The Supreme Court (SC) has affirmed that trust funds managed by government agencies must be used strictly for the specific purpose for which they were created, a ruling that upheld the disallowance of funds intended for indigenous peoples but diverted for an agency’s operating expenses.

In a 20 May 2025, decision penned by retired Associate Justice Mario V. Lopez, the SC En Banc backed the Commission on Audit (CoA) in its finding that the National Commission on Indigenous Peoples (NCIP) Regional Office in Surigao del Norte misused funds.

The funds were originally earmarked for socio-economic programs benefiting the Mamanwa Tribes but were instead used for the regional office’s operational costs.

The dispute stems from a 2009 memorandum of agreement (MoA) involving Taganito Mining Corporation (TMC), Taganito HPAL Nickel Corporation (THPAL), the Mamanwa Tribes of Taganito and Urbiztondo in Claver, Surigao del Norte, and NCIP Regional Office No. XIII. It was linked to the construction and operation of a nickel mineral processing plant within the Mamanwa ancestral domain.

Under the agreement, THPAL committed to providing financial assistance to the NCIP, with the explicit condition that it be used exclusively for socio-economic projects to benefit the indigenous peoples (IPs) of Surigao Del Norte. The funds were required to be deposited into an NCIP-created trust account.

In 2012, tribal leaders signed Resolusyon No. 14, recommending that the financial assistance also be used for NCIP’s operating expenses, including hiring community workers, holding tribal assemblies, and conducting training programs.

CoA later flagged NCIP Region XIII’s use of the funds for its 2013 and 2014 operations, deeming the expenditure contrary to the MoA’s original purpose. State auditors also issued several Notices of Disallowance totaling P1,573,227.83, citing misuse of the trust funds.