23 percent of all MOOE expenses.

It is the biggest single expenditure in the presidency’s budget, eating up 18 percent, in 2006.

“Donations" last year had, in fact, decreased by 38 percent, from P692 million in 2005.

Part of the austerity measures under Administrative Order 103 is the suspension of donations, contributions, grants and gifts, except if those are undertaken pursuant to the mandate of the donor-agency.

Exponential growth

AO 103 also ordered the reduction by at least 10 percent in the cost of services of consultants and technical assistants.

But of the more than P72 million expenses for professional services, almost 78 percent or P58 million – or almost P5 million a month – went to consultancy services, again for unspecified projects.

Consultancy services increased exponentially in 2006 compared to the previous year. In 2005 the OP incurred P2 million in consultancy services.

Professional services also include legal, auditing, environment/sanitary, general, janitorial and security services.

Another unspecified or lump-sum budget item, “confidential expenses," fetched an average monthly budget of P11 million a month eating up a considerable chunk of the OP budget. Confidential expenses pertain to surveillance activities in civilian departments or agencies that are intended to support the mandate or operations of those offices.

For 2006, the OP spent P132 million in confidential expenses, but this is still smaller than the P160 million in spent in 2005. In 2004 OP had a staggering P503 million in confidential expenses, the biggest in recent years.

New offices

Last but not least in a string of incidental expenses was the creation in 2006 of at least seven new offices that were all given budgets of at least P5 million each.

Under the Administrative Code of 1987, the Office of the President consists of the OP Proper and the agencies under it. The OP Proper consists of the Private Offices, the Presidential Assistant System, the Executive Offices, the General Government Administration Staff, the Internal Audit Service Unit, the Locally Funded/Foreign-Assisted Projects and the Other Executive Offices.

The OP directly supervises 61 other executive offices, agencies, commissions and committees that warrant the special attention of the President.

But Director Bato Ali Jr. of COA’s Cluster 1 on Executive and Oversight said their audit does not include all OP offices.

Still, every year Arroyo creates a new office, more often than not under the Office of the President. Each was allocated at least P5 million as initial budget.

In 2006, she issued at least seven executive orders on new offices including those creating the Anti-Red Tape Task Force, the reactivated Southern Philippines Development Authority, the Charter Change Advocacy Commission and the Independent Commission to Address Media and Activist Killings.

In 2007, the number of new offices almost doubled compared to 2006: at least 13 were created. There are presidential task forces on climate change, on “the security of energy facilities and enforcement of energy laws and standards" and another one “to assess, plan and monitor the entire education system."
There is also an anti-hunger task force and another one on investor protection. This month, Arroyo ordered the release of P1 billion to the Anti-Hunger Task Force.

Table 2. New offices in 2006

Office	Under	Presidential issuance	Initial budget
Task Force on the Repatriation of OFWs from Lebanon	DFA/DOLE	EO 551 issued on July 26, 2006	P1 billion
Anti-Red Tape Task Force	Composed of DTI (chairman of the task force), PMS, CICT, Export Development Council Secretariat, NAPC and PCCI	EO 557 issued on August 8, 2006	---
Metro Iloilo-Guimaras Economic Development Council	Regional Development Council	EO 559 issued on August 28, 2006	---
Southern Philippines Development Authority (reactivated)	OPAPP	EO 560 issued on August 29, 2006	P10 million to be taken from the President’s contingency fund
Public-Private Sector Task Force on Philippine Competitiveness	Task Force composed of DTI, DOF, DOTC, DepEd, NEDA, business sector, senior advisor on international competitiveness, policy research institutions and civil society	EO 571 issued on October 5, 2006	P10 million from DTI
Charter Change Advocacy Commission	PMS will serve as Secretariat	EO 495 issued on January 23, 2006	P5 million from OP for 8 months only
Independent Commission to Address Media and Activist Killings	Independent body to be supported by a Secretariat	AO 157 issued on August 21, 2006	OP

Table 3. New offices in 2007

Office	Under	Presidential issuance	Initial budget
International Media Office	OPS	EO 656 issued on August 24, 2007	P30 million charged to OP
Presidential Task Force on the Security of Energy Facilities and Enforcement of Energy Laws and Standards	DOE	EO 655 issued on August 22, 2007	Unprogrammed funds of the DOE
Presidential Task Force to Assess, Plan and Monitor the Entire Educational System	Task Force composed of DepEd, CHR, TESDA, Presidential Assistant for Education and private sector	EO 652 issued on August 21, 2007	funds to be drawn from budget of PA for education
Presidential Anti-smuggling Group	Composed of PNP, PCG, NFA, MARINA, PPA, PN, BFAD and BOC	EO 624 issued on May 21, 2007	P50 million from the President’s Contingency Fund
Inter-agency Task Force for the Millennium Challenge Account	DOF	EO 607 issued on March 5, 2007	Available funds of DOF and DFA
Presidential Coordinating Council on Research and Development	Composed of President of the Philippines, DOST, DA, DBM, DOE, DENR, DFA, DOH, DND, NEDA, DTI, CHED, CICT, National Academy of Science and Technology, National Research Council of the Philippines, private sector and organizations of scientists and engineers	EO 604 issued on February 16, 2007	DOST
Presidential Task Force on Climate Change	Composed of DENR, DOE, DOST, DA, DILG, private sector and civil society	AO 171 issued on February 20, 2007	DBM
Investor Protection Task Force	DOJ	AO 185 issued on July 24, 2007	---
Anti-hunger Task Force	National Nutrition Council of DOH	EO 616 issued on April 3, 2007	---
Inter-agency Task Force to Assess and Resolve Land Disputes in North Cotabato and Address Similar Issues in Conflict-prone Areas in the Country	Task Force composed of DA, DAR, DENR, Joint GRP and MILF CCCH, International Monitoring Team and LGU of Kidapawan	AO 174 signed March 27, 2007	---
Inter-agency Task Force for the Condonation of Agrarian Reform Land Amortization Liabilities and for Other Purposes	Task Force composed of DAR, DOJ, DOF, Land Bank of the Philippines and Agrarian Reform Beneficiaries Association	AO 176 issued on May 11, 2007	---
National Organizing Committee for the Conduct of the Philippine Participation in Expo 2008 Zaragoza, Spain	DOT	AO 177 issued on May 25, 2007	P200M from DOT, P20M from PTA, P10 M from DTI, P10M from DFA, P5M from DENR, P1M from DOST and P10M from PAGCOR
National Committee on Social Integration	OPAPP	AO 172 issued on March 23, 2007	OP through OPAPP

- With reports from Mary Ann Señir