“The public funds disbursed by the DBM (Department of Budget and Management) eventually found their way to bank accounts of favored contractors, in this case, Aremar Construction, which is owned by the in-laws of Secretary Diokno,” he said.
Michael Varcas
Rolando Andaya: ‘Diokno in-laws got P81-million commissions’
Jess Diaz (The Philippine Star) - January 16, 2019 - 12:00am

MANILA, Philippines — In-laws of Budget Secretary Benjamin Diokno received more than P81 million in commissions from government contracts in Sorsogon over a six-month period last year, House Majority Leader Rolando Andaya Jr. said yesterday.

“The public funds disbursed by the DBM (Department of Budget and Management) eventually found their way to bank accounts of favored contractors, in this case, Aremar Construction, which is owned by the in-laws of Secretary Diokno,” he said.

He made the statement at the start of the second hearing of the House rules committee, which he heads, on the alleged questionable DBM fund allocation practices and the multibillion-peso flood control scam under the Duterte administration.

The Hamors of Sorsogon own Aremar Construction. Romeo Sicat Jr., married to Diokno’s daughter Charlotte Justine, is an incorporator and son of Sorsogon Vice Gov. Ester Hamor, whose husband, Jose Edwin, is mayor of Casiguran town. The mayor used to be a major shareholder of Aremar.

But the Casiguran mayor, who was present at yesterday’s hearing, denied being an in-law of the budget secretary.

“Ang tawag niya (Diokno) sa akin mayor. Pero hindi ko balae (He calls me mayor, but I’m not an in-law),” Hamor said.

“Mas lalong hindi ko kaano-ano si (All the more I have nothing to do with) Diokno,” he told the committee.

Andaya insisted that the mayor is an in-law of the budget secretary, Hamor being the stepfather of Sicat Jr.

Hamor denied he was close to Diokno, saying he only saw him once at a wedding.

The House majority leader said Aremar received a total of P81.1 million from different “dummy contractors” between May 5 and Nov. 7 last year, or a period of six months.

Documents he furnished reporters show that the fund transfers amounted to P10.4 million on May 4, P10.5 million on July 3, P12.5 million on Aug. 31, P11.4 million on Oct. 10, P22.4 million five days later on Oct. 9 and P13.9 million on Nov. 7.

Andaya said the transfers are reflected in six bank deposit slips unnamed contractors turned over to him.

“The deposit slips clearly indicate that the deposits are proceeds from DPWH (Department of Public Works and Highways) contracts, none of which Aremar won through bidding. These are the facts confronting Secretary Diokno. He and his family members must explain these to the (House) committee on rules and to the Filipino people,” he said.

“It is clear from documents in our possession that Secretary Diokno is directly related to the owners of Aremar Construction,” Andaya argued.

Diokno has admitted that the Hamors are his in-laws but that he extended no favor to them or to their hometown of Casiguran or home province of Sorsogon.

Mayor Hamor admitted forming Aremar Construction in 2014 but claimed that he divested his shares in 2016 and that he had lost track of its transactions since then.

But Andaya said 2018 documents from the Securities and Exchange Commission show that Hamor was still a major shareholder of Aremar.

He said despite the P81-million fund transfers, Aremar paid only P15,000 in taxes.

Wife’s resentment

Hamor also said he included Diokno’s son-in-law Sicat Jr. among Aremar’s incorporators after a quarrel with his wife Ester, who resented not having anyone from her side of the family included in the construction firm.

Mayor Hamor also claimed Casiguran is not a favored town and ranks seventh among Sorsogon towns in terms of budget allocation.

“Eighteen out of our 25 barangays are vulnerable to flooding,” he said. During the hearing, Andaya revealed more flood control project irregularities.

“I personally examined all the bidding irregularities submitted by CT Leoncio (an Aremar joint venture partner and alleged dummy) to the DPWH (Department of Public Works and Highways). What I discovered was mind-boggling,” he said.

He said among his findings were “18 overlapping projects using one backhoe, 21 overlapping projects using one dump truck and 16 overlapping projects using one pay loader.

“What CT Leoncio is trying to accomplish in its infrastructure projects is humanly impossible… There is only one answer possible: it’s not CT Leoncio that’s doing the projects. It is just a dummy of other contractors who have connections in the highest levels of the DBM and DPWH,” he said.

Andaya and his colleagues were also told that the P75 billion in “insertions” in the proposed P3.757-billion 2019 national budget came from members of Congress.

DBM Undersecretary Tina Canda told the committee on rules that the amount “includes initiatives from lawmakers.”

She admitted that the huge sum was added to the budget of the DPWH without the projects and their appropriations “being vetted.”

“We have no capacity to vet,” she said.

During the House Question Hour on the budget last Dec. 11, Diokno admitted that he added P75 billion to the previously approved DPWH budget ceiling of P480 billion so that the administration’s “Build, Build, Build” program would have more funds.

He later described the augmentation as an “adjustment,” not insertion.

The rules committee and the committee on public accounts chaired by Minority Leader Danilo Suarez are conducting an inquiry into questionable budget practices and the alleged multibillion-peso flood control scam.

Andaya confirmed that the bulk of the P75 billion consisted of projects proposed by House members.

“I already showed you the list. It is composed of many of us,” he told his colleagues.

He said those with huge allocations for their districts were previous leaders of the House led by former speaker Pantaleon Alvarez.

“Senators are among the project proponents. Their funds are parked in congressional districts,” he said.

Andaya did not name names.

Anti-pork Sen. Panfilo Lacson wants the P75-billion insertion removed from the DPWH budget.

Diokno had said Public Works Secretary Mark Villar was ultimately responsible for the huge augmentation in his budget. Villar has not said much about the controversy.

The budget chief said a list of projects supporting the augmentation came from the DPWH.

Contrary to the claim of Andaya that Casiguran, Sorsogon was favored in the alleged P51-billion budget insertions, the municipality was given zero allocation for infrastructure projects under the DPWH.

Based on DPWH records in 2018, of the provinces in Bicol region, Albay received the highest allocation with P11.2 billion, debunking Andaya’s allegation that Sorsogon was unduly favored by Diokno.

Sorsogon came in second (P10.5 billion), Camarines Sur (P10.2 billion), Masbate (P4.5 billion), Camarines Norte (P3.3 billion) and Catanduanes (P2.5 billion).

At least 25 other provincial districts got a bigger share of infrastructure projects than Sorsogon’s first district where Casiguran is located.

 “His accusations are illusory. The numbers are wrong and the narrative he’s selling is not grounded on facts,” Diokno said earlier.

In a two-page document entitled “2019 DPWH Infrastructure Program based on National Expenditure Program,” Sorsogon’s first district was earmarked an allocation of P705 million while its second district is poised to receive P395 million for flood and road projects.

Blame game

At yesterday’s House hearing, DPWH and DBM officials blamed each other for the P75-billion insertion.

Canda defended Diokno’s assertion, saying, “The projects were encoded and uploaded into our (computer) system by the DPWH.”

Andaya, who was budget secretary during the Arroyo administration, said tracing the origin of the P75-billion insertion and supporting projects “should not be difficult.”

“There are codes for those appropriations. We should look at the listing and the encoding process,” he said.

Senators, meanwhile, moved to restore P24.2 billion in the proposed budget of the Department of Health (DOH) this year to boost funding for its programs to rehabilitate or put new health facilities and staff them with medical personnel.

The decision to augment the DOH’s Health Facilities Enhancement Program (HFEP) and the Human Resource for Health Deployment Program (HRHDP) came during the plenary deliberations on the agency’s proposed P171-billion budget.

The DBM earlier slashed P30 billion from the HFEP and HRHDP, a move Health Secretary Francisco Duque III strongly protested, as it would delay the completion of facilities being built.

Senate Minority Leader Franklin Drilon sought on the floor to realign funds from the alleged “insertions” of P75 billion and P28 billion made by the DBM to the budgets of the DPWH and the Department of the Interior and Local Government (DILG), respectively, for the two DOH programs.

Sen. Joseph Victor Ejercito, who was defending the DOH budget, accepted Drilon’s proposal, saying it would make the implementation of the anticipated Universal Health Care Program (UHCP) more effective.

“The slashing of the HFEP budget will be a disaster for the DOH and the initial year of implementation of the UHCP where more patients are expected to go to government health centers,” Ejercito said.

Duque welcomed the development, echoing Ejercito’s statement that it would make the UHCP more effective.

List of projects

Lacson, meanwhile, said he is set to present today a list of projects supposedly to be funded by the P75-billion increase in the DPWH budget.

Lacson stressed the Senate does not intend to cut the DPWH national budget but is merely trying to make sure the people’s money is put to good use.

At Malacañang, presidential spokesman Salvador Panelo expressed confidence the administration would be able to find ways to implement its key projects even with the Senate’s removal from the budget program of P75-billion funding for infrastructure. 

“There are many ways. The executive is very creative as well as Congress. Let’s see,” Panelo said.

“There’s the supplemental budget. That can be tapped. If it’s for the good of the country, every branch of the government should cooperate,” he added.

“That’s the job of Congress, to amend,” he said of the removal of the fund. “If they did that, they were doing their job.”

Senators agreed to scrap the funds after Secretary Villar admitted not having prior knowledge of the alleged insertions, according to Lacson.

But Panelo maintained that Villar was aware of the additional funding.

“Perhaps he (Villar) was misquoted. It cannot be that he had no prior knowledge because that was discussed in the Cabinet. That was a proposal, all of us were present and all of us consented to that,” the spokesman said.

“Every budget is to be presented in the Cabinet and it has to be approved by the President. The President asked us if there was any objection and there was none... He (Villar) was not just informed, he was present in the Cabinet. Unless he went out to... pee... but I doubt,” he added.

Panelo expressed optimism that Congress would pass the 2019 budget within the first quarter.

“In fact, even Senator (Vicente) Sotto (III), when he texted me, said ‘kami OK kami diyan (we are OK with that),’” he said. –  Paolo Romero, Alexis Romero, Cecille Suerte Felipe

BENJAMIN DIOKNO DEPARTMENT OF BUDGET AND MANAGEMENT ROLANDO ANDAYA JR.
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