MANILA, Philippines – The local government of Davao City spent P530 million in confidential funds in 2024, still more than the combined P483.93 million spent by Metro Manila city governments that year, showed a government audit document.

The allocation represented 19.15% of the Davao’s total maintenance and operating expenses, unchanged from the previous year. Although the figures raise questions about scale and transparency, it was compliant as far as state auditors were concerned.

In a report released on July 9, 2025, the Commission on Audit (COA) said Davao City complied with existing rules on the release, documentation and liquidation of confidential funds.

“The outcomes of our audit pertaining to the confidential funds have revealed compliance in both the disbursement of cash advances and the submission of liquidation reports to the Intelligence and Confidential Funds Audit Office (ICFAO). The disbursement of cash advances was substantiated with documentary evidence in accordance with Section 6.1 of COA-DBM-DILG-GCC-DND Joint Circular No. 2015-01,” read part of the COA report.

Over the past decade, Davao City’s confidential fund allocations have climbed sharply. From P144 million in 2016, the spending jumped to P293 million in 2017 and P420 million in 2018, before hitting P460 million in 2019 and holding steady through 2022.

Under Mayor Sebastian “Baste” Duterte, the city government raised the allocation to P530 million in 2023, showing a 15.22% increase from the year before. It then maintained that level in 2024.

The use of confidential funds has become a national concern, particularly amid a controversy involving Vice President Sara Duterte, the mayor’s sister, over her office’s use of P125 million in confidential funds over an 11-day period when she was education secretary under the administration of President Ferdinand Marcos Jr.

Under Sara’s term as Davao City mayor, the local government’s confidential spending rose sharply during her father Rodrigo’s presidency, increasing from P144 million in 2016 to P460 million by the end of her tenure. Under her administration, allocations more than doubled in 2017 and climbed again the following year.

From 2016 to 2022, the city government set aside more than P2.6 billion in confidential funds, exceeding the allocations of wealthier local governments such as Makati, Manila, Quezon City and Cebu City, based on audit data.

Rules governing confidential funds are set out under Joint Circular No. 2015-01, issued by the COA together with the budget, interior and defense departments, and a commission for government-owned and -controlled corporations. 

The circular requires that such spending be directly tied to peace and order programs. Eligible uses are limited to activities such as crime prevention and law enforcement operations, capability-building for law enforcement personnel and volunteers, and programmes addressing illegal drugs, gambling, insurgency, smuggling, human trafficking, illegal fishing, and unlicensed mining and logging.

In 2024, financial statements showed that only eight Metro Manila cities reported confidential spending; the other half avoided confidential fund spending.

Manila posted the largest allocation at P120 million, followed by Pasay City at P80 million, Quezon City at P75 million, Caloocan City at P70.5 million, Parañaque City at P49.5 million, Muntinlupa City at P47.93 million, Marikina City at P25 million and San Juan City at P16 million.

Makati, Pasig, Las Piñas, Mandaluyong, Navotas, Taguig, Malabon, and Valenzuela reported no confidential fund spendings for the year. – Rappler.com