Ombudsman clears Duque of P41B illegal fund transfer

MANILA, Philippines — The Office of the Ombudsman has dismissed the administrative charges against former Health Secretary Francisco Duque III related to the purported unlawful transfer of P41 billion in Department of Health (DOH) funds to the Procurement Service of the Department of Budget and Management (PS-DBM) in 2020.

In a 10-page order dated August 5, the Ombudsman granted the motion for reconsideration filed by the former health chief in May this year which asked the Ombudsman to “reverse and set aside” the conviction which found Duque and former Budget Undersecretary Christopher Lao guilty of grave misconduct and conduct prejudicial to the best interest of service. 

This decision stems from the Department of Health's (DOH) transfer of funds to the Procurement Service of the Department of Budget and Management (PS-DBM) from March to December 2020, amounting P41,463,867,117.52. These funds were intended for the procurement of medical supplies for the pandemic, including detection kits, nucleic acid extraction machines, mechanical ventilators, personal protective equipment, surgical masks, cadaver bags and various test kits.

What happened to the transfer?

According to the Ombudsman, the illegal transfer of funds from the DOH to the PS-DBM meant that about 4% of the money—approximately P1.66 billion—went to service fees instead of being used to purchase essential COVID-19 supplies and equipment. 

“This is a significant portion of the appropriation that could have translated to additional COVID-19 medical goods and equipment which were direly needed by DOH offices, medical and non-medical frontline personnel combatting the pandemic,” the Ombudsman said. 

The Ombudsman added that there was also a lack of control over the items being purchased, including their prices and quantities. 

“Even the Commission on Audit observed that PS-DBM, as a partner procurement agency, incurred delays in the delivery of the requested items. This adversely affected the delivery of critical medical services during the brunt of the pandemic,” the Ombudsman said. 

Duque's defense

Duque’s “conviction” by the Ombudsman in August 2023 led to his dismissal from government service, forfeiture of retirement benefits, and permanent disqualification from holding any government positions.

Meanwhile, in his motion for reconsideration, Duque claimed that there was no undue injury to the government in the transfer as it occurred between two government agencies. He also argued that there was no conspiracy between him and Lao.

Citing a Supreme Court ruling, the former health chief also argued that the administrative penalty could not be applied to him as he was no longer a government official when the Ombudsman order was handed down in August 2023.

This argument was granted by the Ombudsman saying that Duque has separated from government service following former President Rodrigo Duterte’s term in July 2022.

“There is no denying that Duque's separation from service coincided with the end of President Rodrigo Duterte's term of office on 30 June 2022. Such separation was a necessary consequence of the coterminous nature of his appointment as DOH Secretary. Thus, following the Supreme Court's pronouncement in Andutan as further clarified in Jamorabo, this Office is constrained to hold that Duque ‘is no longer the proper subject of an administrative complaint in connection with the irregular fund transfers to PS-DBM during his stint as DOH Secretary,’” the Ombudsman’s order read. 

“Considering that the issues on the administrative charges have been rendered moot, this Office sees no point in belaboring the other arguments relating thereto,” it added.