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KALAHI-CIDSS, DSWD, And The CODE-NGO Peace Bonds Brouhaha (Updated With Release Of New Funding)

August 6, 2010

Its acronym is quite a mouthful – KALAHI-CIDSS.

Spelled out, it means Kapit-Bisig Laban sa Kahirapan- Comprehensive and Integrated Delivery of Social Services.

Its web site says

KALAHI-CIDSS is the Philippine government’s flagship poverty-alleviation project implemented by the Department of Social Welfare and Development through the financial support of the World Bank. It stands for Kapit-Bisig Laban sa Kahirapan- Comprehensive and Integrated Delivery of Social Services.
KALAHI CIDSS entrusts the poor with greater powers, supports poor LGUs in local development, and invests heavily on people, not just projects.
KALAHI-CIDSS believes the poor know who need help the most and that their skills and potentials could be harnessed to undertake development.
Funds are released directly to the villager’s KALAHI-CIDSS bank accounts. Villagers also manage, monitor and supervise the implementation of sub-projects. These sub-projects were implemented faster and cheaper compared to traditional implementation of projects in the Philippines (Mid-term Review, 2006).

Is KALAHI-CIDSS an attached agency of the Department and Social Welfare and Development or is this “flagship poverty alleviation project” actually a de facto non-governmental organization with the DSWD secretary concurrently functioning as its executive director?

Information I’ve gathered so far shows Ms. Soliman also held that top post during the past administration.

Setting aside the thought of a conflict of interest issue on the premise that heading KALAHI CIDSS was/is an ex-officio function, I’m reminded that it was the newly re-minted social welfare boss lady who was among the key personalities who also headed the controversial CODE-NGO group.

In 2005 the Council on Philippine Affairs (COPA) demanded the non-government group make a full disclosure “on how the P1.4-billion commission it had received from the sale of the controversial “Peace Bonds” in 2001 was disbursed, including the complete list of its beneficiaries.

COPA secretary general Pastor Saycon accused Code-NGO, a network of non-government organizations (headed by Maria Socorro Camacho-Reyes, sister of former finance secretary Jose Isidro Camacho) of failing to account for the fund as it was allegedly already transferred to the account of another foundation.

A 2005 news report in the Philippine Star:

When the Bureau of Treasury issued some P35 billion worth of the so-called Peace Bonds in 2001, the transaction was conceptualized and facilitated by Code-NGO, thus entitling it to P1.4 billion in commissions.

The financial instrument with a 10-year maturity period was purchased through auction by the Rizal Commercial Banking Corp. at a discounted rate of only P10 billion. This means that the Philippine government will pay RCBC the face value of P35 billion upon maturity in 2011.

Code-NGO, on the other hand, was supposed to deposit the P1.4-billion commission it received and only use the interest income to fund ipro-poor and other development projects of other NGOs under its wing.

It was reported then that the bulk of the P 1.4-B  windfall was transferred to the account of the Peace and Development Foundation

In 2005, the foundation was reportedly chaired by then Ateneo de Manila University treasurer Fr. Noel Vasquez .

At the peak of its influence its other officers included the Camacho siblings, Ms. Corazon ‘Dinky’ Soliman, her  husband Hector, and Dan Songco who was National Coordinator and CEO of Code NGO from 1993 to 2002.

Here’s the rub: the P35-B in Peace Bonds are scheduled to be redeemed by the government this year on top of the budget deficit that’s hovering near the P300-B mark.
What exactly were the tangible benefits the Filipino people gained from the bonds?

CODE-NGO’s July 2010 report online says this:

While the Administration of former President Gloria Macapagal-Arroyo can point to some accomplishments, most of the targets it laid for itself in the Medium Term Philippine Development Plan (MTPDP) for 2004-2010 have been missed.  Significant key targets were attained only in the macro-economic program, particularly the moderate economic growth averaging around 5 percent per year since 2001, and in micro, small and medium enterprises (MSMEs) development – only 2 of the 17 assessment themes of a recent Assessment of the MTPDP conducted by 27 civil society organizations (CSOs).  GMA left office with many more of the MTPDP targets remaining unfulfilled…”

  • What do WE do now given CODE-NGO’s chequered past??
  • Will the Peace Bonds’ have to be re-issued to its successor foundation,at a discounted rate and under whose care now?
  • What role could KALAHI-CIDSS play?

The conflict of interest appears to be alive and well.


Now comes  this news release on new money coming to the Philippines, including, KALAHI-CIDDSS, apparently following the trip to Washington D.C. of Secretary Soliman earlier in the week.

The funding from the MCC has been in the pipe line for sometime but it was held up as the Arroyo regime was in its final months:

Washington, DC– The Board of Directors of the U.S. Government’s Millennium Challenge Corporation (MCC) has approved a $434 million compact with the Government of the Philippines to reduce poverty through economic growth. Non-governmental organizations, private sector firms, and the Philippine government and people consulted extensively to design a homegrown program to address key constraints to sustainable development.

“Congratulations to the people and Government of the Philippines for tackling difficult challenges to create tangible opportunities for growth and prosperity,”said MCC Chief Executive Officer Daniel Yohannes. “The Filipinos have articulated a clear vision to improve the quality of their lives through a technically, environmentally, and socially sound plan. I am confident that the country’s ongoing commitment to positive reforms, accountability and transparency, and the timely implementation of the compact will deliver tangible results. ”

The Philippines $434 million MCC compact provides funding for three major projects. First, the compact includes $54.3 million in investments to computerize and streamline business processes in the Bureau of Internal Revenue. This project will bolster the effectiveness of revenue collection and reduce opportunities for corruption.

Second, the compact includes $120 million to expand Kalahi-CIDSS, a community-based, rural development program. This innovative approach to development strengthens local accountability and empowers poor communities to design and drive the projects they need to increase their incomes and improve their lives. (emphasis mine.)

Third, the compact includes $214.4 million to construct and repair 220 kilometers of Samar Road. This road, which passes through 15 municipalities, will improve access to markets and services for farmers, fishers, and small businesses in some of the poorest provinces in the Philippines.

The compact may be signed after a 15-day congressional notification period, which follows MCC Board approval.

Converted at P46 to the dollar the new funding going to KALAHI-CIDDSS comes to some P 5.52-B.

Quite a sum that if put to good use, properly accounted for, including being subjected to oversight by the proper unit of government, can surely help ease poverty .

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