COA to OP: Utilize Lopez firm’s P1.4-B donation

The Commission on Audit (COA) has reminded the Office of the President (OP) to formulate a masterplan on the proper use of the P1.412-billion fund donated by the Lopez-owned Benpress Corp. almost three decades ago.

“Guidelines and work and financial plan for the utilization of the donations amounting to P1,412,943,850.00 intended for projects in economic development ... were not formulated, hence, benefits that could have been derived therefrom were not attained,” the COA said in its 2018 audit report on the OP.

The audit body said its review of OP’s book of accounts revealed that as of end of 2018, the entire donated amount remains in the Bureau of Treasury despite several calamities that hit the country, such as the magnitude 7.2 earthquake in Bohol and Super Typhoon Yolanda that devastated the Visayas, both in 2013, and the May 2017 seige of Marawi City by the Islamic State (ISIS)inspired local terrorist group, Maute.

“Such amount could have been utilized by OP in mitigating poverty and addressing the needs of the people during times of natural disaster or calamities that caused damage to the property and lives of the Filipino people in the past years,” the COA said.

The donated amount was an offshoot of a 1990 compromise agreement between the Lopezowned Meralco Foundation Inc. (MFI) and the Presidential Commission on Good Government (PCGG) that settled the dispute regarding Meralco’s 27,776,557 common shares of stocks.

During the term of the late president Corazon Aquino, Benpress Corp. (now Lopez Holdings Corp.) represented by its president Eugenio Lopez Jr. executed a deed of donation on Aug. 24, 1990 giving 3,333,333 Meralco shares in favor of the OP, then represented by Executive Secretary Catalino Macaraig Jr.

The shares, during the administration of Gloria Macapagal-Arroyo, were converted into cash amounting to only P1,383,314,609.05 in 2008 and recorded in the OP’s book of accounts only on Dec. 30, 2010 under the term of Benigno Aquino III.

The OP’s books show that the amount has earned interest totaling P29.63 million as of Dec. 31, 2012, thus, COA said, the unutilized balance now stands at P1.412 billion.

COA noted that under the 1990 Deed of Donation, the Meralco shares could be used by the OP for economic development agenda or national priority plan, as may be determined by the OP, “such as (for) agrarian reform, assistance to victims and areas affected by recent earthquake and rehabilitation of depressed areas.”

“It is worth noting that the non-issuance of pertinent guidelines for the utilization of the said donation may have prevented Management in utilizing the donated amount,” COA said.

COA said it has been reminding the OP to come up with a utilization plan for the past two years as contained in its annual audit reports for 2016 and 2017.

“We reiterated our previous year’s recommendation that management issue necessary guidelines and a work and financial plan for the utilization of the donated amount, taking into consideration the purpose of the said donation,” COA said.

Meanwhile, in the same audit report, COA noted that as of end of 2018, the OP was able to extend a total of P2.145 billion in assistance for the victims of the magnitude 7.2 quake in Bohol and Super Typhoon Yolanda, sourced from its Socio-Civic Projects Fund (SCPF), formerly the President’s Social Fund.

COA’s records show that 67.29 percent or P1.443 billion of the assistance was released in 2015 while the remaining 32.71 percent or P701.753 million was released from 2016 to 2018.

“The purpose of the financial assistance was to defray the equity for housing acquisition to replace washed-out houses or reconstruction of totally damaged houses and rehabilitation or repair of partially damaged houses,” the report read.

COA said the OP was also able to release a total of P2.003 billion, also sourced from SCPF, for the rehabilitation of Marawi City. The breakdown showed that the fund was released to the Department of Education (P3 million), National Housing Authority (P1.5 billion) and Housing and Development Coordinating Council (P500 million).

“The purpose of the fund transfer to DepEd was to cover expenses of its personnel who will undergo psychological first aid training. On the other hand, the fund transfers to NHA and HUDCC are for the recovery, reconstruction and rehabilitation of Marawi City,” COA said.