STATE auditors have warned the Nayong Pilipino Foundation (NPF) of the depletion of its P1.232 billion trust/investment fund after discovering that agency officials have been spending more than P100 million yearly on average.
According to the 2021 audit report released last June 6, the Trust Fund that was supposed to be used for the development of Nayong Pilipino’s property in Parañaque City has been reduced to just P754.682 million as of the yearend or a 39 percent reduction.
Worse, the bulk of the disbursements went to “general, administrative, and support expenses,” meaning spending on programs, activities and Projects (PAPs) related to the mandated purpose of the fund was only “minimal.”
“Further review of records also showed that for the past four years, NPF has been withdrawing from the funds an average of P118.900 million a year,” the Commission on Audit said.
The breakdown submitted by the audit team showed NPF spent P150 million in 2018, P180 million in 2019, P50 million in 2020, and P95.6 million in 2021 or a total of P475.6 million over the four-year period.
Auditors said the money came from a lease agreement signed between NPF and Resorts World Bayshore City, Inc. on August 20, 2014 covering a 5.43-hectare portion of its 15-hectare property in the Manila Bay reclamation area.
Resorts World paid the advance rental of P1 billion and another P232 million as reimbursement for improvements or horizontal structures (roads, paving, drainage system) already made on the property.
Based on the original plan, the advance rental will be used for the development of the new Nayong Pilipino Cultural Park to fulfill its mandate under Presidential Decree No. 37 — to establish parks and recreation centers for the promotion of tourism in the country.
Auditors, however, noted that the spending pattern “is not attributed to the purpose for which the Fund was earmarked, but rather on absence of other sources of revenue/funds to finance the operations of NPF.”
“If NPF would not introduce PAPs that would generate additional sources of funds/revenue and/or introduce improvements on fiscal management, the total remaining Trust Fund of P754.682 million would be depleted after 6.34 years,” the audit team warned.
Citing the terms of the lease agreement, the COA noted that the next rent does not fall due until 2035, which means NPF will have to find other sources of funding once the trust fund is depleted.
“Thus, if the financial conditions would not improve, NPF would be out of funds starting 6.5 years to 13 years from CY 2021. It is also worth emphasizing that once the construction of the NPF Park in Paranaque City commences, the funds would further be depleted, thus, compounding the funding problems of NPF,” the commission added.
