PHP 12.3B IN SECRET FUNDS, LOOSE RULES: Intelligence fund rules need overhaul, Drilon says

Former Senate President Franklin M. Drilon on Wednesday sought an urgent review of Joint Circular No. 2015-01, saying the impeachment proceedings against Vice President Sara Duterte have exposed serious weaknesses in the rules governing billions of pesos in confidential and intelligence funds.

Speaking in an interview with ANC’s Headstart, Drilon identified the circular issued by the executive branch as the “first culprit,” faulting it for defining too broadly the activities that may be financed using confidential and intelligence funds, or CIF.

“The Joint Circular 2015-01 of the executive branch must really govern what can be in the intelligence fund,” Drilon said. “This impeachment trial on the intelligence funds points to the very serious and immediate need to review the use of intelligence funds.”

The circular was issued jointly in 2015 by the Commission on Audit, the Department of Budget and Management, and other government agencies. It lays down the guidelines for the entitlement, release, use, reporting, and audit of CIF.

Drilon argued that confidential and intelligence funds should be confined to agencies whose legal mandates require intelligence gathering and the protection of national security.

He questioned the grant of such funds to the Office of the Vice President and the Department of Education, noting that intelligence gathering is not among their primary functions.

“How in heaven’s name would DepEd and the OVP have confidential and intelligence funds?” Drilon asked.

Intelligence operations, he said, should be carried out mainly by agencies such as the National Intelligence Coordinating Agency and other offices specifically tasked with gathering information on national security threats.

Should the existing circular prove insufficient to prevent abuse, Drilon said Congress should pass a law imposing clearer restrictions and penalties.

He also called for an express prohibition on the use of fictitious recipients in liquidating confidential expenses, describing the practice as possible evidence of malversation.

“To me, it’s a prima facie case of malversation,” he said. “You don’t need to use fictitious names. That is not allowed under the law, even for confidential funds. But this has been the practice, and it must be stopped.”

“If a law has to be passed, then we pass a law and make it punishable,” he said.

Drilon stressed that confidentiality is already safeguarded by the closed-envelope liquidation system, under which sensitive records are sealed and may be examined only by authorized COA auditors.

That system, he said, does not excuse government officials from identifying the actual recipients and accounting for every peso spent.

“You still have to account for it. That’s malversation of public funds if you cannot account for it,” Drilon said.

The testimony presented during the impeachment trial, he added, exposed not only the potential liability of the vice president but also the weakness of the government’s auditing system.

Drilon maintained that the transfer of PHP 125 million from the Office of the President’s contingent fund to the OVP was illegal because the OVP budget contained no existing confidential fund item that could be augmented.

He cited the Supreme Court ruling in Belgica v. Executive Secretary, which held that savings may be used only to augment an existing appropriation item.

“There was no item for confidential expenses in the case of the OVP and DepEd,” Drilon said. “In other words, Congress had determined that there was no need for the OVP and DepEd to have intelligence funds.”

CIF allocations across the bureaucracy reached PHP 12.3 billion in 2024 and PHP 10.2 billion in 2025, according to figures he cited.

The CIF allocation of the Office of the President alone rose sharply across three administrations, climbing from PHP 734 million in 2016, the final year of President Benigno Aquino III, to PHP 2 billion during the first year of President Rodrigo Duterte.

It reached PHP 3.8 billion in 2022, Duterte’s final year in office, and rose to PHP 4.8 billion in 2023 under President Ferdinand Marcos Jr., Drilon said. Under the 2026 national budget, the amount has grown to PHP 9.7 billion, he added.

“I would strongly suggest that this be looked at and revisited,” Drilon said.