By Remy Majangkim, Regionalist
KOTA KINABALU: The fallout between the Marcos and Duterte political dynasties culminated in one of the most significant constitutional trials in modern Philippine history: the 2026 Senate impeachment trial of Vice President Sara Duterte.
At the heart of the crisis lies the handling of confidential and intelligence funds (CIF) within non-defense civilian agencies.
This essay examines how the conversion of public funds into un-auditable cash, justified under the premise of internal security, challenged traditional governance norms.
It demonstrates that transparency is not merely a moral or legal requirement, but the ultimate prerequisite for economic stability, investor confidence, and sustainable national growth.
Introduction
In democracies built on constitutional checks and balances, the allocation and monitoring of public funds serve as the bedrock of both state accountability and economic health.
In the Philippines, the principle of institutional transparency was put to a crucial test when Vice President Sara Duterte requested and spent hundreds of millions of pesos in confidential and intelligence funds allocated to the Office of the Vice President (OVP) and the Department of Education (DepEd).
What began as budgetary inquiries in Congress quickly evolved into a constitutional crisis, culminating in her second impeachment by the House of Representatives and an ongoing Senate trial.
The central issue before the nation extends beyond political rivalries: it asks whether bypassing auditing channels undermines the rule of law and damages the broader economy.
The Mandate Dilemma: Civilian Governance vs. Security Operations
The core legal vulnerability in Vice President Duterte’s defense rests on the functional purpose of civilian departments.
Under standard administrative procedure, agencies like DepEd exist to manage curriculum development, school infrastructure, and educational delivery. Security threats within campuses—such as gang activity, drug enforcement, or insurgent recruitment—are traditionally handled by specialized state bodies like the Philippine National Police (PNP) and the Armed Forces of the Philippines (AFP), which possess both the statutory mandate and established oversight mechanisms for intelligence operations.
By establishing an independent intelligence budget inside DepEd, the administration effectively created a parallel operational apparatus.
During congressional inquiries, defense officials testified to having no record of joint operations or intelligence reports funded by DepEd.
Bypassing established security frameworks created auditing blind spots, raising fundamental questions about whether a civilian education department could lawfully manage secret funds without institutional coordination.
The Paper Trail: Cash Liquidity and Audit Disallowances
Financial integrity in public office relies on an unbroken chain of documentation. While standard government disbursements require Bureau of Internal Revenue (BIR)-registered official receipts, confidential operations permit the use of Acknowledgement Receipts (ARs) to protect informant identities. However, this flexibility introduces immense financial risk once funds are withdrawn from bank accounts as physical cash.
When the Commission on Audit (COA) reviewed the OVP and DepEd expenditures, auditors uncovered systematic irregularities: generic receipts, unreadable names, missing dates, and millions spent on provisions without standard commercial invoices. Consequently, COA issued Notices of Disallowance totaling hundreds of millions of pesos.
Once cash leaves official bank channels without verifiable receipts, the paper trail collapses, converting discretionary spending into unaccounted-for funds.
Good Governance as an Economic Imperative
The financial scrutiny surrounding Vice President Duterte illustrates a fundamental principle of political economy: Good Governance Means a Good Economy.
When public institutions operate with transparency and strict adherence to the rule of law, the benefits cascade directly into economic growth:
Investor Confidence and Market Stability: Foreign direct investment (FDI) and local business expansion require predictability. Opaque spending, audit disallowances, and institutional instability signal high political and financial risk, driving away capital or raising borrowing costs.
Fiscal Efficiency and Resource Allocation: Every unit of public currency diverted into un-auditable cash represents starved resources for essential infrastructure, public healthcare, and school classrooms.
Good governance ensures public revenue builds long-term economic productivity rather than leaking into unaccounted expenditures.
Credit Ratings and Sovereign Trust: International rating agencies heavily factor institutional governance and corruption controls into sovereign credit ratings.
Maintaining clean public accounts lowers interest rates on national debt, preserving state funds for productive investments.
Conclusion: Closing the Door to Vulnerability
In political strategy and public service, strict legal compliance and financial transparency form an unassailable shield.
When an official operates with complete integrity, political opponents find no legal leverage or auditing flaws to exploit.
The impeachment trial of Sara Duterte serves as a vital case study for the entire region, proving that executive confidentiality cannot override democratic oversight.
Ultimately, the trial reinforces the truth that upholding good governance is not merely an ethical obligation—it is the indispensable foundation of a resilient, thriving economy.
