Statement of PIDS President Gilbert Llanto regarding media reports on the Commission on Audit findings

This is to clarify certain issues raised against the Philippine Institute for Development Studies (PIDS) in connection with the 2013 Annual Audit Report of the Commission on Audit (COA), and published in the newspapers and online news web sites today.

First, the amount of PHP 660 million, mentioned in various reports, did not go entirely to PIDS. There were two fund releases: (a) PHP 560 million of which PHP 504 million went to the Commission on Higher Education (CHED) and PHP 56 million to the PIDS for policy research (released on June 20, 2012), and (b) PHP 100 million for the purchase of property that would be the new site of PIDS offices (released on August 1, 2013). The funds released to CHED were for projects of the state universities and colleges (SUCs). Twenty nine (29) and not 25 SUCs have benefited from those funds.

It is alleged that PIDS kept PHP 213 million lying dormant in Landbank accounts. Nowhere in the COA report was this mentioned as dormant. The amount of PHP 194.2 million was in fact with CHED, while PIDS had PHP 19.2 million. To clarify, these funds have been already legally obligated by CHED and PIDS and cannot be considered as “dormant”. In short, the funds have already been earmarked for specific projects.

PIDS was also erroneously reported as having been asked by COA to return the interest earnings on these funds and for claiming that its deposits went to non-­‐interest bearing accounts. PIDS did not ever claim that its deposits were in non-­‐interest bearing accounts. The accrued interest of the balance remaining in the custody of PIDS amounts to PHP 1,147,798.90 as of June 30, 2014, and this is known to COA. It is CHED that maintains a non-­‐interest bearing account with Landbank. CHED sent PIDS a letter on July 31, 2014 stating that a request had been sent to Landbank Quezon City Circle branch to certify that the account is non-­‐interest bearing. Landbank Manager Acsa Ramirez (LBP-­‐Quezon City Circle Branch) sent a certification that “the CHED Trust Account”  is a non-­‐interest bearing account.

News reports also highlighted the COA finding that PHP 297 million remained unliquidated by SUCs. The funds are all accounted for and they have been released by CHED to various SUCs. CHED is waiting for the complete liquidation of those amounts. As of June 30, 2014, a total of PHP 82.1 million have been liquidated by SUCs.

It is unfortunate that COA has been quoted at length without considering PIDS management’s replies in the same audit report, which were acknowledged by COA. A careful reading shows that Section 1.15 of the COA audit report stated clearly that the copies of the Memorandums of Agreement between CHED and 29 SUCs were submitted to COA with confirmation letters acknowledging the amounts that the SUCs had received from CHED for their research, development and extension projects. One story alleges that “the PIDS failed to submit copies of the agreements between the CHED and the SUCs on the use of the DAP funds”; and that “the auditing agency said that aside from the check number in the CHED report, no document acknowledging the receipt of fund by each SUC was submitted.”

Finally, the claim that the PHP 100 million spent on a lot from NHA was a “bad land investment” is unwarranted.

PIDS undertook the necessary due diligence before purchasing the lot—a tiny portion of the 3.7 hectares currently occupied by Philippine Children’s Medical Center (PCMC)—in good faith. The sale transaction between the National Housing Authority or NHA (the lot owner) and PIDS (the lot buyer) was clean, legal and transparent. The PIDS is now in the process of land titling and registration with the Register of Deeds of Quezon City.

The fact is that the PCMC signed a “conforme” to the NHA letter dated July 15, 2013 informing PCMC among others that the award of the 2,580.50-­‐square-­‐meter lot to PIDS where PCMC building has encroached has been approved by the NHA management. In effect, the PCMC agreed to the sale on July 15, 2013. I cannot understand how it was concluded that “widespread opposition” to the hospital’s supposed eviction forced the PIDS and the NHA to suspend the land deal.

The sewerage treatment plant (STP) mentioned in various reports occupies a small corner of the lot purchased by PIDS. The STP treats wastewater discharge. On this, the COA audit report stated: “On the presence of the STP, PIDS in consultation with architects and engineers, can share the use of the STP with adjacent buildings. The presence of the STP should not be a matter of adverse concern.”

PIDS has been judicious in its use of public funds in accordance with government procurement processes.

I invite the media and the public to read the COA Annual Audit Report 2013. It is available on the COA web site. I thank the media in advance for providing us the opportunity to air our side.