Budol-Budol Governance (Part 4): Institutionalized Corruption

Do we really need to insert Confidental Funds

in the National Budget?

by Jo Chanco

EDITOR THINKS

The Philippines is a country where corruption has not just survived every administration — it has adapted, mutated, and entrenched itself into our political DNA. Each presidency comes promising reform, transparency, “daang matuwid,” or “bagong Pilipinas.” Yet beneath the recycled slogans, one old practice persists: the allocation of lump sum funds like the Pork Barrel, Infra-Funds and Confidential and Intelligence Funds (CIFs) to high officials.

These funds, which run into billions of pesos annually, are supposedly earmarked for "necessary" or “sensitive” operations. In truth, they function as legally sanctioned slush funds. They are somewhat shielded from audit, duplicated across agencies, and distributed like perks in a patronage system. They are, quite literally, institutionalized corruption.

I submit that these sort of funds must be abolished. Not trimmed. Not “reformed.” Abolished outright.

Why? Because they represent redundancy in budgeting. Because they erode public trust. Because they perpetuate the “loot bag mentality” in government. And because history shows us they have been consistently abused — from Gloria Arroyo’s time, to Sara Duterte’s ballooning allocations, down to the current Marcos administration’s extravagant requests.

Confidential Funds

The Pork Barrel, or InfraFund today, distributed in congress as lump sum, is the Confidential Funds. Under the General Appropriations Act, certain government offices are granted Confidential Funds (for information-gathering activities related to their mandate) and Intelligence Funds (for strictly military or police purposes). The rules are vague. The auditing is minimal. The result? Billions vanish each year into a void.

Unlike regular appropriations, CIFs are not subject to standard itemized auditing by the Commission on Audit (COA). At most, agencies submit summary liquidation reports, often reduced to a few sheets of paper, certified by the very officials spending the money.

This is where abuse thrives. A senator can tap CF for “intelligence” against smuggling, but need not show any arrests. A vice president can spend CF in “confidential projects,” but the public will never know what those projects were. A president can distribute CF among allies, and no citizen has standing to demand receipts.

It is government without accountability.

The Sara Duterte Example: Education as Intelligence Work?

Nothing illustrates the absurdity better than the 2022 budget controversy. Vice President Sara Duterte, who concurrently heads the Department of Education (DepEd), requested a staggering ₱500 million in Confidential Funds for her office. She also sought an additional ₱150 million for the Office of the Vice President (OVP).

For what purpose? DepEd is mandated to educate Filipino children, not run covert operations. Its role is to build classrooms, pay teachers, update curricula — not finance intelligence missions. Yet DepEd defended its CF request by claiming it needed funds to “protect learners” from “threats.” That justification was met with disbelief, even ridicule, by education experts and lawmakers.

When pressed, Sara Duterte declared she was willing to “die” defending her CF. It was a dramatic line, but it only exposed the sense of entitlement politicians now attach to these funds. To them, CFs are not extraordinary allocations but entitlements of power — loot bags handed to whoever sits in high office.

In the end, Congress realigned DepEd’s CF to agencies actually tasked with intelligence work. But the attempt itself showed how normalized the abuse has become.

Gloria Arroyo and the Birth of Excess

The rot did not start with Sara Duterte. The history of CF abuse goes back decades.

During Gloria Macapagal Arroyo’s presidency, “intelligence funds” ballooned to unprecedented levels. By 2007, her office alone controlled over ₱650 million in intelligence and confidential allocations. Critics accused her of using these funds to finance political survival, including loyalty checks for allies and counter-insurgency programs that blurred the line between military operations and political repression.

When the “Hello Garci” scandal erupted in 2004 — implicating Arroyo in election cheating — suspicions grew that intelligence funds had been tapped for electoral manipulation. While direct evidence was hard to prove (precisely because the funds are untraceable), the timing and amounts raised red flags.

Arroyo’s years proved one thing: once leaders discover the convenience of unaccountable funds, they cling to them as political lifelines.

Bongbong Marcos and the New “Normal”

Fast forward to President Ferdinand Marcos Jr. In 2023, his administration sought a whopping ₱10 billion in Confidential and Intelligence Funds spread across multiple civilian agencies. The Office of the President alone asked for ₱4.5 billion.

To justify the requests, officials cited “national security threats” ranging from terrorism to cybersecurity. But critics noted the glaring redundancies: the Department of National Defense, the Armed Forces, the National Intelligence Coordinating Agency, and the Philippine National Police already receive billions in intelligence budgets. Why should the Office of the President — already wielding immense power — need its own multi-billion-peso CF?

The answer, of course, is politics. CF gives the President a free-flowing pool of funds to dispense as he sees fit, whether for genuine security operations, political patronage, or even personal discretion. In a country where COA can question every peso spent on a classroom chair, it is nothing short of scandalous that billions in CF flow unquestioned.

Congress: The House of Loot Bags

If the Executive branch has perfected CF abuse, Congress has gleefully followed suit. Senators and congressmen also receive their share of CFs — often under vague justifications like “anti-criminality monitoring” or “constituency security.”

Let us be blunt: Philippine legislators are not spies. They are lawmakers. They have no mandate to conduct surveillance or intelligence operations. Yet they justify their CF as tools to “assist in oversight.” In reality, they function as political war chests — funds that can be deployed during elections, spent on local patronage, or even pocketed outright.

The 2024 budget hearings revealed how fiercely lawmakers defend their CF. Some congressmen angrily opposed proposals to scrap their allocations, calling it an “affront to legislative independence.” But what independence is there in hoarding loot bags at the expense of taxpayers?

The Loot Bag Mentality

The Sara Duterte case, the Arroyo precedents, the Marcos requests, the congressional allocations — all of them reveal the same mindset: CF is not a tool. It is a perk.

It has become normalized that the higher your office, the bigger your confidential entitlement. Presidents demand billions. Vice presidents hundreds of millions. Senators and congressmen their own slices. Even agencies with no security function — tourism, education, culture — insist they too need CF.

This is the loot bag mentality: that every official deserves their share of untraceable cash. It reduces public finance to a fiesta, where positions are invitations to dip into the piñata of taxpayer money.

The Myth of Necessity

Proponents of CF always fall back on one argument: necessity. They claim sensitive operations require funds that cannot be publicly disclosed. But this is a myth.

First, legitimate intelligence already has dedicated channels. The AFP, PNP, and intelligence agencies all have budgets for covert operations. These are classified, yes, but subject to controlled oversight.

Second, other democracies prove that oversight need not compromise secrecy. In the U.S., the CIA’s “black budget” is reviewed by select congressional committees. In the U.K., the Intelligence and Security Committee conducts confidential audits. Transparency and confidentiality coexist.

Third, the Philippine CF is so broad that almost anything can be justified. During hearings, officials have cited “cyber monitoring,” “peace promotion,” even “education protection.” The vagueness is deliberate. It allows maximum discretion, minimum accountability.

The Fiscal Cost: What We Lose

Let us be clear about what is at stake. Every peso spent on CF is a peso lost to transparent programs.

When the OVP asked for ₱500 million in CF, critics pointed out: the same amount could build 1,000 classrooms. When the Office of the President requested ₱4.5 billion, analysts noted: that money could double the calamity fund for disaster victims.

The fiscal opportunity cost is staggering. We chronically underfund hospitals, scholarship programs, and disaster preparedness. Yet we overspend on confidential perks. It is nothing short of national mismanagement.

Why Abolition, Not Reform

Some argue for reform: limit amounts, tighten guidelines, require partial audits. But reform is insufficient.

Why? Because CF is redundant. Non-security agencies do not need them. Presidents, vice presidents, lawmakers — they already command massive budgets. Adding CF is double-charging.

Because CF is inherently prone to abuse. Even with tighter rules, the absence of transparency will always invite misuse.

And because reform only legitimizes the practice. To trim the loot bag is still to hand out a loot bag. The only real solution is abolition.

The Moral Imperative

At bottom, this is not just a technical budget debate. It is a moral question: Do we allow our leaders to dip into untraceable public funds while ordinary Filipinos account for every centavo of tax?

Public office is a public trust. Yet CF turns it into a private privilege. To keep it alive is to normalize theft. To abolish it is to reaffirm that in a democracy, public money deserves public eyes.

The Path Forward

The road to abolition is clear:

1. Legislation — Amend the General Appropriations Act to remove CF allocations for all elected officials and civilian agencies.

2. Oversight Exception — Retain confidential allocations only for specialized security agencies, subject to closed-door congressional oversight.

3. Reallocation — Redirect billions in CF toward education, healthcare, disaster relief, and poverty alleviation.

4. Public Pressure — Civil society, media, and citizens must sustain pressure. Only public outrage can force lawmakers to surrender their loot bags.

   
   

Ending the Loot Bag Era

Confidential Funds are not instruments of governance. They are relics of patronage politics, codified into law. They are not about protecting citizens. They are about protecting political interests.

From Arroyo’s swollen intelligence allocations to Sara Duterte’s audacious DepEd requests, from Marcos Jr.’s billions for the Palace to Congress’s petty entitlements, the story is the same: CF is corruption institutionalized.

The time has come to end this farce. Reform is not enough. Only abolition can restore integrity.

If our leaders are serious about good governance, they must surrender the loot bags. If not, then citizens must keep demanding, louder each year, that the shadows of secrecy be pierced by the light of accountability.

Because at the end of the day, democracy is not measured by how much our officials can hide, but by how much they are willing to show. And the people’s money, no matter how small or how large, must never be spent in secret.