Speaking during a campaign rally in Laguna the other day, Mrs. Arroyo accused Ronald Lumbao of using funds of the Cooperative Development Authority (CDA) to finance the activities of the Philippine Movement Against Poverty (PMAP), a private group supporting former President Joseph Estrada.
"One of our problems is the CDA," she said in Tagalog, lamenting that she could not remove Lumbao because he enjoys a fixed term under the law.
"How did they (CDA officials) use the funds of CDA? Instead of using the funds to help you improve your lives, they continue to use the funds for politicking and destabilization," the President said during a multisectoral consultative assembly at the San Luis Sports Complex.
Mrs. Arroyo said she has no choice but to follow the law on fixed terms but stressed that she would withhold the release of the maintenance, operating and other expenses (MOOE) budget of CDA.
"We will help cooperatives by finding funds from other sources because, under incumbent CDA officials, you have no hope of getting help until their (CDA officials) terms expire," she said.
She vowed to find other means to help cooperatives but rejected appeals to reduce the six percent interest rate government financial institutions (GFIs) charges cooperatives.
The President said the government’s ability to subsidize interest rates has been hampered by the misuse of public funds, leading to the gaping budget deficit that reached more than P130 billion last year and is expected to hit P145 billion this year.
"That is why the ability to lower the six percent interest rate is quite difficult. I would be lying if I promise to do it and I think you wouldn’t like a lying president," she told the crowd.
The President cited the losses sustained by government financial institutions (GFIs) which were forced to finance the lavish lifestyle and building binge of the previous administration.
As an example, the President said she would construct multi-purpose halls for senior citizens, youth and women folk instead of bidding out contracts to construct senior citizens centers alone.
"That is how we will save our limited funds," she said, deploring the lavishness of serving wine, roast suckling pig and prawns at Malacañang every day.
"Let us not be ostentatious like the previous administration. If we will be ostentatious and conduct a building binge, our economy will fall further," she stressed.
She lamented that the funds of GFIs were used to invest in companies linked with Estrada cronies as attested by the testimonies of the heads of the country’s two state pension funds.
She was referring to the testimonies of former Social Security System (SSS) chairman Carlos Arellano and Government Service Insurance System (GSIS) president Federico Pascual who admitted Estrada earned as much as P189 million in kickbacks through the use of pension funds.
Mrs. Arroyo said Estrada instigated similar misuse of government funds of the Land Bank of the Philippines (LBP), Development Bank of the Philippines (DBP) and Philippine National Bank (PNB).