DPWH district engineers given ‘too much power’
District engineers of the Department of Public Works and Highways (DPWH) were given “too much power” and control over how much and when public funds are released to contractors or implementers of infrastructure projects.
The head of the Independent Commission for Infrastructure (ICI) put this observation on record during the fact-finding body’s first livestreamed hearing on Tuesday, saying it was a systemic loophole that apparently allowed kickback schemes to go unchecked.
Land Bank of the Philippines president and chief executive officer Lynette Ortiz, one of the resource persons from the state-run bank who faced the commission, noted that the government’s centralized payment scheme, called the List of Due and Demandable Accounts Payable and Advised Debit Account (LDDAP-ADA), permitted agencies such as the DPWH to transfer funds from their Landbank accounts to the contractors’ bank accounts.
Concentration of power
This disbursement system, which centralized government payments through the issuance of checks from Landbank, has been a “well-established practice” in place since 1990, said Ortiz.
By 2013, it shifted to a digital system, where Landbank could merely do electronic transfers when prompted by the requesting government agency.
When ICI Chair Andres Reyes Jr. asked Landbank whether it needed only the signature of a DPWH district engineer, the bank officials said yes, provided that the district engineer is deemed the highest-ranking authority authorized to sign the documents.
“This is what I’m saying,” Reyes said. “There was too much power given to the district engineer. And he could ask for the funds, and he’s the one who issues the check. So he controls everything.”
Reyes, a former Supreme Court justice, noted that not even an independent auditor such as the Commission on Audit scrutinizes the payables to a contractor at the implementation stage, when funds are supposed to be paid in tranches as the project progresses.
Landbank first vice president Cesar Cabanes explained that when it receives the instruction from a DPWH District Engineering Office to transfer funds through a notice of transfer allocation (NTA), the bank “verifies” the following in the next 24 to 48 hours: the signatories, whether he or she is indeed the authorized official to greenlight the issuance of funds; and the “hash totals,” a term that refers to a security and data integrity check for disbursement transactions.
“So that the amounts actually correspond to what was indicated in the [NTA],” Cabanes told the fact-finding body.
Due diligence
Ortiz said there were “no red flags” in its current disbursement system, but vowed to strengthen its scrutiny of funding payments after she admitted that “there was a presumption of regularity” on the part of the government-run institution.
“My head hurts hearing that [presumption of regularity]. Everything is assumed regular,” retorted ICI Commissioner Rogelio Singson, who served as DPWH secretary during the Aquino III administration.
He continued: “I’m sorry. I just had to blurt that because I’ve heard that several times over from other agencies that they assume regularity, and that’s why this thing happened.”
The Landbank executive explained that when they looked at the funding source, which is the national budget, it was deemed “clean.”
“The presumption of regularity is really just based on the fact that the source of the funds are government funds. Therefore, we did not view them as suspicious. But clearly… there’s always a benefit of hindsight, 20-20 vision. And right now, certainly all our enhanced due-diligence measures are in place,” she noted.
No Discaya dealings
Earlier during Tuesday’s hearing, Laguna Rep. Benjamin “Benjie” Agarao Jr. appeared as an invited resource person after contractor couple Curlee and Sarah Discaya linked him to anomalous flood control projects and identified him as one of the lawmakers who received kickbacks from them.
Agarao denied having met the Discaya couple, saying he was not a member of the 19th Congress from 2022 to 2025.
It was his daughter, Jam Agarao, who served as the fourth district representative during that period.
“In fact, I was surprised as to why I was implicated in this for 2022–2025, since I wasn’t serving as a congressman during that time,” Agarao said in Filipino. “I do not personally know the Discaya couple, and I don’t recall having any transaction with them.”
While Agarao insisted that he did not personally know the Discayas, he admitted knowing a certain Alvin Mariano, the supposed middleman named by the Discayas in their alleged transactions with Agarao.
“I only know that he is a contractor. But as for being close, I don’t have any long-standing relationship with him,” Agarao said.
He also denied the supposed P9-million advance given to him by the Discayas, as well as the “exotic bulldog” allegedly gifted to him in exchange for infrastructure projects.
Unwilling to share number
However, Agarao declined when asked by Reyes if he would be willing to surrender his phone records to verify his testimony before the commission.
“Your honor, no… because I only have two cell phones. My new phone is used only for our party’s Viber group and for the CA, while my other phone contains details that I cannot… my wife might get angry,” Agarao explained.
“I’m just asking if you’re willing to surrender your cell phone because we’re investigating everything that has been alleged. Sorry if I asked about your wife… this is exactly why I really don’t like livestreaming,” Reyes said in Filipino.
Young Marcos among next
The ICI finally started broadcasting its hearing live on Dec. 2 as it continued to investigate the widespread corruption in flood control projects and other government infrastructure works over the past 10 years.
From Dec. 3 to Dec. 5, Bulacan Rep. Danilo Domingo, Davao City Rep. Paolo “Pulong” Duterte, House Majority Leader Sandro Marcos, and Benguet Rep. Eric Yap are set to appear before the commission in separate hearings.
Initially reluctant to do livestreaming in order to avoid trial by publicity, the ICI reconsidered its policy in October and released the guidelines on Nov. 21.
According to its rules, all ICI hearings will be live except when there is a need for an executive session upon a resource person’s request, if the information to be divulged must be kept confidential in the interest of national security, or if the public disclosure would put lives in danger.
The ICI livestream link is https://www.youtube.com/live/cVERXtWxV7E.
