Confidential Funds

What are 'confidential' funds?

A lump sum in the national budget for expenses government says it can't disclose. This includes buying information, surveillance transport, safehouses, informant rewards.

It is not the same as an intelligence fund.

Sources: COA–DBM–DILG–GCG–DND Joint Circular No. 2015-01 · COA 2023 spending data

Why do they even exist?

Because some spending genuinely can't carry a paper trail.

The circular permits these funds for purchasing information, maintaining safehouses, and paying informants who aren't government employees.

You can't file a receipt that tells a surveillance target they're being watched.

Source: Permitted uses under Joint Circular No. 2015-01

Not every agency is allowed one

The circular limits these funds to activities concerning peace and order and national security.

They may not be spent on:

• Salaries, wages, overtime, allowances or other fringe benefits of government officials and employees, except when authorized by law
• Representation, consultancy fees or entertainment expenses
• Construction or acquisition of buildings or housing structures

And who approves the spending? The agency head.

Source: Joint Circular No. 2015-01, Sec. 4.11 and Sec. 6.1.2

The missing law

The Constitution requires the State to disclose transactions involving public interest, "subject to reasonable conditions prescribed by law."

That law was never written.

Everything you just read comes from a circular signed by agency heads in 2015, not a statute passed by Congress.

Retired Justice Antonio Carpio petitioned the Supreme Court to void the circular in November 2023.

Sources: 1987 Constitution, Art. II Sec. 28 and Art. III Sec. 7 · Carpio et al. petition, filed Nov. 15, 2023, via Rappler

How the money moves

The money is drawn as cash advances and liquidated with acknowledgment receipts, a signature saying money was received.

Within seven days of the cheque being released, the cash advance voucher goes to COA's audit team leader in a sealed envelope. Liquidation is separate and slower: due within 30 days after every quarter, and sent not to the regular auditors but to one unit — the Intelligence and Confidential Fund Audit Unit — by registered mail, courier or authorized liaison officer.

ICFAU staff open the envelope in front of whoever delivered it and check that every document named on the transmittal letter is actually inside. If anything is missing, it is not stamped received and goes back sealed.

That completeness check is the part the public can picture. What follows is a post-audit conducted by that one unit, on records nobody else sees — and for intelligence funds, COA does not even receive the evidence. It stays in a sealed envelope in the disbursing officer's own vault, inspected only if ICFAU demands it.

Sources: Joint Circular No. 2015-01, Secs. 4.12–4.13, 6.1.8.4 and 6.2.2 · former COA Commissioner Heidi Mendoza, via Rappler

So why did the Department of Education have surveillance money?

In its entire history, DepEd had never received confidential funds — until 2023.

A COA auditor testified that he served at the Intelligence and Confidential Funds Audit Office from 2014 to 2024. Three vice presidents held office in that time — Binay, Robredo, Duterte.

Duterte was Vice President and Education Secretary at once — the agency head for both offices holding the money.

Source: Testimony of former COA-ICFAO state auditor Roderick Wamil, Senate impeachment court, Aug. 3, 2026, via Philippine News Agency and The Manila Times

Seven cheques. ₱612.5 million in cash.

Two former Land Bank branch managers testified on July 29 to how it left the bank.

Office of the VP — ₱500M. Four cheques of ₱125M each, December 2022 to July 2023, encashed by special disbursing officer Gina Acosta.

DepEd — ₱112.5M. Three cheques of ₱37.5M each, February to July 2023, encashed by special disbursing officer Edward Fajarda.

Together, that's the ₱612.5 million in Impeachment Article 1.

In 2024, Congress cut both offices' confidential funds to zero.

ACT Teachers Rep. France Castro said it turned the education department into "a department of surveillance."

DepEd's own finance office later said it did not know how the money was spent.

Sources: Rappler · Inquirer · GMA News · Philstar · VERA Files — 2022–2024 reporting

COA findings

1,200+ deficient acknowledgment receipts filed by the OVP, with wrong dates, unreadable names, some bearing only a signature.

One payee, "Mary Grace Piattos," does not exist.

₱448M is what COA has ordered returned. The Vice President is named jointly with three other officials.

A disallowance is a finding, not a conviction. It can be appealed, and the auditor testified the ₱73-million order stands unless the Supreme Court stops it.

Sources: COA notices of disallowance · testimony of Roderick Wamil, Aug. 5, 2026

The defense

Refusing to stipulate receipts and opposing judicial notice are due-process positions, not evidence of anything.

Sources: Defense counsel Sheila Sison, Michael Poa and Kristine Ferrer · testimony of Roderick Wamil, Aug. 3–5, 2026, via GMA News, Rappler and Daily Tribune