Recto’s black hole

Two of the nation’s top economic managers have broken their silence on the ongoing fiscal fiasco involving Finance Secretary Ralph Recto’s diversion of state funds — and their revelations are staggering.

The former Secretaries of Finance, Jess Estanislao and Ramon del Rosario Jr., were on the social media page of former Interior Secretary Raffy Alunan to sound the alarm “that the National Treasury is being plundered.”

Del Rosario succeeded Estanislao as head of the Department of Finance during the term of the late President Cory Aquino.

In a message that Alunan said was forwarded to him by retired Supreme Court Associate Justice Tony Carpio, Estanislao said Filipinos are “once again hurtling into the deep black hole we fell into before.”

He lamented that some “politicians are spending public money as if it grew on trees” and “control over the budget process” was lost, adding that the budget deficit is rising at an alarming rate.

The fiscal gap between January and November 2024 was P1.18 trillion, or about 20 percent of the budget for last year.

Estanislao indicated that certain public officials are raiding government-owned and controlled corporations (GOCCs) and government financial institutions (GFIs), “scooping up funds because Congress has diverted public money to fuel their extravagant corruption.”

Moreover, he warned that he “witnessed firsthand what happened to the Development Bank of the Philippines (DBP) before 1983 and the immense effort and painful sacrifices it took to rehabilitate it.”

Behest loans to favored groups and individuals passed through the state bank then, which destabilized its finances.

“Now, DBP is once again being financially vandalized. It is undercapitalized and has been forced to seek regulatory relief from the Bangko Sentral ng Pilipinas (BSP) just to appear afloat,” according to Estanislao.

He added that he had strongly opposed the Maharlika Fund, which he described as a “harebrained idea.”

Estanislao refused to sign a letter circulated among former finance secretaries endorsing Recto’s transfer of funds from the Philippine Health Insurance Corp. (PhilHealth), Philippine Deposit Insurance Corp. (PDIC), and other GOCCs/GFIs.

He described the sweep of excess funds as a desperate move to cover the extravagant corruption behind unprogrammed funds and other financial mismanagement.

Del Rosario also flagged the syndicated pilfering of funds.

“In this ‘black hole’ called the bicameral conference committee, what happened was that our esteemed legislators transferred huge amounts of funds from what are ordinarily identified as high-priority projects,” he said in an address to businessmen.

Alunan said Del Rosario went off-script in his speech to touch on the current imbroglio involving the Executive in connivance with members of Congress.

The priority projects were underfunded, or allocations were diverted toward “a bunch of what they called public works projects that are scattered all over their districts, which are poorly studied, identified and largely clustered around what they call flood control projects,” Del Rosario stated.

“These are projects, in my mind, which are the most difficult to monitor.”

“Since they diverted funds from high-priority projects, they are now looking for funds for priority projects, which include health, education and major categories of public works projects that enjoy foreign financial assistance, which required counterpart funding,” an incensed Del Rosario averred.

“The counterpart funding was similarly defunded,” according to Del Rosario. Thus, Del Rosario said the DoF is scrambling to now find money to pursue the essential projects.

Recto and his fellow economic managers have plunged the nation into a bottomless fiscal crisis, all to fund the unchecked excesses of their overlords in Congress.