Page 2 - Hello Philippines January 2016 'B' issue

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POOR PLANNING AND MONITORING
COA hits DA for delays in FMRs worth P3.2B
THE Commission on Audit
(COA) has found the Department of
Agriculture (DA) liable over the delays
in implementing farm-to-market road
(FMR) projects valued at P3.2 billion,
supposedly because of poor planning
and monitoring.
In a 2014 annual audit report,
recently released, the commission
noted the department received P8.294
billion in allocations for 2014 and
2013 for the repair and construction
of 2,773 FMR projects in “designated
key production areas...” The roads are
1,385.716 kilometers (kms) in length.
The fund was directly downloaded
to the DA’s Regional Field Units (RFUs)
that are supposed to implement the
Farm-to-Market Road Development
Program (FMRDP), the commission
noted.
However, the Agriculture
Department on Friday claimed it had
nothing to do with the implementation
of the FMR projects in the last two
years.
The implementation of FMRs
were under the Department of Public
Works and highways (DPWH), DA
Spokesperson and Undersecretary for
Field Operations Emerson U. Palad told
GMA News Online.
“Implementation of 2014 and 2015
FMRs are with DPWH, I think,” he
said and proceeded to explain the
Agriculture Department’s role in the
scheme of things.
“Fund source ang DA, but there are
justifications for the delay, if any,” he start, according to the commission.
said.
Palad declined to elaborate on what
the justifications were. Instead, he
pointed at the DPWH. “Better to ask
DPWH din.
“I’ll write memo for them to
comment on the findings,” he said.
The DA is now in the process of
WHAT IS THIS?
BSP reminds bank clients of right to ‘cooling off’ period
CLIENTS of financial institutions
supervised by the Bangko Sentral ng
Pilipinas (BSP) may cancel contracts
without penalty under their right to
“cooling-off,” the central bank said on
Friday.
Under the right to “cooling-off,”
clients of BSP-supervised financial
institutions (BSFIs) are given the right
to cancel a contract without penalty
within two days from signing the
contract.
“BSFIs should give their clients at
leat two banking days from the signing
of the contract to cancel,” the central
bank said in a statement.
“This right to cooling-off is one
of the key requirements of the new
BSP Financial Consumer Protection
Regulation that seeks to empower
revisiting all FMRs implemented since
2010, he added.
99% obligated funds. According to
the COA, 99 percent or P8.212 billion
was obligated or committed as of
December 31, 2014. The unobligated
amount of P81.464 million should
revert to the DA’s General Fund
and “... no longer be utilized for the
implementation of FMR project.”
Despite 99 percent commitment of
the money, the commission revealed
that only 67 percent or P5.056
billion equivalent to 2,016 FMRs
were completed as of December 31,
2014. It said the completed projects
measure 924.781 kms compared to the
program’s 1,385.716-km target.
The remaining 33 percent or 757
FRMs, measuring 460.935 kms, with
the aggregate cost of P3.238 billion
“were still ongoing or not yet started”
as of end-2014, the COA said.
“The Agency’s mandate of
empowering the agriculture and
fisheries sector by providing transport
facilities for the farmers and fisherfolk
thru the repair/rehabilitation and
construction of farm-to-market
roads was not fully achieved due
to the delayed completion and
implementation of FMR Projects with
an aggregate allocation of P3.2 billion,”
the report read.
A total of 469 FMRs equivalent
to 332.051 kms were still under
construction as of December 31, 2014
while the construction of 288 FMRs
equivalent to 128.884 kms have yet to
Of the 288 FMR projects, the COA
noted:
• 156 were under procurement or
fund transfer stage
• 27 were with the respective MOAs
being prepared of submitted
• 26 were undegoing change of
clients by giving them the opportunity
to reconsider long-term investment
decisions,” it added.
However, this right is only applicable to
individuals. It does not cover corporations,
partnerships, and associations.
“This shall cover investment in
long-term financial instruments with a
remaining term of at least one year,” the
BSP said.
These investments include government
securities, corporate bonds, and long
term negotiable certificate of deposit
(LTNCD).
Clients who wish to terminate the
agreement must notify the BSFI his
intention which must be put into writing,
within the cooling-off period.
“The client shall shoulder only
reasonable amount of processing or
BUSINESS & FINANCE
site/realignment/final listing approval
• 21 were experiencing delayed
submission of required documents
• 9 were facing right of way issues
• 8 were suspended / not
implemented for unknown reasons
• 6 were with unliquidated previous
financial transactions
The status of 35 projects was not
given by the DA.
“As a result of the delay and non-
implementation of the projects, the
objective of the program to provide
efficient transport facilities to farmer
beneficiaries for their products was
not fully attained as of year-end,” the
report read.
Poor planning. In the case of the DA-
Cordillera Autonomous Region (CAR),
all nine FMR projects amounting to P10
million “were constructed in locations
without agriculture and fisheries
administrative fees plus any mark to
market costs from the signing of the
contract up to its cancellation,” the
BSP said.
The respective BSFIs will also have to
disclose these costs under the mandate
of the BSP. n Jon Viktor Cabuenas / NB, GMA
News / Published / January 15, 2016 / 4:04 pm
January 2016 / Fortnightly – No. 2 • UK & Europe Edition
production sites, coastal landing points
and post-harvest facilities linking to
the market and arterial roads and
highways,” the commission noted.
The roads were supposedly built in
residential areas “where residents are
neither agrarian reform beneficiaries
nor small farmers/fisherfolk,” the
commission said.
The general guidelines for the Farm-
to-Market Road Development Program
(FMRDP) placed the burden of
responsibility upon the DA to evaluate
and validate each FMR project using
the Philippine Agricultural Engineering
Standards (PAES) and taking into
account the number of farmers and
fisherfolk and their families that stand
to benefit from the roads.
The “amount, kind and importance
of agriculture and fisheries products
produced in the area” must also be
studied, the commission said.
“Had the DA-CAR properly
identified and validated the proposed
FMRs, the above deficiencies could
have been prevented and implemented
instead in other barangays in need of
the FMRs,” the report read.
“Interview disclosed that DA-CAR
discontinued the preparation of an
FMR Network Plan due to various
political interventions in the funding of delays could have been avoided, the
projects,” the commission said.
It revealed that based on the audit
team’s review of the agreement among
the DA-CAR, Baguio City District
Engineering Office (BCDEO) and the
then congressman, it was the politician
who should identify and prioritize the
FMRs to be constructed, rehabilitated
or improved. The report did not name
the congressman.
The agreement violated Section 52
of Republic Act 8435 or the Agricultural
and Fishery Modernization Act of
1997, which states that “the DA shall
coordinate with the LGUs and the
resident-farmers and fisherfolk in order
to identify priority locations of farm-to-
market roads.”
Inaccurate status reports. The
commission also found several
inaccuracies on the DA’s status reports
on FMR projects.
It claimed that based on the audit
team’s site validation, the FMR projects
in the following areas were ongoing
as of end-December 2014 but the DA
reported the roads were 100 percent
complete.
• Sibalom, Antique – P1 million
• Guimbal, Iloilo – P30 million
• San Joaquin, Iloilo – P15 million
• Tubungan, Iloilo – P50 million
The DA reported the San Isidro to
Manahub FMR in Gigaquit, Surigao del
Norte as 100 percent complete, but the
P9-million project was actually paved
but with an unfinished shoulder, the
commission claimed.
Meanwhile, the P2-Anas FMR
project in Barangay Matin-aoin Burgos,
Siargao Island, Surigao del Norte
was reported as 45-percent complete
but was found to have “no physical
accomplishment per validation,”
according to the commission. The FMR
has a project cost of P10 million.
If the DA had hired enough third
party agencies to monitor projects
implementation, such inaccuracies and
COA noted.
The government also allocated a
separate fund of P150 million for the
monitoring and evaluation of FMR
projects in 2014, the commission
pointed out.
Section 7 of Republic Act 10633 or
the General Appropriations Act (GAA)
of 2014 cited that the P150 million “...
shall be appropriated for the monitoring
and evaluation of FMR projects which
shall be used exclusively for the hiring
of third party agencies, entities or
organizations to monitor compliance
with the construction specifications
and project schedule, and evaluate the
quality of FMRs implemented.”
Of allocationsfor project monitoring,
58 percent or P87.670 million was
obligated as of end-December 2014.
But only P623,404 or 0.7 percent was
actually used to pay for consultants,
the commission noted.
The commission claimed the delays
in hiring consultants “... jeopardized the
assurance of project implementation in
accordance with the approved Program
of Works and other specifications and
schedules.”
The Agriculture Department should
institute corrective measures and
impose sanctions against the regional
officials responsible for the FMR
that remain incomplete beyond the
timeframe under the agreement, the
commission added. n Elizabeth Marcelo with
Jon Viktor Cabuenas / VS, GMA News / Published /
January 15, 2016 / 5:25 pm