Philippine media fell for hoax WB report?

Philippine media has a term for it: kuryente

It looks like a number of Philippine media organizations were victims of a hoax World BanK Report regarding Supreme Court’s Judicial Reform Support Project criticizing Chief Justice Renato Corona and Court Aministrator Midas Marquez.

Manila Bulletin came out with a report on WB disowning the so-called JRSP report. Here it is:

World Bank disowns JRSP report
By CHINO S. LEYCO
January 16, 2012, 5:38pm

MANILA, Philippines — The World Bank denied on Monday it released a report on the Supreme Court’s Judicial Reform Support Project (JRSP) that noted its dissatisfaction with the way the project was being implemented.

Erika Leann Lacson-Esguerra, World Bank program assistant for external relations, said Monday the bank did not release to the media a supposed memo regarding the “unsatisfactory” progress of the high court’s loan.

“This email message did not come from the World Bank. Any official statement from the World Bank will be posted online (www.worldbank.org.ph),” Lacson-Esguerra said.

On Monday, several newspapers including Manila Bulletin received a press release on JRSP’s progress report that claimed it was an official statement coming from the World Bank.

The press release said that since mid-2010, or months after Supreme Court Chief Justice Renato Corona took over, progress in attaining the project development objective and implementation have been rated “unsatisfactory.”

“The World Bank also noted the continuing procurement delays, uneven pace and quality of implementation, limited information on project results and fiduciary issues,” the statement read.

Data from the World Bank’s website revealed that the pace of implementation has picked up under Corona’s leadership, saying more than $1.3 million was disbursed in the first half of 2011 alone.

Of the total project cost of $24.4 million, which aims to make the judicial system more accessible, about $21.9 million would come from World Bank’s International Bank of Reconstruction and Development (IBRD) and the remaining $2.5 million will come from the national government.

Data from the World Bank showed that the bank has disbursed a total of $16.47 million as of December 31.

It also showed that the JRSP project could not be completed by December 31, 2009, and had to be extended by 18 months, to June 30, 2011.

The extension, however, was not enough, so the project was extended anew to June 30, 2012.

The bank attributed the delays to implementation and coordination issues in the Supreme Court, lengthy procurement processes as well as changes in the judiciary leadership.

The World Bank also cited the severe Typhoon “Ondoy” in 2009 as a setback because of the damage it brought to courts and records.

The bank also said that aside from the extension, the loan was also modified, with some loans reallocated and $500,000 cancelled.

World Bank did not disclose of reason for the cancellation.

“There are no changes to components but there are modifications to some activities within components. These changes have no implications for the development objectives,” the World Bank said.

On Monday, President Benigno S. Aquino III called for a review on the use of judiciary fund for transparency after the impeachment trial of Chief Justice Renato Corona is finished. (Additional reports from Genalyn D. Kabiling and Hannah L. Torregoza)
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Here’s the ‘WB report’ which I got by email (worldbankreport@gmail.com)

MEMO
RE: WORLD BANK REPORT ON THE JUDICIAL REFORM SUPPORT PROJECT
DATE: 8 JANUARY 2012
x——————————————————————————————————-x

Background: The World Bank (WB) approved a loan to finance the Philippine Supreme Court’s Judicial Reform Support Project (JRSP) on 2 October 2003. The thrust of the JRSP is to assist in developing a more effective and accessible judiciary that would foster public trust and confidence through the implementation of the Supreme Court’s Judiciary Program for Judicial Reform conceptualized during the term of Justice Hilario Davide. The JRSP is set to end 30 June 2012 and is therefore at the closing stage. Disbursements as of 30 November 2011 is at US$16.3 million.

However, the WB Task Force has forcefully called the attention of the Supreme Court that while there were significant early victories such as the small claims court and the e-library, “since mid-2010, progress in (a) attaining the project development objective and (b) implementation have been rated ‘Unsatisfactory”. Hence, the unsatisfactory performance is directly attributable to Renato Corona since he assumed the position of Chief Justice in June 2010. The WB also noted the continuing procurement delays, uneven pace and quality of implementation, limited information on project results and fiduciary issues. Among the significant delays were the dropping of the Halls of Justice for Mindanao and Manila. While Halls of Justice for Angeles and Lapu-Lapu pushed through, the WB found that both remain at risk of diminished levels of performance and insufficient maintenance.

While the WB noted the incompetence and inefficiency in the implementation of the project that is the ultimate responsibility of Corona as CJ, its key finding is that the fiduciary environment pertaining to JRSP implementation has so deteriorated that the JRSP was rated as “`high risk’ and `unsatisfactory’ on project management, project procurement and financial management dimensions”, and it was observed that the SC’s “project financial statements can no longer be relied upon.” The WB stated that the fiduciary failures begun in 2010 and accelerated in 2011. From mid-2010, project decision-making became more centralized with the sidelining of the Program Management Office (PMO) and the assumption of authority of Marquez (Public Information Officer (PIO) Midas Marquez was appointed also as the Court Administrator, Chairman of Bidding and Awards Committee and as the authorized signatory of Corona) that there was a break-down and elimination of internal controls that resulted in questionable procurement and expenditures, ineligible disbursements, retroactive contracts, uncontrolled commitments, increased risk of contingent liabilities and potential over-commitment of funds. The WB continued “as a result, the quality of project implementation and reliability of project financial information deteriorated.

These were the observations that resulted in that rating:

1. The capacity of the SC’s Program Management Office (PMO) that was supposed to oversee the implementation of the project was downgraded. PMO staff was reduced from 30 to 10. PMO personnel with institutional memory departed or were sidelined and an ad hoc management style emerged that has demoralized remaining PMO personnel. The WB also noted that while the PMO had responsibility, it had no authority. As a result, there was a loss of attention to project development objectives and results;

2. Instead, authority was shifted to Midas Marquez. Hence, the WB this noted that since mid-2010, an increasingly top-down project decision-making and implementation process (especially on what to procure and through what method) has resulted in the exclusion of key stakeholders within the SC and diminished existing internal “check-and-balance” mechanisms. Power and authority over the JRSP was consolidated to Public Information Officer (PIO) Midas Marquez, who was also appointed as the SC Court Administrator. Marquez was authorized to approve on behalf of the Chief Justice payments up to P200,000 which was later increased to P500,000. Marquez was also the Chair of the Bidding and Awards Committee in 2010. Thus, in 4 contracts to one firm (Media Banc), Marquez was the requestor of the services, the approver of terms of reference, the end user and the authorizer of contract extensions and payments to the firm. The report also stated that Marquez appear to exercise authority without commensurate responsibility or accountability.

3. Consequently, the WB noted that “procurement and financial management disclose numerous issues. Contract management was rated “unsatisfactory”: substantial implementation delays (and possibly cost escalation) have occurred on key contracts and the final benefits and impact of project activities are likely to be significantly less than expected.” In addition, there are delays in payments, incomplete billings and there appears to be unpaid bills. WB noted since mid-2010, GOP financed payments amounting to P43.9 million has not been made by the SC. In view thereof, there is high risk of contingent liabilities despite fact that project was about to be completed.

4. The WB noted that while the project was supposed to be in the closing stage, there was a sudden increase in expenditure in the latter half of 2011 that were mostly made without prior agreement with the WB and even in spite of such non-agreement. The Bidding and Awards Committee chaired by Marquez went ahead with procurement knowing these were not included in the agreed procurement plan or not agreed with the Bank. Worse, ICT goods were not procured for front-line judges and court personnel who desperately needed it but for the SC in Manila. Only 14 percent of the ICT goods went to the lower courts—the key JRSP beneficiaries. 62% by value of the IT procurements bought in small lots was used for SC and appellate courts. 18 % of the purchases went to units or officials whose connection with the JRSP project was unclear such as for Justice Roberto Abad, the Bar Examination Chairperson.

The WB noted that it was not even aware of the IT purchase for the Regional Court Administrator Office (RCAO) which is under Marquez until a site visit when Lapu-Lapu judges informed them that they received no IT equipment under the JRSP. Apparently, the IT purchases were diverted to the RCAO at the initiative of Marquez, leaving the courts bereft of IT equipment. The WB noted that it was not informed of this “major change in destination of IT equipment earmarked for a priority front-line project beneficiary group!” [1]

The purchase of these ICT through inefficient and expensive shopping procedure (which practice emerged since mid-2010 and accelerated in 2011) mostly outside of the agreed procurement plan and through individual items and small lots inimical to economy and efficiency accelerated in 2011. The WB noted that this procurements ‘appear to be driven by the objective of rapidly disbursing JRSP resources” before the loan expires despite the fact that this was outside of project priorities or results.

5. The WB based on a random sampling of only 133 SC disbursements, 70 payments totaling US$199,900 as ineligible and asked SC to reimburse. SC has initiated refund but as of 30 November 2011, US$161,422 has not yet been refunded. The WB noted that of these ineligible expenditures, 16 expenditures were for Marquez’s Office of the Court Administrator.

Among the ineligible expenditures were: speaker’s fees for Marquez’ a unnamed OCA staff, registration fees of unnamed senior SC official to the Court Public Information Seminar in Atlanta, USA and International Association of the Court Administration in Jakarta, Airfare of Judges to Sydney, registration fee of unnamed Senior Supreme Court official and OCA staff for a Conference in Bogor, Indonesia, trips and accommodation of SC officials to Cebu, room accommodation during the Goodwill games with Guam at P69,000, meals with justice and Guam delegation at P83,529, 11 notebook computers for OCA (at P259,050), 8 units of laptop at P364,960 and 1 unit at P65,580 for 2011 Bar Chairperson (Justice Roberto Abad), 12 units desktop and 1 notebook to Office of the Chief Justice at P496,790, 1 unit printer at P24,415 for the OCA.

6. The WB also stated that the information it received about the amount of Government contribution is not fully reliable. The WB task force found that they were misled as to the amount of actual GOP contribution. The SC claimed that the unspent balance of the GOP commitment was US$.8 million (P34 million at current exchange rate) but the WB team was informed that outstanding GOP counterpart was P50 million. Hence, it appears SC was not disbursing GOP contributions.

7. The practice of “borrowing funds” from the WB account to finance unrelated expenditures like foreign travel, conferment of honorary degrees, Goodwill games was also noted. There were also expenses that were never reimbursed such as costs of tickets paid to a travel agent.

8. As a result of the mismanagement of the JRSP and the delays in the implementation, Philippines suffered exchange rate losses due to the devaluation of the US dollar amounting to US$3.9 million (about P174.5 million, including realized losses of P88.6 million).

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[1] Par. 27 of page 9 of the Report.