The University of the Philippines (UP) has refuted the Commission on Audit’s (COA) claim that UP allegedly made questionable investment undertakings totaling P15.055 billion by citing the principle of fiscal autonomy granted to the national university under Republic Act 9500 or the UP Charter of 2008.
In response to the COA’s claims, as stated in an article published by The Philippine Star on July 25, 2023, UP Vice President for Planning and Finance Iryn Balmores said that funds received by the University, such as through the 2022 General Appropriations Act, are utilized for intended projects and purposes.
In cases where the funds are received prior to the time that required disbursements for the University’s projects, programs, and activities need to be made, the University places them in short-term placements as part of good stewardship of funds and as a way to ensure that these funds are made readily available at the time these are required to be disbursed. Moreover, all income earned from such investments is also used for or in support of educational purposes.
This practice, Balmores stressed, is well in accordance with RA 9500, particularly with Section 24, which deals with managing the national university’s funds. Sec. 24 (c), in fact, states: “The independent trust committee shall provide the Board with direction on appropriate investments with the view to preserving the value of funds while allowing the University to earn a reasonable return thereon.”
“Based on Section 24 of RA 9500, the University crafted an Investment Policy Statement approved by the UP Board of Regents (BOR) on 29 April 2015,” Balmores said. She added that the 2022 COA audit report cited in the Star article recognizes that most investment placements of the University are short-term in nature, that is, with a maturity period of less than one-year maturity, and that these are in the form of government bonds and securities and high-yield short term time deposits. None of these funds are placed in speculative investments.
Aside from being one-sided, “the article made it sound that the funds were placed in time deposits without any regard to the intended purpose of the funds,” Balmores said. “This is incorrect because investing the funds in short-term placements is not equivalent to using the funds.”
Balmores clarified matters concerning the UP constituent units in the Philippine Star article—UP Diliman, UP Mindanao, UP Manila, and UP Baguio. She said that UP Diliman would comply with the COA recommendation. Steps to review and update existing UP Diliman investment policies will likewise be recommended to address the concerns of the COA.
The UP Mindanao Investment and Income Committee (IIC) has identified the utilization of these reprogrammed and trust funds and have consulted with the UP System IIC concerning the revision of its investment policies and guidelines.
The UP Manila IIC has agreed to adhere to the provision that investments should not be placed for more than two years. Moreover, its Budget Office will also submit a consolidated proposal on utilizing the funds for UP Manila.
Finally, UP Baguio’s IIC mirrors the activities of the UP System IIC. It is incorrect to say that UP Baguio had no established policy and definite rules and regulations to follow in their investment activities.
“We wish to reiterate that the intention of placing portions of the fund in short-term investments is to obtain modest yet safe income from these funds while the payments for the intended projects are yet to be made. Once payments for these projects need to be settled, the funds are readily available,” Balmores said. “We respectfully disagree with the COA’s statement that there is a lack of transparency in the placement of these funds as these placements have gone through proper and complete documentation and approval.”