Iloilo flagged for favoring NTF-ELCAC over development fund projects

By Joseph Bernard A. Marzan

The Iloilo Provincial Government was flagged by the Commission on Audit (COA) for prioritizing the use of the funds given by the National Task Force to End Local Communist Armed Conflict (NTF-ELCAC) over its own development funds that are required by the law.

The COA’s Annual Audit Report of the province stated that projects bankrolled by the Capitol’s development funds were “not well-planned and/or procurement-and implementation-ready.”

It noted that ₱256.57 million, or only 29.1 percent of the current ₱882.69 million allocated in its ₱4.16 billion National Tax Allotment, were utilized.

Less than half of the funds were utilized last year in all specific Projects, Programs, and Activities (PPAs), which include:

–          Agricultural Services (9.2 percent);

–          Water Supply System project under Rural Water Supply and Sanitation Services (14.3 percent);

–          Provincial Roads and Bridges Development Projects under Engineering Services (24.7 percent);

–          Public Health Services (34.1 percent);

–          Environmental Services (41.6 percent); and

–          Other Small Scale Infrastructure Projects (44.5 percent).

COA also noted that of the 97 PPAs, 63 had ‘zero utilization’, indicating that funds were left untouched.

Water Supply System projects under Rural Water Supply and Sanitation Services had the most zero utilizations (23 out of 26 PPAs), followed by Environmental Services (4 out of 7), Agricultural Services (16 out of 20), Public Health Services (5 out of 10), Other Small Scale Infrastructure Projects (2 out of 9), and Provincial Roads and Bridges Development Projects under Engineering Services (13 out of 25).

The commission also noted the underutilization of ₱167.43 million, or only 33.5 percent out of a ₱500.14 million budget, in continuing appropriations and utilizations stretching back to 2014, with 41 out of 87, or 47.12 percent, projects that remained in the doldrums.

The Department of Budget and Management (DBM) defined ‘continuing appropriations’ in a 2012 file on basic concepts in budgeting as “appropriations available to support obligations for a specified purpose or project, such as multi-year construction projects which require the incurrence of obligations even beyond the budget year.”

The total utilized funds under Iloilo province’s development fund last year totaled ₱424 million, which is only 30.7 percent of the total ₱1.38 million allocated for both current funds in 2022 and continuing funds from 2014 to 2021.

COA found that like its 2021 findings, the main reason for the delay in the utilization of these funds was the prioritization of the implementation of PPAs funded by the Local Government Support Fund-Support to Barangay Development Program (LGSF-SBDP) of the National Task Force to End Local Communist Armed Conflict (NTF-ELCAC).

NTF-ELCAC has earned brickbats for red tagging or linking to the rebel movement persons and institutions who are critical of the government. Red tagging has been slammed as a way to stifle dissent and free speech and endangered groups and personalities perceived to be enemies of the state, including journalists.

“It was noted that the implementing offices focused most on the implementation of the ELCAC-funded projects as the amount of funds and quantity of projects were substantial. Also, the period to utilize the funds was limited from April 2021 until December 31, 2022, amidst the pandemic,” COA said in its observations.

“Understandably, the implementation of other projects such as those funded by the 20% DF was significantly affected since these require almost similar tedious processes, such as the preparation of the DED or program of works for the construction works or infrastructure.  Other than its ongoing infrastructure projects, the Provincial Engineer’s Office (PEO) alone had to divert its efforts to implement 118 infrastructure projects under the ELCAC,” it added.

Other reasons COA noted in its observations include late issuances or approvals of supplemental budgets, series of failed biddings, and balances of PPAs under continuing appropriations for the Provincial Roads and Bridges Development Project in 2020 and 2021 came from savings generated out of the appropriated amounts and revised contract amount of the projects.

COA observed that this ran contrary to Item 3.2.1 of the Joint Memorandum Circular No. 1 of the DBM, Department of the Interior and Local Government (DILG), and the Department of Finance (DOF), which sets the guidelines for the utilization of the development funds.

The provision states that development funds shall be utilized to finance the local government units’ (LGUs) priority development projects and that LGUs shall ensure that development projects to be funded out of the were well-planned and procurement-and implementation-ready.

The commission noted that the amount of the PPA balances would be programmed for further improvement of the concerned road sections and included in the Supplemental Annual Investment Program (AIP) No. 1 for 2023.

In its reply to the COA’s Audit Observation Memorandum (AOM), the Provincial Engineer (PE) said majority of the Water Supply Systems PPAs were already up for bidding, with 2 already completed, and 2 already ongoing.

The PE also said that 23.6 percent of the appropriation for Water Supply Systems had already been obligated, while 87.5 percent of the Provincial Roads and Bridges Development Projects have also been obligated with 18 of them with ongoing implementation. It also assured that they would push for more successful bidding for earlier implementation of the projects.

Section 287 of the Republic Act No. 7160, as amended (Local Government Act of 1991), mandates LGUs to appropriate 20 percent of its National Tax Allotment for development projects.


Likewise, the provincial government was also called out for agricultural equipment worth ₱10.83 million which remained undistributed to farmers, which exposed them to deterioration due to external elements and its non-usage, and ultimately delayed economic returns for the province.

This farm equipment was also procured using appropriations under the province’s development fund.

This consisted of 8 power tiller cultivators (₱1.95 million), 20 rice threshers (₱2.4 million), 20 hand tractors (₱2.78 million), and 10 each of mechanical corn shellers and hermetic cocoons (₱3.7 million).

The non-distribution was attributed by COA to the lack of documents from beneficiary LGUs, and data indicated in the annual report shows that only 7 out of 38 intended beneficiary LGUs had completed documentary requirements and passed the assessment and screening of these.

Focal persons from the Provincial Agricultural Office (PAO) told COA that one of the major reasons was the prioritization of implementing NTF-ELCAC-funded projects.

“The delays, which could have been minimized by ensuring that the programs to be funded by the [20 percent development funds] are well-planned and procurement-and-implementation-ready, deprived the constituents of the immediate benefits including but not limited to land and labor productivity as well as increased economic return that could have been already derived from the use of the agricultural equipment,” the commission stated.

In its AOM reply, the head of the concerned office stated that most of the beneficiary LGUs had already submitted the required documents as of March 27, 2023.

The PAO representative in their exit conference also informed the commission that some of the equipment had already been distributed and that further distribution was ongoing and on track to be finished.