World Bank confirms memo on SC loan misuse

MANILA, Philippines (Jan 18, 2012) - The World Bank (WB) confirmed yesterday it issued an aide memoire that referred to some “ineligible expenditures” and demand for refund of disallowed disbursements  in connection with the $21.9-million loan the bank extended to the Supreme Court (SC).

The aide memoire summarized the findings and recommendations of a WB task team, pointing out implementation issues that include the ineligible expenditures.

The Judicial Reform Support Project (JRSP) is scheduled to close on June 30, 2012 and the focus for the remaining period is to bring the project to a closure, the WB said in a statement.

The bank said the report was submitted on Dec. 28, 2011 to the implementing agency.

“The aide memoire is a project monitoring and management tool that captures the World Bank’s implementation review findings and recommendations. Through the aide memoire, the bank informs the appropriate country authorities and works with them to address implementation issues. Given the deliberative nature of information, the aide memoire is usually not disclosed to the public,” the statement said.

The aide memoire covered the World Bank loan of $21.9 million to support the Philippine government’s Action Program for Judicial Reform.

The WB’s board of executive directors approved the program on Oct. 2, 2003. The team leader of the project was Lloyd McKay.

Chief Justice Hilario Davide Jr. headed the Supreme Court at that time.

Davide initiated the analysis for the reform program, which was prompted by the perception of corruption in the country’s judicial system.

The JRSP was intended to assist the Philippine government in developing a more effective and accessible judiciary that would foster public trust and confidence, through the implementation of reforms under four components comprising: (a) improving case adjudication and access to justice; (b) enhancing institutional integrity; (c) strengthening institutional capacity; and (d) supporting the reforms of the judicial system and the Project Management Office.

Starting in 2004, the World Bank was supposed to have disbursed the full amount until 2010. In 2004, it released $2.79 million, $5.04 million the following year, $5.61 million in 2006, $6.69 million the next year, $0.92 million in 2008, another $0.75 million in 2009, and $10,000 in 2010.

“The Bank has rigorous processes for monitoring the management and use of project funds for intended purposes with due regard to economy and efficiency. This monitoring includes routine implementation review missions to help the Government assess the progress of implementation, review achievements against project development objectives, identify implementation issues, and agree on next steps,” the statement added.

Except for the official press statement, no World Bank official could be reached as of press time.

Malacañang maintained yesterday that the WB report is authentic.

“What the World Bank press release was mentioning or was saying (is) that it did not release the report themselves,” presidential spokesman Edwin Lacierda told Palace reporters, dismissing allegations that the report was spurious.

He insisted, however, that the WB document was furnished to the judiciary and also to some officials of the executive branch.

Lacierda said they have verified with officials who were furnished copies of the report that the version uploaded by a media outfit online, and theirs, are the same.

“It seems that what the World Bank has done is clarify that it did not release the report to the media, but a careful reading of its statement shows that they did not deny the authenticity of the report itself,” he justified.

Details regarding the $21.9-million loan extended to the SC’s JRSP are genuine and also included a demand for the SC to refund the expenses that were not covered by the grant.

Lacierda said that even Corona could not deny the existence of such a report, and neither could spokesman and SC Administrator Midas Marquez who was also implicated in the WB aide memoire.

“It is interesting to note that neither the Chief Justice nor his spokesman have disputed the authenticity, or the existence, of the report: what the Chief Justice has egregiously misrepresented is that the report didn’t cover his period in office,” he said.

Marquez, for his part, could only describe the report as “unfair.”

“The truth is the report specifically covers the period of Mr. Corona being Chief Justice. As the President has pointed out, the report proves the pressing need for reforms in the judiciary,” Lacierda, a lawyer by profession, added.

SC prepares report on WB loan

Marquez said the Court is preparing its report on the $21.9-million WB loan.

In a press conference, Marquez said the Court’s Project Management Office is preparing its answer to the reported aide memoire of the World Bank’s International Bank of Reconstruction and Development (IBRD) even after it was already disowned by the World Bank program assistant for external relations Erika Leann Lacson-Esguerra.

“It appears that the press release (report on aide memoire) is now turning to be fake one. It’s really unfortunate. But the court will still look into it,” he lamented.

The SC official said the report on the alleged “unsatisfactory” progress of the high court’s loan came at a “very suspicious time” when the Chief Justice is on impeachment trial.

“It was intended to put the Court in disrespect,” he alleged.

Marquez said the SC is ready to answer insinuations on the

JRSP in any probe, although he already revealed that the project has been regularly monitored and audited by IBRD.

Sen. Franklin Drilon earlier sought investigation into the controversy.

Marquez believes it would be unfair for the aide memoire of the WB to be released without first getting the explanation of the SC.

“A receiving party is required to answer such report before it becomes final and could be made public. It is unfortunate that this rule was not followed in this case,” he lamented.

He likewise questioned the release of the report on the loan granted in 2003 during the time of retired Chief Justice Reynato Puno.

He gave assurance that all expenses of the project were accounted for.

Marquez slammed critics who used this new issue against the Court “for talking when they don’t understand what they’re talking about.”

Congress could probe WB report

Either the Senate or the House of Representatives could investigate the WB report that allegedly detailed anomalies in the expenses made by the SC.

“It could either be in the House, it could either be in the Senate or it could even be raised in the impeachment court as some of the prosecutors are intending to do. What we want is for the WB report to officially come out,” Lacierda said.

Lacierda believes the Senate would tackle the issue following the resolution initiated by Sen. Franklin Drilon.

“Insofar as the House is concerned, I think most of them (congressmen) are in the Senate already right now, focusing on the impeachment trial. But anyway where the WB report can be disclosed officially, that is something we can welcome,” Lacierda said.

Two more congressmen asked the House of Representatives to look into the alleged misuse of portions of the World Bank loan extended to the Supreme Court.

In Resolution No. 2049, Bayan Muna Representatives Teddy Casiño and Neri Colmenares said they were alarmed by the reported irregularities in the implementation of the World Bank-funded judicial reform support project.

“The odd thing here is that since Corona became the Chief Justice, the WB reported that progress in attaining the project development objective and implementation have been rated ‘unsatisfactory’ by the WB,” said the two lawmakers.

“Also, disbursements as of Nov. 30, 2011 stood at $16.3 (million) or 76 percent of the revised loan amount of $21.4 million,” they said.

“What we want here is for the judiciary to truly be cleansed and this is part of that effort,” they added.

Eastern Samar Rep. Ben Evardone had earlier filed a separate resolution seeking an inquiry on the reported SC anomalies. (From Philstar.com)