And BTW... this incident haunts back again about PAF..
So where does the AFP Modernization Fund went? Read on to know where. This is the most credible information there is.
Erap: FVR borrowed ‘modernization’ fundPostscript By Federico D. Pascual Jr.
Thursday, September 4, 2008
http://www.philstar.com/index.php?Opinion&p=49&type=2&sec=25&aid=20080903103MODERN?: From Polk Street, comes now former President Joseph “Erap” Estrada debunking a claim of former President Fidel V. Ramos in Postscript that he left with Mr. Estrada (his successor) P5.484 billion for the “modernization” of the armed forces.
Mr. Estrada said Mr. Ramos did not use the trust fund from the sale of Fort Bonifacio for the armed forces — as dictated by law — but borrowed it for window-dressing his yearend financial report to minimize an expected budget deficit.
The government is now scrounging around for funds for AFP “modernization,” a euphemism for acquiring a few planes, ships, vehicles and other materiel rebuilt like new and polished to showroom quality.
The pathetic state of the armed forces has been brought to the fore by the campaign against better equipped and highly motivated ground fighters of the secessionist Moro Islamic Liberation Front in Mindanao.
As if to stress the obvious, one of two overworked C-130 Hercules transport planes of the air force plunged into the Davao Gulf last Aug. 26, killing its two pilots and a crew of seven. There are three other C-130’s, but they are under repair.
* * *
MISSING FUNDS: Many people remember that the Ramos administration netted close to P8 billion from the sale of Fort Bonifacio in 1995 to Fort Bonifacio Development Corp., the buyers’ group organized by Metro Pacific.
Under RA 7898, the proceeds must go to a Trust Fund for the AFP. But until now, nobody seems to know what happened to the P8 billion, or who should go to jail for misappropriating it.
At P34,000 per square meter, the 240-hectare prime property should gross P81.6 billion. But only about P30,359,605,589 has been admitted by Mr. Ramos as having been collected and P5.484 billion supposedly left by him to his successor.
If Malacañang or the Commission on Audit is not interested in getting to the bottom of the mess, maybe a Senate committee should flush out the facts and figures.
* * *
REACTION: Mr. Estrada would not take lying down any attempt to make him the fall guy.
Reacting to our last Postscript (Aug. 28) wherein Ramos was quoted as saying he left P5.484 billion with Mr. Estrada, the latter e-mailed us this recollection of former Budget Secretary Ben Diokno:
1. The P5.484 billion for the AFPMF from the sale of Fort Bonifacio was placed by the Bureau of Treasury in a Special Account in the General Fund. The law says that the share for AFPMF should be placed in a Trust Account.
2. The difference between the two modes is important. The first mode — Special Account — allows the Executive Department to use the money to finance any item in the budget. The Ramos administration used the proceeds to finance the national budget. Operationally, the Ramos administration “borrowed” money from the Special Account to finance government operations or finance the deficit rather than float treasury bills. Effectively, the fund in the Special Account was depleted. On paper, however, the P5.5-billion appears to be intact. But should the AFP need the money to implement its modernization program, the Treasury has to refinance what was “borrowed” — either by getting money from revenues collected or by floating T-bills. The second mode restricts the use of the fund for the modernization of the AFP. Interest on the money deposited in the Trust Account will form part of the Account.
3. On April 30, 1998, the AFP advised the Office of the President of its readiness to manage the AFPMF trust fund. It is in the interest of the military establishment to have the trust fund under its control. First, it assures them that the money for AFP modernization is intact and available. Second, interests of the trust fund form part of the fund; the fund will continue to grow even if the modernization program is delayed. DBM and other fiscal authorities have other motives. By not releasing P5.5-billion to AFP, the Ramos administration was able to window-dress the deficit — reducing the budget deficit by P5.5 billion.
4. The Estrada administration had to postpone the release of the modernization fund to AFP for two reasons. First, when Estrada assumed office, the Philippine economy was in the midst of the Asian financial crisis. There was a need to jump-start the slowing economy by creating more jobs and increasing economic activities in urban centers and rural areas. Studies show that the contribution of defense spending to economic growth and development is, at best, neutral and, at worst, negative. Second, the AFP leadership at that time had yet to decide on the size, specific content, and financial requirements of the modernization program. As I recall, and this personal recollection could be supported by minutes of proceedings of committee hearings in the House and the Senate, the major divisions of the military establishment (GHQ, Army, Navy, Air Force) at the time had yet to decide how the Modernization Fund would be allocated and prioritized.
5. But on May 29, 2000, DBM issued the Special Allotment Release Order (SARO) to the AFP in the amount of P5.484 billion. And with subsequent releases, we backed up the SARO with several NCAs based on specific proposals and progress in the utilization of the Fund.
Bottom line: Mr. Ramos “borrowed” money from the proceeds of the sale of the Bonifacio property earmarked for AFP modernization to finance his other projects. Mr. Estrada restored the money that Mr. Ramos “borrowed” from the modernization fund, and released the P5.484 billion fund in full on May 20, 2000.
What should have been bought on that fund for the Air Force?12 F-16C block 30 ex USAF
AFP modernization blues.
MANILA TIMES EDITORIAL
http://www.manilatimes.net/national/2008/aug/28/yehey/opinion/20080828opi1.html
The tragedy of the 37-year-old C130 Air Force Transport plane once more should remind everyone in the Cabinet of the sputtering implementation of the Armed Forces Modernization Program.Some years ago, when thousands of OFWs where in mortal danger in one of Lebanon’s wars between Israeli and Hizbollah forces, the late Blas Ople, then Foreign Affairs secretary, thought the Philippine Air Force’s C130 could help bring the Filipinos back to the Philippines. He was told there were only two serviceable C130s. And that none was good enough to make it to Lebanon without the risk of developing serious engine trouble. It is now 2008 and nothing much has changed.
In April 2007, Economic Planning Secretary Ralph Recto, who was then a senator, noted that at that time the level of spending for purchases for the PAF was not enough to help it become a modern-day fighting unit. He said our Air Force was virtually a grounded branch of the military. The P5 billion allocated annually for the modernization program of the entire Armed Forces of the Philippines was simply not enough.
That amount could not even buy a squadron of second-hand F-16s, he said. The US-made F-16 fighter-jet is the mainstay of most US-oriented countries’ air force, including our fellow Asean members. The Philippines has had to put on hold earlier plans to acquire some.
