Auditing Maguindanao

Maguindanao is a backward province that is the second-poorest in the country, according to government statistics. It also has one of the highest population growth rates, the lowest literacy rates, and highest infant-mortality rates. With 63 percent of its people living on less than a dollar a day, Maguindanao is third in a list of provinces with the worst quality of life in the country, according to the 2009 Philippine Human Development Report prepared by the UN Development Program.

Mainly agricultural, it has no industry to speak of. What it has, however, is a rich voting population —  more than 470,000 voters this year out of more than a million residents (2006 population estimate) — that the Ampatuans have exploited to ingratiate themselves to whoever is in power in Manila, as happened in the past two elections, when the administration thoroughly dominated the elections. In the 2007 elections, for instance, the administration’s senatorial candidates all won in Maguindanao. This has been called a fraud at worst, a statistical anomaly at best.

As a result, according to experts, politics became the local industry, with the whole political culture, even the economy,  revolving around it. The rulers of the province rely on the patronage of Manila politicians; in turn, they live off their share of national taxes, called Internal Revenue Allotments, doled out by the Manila government.

This system has, according to Francisco Lara, an expert at the Development Studies Institute of the London School of Economics, given rise to a class of ‘‘ruthless political entrepreneurs’’ in the Philippines. In many areas, Lara said, the money allows local politicians to entrench themselves; many then engage in lucrative illegal activities such as drug trafficking, gambling, kidnapping, gunrunning and smuggling.

“Political office has become more attractive due to the billions of pesos in IRA remittances that electoral victory provides,” Lara said, referring to the international revenue allotment, or the share of local governments from national taxes. “The ‘winner-takes-all’ nature of local electoral struggles in Muslim Mindanao also means that competition is costlier and bloodier.”

Aside from the money from national taxes, Maguindanao has likewise benefited from foreign fund donors or so-called official development assistance (ODA) coming from such countries as the US, Canada, Australia and Japan. Between 2001 and 2008, according to this report, the US alone poured in $345 million in loans and grants to the whole of Mindanao, particularly the autonomous region that includes Maguindanao and where Zaldy Ampatuan, one of the sons of Maguindanao Governor Andal Ampatuan Sr., is governor.

According to figures from the Department of Budget and Management and the Commission on Audit, Maguindanao’s overall income in 2008 was P541 million, P540 million of which came from national taxes. Most of these funds went to personal and operating expenses, which are usual sources of corruption and patronage in the Philippine bureaucracy.

The Commission on Audit’s annual reports on Maguindanao have always highlighted deficiencies in the province’s finances. In its 2008 audit report, the commission found that it could not ascertain the validity of the provincial government’s claim that the province had more than P107 million  deposited in banks. The COA also could not verify the existence of properties and assets worth P345 million  that the province said it had.

Also, in the same report, the province listed an income from taxes of a little over P204,000 for the whole 2008. That is incredibly low even for a town, let alone a whole province.

Download COA’s 2008 audit report on Maguindanao: Full report (zip), Executive Summary (pdf)

Download COA’s 2008 audit report on the Autonomous Region in Muslim Mindanao: Full report (zip), Executive Summary

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