Government arsenal spending up 420 percent but misses production target

MANILA, Philippines — The Government Arsenal (GA) increased its spending in 2023 by 420 percent, but still failed to meet its ammunition production target for the year, according to a report from the Commission on Audit (COA).

The GA, a line bureau under the Department of National Defense, was established in 1957 to ensure that the country’s military and police have a sufficient supply of arms, mortars and other weapons and munitions.

The GA increased its spending on the importation of raw materials and acquisition of more semi-expandable machinery, equipment and supplies, COA data showed.

Based on the COA’s 2023 annual audit report on GA, the agency’s Maintenance and Other Operating Expenses (MOOE) increased by 420.6 percent or P454.949 million in 2023 from just P87.383 million in 2022.

The annual report was uploaded on the COA website on March 25.

Under the GA’s MOOE, “taxes, insurance premium and other fees” had the biggest increase: P351.27 million in 2023 from P369,274.29 in 2022.

The COA said P331.337 million of the expenses on taxes went to paying customs duties arising from the importation of raw materials for ammunition.

The reason for the increased importation of raw materials for the production of ammunition was not stated in the audit report.

Meanwhile, the GA spent P46.528 million on “supplies and materials expenses” in 2023 compared to P27.358 million in 2022.

Included in this category is the acquisition and maintenance of semi-expandable machinery and equipment, semi-expandable furniture and fixtures, fuel, oil and lubricants, drugs and medicines, traffic suppliers and “other supplies expenses.”

The GA’s “other maintenance and operating expenses” also increased to P13.564 million in 2023 from P10.063 million in 2022. Expenses for advertising, representation, printing and publication of materials are included in this category.

In the same audit report, the COA recommended that the GA conduct a cost-benefit analysis for replacing instead of repairing old machines used in the manufacture of small arms ammunition (SAA).

State auditors noted that the GA was short by 17.66 percent or 7.06 million rounds (MRDS) in its SAA production target for 2023.

The COA noted that under the 2023 General Appropriations Act, the GA was supposed to manufacture a total of 40 MRDS.

Representatives from the GA’s three manufacturing plants said the poor output was due to the “degradation” of machines due to old age, resulting in frequent misalignments and breakdowns.

In its reply, incorporated in the audit report, the GA committed to follow the audit recommendation of conducting a cost-benefit analysis of its machines for possible replacement.