the report of the fact finding commission - GMA News Online

- iii –III. The AFP Procurement System: Conversion and Other Problems..A. Introduction… … … … … … … … … … … … … … … … … … …B. The AFP Procurement System… … … … … … … … … … … ..C. Procurement and Delivery Temptations: The Incentives toand Modalities of Corruption… … … … … … … … … … … … .1. Conversion… … … … … … … … … … … … … … … … … .2. “ Centrally Managed Funds” and “ Contingency Funds” …3. “ Washing” … … … … … … … … … … … … … … … … … ..4. “ Rigged Bidding” … … … … … … … … … … … … … … ..5. Purchase Order (PO) Splitting… … … … … … … … … ..6. Other Problems… … … … … … … … … … … … … … … ..a. Ammunition… … … … … … … … … … … … … … …b. Petroleum, Oil and Lubricants (collectively “ POL” )..D. The AFP Grievance Mechanism: The Limitations ofInternal Controls… … … … … … … … … … … … … … … … … .E. Recommendations of the Commission… … … … … … … … ....1. Simplify AFP procurement procedures… … … … … … ..2. Control commanders’ discretionary powers over theCMF… … … … … … … … … … … … … … … … … … … …3. Reduce the amount of CMF in GHQ/service HQ hands… .4. Strictly implement control measures over supplies… … .5. Set tenure limits for AFP finance and procurementofficers… … … … … … … … … … … … … … … … … … …6. Establish an autonomous Internal Affairs Office(IAO)… … … … … … … … … … … … … … … … … … … ..IV. Modernizing the AFP: Funding and Consequential Problems… ..A. Introduction… … … … … … … … … … … … … … … … … … …B. The Sad and Obsolete State of AFP Equipage… … … … … ...6464656666697172737575787981838182828282838383

- iv –B. The AFP Modernization Act and the AFP ModernizationTrust Fund… … … … … … … … … … … … … … … … … … … ..C. Sale of Fort Bonifacio Properties by the BCDA… … … … …D. Actual Status of the AFP-MATF as of August 2003… … … ..E. Potential Additional Sources of Funding for the AFP-MATF...1. The JUSMAG Area Case… … … … … … … … … … … …2. The NOVAI Case… … … … … … … … … … … … … … …F. Principal Findings of the Commission… … … … … … … … ...H. Recommendations of the Commission in Respect of theFurther Funding of the AFP Modernization Program… ........1. Vigorously pursue recovery of the JUSMAG andNOVAI properties… … … … … … … … … … … … … … ..2. Pursue recovery of the “ squatted” land in Fort Bonifacio..3. Substantially increase AFP’s share in Fort Bonifacio’ssale proceeds… … … … … … … … … … … … … … … … ..4. Reinforce Office of the Ombudsman by increasingfunding and other support… … … … … … … … … … … ..V. The State of the AFP Medical Services… … … … … … … … … … ..A. Introduction… … … … … … … … … … … … … … … … … … … .B. The AFP Medical Services Today on Paper… … … … … … ..1. Hospitals and Dispensaries… … … … … … … … … … …2. The AFP Medical Corps… … … … … … … … … … … … .3. Medical Management in Combat Areas… … … … … … .4. Doctor-to-Patient Ratio… … … … … … … … … … … … .5. Health Insurance… … … … … … … … … … … … … … … .6. General Assessment made by the Surgeon General… ..C. The AFP Medical Services as Seen by the Troops Today… .D. Findings and Recommendation… … … … … … … … … … … .86899092949799100100100101101103103104104106108110111111112114

- v –VI. The Problem of Benefits for Soldiers Killed in Action… … … … ..A. The Problem… … … … … … … … … … … … … … … … … … …B. Pension Management… … … … … … … … … … … … … … … ..C. Benefits of Soldiers Who Die in Combat… … … … … … … …D. Complaints of Delay in Release of Pension Benefits… … … ..E. Processing Needs… … … … … … … … … … … … … … … … … .F. Findings and Recommendations… … … … … … … … … … … .VII. The Problem of Pilot to Aircraft Ratio or Too Few Aircraft… … ..A. Introduction… … … … … … … … … … … … … … … … … … … .B. On Pilot-to-Aircraft Ratio… … … … … … … … … … … … … ..C. On the Complaint About Delay in Training and Promotionof Pilots… … … … … … … … … … … … … … … … … … … … .D. On Air Force Modernization… … … … … … … … … … … … .VIII. The Inadequacies of AFP Housing for Officers and EnlistedPersonnel… … … … … … … … … … … … … … … … … … … … … … .A. On-Base Housing and Allocation Thereof… … … … … … … .B. Off-Base Housing in Military Lands… … … … … … … … … ..C. Recommendations… … … … … … … … … … … … … … … … ..Part Three: Findings and Recommendations of the Commission:Reiteration and Collation… … … … … … … … … … … … … … … … … … … .I. Findings of the Commission Concerning the Events of 27 July2003 at Oakwood… … … … … … … … … … … … … … … … … … ....A. Analysis and Findings… … … … … … … … … … … … … … ......II. Recommendations of the Commission Concerning the Events of27 July 2003 at Oakwood… … … … … … … … … … … … … … … …III. Recommendations of the Commission Concerning theGrievances Voiced by Mutineers at Oakwood… … … … … … … ..115115116116117117118118118119120121122122124125126126126135137

- vi –ConcludingObservations… … … … … … … … … … … … … … … … … … … …Annex A – History of the Fact-Finding CommissionAnnex B – Administrative Order No. 78Annex C – Rules of Procedures of the Fact-Finding CommissionAnnex D – Full Texts of Resolutions of the CommissionD.1 Resolution 002: Appointment of Commission Counsels146D.2 Resolution 003: Appointment of Executive Assistants andOffice StaffD.3 Resolution 004: Visit to Zamboanga City and BasilanAnnex E – List of Documents Submitted during Commission Hearingsand Marked as ExhibitsAnnex F – List of Documents and Items Received by the CommissionAnnex G – List of WitnessesAnnex H – Procurement FlowAnnex I -- AFP Modernization Procurement FlowAnnex J -- Retired Officers Occupying at JUSMAG with Properties atAFPOVAI and Cavalry Hills; Source: BCDAAnnex K -- Active Officers Occupying at JUSMAG with Propertiesat AFPOVAI and Cavalry Hills; Source: BCDAAnnex L -- Occupant Members as of January 2000 Source: BCDAAnnex M -- List of Overstaying Retired Military Officers OccupyingGovernment Quarters at Southside Housing Area as ofSeptember 2003 Source: Maj. Gen. Rodolfo Garcia, AFPAnnex N -- List of Overstaying Retired Military Officers OccupyingGovernment Quarters at BNS Area as of September 2003Source: Maj. Gen. Rodolfo Garcia, AFPAnnex O -- List of Retired Military Personnel Still Occupying at BNSSource: Maj. Gen. Rodolfo Garcia, AFP

IntroductionOn 27 July 2003, three hundred twenty-three (323) junior officers and enlistedmen, mostly from the elite units of the Armed Forces of the Philippines (AFP) --- thePhilippine Army’ s Scout Rangers and the Philippine Navy’ s Special Warfare Group(SWAG) --- took over the Oakwood Premier Apartments in the Ayala Center, MakatiCity (Oakwood). 1 Led by a small number of junior officers --- the soldiers who calledthemselves the “ new Filipino heroes” and became widely known as the “ Magdalo group”--- claimed that they went to Oakwood to air their grievances about graft and corruptionin the military, the sale of arms and ammunition to the “ enemies” of the state, thebombings in Davao City which were allegedly ordered by the Chief of the IntelligenceService of the Armed Forces of the Philippines (ISAFP) BGen. Victor Corpus in order toobtain more military assistance from the United States, and “ micromanagement” in theAFP by then Department of National Defense (DND) Secretary Angelo Reyes. Theleaders of the Magdalo group are Navy Lt. Antonio Trillanes IV, Army Capt. GerardoGambala, Army Capt. Milo Maestrecampo, Navy Lt. James Layug, and Marine Capt.Gary Alejano. The incident was brief, lasting less than a day. It ended withoutbloodshed, nor damage to property. But it contributed to the projection of the Philippinesas an unsafe, unstable and crisis-prone country.The leaders of the Magdalo group claimed the take-over of Oakwood was notplanned and was spontaneous. They had simply intended to make a dramatic expressionof their grievances against the Government and had no political agenda. However, theydeclared they had a list of demands which they wanted Government to grant and shouldthey be attacked by Government forces, they were prepared to make a stand and die forwhat they stood for. They ringed the area around Oakwood with explosives.The investigation by the Fact Finding Commission (Commission) created underAdministrative Order No. 78 dated 29 July 2003 of President Gloria Macapagal Arroyo1 Taken from the Briefing Manuscript submitted by the Deputy Chief of Staff for Intelligence of the AFPMaj.Gen. Pedro Cabuay who testified before Commission on 12 August 2003.

- 2 –sought to bring to the surface and pull together all relevant information regarding theOakwood incident. The Report covers the series of events prior to, during, and afterOakwood. It also sets out the principal findings of the Commission, including theinsights and implications that might be derived from these findings, and offers certainrecommendations.Part One of the Report describes the events at Oakwood on 27 July 2003 from theplanning and preparation of a comprehensive plot to seize control of the Government, thediscovery and pre-emption of the plot, the execution of the fall-back scenario of PlanCharlie, the negotiations for the stand down and return to barracks of the Magdalo group,the stand down and return to barracks, to the post–27 July 2003 events.In Part Two of the Report, the Commission examines the several grievancesexpressed by the Magdalo group and seeks to determine the extent to which thosegrievances are reflective of reality in the AFP. The Commission, at the same time,stresses the critical difference between (a) the concrete objectives which moved theMagdalo group to put the plot in motion, from (b) the justifications offered by the coregroup of the young officers and soldiers who went to Oakwood.Part Three of the Report pulls together some of the findings and all of therecommendations of the Commission and its concluding observations.Comprehensive information about the Commission itself, the Chairman and theMembers of the Commission, the staff of the Commission – legal and non-legal - theprocedures and methods of fact-finding adopted by the Commission, and other pertinentadministrative aspects of the work of the Commission may be found in Annex A of theReport.

- 3 –Part One: The Events of 27 July 2003 at OakwoodI. The Oakwood Incident: Planned and Not SpontaneousContrary to the statement made by Trillanes before the Commission that the takeoverof Oakwood by the Magdalo Group was unplanned and spontaneous, the factsgathered by the Commission show that extensive planning and preparations for severalmonths had preceded the events of 27 July. There was the holding of gripe sessionsamong soldiers sought to be recruited, the distribution and discussion of copies of theNational Recovery Program (NRP) of Senator Gregorio Honasan (Honasan) and adocument entitled “ The Last Revolution” , bloodletting meetings and taking of an oath ofloyalty by the recruits, the purchase of flags, armbands, uniforms, backpacks, and otherrebel paraphernalia, and telecommunications equipment and vehicles, and so on.A. Planning and PreparationAs early as last year, from July to December 2002, rumors had been spreadingthat some military personnel were inquiring about the grievances of members of thearmed forces. Talks about recruitment from the ranks of the discontented and potentialrebels in the military were heard from former members of the Reform the Armed ForcesMovement (RAM) and junior officers in the military. These reports were relayed toBGen. Victor Corpus. 2 It was later verified that a series of secret meetings among juniorofficers in the military had taken place in various parts of the country, in Metro Manila,Central Luzon, and Mindanao. 323Testimony of PN Commodore Tirso Danga before the Commission on 20 August 2003.Testimony of Cabuay on 12 August 2003.

- 4 –A bloodletting ritual took place on 4 June 2003 in a house in San Juan, MetroManila. 4 Honasan allegedly presided over this occasion with junior officers of the AFP.At this meeting, Honasan discussed the NRP which sets forth his platform ofGovernment, and the document entitled “ The Last Revolution” which emphasizes that theonly means to achieve that platform or vision is through the use of force, violence, orarmed struggle because incumbent officials will not give up their positions voluntarily. 5The bloodletting rite was administered to those who agreed to be part of the Magdalogroup. To carry out the bloodletting rite, he provided special knives and showed theparticipants how to inscribe the letter “ I” (or “ K” in the old Tagalog alphabet) under theirleft upper arms. It was during this meeting that Major Perfecto A. Ragil, a member of theAFP Communications Electronics Information Service detailed in Malacañang Palacewas tasked by Alejano, a member of Philippine Military Academy (PMA) ’ 95, to switchoff the Malacañang Palace’ s telephone system on “ D-day.” 6The gripe sessions progressed to a recruitment process. Two meetings were held inMetro Manila, one in Robinson’ s Galleria Suites in Mandaluyong City on 4 June 2003 andanother in an old house in San Juan on 12 June 2003. A photograph taken in one of thesemeetings, which was released to the press by the Presidential Security Group (PSG), showsTrillanes and a person who appears to be Honasan standing before the Philippine flag and aflag or streamer with the Magdalo countersign. 7In the 12 June meeting in San Juan, the following topics were discussed: the peaceand order situation, the national economy, the alleged illegitimacy of the Arroyo4 Sworn statement of Maj. Perfecto Ragil, a member of the AFP Communications Electronics InformationService, to the Commission on 3 September 2003.5Exhibit “ D” identified by Cabuay on 12 August 2003.6Testimony of PC Chief Superintendent Eduardo Matillano on 25 August 2003, referring to affidavit ofPerfecto Ragil dated 4 August 2003.7Exhibit “ G” presented during the testimony of Trillanes on 13 August 2003.

- 5 –administration, the Estrada plunder case, the NRP, the need to rectify the errors broughtabout by EDSA 2, and the contents of a document entitled “ The Last Revolution” . 8 Toimplement “ The Last Revolution” the junior officers took their oath of loyalty as “ NewFilipino Heroes” in this and other similar meetings. 9Based on intelligence reports, two documents of dubious origin were distributedduring the meeting in San Juan. These documents were “ designed to pollute the minds ofthe junior officers” . 10 The first is a supposed Memorandum of Instructions addressed to theSecretary of National Defense dated 11 February 2003, directing the full implementation of“ Oplan Greenbase.” The document, purportedly signed by the President, contains a plan tocapture Hashim Salamat dead or alive and to occupy the Buliok Complex at the LiguasanMarsh area in North Cotabato. Secretary Eduardo Ermita of the Office of the PresidentialAdviser on the Peace Process (OPAPP) purportedly signed the other document entitled“ The President’ s Four-Point Policy Framework in Addressing the Southern PhilippinesSecessionist/MILF Problem” , 11 allegedly pursuant to the 11 February PresidentialMemorandum of Instructions. This latter document purports to show that “ there isapparently a plan by the government to hold the MILF responsible for AFP-backedbombings in urban areas in Mindanao” . 12 President Arroyo denied having issued the firstmemorandum, and Ermita denounced the second document as being spurious andfabricated.8910Exhibit “ C” identified by Cabuay on 12 August 2003.Testimony of NSC Secretary Roilo Golez in his testimony before the Commission on 12 August 2003.Ibid.11Testimony of Secretary Eduardo Ermita on 3 September 2003; MILF refers to the Moro IslamicLiberation Front.12Testimony of Golez on 12 August 2003.

- 6 –The meeting on the night of 12 June was reportedly attended by top RAM officersincluding Honasan and retired Navy Capt. Felix Turingan, and the rebel leaders Trillanes,Gambala, and other junior officers. The group planned to attack high impact targets suchas Malacañang Palace, Ninoy Aquino International Airport, Fort Bonifacio, Camp Crame,Villamor Air Base, Camp Aguinaldo, and all television and radio stations in Metro Manila.The plotters underwent the ritual earlier described as bloodletting, which they termed“ dinuguan” . 13Apart from the gripe sessions and bloodletting rites, the Magdalo group’ spreparations included the acquisition of rebel paraphernalia. On 4 June 2003, a malecustomer went to the International Flag House (IFH) in Manila and placed a job order forone hundred (100) pieces each of Philippine flags and Bonifacio flags (i.e., displaying theMagdalo symbol). He deposited one thousand pesos (P1,000.00) for the job order, the totalcost of which was twenty-four thousand pesos (P24,000.00). 14 The customer wrote hisname on Job Order 2186 as Armand Pontejos and his telephone number as 456-3222.Subsequent additional orders were placed for more flags, which orders raised the total costto forty-five thousand pesos (P45,000.00). The customer was later identified as NavyEnsign Armand Pontejos, PMA ‘00, one of the rebel soldiers who went to Oakwood. 15Another rebel soldier who went to Oakwood was Navy Lt Manuel Cabochan, of PMA ‘95who bought forty-nine (49) sets of battle dress attire (BDA) uniforms, t-shirts, and combatboots worth one hundred eight thousand seven hundred and eighty pesos (P108,780.00) on30 June 2003. 1613Ibid.14Based on the report of the NBI submitted by Dir. Reynaldo Wycoco on 1 September 03, theInternational Flag House is known as a pioneer and leading manufacturer of quality flags and bannerslocated at 973 Rizal Avenue, Sta. Cruz, Manila.15 Ibid., see sworn statement of Glenn Mabag y Pardilla marked as Annexes D-D1.16Sales Invoice No. 007 issued by EREV Military Supply and General Merchandise marked as Exhibit“ TT” on 3 September 03.

- 7 –There is evidence the Magdalo group also acquired vehicles apparently totransport troops to target areas. On 23 July, five (presumably second hand) Hyundai aerobuses were purchased for two million one hundred thousand pesos (P2.10 million) in cashby Francisco Dimaculangan and Isidro Samaco from a company named Car Option Sales,Inc. 17 One bus was later found in Oakwood while another was abandoned in Binakayan,Cavite. There is also evidence that some communications equipment used by the rebelsoldiers were of the same specifications as those proposed to be acquired under the AFPModernization Plan. It was established that such equipment was not taken from anyknown or existing inventory of the AFP. 18The Magdalo group, it appears, targeted Oakwood as the site for the execution ofPlan Charlie. 19 On 19 July, Gambala checked in at Oakwood under the name of GeorgeUy, coincidentally the same name as Southcom Admiral George Uy. A cash deposit offorty-eight thousand eight hundred pesos (P48,800.00) for room rental from 19 to 28 July2003 was paid by a certain Tina Uy Angeles who made the reservation. 20B. Discovery and Pre-emptionFrom 21 to 23 July, unauthorized troop movements apparently bound for Manilahad been monitored upon validation of the information that there was restiveness amongjunior AFP officers.Having validated the coup rumors and considering the troop movements, theGovernment took a number of pre-emptive measures. It was fortuitous that these rumors1718Exhibits “ CCC” to “ CCC-4” submitted by Mr. Peter Nolasco on 24 September 03.Testimony of 1 st Lt. Lindsey Rex Sagge on 25 August 2003.19Plans Alpha, Bravo and Charlie in relation to the failed coup were discovered through the diskettesrecovered by ISAFP in Oakwood. The Plans were referred to by Golez, Cabuay, and Corpus in theirtestimonies before the Commission.20Exhibit “ R” provided by Mr. Robert Rosetti, General Manager of Oakwood on 21 August 2003.

- 8 –and troop movements materialized just prior to the President’ s State of the NationAddress (SONA) scheduled for delivery on 28 July. In connection with the SONA, theGovernment was already taking measures to ensure the security of the President and theGovernment. On 10 July, the National Security Council (NSC) had requested theNational Intelligence Coordinating Agency (NICA) to host a “ small group” meeting ofthe Special Monitoring Committee Alpha (SMC Alpha), which was organized to ensuresecurity during the SONA, together with the major service intelligence chiefs of the AFPand counter-intelligence specialists.SMC Alpha is composed of representatives from various intelligence bodies, andis mandated to monitor domestic threats, particularly destabilization plots against theGovernment, and to recommend appropriate counterintelligence measures. Its task is toprevent mass mobilizations from turning into a situation similar to the attempted siege ofMalacañang Palace on 1 May 2001 by the supporters of former President JosephEstrada. 21At the SMC Alpha meeting held on 11 July, the details of the recruitment by theMagdalo group were discussed and those involved were identified. On the same day,NICA Director General Cesar Garcia reported to National Security Adviser Roilo Golezon the ongoing recruitment activities in the AFP by certain junior officers. Subsequently,SMC Alpha submitted a report from various intelligence sources that the plot beingwatched involved plans to temporarily reinstate deposed President Estrada.On 12 July, the intelligence group informed the President about persistent reportsof rebel recruitment activities in the AFP and the Philippine National Police (PNP),particularly in Mindanao, Central Luzon, and Metro Manila. The Deputy Chief of Stafffor Intelligence (J2), MGen. Pedro Cabuay, presented a summary of what was taken up atNICA the previous day. Considering its highly sensitive nature, the information was kept21 Testimony of NICA Dir. Gen.Cesar Garcia on 14 August 2003 on “ How the Coup Was Cracked Down” .

- 9 –within a small group. Apart from the top officers of the AFP and the PNP, only a smallnumber of Cabinet members attended. Recruitment efforts were noted to be most intensein the First Scout Rangers and Special Forces Regiment of the Special OperationsCommand, the Philippine Navy (SWAG), Fort Bonifacio Units, the Philippine Army’ sLight Armor Brigade (LABDE) and the Anti-Crime Task Force (ACTAF). Most of thosewho were approached were junior officers from the PMA ’ 95 up to ’ 99. Considering thesituation as having developed into a crisis, the President immediately designated Golez ascrisis manager. An action plan was approved which consisted of pre-emptive measuresemploying persuasion efforts on the one hand, and cracking down on the suspectedplotters should they commit any overt illegal acts, on the other. 22Recruitment activities by suspected rebels were again reported during the 14 Julymeeting of the Cabinet Oversight Committee - Internal Security (COC-IS). The meetingdiscussed threats to SONA and the concomitant security preparations. At this time, theGovernment had not yet established concrete links between the recruitment of militaryofficers as rebels and the anti-government mass actions mobilized for the SONA. In themeeting of SMC Alpha on 15 July, the recruitment had been reported as led by a covertfraternity called the “ New Filipino Heroes” who were advocating the adoption of theNRP of Honasan. Plans of the groups to rescue and release ex-President Estrada from theVeterans Medical Memorial Center (VMMC) and to take over radio and TV stationswere likewise revealed. Another meeting by the SMC Alpha took place on 18 July toensure that the action plans agreed upon were already in place and being implemented. 23Having received reports about the troop movements, PNP Chief, Director GeneralHermogenes Ebdane, Jr. issued a directive to all field commanders to coordinate withAFP units and investigate any unauthorized movements and other groupings. He alsoordered all PNP personnel to be accounted for, and declared a full alert status for the PNP22 Testimony of Golez on 12 August 03.23 Ibid.

- 10 –National Headquarters in Camp Crame, effective 6:00 p.m. on 22 July 2003. There wasalso an order to reinforce the guards at Camp Crame.It further appears that the intelligence community had been receiving reports thatHonasan had been holding sessions with the members of the Magdalo group in MetroManila and Sangley Point, Cavite. Information on these sessions was shared during thepreparation for the President’ s SONA. At the meeting on 23 July, the SMC Alphadiscussed plans on how to counter the likely staging of mass actions by anti-governmentgroups at the Batasang Pambansa during the SONA. At this meeting, the efforts atrecruitment of junior officers in the AFP and the PNP in Mindanao were reported. The11 February Memorandum of Instructions to the DND Secretary purportedly issued bythe President and the “ Oplan Greenbase” attributed to Ermita were reported to have beendisseminated to bolster the recruitment effort.Troop movements actually occurred two days before the Oakwood incident.Some forty-seven (47) marines, carrying firearms were sighted coming from Ternate,Cavite. In the early morning of 25 July, 28 Scout Ranger personnel boarded a CebuPacific flight for Manila and were monitored to have proceeded to Virramall ShoppingCenter in Greenhills, San Juan. On the same day several Scout Rangers were alsoreported surveying the Makati business district. 24 Moreover, a group of Scout Rangersand members of the Philippine Marines boarded Superferry 2 from Zamboanga City forManila via Iloilo City. 25 The troop movement was being monitored and it was decidedthat the soldiers be met once they arrive in North Harbor. Upon their arrival, they werein fact met by some officers, including Col. Danilo Lim of the First Scout RangerRegiment (FSRR), and were found to have apparently legitimate reasons for coming toManila. They carried documents showing either they were on rest and recreation orabout to undergo training. Despite the coup rumors, Government security forces24 From the Briefing Manuscript by Cabuay during his testimony to the Commission on 12 August 2003.25 Testimony of PNP Chief Superintendent Arturo Lumibao on 14 August 2003.

- 11 –refrained from taking punitive action against the junior officers at that time as nothingovertly illegal had been committed. Some of them came in BDA uniforms and carriedarms and ammunition. Some of them ended up in Oakwood.Before the Oakwood incident, amid the coup rumors, the President met withofficers and men, including Trillanes and some members of PMA ’ 94 and ’ 95. On 10July, Navy Lt. Christopher Magdangal, an Aide de Camp to the President and a memberof PMA ’ 95, called his classmate Trillanes to ask him about the veracity of reports thatthe latter was a leader of a rebel group moving to destabilize the Government. Trillanessaid he was surprised to hear such report and later confided to Magdangal, after severalexchanges of text and cellular phone messages, that he was in fact receiving death threatsover the phone. Trillanes then asked Magdangal if he could see the President inMalacañang on 13 July to clarify the issue with her. 26Trillanes, who would later act as spokesman of the Magdalo group, met with twomembers of the PSG, Col. Delfin Bangit and Magdangal in the early morning of 13 July.They talked for nearly four hours from 3:00 a.m. onwards. 27 The two officers werepresent when Trillanes met with the President at 7:00 a.m. of the same day. During themeeting with President Arroyo, Trillanes brought up the problem of corruption asdiscussed in the two term papers which he submitted for his masters program at theUniversity of the Philippines’ National College of Public Administration andGovernance. He later alleged that the President did not give him a chance to discuss thepapers and instead scolded him. The President allegedly ordered the PSG officers toparade him before the media to give him a lesson and called the Flag Officer-in-Command (FOIC), Vice Admiral Ernesto de Leon, to detain him at the Naval26 Testimony of Trillanes on 13 August 2003.27 Testimony of Bangit on 9 September 2003.

- 12 –Intelligence and Security Force (NISF) in Fort Bonifacio. 28 In this connection,Magdangal, testified that, to the contrary, the conversation between the President andTrillanes was cordial. The President’ s parting shot was “ Trillanes, you are a young, verybright and very idealistic officer. Huwag mong gayahin si Honasan at si Cardeño.” 29 Themeeting lasted for about an hour.In the evening of 23 July 2003, about one hundred (100) members of PMA ’ 94and ’ 95 had dinner and a “ photo opportunity” with the President in Malacañang Palace.A few days before the dinner, Chief of Staff, AFP (CSAFP) General Narciso Abaya heldseparate meetings with the officers of the two classes. He was informed of theirsentiments, particularly that they were being unjustly dragged into the alleged plan for arebellion. 30 Through the efforts of their classmates in the PSG and Abaya, the dinner withthe President took place. Members of PMA ‘94 and ’ 95 were invited to the occasion for“ pure socializing” through text messages that originated from Magdangal. 31 The classofficers, expecting to have a “ dialogue” with the President that night regarding the issuesin the AFP that they would like to raise, got frustrated as all Air Force Capt. SegundinoOrfiano was able to say after the dinner, when the President briefly asked about the coupissue, was “ … we are against corruption” . Likewise, based on the remarks made ontelevision immediately after the dinner, PMA ‘94 class president Army Capt. Ma. NoelTolentino said, “we assured her that we are still…..we are loyal to her”.The President also attended on 24 July the turn-over of the command at the FSRRin Camp Tecson in San Miguel, Bulacan as part of the effort to neutralize the coup threat.The President took this opportunity to visit with the members of the FSRR, which at that28 Testimony of Trillanes on 13 August 2003.29 Testimony of Magdangal on 9 September 2003.30 Commission interview with Abaya during ocular visit to GHQ on 29 September 2003.31Interview by Commissioners Gonzaga-Reyes and Narciso with Capt. Segundino Orfiano in the presenceof Atty. David Gabriel and Atty. Irwin Tiamson in the detention facility at the Villamor Airbase on 6October 2003.

- 13 –time was reported to have been significantly infiltrated by suspected rebels. She alsovisited on 25 July the Marine Training Camp in Ternate, Cavite, the PAF 15 th StrikeWing, and the SWAG in Sangley Point, Cavite. Abaya made rounds of other unitswhere restiveness had been reported.In the early morning of 26 July, the 10 suspected leaders declared unaccounted forby the AFP were identified as Trillanes, Layug, Gambala, Maestrecampo, and Armyofficers Capt. Lawrence Louis Somera, Capt. Albert Baloloy, 1 st Lt. Lawrence San Juan,1 st Lt. Florentino Somera, 1 st Lt. Jose Enrico Demetrio Dingle, and 1 st Lt. Waren LeeDagupon. At 5:00 a.m., emergency meetings were held by Abaya, Golez, and Garciawith the general staff and senior officers to discuss the reports on the missing officers andthe reported destabilization plot.At around 10:00 a.m., President Arroyo and Corpuz met with a group of NGOs atthe EDSA Shrine. Corpuz announced that certain units from Tanay were missing.At 2:00 p.m., a meeting was held by the same group with House Speaker Jose deVenecia and the House Committee Chairman for Defense and Security, Prospero Pichay,to discuss the matter. 32At 5:00 p.m. of 26 July 2003, the President convened a full cabinet meeting whereCabuay presented a briefing on the looming coup plot. 33 Thereafter, the Presidentpublicly announced for the first time at 8:19 p.m. in the media that “ a small band of roguejunior officers and soldiers had deserted their posts and illegally brought weapons with32 Testimony of Garcia on 14 August 2003.33From the “ Briefing on the 2003 SONA and the Attendant Destabilization Activities” given to theCommission by NICA on 14 August 2003.

- 14 –them” . 34 The security plan of action was immediately set in motion. Task Force Libra (TFLibra), the counter-coup composite unit of the AFP, was set in motion. The action forceswere immediately dispatched in anticipation of the rumored coup.A week earlier, a meeting of the leaders of “ anti-President Gloria Macapagal-Arroyo” (PGMA) groups allegedly to discuss pre-SONA activities at the Danarra Hotelin Quezon City was monitored by Government intelligence. 35 On 25 July 2003,intelligence reports were received that some so-called “ anti-PGMA” groups like thePeople’ s Movement Against Poverty (PMAP) and DEMOKRASYA had been instructedto assemble at the EDSA Shrine at 4:00 p.m. on 27 July and hold an overnight vigilthereat before proceeding to the Batasan area to hold anti-government rallies during theSONA. Invitations by the “ anti-PGMA” group members to civilians to join the coup tobe staged on 27 July were made through cellphone text messages. Among those whowere recruited were past and present members of the DIABLO and Philippine GuardiansBrotherhood, Inc. (PGBI” ). 36 Police Chief Inspector Leborio Jangao, one of the foundingmembers of PGBI, stated he received cellphone text messages on 26 July informing himthat a coup d’ etat would be staged on 27 July. At this time the crime disturbancepersonnel of the PNP had already been instructed to secure the EDSA Shrine, theConnecticut Street area, and the Ortigas Avenue Extension area from rallyists. Therewere reports the EDSA Shrine would be the target where another EDSA 2 or EDSA 3would be staged. 37Early on Friday night of 25 July, the 80 thInfantry Battalion based in CampCapinpin was ordered to augment TF Libra. The mission of the TF Libra included the34 Statement of President Arroyo ordering the arrest of coup plotters on 26 July 2003 shown on ABS-CBNNews Channel The World Tonight on 26 July 2003.35 Testimony of Garcia of NICA on 14 August 2003.36 Testimony of CIDG Chief Dir. Eduardo Matillano on 25 August 2003.37 Testimony of PNP Gen. Reynaldo Vicente Velasco of NCRPO Mandaluyong on 27 August 2003.

- 15 –securing of vital communications installations such as radio and TV stations. It assistedthe PNP in securing the EDSA Shrine and containing civilian groups in the area. The firstelements of the joint TF Libra arrived in Camp Aguinaldo at about 11:00 p.m. 38For his part, Ebdane declared a full alert status nationwide, effective 12 noon on26 July, as a contingency measure. All PNP field commanders were directed to securevital installations and key establishments.At around 2:00 p.m. of 26 July, the Mandaluyong City police started thedeployment of at least one hundred forty (140) personnel at the Poveda, Connecticut, andOrtigas areas. Later at 3:00 p.m., intelligence reports indicated a change of instructionsto the rallyists manning the EDSA Shrine. The anti-government groups were advised toassemble at the EDSA Shrine at 6:00 a.m. on 27 July instead. 39At about 7:00 p.m. of 26 July, MGen. Efren L. Abu, Vice Commander PA andCommander of TF Libra, visited the 80 th Infantry Battalion. By this time, TF Libra wasalready at its full strength. An hour later, President Arroyo went on air and ordered thearrest of the junior officers who had deserted their posts. A conference presided over byAbaya was held at about 9:00 p.m. to assess the intelligence situation. Abu gave anupdate on the forces composition of TF Libra.The PNP report on troop movement by Marines from Ternate, Cavite to the Northor to Manila was confirmed by Cavite PNP Provincial Director Police SeniorSuperintendent Roberto L. Rosales and Marine Commandant, MGen. EmmanuelTeodosio. The advancing Marines were able to avoid checkpoints on their way to Makatiby evasive movements. The PAF civil disturbance contingent earlier deployed at theBatasan area and the PN contingent at the VMMC, both in Quezon City, were then38 Testimony of PA Vice Commander Gen.Efren Abu on 14 August 2003.39 Testimony of Garcia on 14 August 2003.

- 16 –redeployed to the Makati area. An additional one hundred (100) Special Action Force(SAF) personnel of the PNP were then sent to secure the Batasan complex. In addition,one (1) PA platoon and a PNP contingent reinforced the security forces of TV stationsand telecommunications facilities. 40Also on 26 July, Naval Base personnel in Cavite received a report that threesuspicious-looking vehicles were parked at the back of the Naval Sea Systems CommandArmory in Fort San Felipe, Cavite City. 41Following the order issued by President Arroyo to the AFP and PNP for the arrestof the Magdalo officers at around 8 p.m. and the conference called by Abaya to assess theintelligence reports at 9 p.m., operatives of the PNP’ s Criminal Investigation andDetention Group (CIDG) were dispatched to Dasmariñas Village, Makati City at around10:00 p.m. that same night of 26 July to verify the presence of heavily armed men inmilitary uniform reported by security guards of the Dasmariñas Village. National Bureauof Investigation (NBI) agents were also dispatched to monitor this development. 42The Oakwood siege had been facilitated by earlier activities as seen in theforegoing account. The antecedents show that the rebellion was not a spontaneousphenomenon as extensive preparations and mobilization activities were undertaken priorto the occupation and control of the Oakwood Apartments.40Exhibit “ N-1” identified by Garcia on 14 August 2003.41This report was relayed to the command duty officer, Naval Base Cavite and further relayed toCommander of NBC Commo Sanglay. On the investigation of vehicles used by rebel soldiers, a specialreport submitted by Capt. Alexander Pama, the assistant Chief for Naval Intelligence, provided details onthe recovery of vehicles abandoned by the Oakwood mutineers.42 Testimony of Matillano on 25 August 2003.

- 17 –The rebels took over Oakwood at past 1:00 a.m. of 27 July. Over three hundred(300) soldiers quietly entered the premises of Ayala Center in several groups. 43 Thesoldiers disarmed the security guards and took over Oakwood. They planted claymoremines around the building and in the vicinity. Snipers were posted at the Oakwood roofdeck. 44 Two government command groups were immediately dispatched after reports ofthe occupation of Oakwood, and of movement of the Marine contingent from Ternatetowards Camp Aguinaldo were confirmed. The Crisis Management Staff was formed atthe Command Operation Center in Camp Crame, and the Advanced Command Post ofthe PNP was established behind the Intercontinental Hotel in Makati. Marines and Armyofficers later joined the PNP at the Makati post, and the Southern Police District Director,Police Chief Superintendent Jose Gutierrez, was designated as the ground commander.At around 2:00 a.m. on 27 July, Abu was informed by the Joint Operation Centerin Camp Aguinaldo about the presence of troops moving towards Metro Manila. Most ofthese troops were coming from Ternate, Cavite. At this time, the Marines underTeodosio were already poised to stop the troops. They were pre-positioned around thecar park behind Oakwood.At about the same time, the security guards of Dasmariñas Village in Makaticonfirmed the presence of heavily armed men in full battle gear marching from ParaisoStreet to the EDSA-Pasay Road gate of the village. The armed soldiers, wearing redarmbands, forced the security guards to open the gate. They were seen crossing EDSAand going towards the direction of Ayala Center, Makati City. The CIDG-NBIcomposite team confirmed that the rebel soldiers came from a house at 2177 ParaisoStreet, Dasmariñas Village, owned by Ramon Cardenas who was residing at 1346 Palm43 Testimony of Josefino Marcellones, 8 September 2003.44 From the Briefing Manuscript submitted by Cabuay to the Commission on 12 August 2003.

- 18 –Avenue in the same village. At 4:00 a.m. TF Ayala of the Marine Corps had beenactivated and had occupied positions with infantry and armor, encircling the AyalaCenter Complex. 45Between 4 and 5 a.m., the rebel soldiers were able to make arrangements to go onair to issue a public statement. The ABS-CBN News (ANC) network showed a live TVcoverage of the prepared statement read by Gambala. In the statement, the rebelsdeclared their withdrawal of support from the chain of command and presented theirgrievances against the Arroyo government. They demanded the resignation of theArroyo administration leaders and endorsed the NRP as the solution to the problems ofthe Philippines. 46Also at dawn, Alex Benasin, a resident of the Baseco compound at the Port Area,was busy recruiting residents of the compound to go to Oakwood for a consideration ofthree hundred pesos (P300.00) each. 47 Later, at about 8:30 a.m., members of the PGBIcarrying banners of the NRP were seen in the Makati area but they were prevented by thePNP from reaching and camping in the vicinity of Oakwood. Pro-Estrada rallyistsheaded towards the People Power Monument on EDSA were also dispersed by policestationed in the area. It was reported that more pro-Estrada followers actively recruitedpeople from various Metro Manila locations to regroup in the EDSA Shrine. Members ofthe PMAP marched in the direction of Makati City from Greenhills.After 9:00 a.m. of 27 July, President Arroyo gave the rebel soldiers a 5:00 p.m.deadline to give up their positions peacefully and return to barracks. At around 1:00p.m., she declared the existence of a “ state of rebellion” and issued an order to use45 From the After-Operations Report of the Philippine Marine Corps dated 28 July 2003 submitted to theCommission.46 From the video tape of ANC’ s Special Coverage of the Oakwood Incident of 27 July 2003.47 Exhibits “ HH-1” to “ HH-7” identified by DILG Sec. Jose Lina, Jr. on 26 August 2003.

- 19 –reasonable force, and pay due regard to constitutional rights, in putting down therebellion. 48 The rebel soldiers held another public airing of their grievances at around4:20 p.m. By that time, 25 rebel soldiers had surrendered to the TF Libra in two batches,as revealed by the Government command stationed outside of Oakwood. Theannouncement of the surrender was downplayed by the Magdalo group as part of a“ psywar” operation on the part of the Government, during an ambush interview ofTrillanes.During the media briefing in the afternoon, other rebel officers besides the knownleaders expressed their grievances against the Government while the press conferencewas going on. 49 Trillanes, in a side interview by a news reporter, stated that they werewilling to negotiate.Teodosio arranged for the rebels’ close family members to go to Oakwood andhelp persuade members of the rebel group to give up their plans.Shortly before the 5:00 p.m. deadline, the President announced an extension ofthe deadline to 7:00 p.m. It was during the two-hour reprieve that negotiations withvarious personalities and groups of negotiators prospered. As the deadline approached,negotiations between the rebel soldiers and the Government team led by the Governmentchief negotiator, Ambassador Roy A. Cimatu, effectively extended the deadlineindefinitely. 50 An agreement was forged between the two groups at 9:30 p.m. At 10:00p.m., President Arroyo announced that the occupation of Oakwood was over. Therebels agreed to return to barracks and were out of the Oakwood premises by 11:00 p.m.48 General Order No. 4 read on air by Presidential Spokesman Sec. Ignacio Bunye on 27 July 2003.49 From the video tape of ANC’ s Special Coverage of the Oakwood Incident of 27 July 2003.50 From the Briefing Manuscript submitted by Cabuay to the Commission on 12 August 2003.

- 20 –C. Negotiation of the Return to BarracksAs already noted, there were several occasions when the rebel soldiers madeknown their demands and grievances publicly. In the early morning ANC TV coverageairing the Magdalo group’ s prepared statement, the rebels accused the military and theArroyo administration of open corruption and of sponsoring terrorism.The statement read by Gambala asserted that the Arroyo Administration: (1) soldarms and ammunitions to enemy groups as the soldiers continued to defend theGovernment. The thirty (30)-year war against such groups as the Moro IslamicLiberation Front (MILF), Abu Sayyaf, and the NPA (New People’ s Army), was beingused by corrupt officials to enrich themselves; 51 (2) ordered the bombings in Davao Citythrough the special operations team of Secretary Reyes and General Corpus, and thenascribed these bombings to the MILF so that President Arroyo’ s request for more antiterroristsupport from the United States would be strengthened; 52 (3) planned to declareMartial Law in August (2003) after a period of planned bombings all over Metro Manila,which would be attributed to various enemy groups. Gambala further announced that thegroup’ s demands were (1) for the leaders of the Arroyo administration to resign, 53 and (2)for the implementation of the NRP, which is the only “ true solution” to the primaryproblems that beset the Philippines today. In the statement, the group declared that theywere members of the AFP representing the junior officers and some senior officers of theAFP, who were disgusted with the corruption in Government and the military. Gambala51 From the statement: “ Ginagawa nila ito upang ang giyerang walang katapusan ay maging gatasan ngmga sakim na traydor na mga opisyal ng gobyerno at AFP.” Read by Gambala on 27 July 2003.52From the statement: “ Ito ay ginagawa nila upang tuluyang mabansagang terorista ang MILF paramaging basehan sa paghingi sa Anti-Terrorist Fund ng America bago si GMA bumiyahe doon. Ang mgabuhay ng mga sibilyang namatay doon ang kapalit ng mga military hardware na nilimos ni GMA saAmerica.” read by Gambala on 27 July 2003.53 From the statement: “ Hinihingi namin ngayon ang pagbibitiw ng mga lider ng kasalukuyang rehimenna walang pinagkaiba sa nakaraan.” read by Gambala on 27 July 2003.

- 21 –appealed to the Filipinos at large to join the soldiers if the people believed their sincerityin defending the country. 54During the afternoon press conference held by the rebel soldiers, Gambala’ s andother rebels’ voices were heard. According to a side interview with Trillanes, theobjective was to hold an open forum covered by media where “ the other officers can airtheir gripes” . It was on this occasion that Maestrecampo denounced what he called thesenseless deaths of his fellow soldiers: “ hindi ko nakita ang kabuluhan ng pagkamatayng kapwa ko sundalo”. 55According to Cabuay, the specific issues raised by the junior officers during thesiege related to: (1) corruption in the Government, including the AFP and PNP; (2)corrupt and self-serving politicians; (3) disparity in salaries of AFP and PNP personnel;(4) funds that do not flow down to operating units and troops; (5) the powerful“ comptroller family” that controls and manipulates funds, and enjoys promotions andjuicy positions; (6) the big difference between the Army’ s combat pay and the AirForce’ s flying pay; (7) “ militics” and patronage leadership in the AFP hierarchy; (8)“ micromanagement” by the Secretary of National Defense; and (9) insufficient supply ofmedicines at the AFP Medical Center. 56These grievances were discussed at length during the discussions between theGovernment group led by Cimatu and the Magdalo group represented by three (3) of itsleaders, Trillanes, Gambala, and Maestrecampo.54 From the video tape of ANC’ s Special Coverage of the Oakwood incident of 27 July 2003.55 From the video tape of ANC’ s Special Coverage of the Oakwood Incident on 27 July 2003.56 From the Briefing Manuscript submitted by Cabuay to the Commission on 12 August 2003.

- 22 –The Cimatu report to the President listed the concerns discussed during thenegotiations. 57 In addition to the issues and demands read from the rebel soldiers’prepared statement earlier that day, the following matters were raised: (1) the creation ofan independent investigative body like the Davide Commission to look into the bombingincidents in Davao and Koronadal, which were allegedly carried out by a specialGovernment team upon orders of top officials; (2) the creation of an independentcommission to evaluate and recommend reforms in the AFP, particularly in the financeand budget system and logistics and procurement system where institutionalizedmalpractices exist, cases involving pilferage where sale and trafficking of governmentarms and ammunition ended up in the enemy’ s possession, and the speedy resolution ofthe ongoing investigation and audit of the reported anomalies in the Retirement andSeparation Benefits System (RSBS); (3) the personnel morale and welfare of the AFP, forthe most part concerning the poor medical and health services delivery system,inadequate housing program for soldiers, and the extreme delays in the issuance of deathbenefits to families of soldiers who died in battle; and (4) in the case of the Air Force, thepatent preferential treatment or favoritism, and the delays in training and promotion dueto disproportionate pilot to aircraft ratio. Cimatu reported that the group demanded theimmediate removal from office of Reyes, Corpus, and Ebdane who were perceived asincompetent or irresponsible in their respective commands.D. Return to BarracksThe daylong rebel occupation and the Government siege of Oakwood ended aftertwo extensions of the original deadline, and conciliatory statements on the part of somenegotiators. While the crisis situation eventually ended without violence and bloodshed,the terms of agreement on the rebels’ return to barracks appeared vague and unclear andmay have generated a perception of betrayal among the rebel soldiers.57 Exhibit “ XX” identified by OPAPP Sec. Eduardo Ermita on 3 September 2003.

- 23 –After the President had declared a deadline of 5:00 p.m. for the mutineers “ tostand down, surrender their weapons and return to barracks” , the President requestedseveral members of PMA ’ 95 to go to Oakwood to convince their classmates and otherofficers to stand down. In the late afternoon of 27 July and after a press conference bythe rebel soldiers, certain persons arrived at the site apparently to have a dialogue withthe rebels. One of them was Honasan who had made arrangements through his fraternitybrothers at Malacañang Palace to come to Oakwood.Renato Velasco, Senior Deputy Chief of Staff, Office of the President (OP) (afraternity brother of Honasan), who was helping out in the preparations for thePresident’ s SONA at the guesthouse of Malacañang Palace that afternoon, received a callfrom Honasan. Honasan told Velasco that he wanted “ to talk sense to the rebels” but hewanted an assurance that he would not be arrested on grounds of alleged involvement inthe mutiny. After obtaining clearance from the President, Velasco asked SecretariesSilvestre Afable and Rigoberto Tiglao of the OP to go with him to Mandarin Hotel inMakati where Honasan had arranged for a meeting room. Housing Secretary MichaelDefensor, another fraternity brother earlier contacted by Honasan, joined them. 58Military officers from various AFP services also joined the dialogues at Oakwoodupon request of the rebel soldiers. Abaya, after a call from the President, told Commo.Tirso Danga, who as Camp Commander at that time was attending to the defense ofCamp Aguinaldo, that he was being requested by the rebel soldiers to join the negotiatingpanel. He was told that there were two others --- Air Force Col. Eduardo Oban, Jr. andLim --- whose presence had been also requested by the Magdalo group. Danga wasinstructed to coordinate with the two and with Cimatu.58 Testimony of Senior Deputy Chief of Staff, Office of the President, Renato Velasco on 27 August 2003.

- 24 –Upon learning about the occupation of Oakwood by the Magdalo group and itssiege by Government forces in the morning, Senator Rodolfo Biazon and his son,Congressman Rozanno Biazon, went to the Oakwood area to convince the Magdalogroup to stand down. Rebel soldiers on the ground floor lobby of Oakwood told him towait and not to go away --- “huwag muna kayong umalis” --- as the PMA classmates ofthe rebels were still at the 6 th floor of the hotel talking to the Magdalo group. In themeanwhile, Biazon was asked to talk to the Magdalo soldiers by Secretary Romulo whohad learned he was in the area through Senate President Franklin Drilon. 59After some Magdalo soldiers had walked out and surrendered before the firstdeadline at 5:00 p.m., Trillanes went out of Oakwood to fetch Honasan, Lim, Biazon,Senator Vicente Sotto III, and Congressman Biazon at the Intercontinental Hotel. Thiswas after Honasan had talked to Trillanes on the phone. 60On the 7 th floor of Oakwood, the negotiators listened to the rebel soldiers’demands. The group talked about the same issues which they had already raised such asthe resignation of certain Government officials, the Davao bombing incidents, the issueon pilferages and selling of firearms, equipment, and ammunitions to the “ enemy” , andthe need for reforms within the AFP.Defensor and Velasco, on several occasions, told the group that their demandscould not be decided upon by the group but assured them that they were going to bringthe soldiers’ demands to the attention of the President. Biazon gave “ fatherly” advice tothe members of the group and told them not to panic because the President was certainly59 Interview by Commissioner Carolina G. Hernandez with Senator Biazon on 25 September 2003 at hisPICC office.60 Ibid.

- 25 –going to extend the deadline. The soldiers “ were agitated; there was uneasiness in their[eyes]” . 61It was already past 5:00 p.m., the deadline set for the rebels to stand down.Honasan talked to the rebel soldiers and discussed the suggested resignation ofEbdane on the grounds of alleged incompetence. He also talked about the NRP and, indoing so, “ mesmerized” the junior officers. Honasan explained they were not reallyofficial negotiators since the official negotiation process would have to be undertakenwith Cimatu. There was initial resistance from the rebel group to Cimatu negotiating forthe Government as he was viewed as a member of the “ comptroller family” . Cimatu hadto wait in the lobby for about half an hour, awaiting the rebel group’ s acceptance of himas negotiator. 62Cimatu with Assistant Secretary Abraham Purugannan of the Office of thePresidential Adviser for Special Concerns and retired General Dionisio Santiago of theBureau of Jail Management and Penology (BDMP) composed the official negotiatingteam sent by Malacañang Palace to Oakwood. Other military officers who joined thenegotiating team were Army Col. Rolando Detabali, Navy Capt. Feliciano Angue, andDomingo. Philippine Star publisher Maximo Soliven was also present, upon the rebelgroup’ s request. Everybody’ s primary concern was to put an end to the situation inOakwood without bloodshed and damage to property.The leaders of the Magdalo group, namely, Trillanes, Gambala, Maestrecampo,Layug, and Alejano sat with the negotiating team. The Cimatu report, however, onlynoted the first three (3) as taking part in the negotiations. It also mentioned Army Capt.John Andres who participated in the discussion. Trillanes, the Magdalo spokesman,voiced the group’ s concerns, interrupted from time to time by Maestrecampo andGambala.61 Testimony of PN Commodore Tirso Danga on 20 August 2003.62 Testimony of Velasco on 27 August 2003.

- 26 –During the discussions, there were disagreements among the rebels regarding thedemand for the resignation of the three Government officials earlier mentioned. Andresasked that they drop this demand as it would mean “ non-observance of due process oflaw” . 63 Trillanes initially asked for admonition for the rebel soldiers, except for the coregroup who would take full responsibility for their actions. Cimatu did not accede to thisdemand. Members of the negotiating team expressed the view that the rebels should facethe “ military justice system under the framework of the Articles of War” . 64 No referencewas made to the law punishing coup d’ etat as an offense cognizable by the civiliancourts. None of the negotiators, including Cimatu, appear to have been aware of this law.After discussing the proposals and counter proposals for about five hours, Cimatureminded the group that a decision had to be made immediately on the terms of the pulloutfrom Oakwood. During a 15-minute break in the negotiations, Cimatu calledSecretary Romulo in Malacañang Palace for approval of the proposed terms of the standdown.In his report to the President, Cimatu stated that “ the Magdalo group… .furtheragreed that they would face the consequences of their actions as provided for in theArticles of War” . 65 In his recollection of the 27 July negotiations submitted to theCommission, he stated that Trillanes said his team agreed “ that admonition should beconsidered only after the followers undergo the process based on the Articles of War”. 66Concluding, Cimatu stated that “ they further agreed that the core group would face the63Testimony of PMEPC Ambassador Roy Cimatu’ s regarding his 27 July 2003 report to the President(Exhibit “ XX” ) given on 22 September 2003 to the Commission.64Testimonies of V. Adm. Ruben Domingo on 22 Sept. 2003, Col. Eduardo Oban, Jr. on 28 Aug. and2003, Commo. Danga on 20 Aug. 200365Exhibit “ XX” identified by Ermita on 3 September 2003.66Testimony of Cimatu regarding his recollections about the 27 July 203 negotiations given to theCommission on 22 September 2003.

- 27 –consequences of their actions as provided for in the Articles of War. And for thefollowers to likewise undergo the process as called for in the Articles of War beforeadmonition can be considered” . According to two other government representatives whowere present, Danga and Lim, they understood that the agreement reached was that thefive leaders would bear the full consequences of their actions, while their followerswould be punished with admonition under Article 105 of the Articles of War. 67 Obanclaimed, on the other hand, that “ prosecuting the rebel soldiers by the civil courts will(sic) be a violation of the agreement reached with Cimatu” . 68The mutineers withdrew from the premises peacefully. The soldiers boardedmilitary vehicles and were brought to the PA headquarters in Fort Bonifacio. They wereaccounted for and their firearms and equipment were deposited at the PA grandstand. 6967 See, in this connection, the following articles of the Articles of War:Article 67 on Mutiny or Sedition states that “ any person subject to military law whoattempts to create or who begins, excites, causes or joins in any mutiny or sedition in anycompany, party, post, camp, detachment, guard, or other command shall suffer death orsuch other punishment as a court–martial may direct” . (Underscoring added)Article 105 states that:“ a. The commanding officer of any detachment, company, battalion, squadron,commissioned vessel, or higher command, or such other officers as may be authorized bythe President, may, for minor offenses, impose disciplinary punishments upon persons ofhis command without the intervention of a court-martial.b. Subject to subsection g of this article, any commanding officer may, in additionto or in lieu of admonition or reprimand, impose one or more of the followingdisciplinary punishment…x x x x x x x x xe. The imposition and enforcement of disciplinary punishment under this articlefor any act or omission shall not be a bar to trial by court-martial for a serious crime oroffense growing out of the same act of omission, and not properly punishable under thisarticle… ” (Underscoring added)68 Testimony of Oban on 28 August 2003.69 Testimony of Rosetti on 21 August 2003.

- 28 –E. Post 27 July 2003 Events1. Search and Recovery OperationsThe search for staging points and recovery of paraphernalia, equipment, andvehicles was largely made after the pull-out of the rebels from Oakwood. But actualsearch in other areas started during the day of the rebel occupation of Oakwood. Withthe recovery of pieces of evidence, staging points for the rebellion were identified by theGovernment in Cavite, and Makati and Mandaluyong cities.Cleaning and mopping up operations began after the rebel soldiers left at around11 p.m. of 27 July. The Ayala Security officers came in to secure the entrance and tookcontrol of the Oakwood premises to search for explosives and to clear the building foruse the following day.Among the supplies left behind by the rebel group was a pile of boxes numberingabout a dozen, containing communications equipment. These were recovered by PMA’ 95 Capt. Windell Rebong of the ISAFP Mobile Intelligence Team at around 11:00 p.m.of 27 July, on the ground floor lobby of Oakwood. The recovered equipment had anestimated cost of one million six hundred thousand pesos (P1.6 million). He also foundten (10) physically damaged 1.44 megabyte diskettes in a transparent bag lining thegarbage bin in the men’ s room on the 6th floor. It was Mr. Josefino Marcellones of theAyala Security who had informed Rebong of the diskettes, but Marcellones was notpresent during the retrieval of these diskettes. 70The contents of the diskettes were later examined by ISAFP. The diskettesdisclosed an elaborate campaign plan to overthrow the duly constituted governmentcodenamed “ Oplan Andres” , with a listing of seventeen (17) task groups that were70Testimony of Marcellones on 8 September 2003.

- 29 –organized to carry out specific operations. They reveal the operational details of aplanned coup consisting of Plans Alpha, Bravo, and Charlie. Plan Alpha would beimplemented if the rebels accumulated sufficient combat power to assault MalacañangPalace and other strategic installations. Plan Bravo contemplated an assault with lessintensity due to less combat power at their disposal. Plan Charlie, which was eventuallyundertaken or implemented by the rebel group, was the planned recourse if there wasinsufficient combat power but a significant assault could be mounted by using a highlyvisible target like Oakwood as a staging ground to mobilize potential mass support. 71The Oakwood housekeeping staff started to clean up debris at 8:00 or 9:00 a.m. of28 July 2003. Nothing of value to the Oakwood management was found missing fromthe rooms but the loss of six (6) walkie talkies. 72 The housekeeping and security staff didnot report any equipment left by the rebels in the building. 73 In the different roomssearched by Lt. Lindsey Rex Sagge of ISAFP in the afternoon of the same day,documents, maps, overlays, and torn pieces of papers in different rooms were found.Detached Globe and Smart SIM cards were also retrieved inside a trash can. 74Abandoned vehicles were found at the parking lot of Oakwood after the departureof the mutineers. One of these vehicles was a Hyundai aero bus with plate number XET-362. In addition to this bus and another one found in Binakayan, Cavite, there werethree (3) other Hyundai aero buses that had been purchased from the same dealer butwhich have not to date been found. Other vehicles were found abandoned at theOakwood parking area, namely an Elf aluminum van with plate number WPJ-706 and aMitsubishi L200 pick-up with plate number UMN-405. Documents such as LandRegistration Office (LTO) registration papers dated 6 June 2003 and a car insurance71727374Testimony of Corpuz on 25 August 2003.Ibid; clarified at Rosetti’ s recall testimony on 8 September 2003.Testimony of Wycoco on 14 August 2003.Testimony of Sagge on 25 August 2003.

- 30 –certificate bearing the name of a Joey Estrada of 387 P. Guevarra St., Additional Village,San Juan, Metro Manila, were found inside the pick-up vehicle. The name “ JoeyEstrada” was later found to be fictitious. Investigation revealed that the same vehiclehad been stolen from its owner, a certain Jane C. Rey of Cagayan de Oro City on 15November 2001. LTO records show that it was registered in the name of Luis Nunez ofRosewood, Paranaque, Metro Manila. 75The house owned by Cardenas at 2177 Paraiso St., Dasmariñas Village, MakatiCity, was searched on 28 July at around 2:00 p.m. The NBI secured from the MakatiRegional Trial Court a warrant authorizing the search witnessed by representatives frommedia, the security force of Dasmariñas Village, and a representative of the Chairman ofthe Barangay.The search of Cardenas’ house yielded the following items: one M-14 rifle, threeM-16 armalite rifles, assorted live ammunition, Philippine flags, Magdalo armbands andbanners, empty hand grenade cases, thirty backpacks containing personal effects, andvoluminous rebel documents. After the raid and the recovery of evidence claimed to linkhim to the rebellion, Cardenas, accompanied by his counsel, Atty. Rene Saguisag, wentvoluntarily to the CIDG in Camp Crame. 76An investigation was likewise made by the Mandaluyong City Police Chief inrespect of the Mandaluyong townhouses and the flags used by the rebel soldiers. LiezelMagpoc signed an affidavit on 30 July stating that Laarni Enriquez is the real owner ofthe townhouses in Mandaluyong City and that the Deed of Sale executed in her favor,covering the land on which the townhouses were constructed, was merely for75 Testimonies of Matillano on 25 August 03 and of Wycoco on 14 August 2003.76 Testimony of Matillano on 25 August 03.

- 31 –convenience and without any consideration. 77 Enriquez admitted that she is the true andbeneficial owner of the property but denied that she had allowed its use as a staging areaof the rebel soldiers. 78 On 11 August, Glenn Mabag of the IFH positively identified theflags recovered from the house of Cardenas as the same flags ordered by Pontejos.Mabag also identified Pontejos from the 2000 PMA yearbook as the man who hadordered the flags from him. 79Also on 12 August, the baggage claim stub in the name of Jonah Arugay foundinside the house of Cardenas matched the same claim stub issued by Cebu Pacific Airflight number 5J852 in the name of passenger Navy Ensign Jonah Arugay. Arugayarrived in Manila from Zamboanga City via this flight on 26 July 2003. He broughtmedical kits with him as reflected in his baggage claim (stub number 2842598). 80 He wasone of the rebel soldiers at Oakwood.2. Filing of ChargesOn 28 July, Cardenas was brought for inquest proceedings before the Departmentof Justice (DOJ). He was initially detained at the Office of the Anti-Organized CrimeDivision of the CIDG. In the afternoon of 28 July, Cardenas was brought to the DOJ. Hewas later charged with the crime of rebellion. The case is now under trial before JudgeOscar Pimentel of the Makati Regional Trial Court where he filed a petition for bail,which was granted on 10 October 2003.77 Affidavit of Liezel Magpoc dated 30 July 2003, Exhibit “ MM” submitted by NCRPO Dir. Supt EricsonVelasquez of the Mandaluyong Police Station in his testimony on 27 August 2003.7879Affidavit of Laarni Enriquez dated 3 September 2003 submitted to the Commission.Testimony of Wycoco on 14 August 03.80 From Exhibit O, “ Chronology of Events Known to the NBI As A Result of Its Investigation,” presentedby Wycoco on 14 August 2003 to the Commission.

- 32 –On 31 July, three hundred twenty-three (323) rebel soldiers were charged by theNBI with the crime of coup d’ etat under Article 134-A of the Revised Penal Code. Thecase was forwarded by the DOJ to the Makati Regional Trial Court under Criminal CaseNumber 03-2784 (I.S. No. 2003-1103). It is still pending investigation.Under a 1 st Indorsement dated 4 August 2003, Local Government Secretary JoseLina, Jr. forwarded to the DOJ the affidavit-complaint of PC Chief SuperintendentEduardo Matillano against Honasan, 81 Turingan, Ernesto Macahiya, George Duldulao, etal., and several “ John and Jane Does” numbering about one thousand (1,000) personswho are alleged members of the PGBI, for the crime of coup d’ etat and other offenses.The case against Honasan, et al. has been submitted for resolution at the DOJ.On 8 August 2003, the PNP Chief Inspector Jesus Fernandez of the Eastern PoliceDistrict, National Capital Region Police Office (NCRPO) referred to the DOJinvestigation records pertaining to an alleged violation of Article 134 (Rebellion andInsurrection of the Revised Penal Code, and/or Violation of P.D. 1866 as amended (Re:Illegal/Unlawful Possession, etc., of Firearms), naming as respondents Laarni Enriquezand Engr. Romy Escalona of JELP Real Estate Development Corporation, et al. Chargesinvolving Enriquez and possibly Senator Luisa Ejercito are still being evaluated by theDOJ. No formal charges have been filed to date.II.Analysis and FindingsIn the section that follows, we seek to present the findings of the Commission, aswell as the inferences and possible insights that appear to be derivable from the events of27 July 2003 at Oakwood. The over-arching theme is the distinction that, theCommission believes, must be drawn between, on the one hand, the objectives which the81 Twenty-four witnesses executed written statements marked as Exhibits “ JJ-1” – “ JJ-24” , affirming thatHonasan had been present in the bloodletting rituals prior to the Oakwood incident.

- 33 –Magdalo group sought to realize by going to Oakwood -- that is, the forcible seizure ofpower and the overthrow of the existing Government – from, on the other hand, thegrievances and the complaints the existence of which constituted the profferedjustification for their attempt to seize control of government by force of arms. TheCommission believes that the mutiny had been planned and was not spontaneous andthat it was part of a larger plan to achieve political change by military force. At thesame time, it will be seen from Part Two of this report that some of the grievances givenexpression by the rebels at Oakwood, although utilized by them to radicalize soldiers andyoung officers and to recruit adherents to “ Oplan Andres,” are to a substantial degreereal, and not merely fictitious. Finally, those grievances are not unique to the militarybut rather reflect insistent demands for reform made by practically all sectors of oursociety. The total picture is, indeed, a complex one and the challenges inherent thereintruly formidable.A. The Mutiny was Planned and not “Spontaneous”1. The rebel group did not take control of Oakwood only to air theirgrievances nor was the incident “ spontaneous” . Facts gathered by the Commission pointto the political goal of taking power by the Magdalo group and the establishment of afifteen (15)-member council after the restoration of former President Estrada to thePresidency for three (3) days only. By early 2003, it was clear that recruitmentconducted by the rebel leaders exploited the soldiers’ legitimate grievances against theAFP, for which Honasan’ s NRP was the purported sole solution. The “ Last Revolution”stressed that since the incumbents in the Government and senior military officers wouldnot give up power voluntarily, they would have to be removed by force.2. The fact that groups identified with Honasan (Diablo and PGBI) andEstrada (PMAP and DEMOKRASYA) were apparently part of the support group for aplanned replication of “ people power” further indicates the political character of the

- 34 –incident. They attempted to mass at the EDSA Shrine and to go to the Oakwood area, butwere prevented from doing so by the Government’ s blocking forces.3. That the event was not “ spontaneous” is strongly indicated by severalfactual circumstances, including: (1) the wide recruitment of military personnel, whichhad begun months before the mutiny at gripe sessions at which the bloodletting rite andthe oath of loyalty were undertaken by each recruit; (2) the purchase of uniforms andcombat boots, rebel flags, and arm bands utilized at Oakwood; (3) the provision to therebels of backpacks that must have been purchased ahead of time; (4) the purchase ofexpensive communications equipment and vehicles that were later recovered atOakwood and various other places by the authorities; (5) the reservation for Gambalaunder the name of George Uy for 19-28 July at Oakwood, and his actual occupation ofthe room where he was visited by Trillanes on 24 July; (6) the rebels’ use of two stagingpoints in Dasmarinas Village and Mandaluyong City; and (7) the prepositioning of rebelvehicles in the armories of Fort San Felipe and Sangley Point at Naval Base Cavite.4. The discovery of the plot prompted the rebel group to implement PlanCharlie and stage the Oakwood occupation as soon as the President ordered the arrest ofthe leaders in the evening of 26 July.B. Discovery and Pre-emption1. The fortuitous scheduling of the coup attempt close to the President’ s thirdSONA scheduled for 28 July 2003, helped in the timely adoption of countermeasures toavert the plot. Security arrangements for the SONA probably helped Government forcessuch as TF Libra under Abu and TF Ayala under Teodosio prepare the countermeasuresactually adopted during the Oakwood incident.

- 35 –2. However, the Government authorities failed to prevent the Marines fromTernate, Cavite from moving to Oakwood despite intelligence reports about them.Neither did the authorities succeed in preventing the rebels from occupying Oakwood.Since Oakwood was a “ soft target” and prematurely committing Government troops inthe area could expose the “ hard targets” such as Malacanang Palace, military camps, andtelevision and radio stations that are more critical to the survival of the Government, theauthorities continued to watch troop movements and opted not to deny Oakwood to therebels. Hitting the “ hard targets,” according to Plans Alpha and Bravo, was apparentlypremised on the achievement of the goals of a wider and larger recruitment of rebeltroops and civilian components of the plot. As this did not materialize due to the earlydiscovery of the plot, Plan Charlie was activated.3. The rebels failed to elicit significant support especially from the seniorofficers in the military. Thus, the Oakwood coup attempt is the first one in the country’ shistory that had been led by junior officers. This suggests (1) a breakdown in the chainof command that the leaders themselves referred to, (2) alienation of the Magdalo groupfrom their senior officers, which may reflect sentiments shared by other junior officers inthe AFP, and (3) a general decline of professionalism in the AFP officer corps.4. The rebel leaders, it appears, also miscalculated the state of publicsentiment or opinion as they failed to draw civilian support from sources other than thePGBI, Diablo, PMAP, and DEMOKRASYA.C. Demands and GrievancesThe grievances aired by the rebels referred to the RSBS, the military procurementsystem, particularly the practice of “ conversion” , the transfer of arms and ammunition tounauthorized parties, and anomalies in the construction and repair of various facilities atMarine Base Cavite.

- 36 –1. The Commission has looked at these grievances and found some are notwithout foundation. Nevertheless, it appears that the real impetus for the rebellion, theoperative goal of the Magdalo group, was to seize power by force and implementHonasan’ s NRP.2. The goal and the plotting and the willingness to use armed violence tosecure political changes and thereby, hopefully, correct the grievances proclaimed appearto reflect a certain psychological basis which, in the Final Report (1990) of the DavideCommission, was described as a “ Messianic complex” . 82 There is the idealism taught atthe PMA which is later challenged by the realities of combat duty and life in the realworld. This creates a powerful emotive force that when combined with the issue of graftand corruption and the poor conditions in the field, could make soldiers vulnerable torecruitment by both military and civilian coup plotters.3. This, however, does not diminish the reality and legitimacy of theirgrievances, with respect to, for instance, the RSBS, the Modernization Fund, and a fewother cases discussed in detail in Part II of this report.4. Moreover, the military’ s rigid hierarchy, subordination to seniors, andstrict culture of obedience make the grievance mechanisms such as the Inspector GeneralArmed Forces of the Philippines (IG) and the Office of Ethical Standards and PublicAccountability (OESPA) ineffective. 8382 The Final Report of the Fact-Finding Commission (pursuant to R.A. No. 6832), Chapter III, Sections Aand B, and Chapter VII, Section A, October 1990.83See below, “ The AFP Grievance Mechanism: The Limitations of Internal Controls” , Part Two, II-D.

- 37 –D. The Negotiated Return to Barracks1. Many groups persuaded the rebels to return to barracks, including theirclassmates from the PMA and military officers the rebels trusted such as Lim, Oban,Domingo, and Danga. Two groups of negotiators were apparently cleared to negotiatewith the rebels by Secretary Romulo. The first consisted of Biazon, Honasan, Sotto,Defensor, and Velasco who apparently obtained authorization from the ExecutiveSecretary at various times and through various means. The second was led by Cimatuwho, after obtaining the acceptance by the rebels as the principal Government negotiatoreventually succeeded in concluding the return to barracks agreement.2. Varying accounts of the details of the discussions with the rebels could bedue to the large number of people present at different stages of the process, their locationrelative to the scene of the negotiations as well as to the participants, the variety ofpersonal and positional interests they represented, and the environment of tension andcrisis.3. Not having a more clearly defined mandate other than to end the incidentas soon as possible and without bloodshed and damage to property, a military frameworkdefined the terms of the agreement, i.e., that the core group would bear full responsibilityfor the incident under military law while the followers would be processed according tothe Articles of War. The discussions between the Government group led by Cimatu andthe Magdalo group is also a classic case of “ mutual ignorance” of the applicable laws,neither side being aware of Article 134 of the Revised Penal Code that penalizes coupd’ etat. This is a disturbing revelation. Neither, it also appears, was there anyone with aworking knowledge of what Article 105 of the Articles of War actually provides.4. Some have alleged that differences in the interpretation of the terms of thereturn to barracks agreement by the rebels, by the negotiators, and by the civilian

- 38 –prosecutorial agencies of the Government may have created a perception that the rebelofficers were “ betrayed” by the filing of charges in civilian courts. Assuming thissentiment exists and if it becomes widely shared by officers in the AFP, it could becomea tool of recruitment and tend to discourage future negotiations with the Government in asimilar situation.E. Other Findings(1) Search and Recovery of Materials Left by Rebels(a) Materials, including documents left by the rebels in Oakwood and in thevehicles recovered in Naval Base Cavite indicated some civilian support, in cash and inkind, had been extended to the rebels. Communications equipment left at Oakwood,vehicles, uniforms, flags, arm bands, backpacks, and other paraphernalia obviously cost asubstantial amount of money. The use as staging points of two houses owned by personsclose to former President Estrada described above tends to reinforce the belief that somesupport from certain civilian sectors had been provided.(b) There is reasonable basis to believe that the documents and diskettesrecovered by Government authorities were not merely fabricated and planted by militaryauthorities. Testimonies regarding the details of the process of recovery and the placeswhere they were recovered tended to be, in part, inconsistent with each other. This isdue perhaps to the haste with which the Oakwood management sought to clear thepremises, the different views held by the Oakwood management, and the ISAFPoperatives on what “ valuable” means, as well as the ISAFP officers’ desire immediatelyto recover whatever materials might have intelligence value.

- 39 –(c) Authorities that came to investigate and gather evidence regarding theincident appeared less than careful in the observance of standard evidence-collectionprocedures.(2) Root Causes(a) The politicization of the military amid the erosion of civilian politicalinstitutions that had oversight powers over the military, particularly during and since theimposition of martial law, is a cause of military adventurism. The AFP’ s role as apartner in national development efforts led them to assume roles that used to be played bycivilian authorities. This tended to increase their political leverage over other sectors ofsociety, and contributed to their politicization as they interfaced directly with the peopleand the problems of the country. During the martial law period, there were noinstitutional checks on the military’ s power and influence as well as on the uses to whichits power was used, other than the personal power of President Marcos.(b) Failure on the part of the Government to enforce the law deprives the lawof its power to deter, particularly among those who had engaged in previous coup plotsagainst the Government but who were granted unconditional amnesty in 1995 withoutprior punishment. A number of former coup plotters who had been punished for theirparticipation in the coup attempts of the 1980s and returned to the military after the 1995grant of unconditional amnesty, have turned their back on military adventurism.Members of their units did not join the Magdalo group in Oakwood. But some of thosewho received unconditional amnesty without prior punishment were in the list ofmembers of the NRP Council. This suggests that consistent enforcement of the law maybe a critical factor in neutralizing the coup virus.(c)The key role of the AFP in the campaigns against communist insurgencyand Moro secessionism creates civilian Government dependence upon the military. In

- 40 –addition to the clearing of areas of insurgents and defending such cleared areas, soldiersare required to discharge the tasks of consolidation and development that properly belongto civilian authorities. 84 Not only is the military’ s political power enhanced, but theirpoliticization is also thereby increased as they confront the problems of thesecommunities on a prolonged basis.(d) Enlistment by civilian persons, including politicians, of military supportfor their personal and political ambitions contributes to military politicization andadventurism. Former President Marcos (and not the AFP) initiated the enlargement ofthe role of the military during his incumbency, particularly during martial law. Civilianpersons, including politicians, also sought and encouraged the military breakaway ofFebruary 1986 and January 2001, giving thereby the AFP great political leverage over thecivilian leaders who appear to rely on the military for political survival. Whenadequately motivated, military adventurers could exploit this situation to destabilize andoverthrow the Government.(e) At the same time, officers and troops under diligent and respectedcommanding officers did not join in the 27 July mutiny, suggesting the critical roleplayed by this breed of military leaders in dealing with the coup virus.(3) Provocations(a) Grievances about graft and corruption in the military, such as the RSBS,the Modernization Fund, and the procurement system provide a fertile ground for therecruitment of officers and men for military intervention and even the overthrow ofGovernment. The expression of grievances resonates to the wider polity who share these84 Army Col. Noel Buan, at the Dialogue between the Commission and the First Scout Ranger Batallion,Isabela City, Basilan, 19 September 2003.

- 41 –sentiments, even as they do not approve of the means used and the solution proffered bythe Magdalo group.(b) The Commission believes that the discovery or disclosure of the plot ledthe rebels prematurely to launch “ Oplan Andres” , a plot larger than the Oakwoodincident. Failure to attain the force requirements of Plans Alpha and Bravo compelledthe rebels to launch Plan Charlie.(c) Moreover, members of PMA ’ 94 and ’ 95 were “ frustrated” when thedialogue about their concerns they expected would take place during the dinner hosted bythe President on 23 July, did not take place. PMA ’ 94 and ’ 95 had the opportunity to talkto Abaya at the “ White House” . 85 They talked about their class being unjustly linked toa plot against the Government as well as about their commitment to fight graft andcorruption ever since their graduation from the Academy. When the dinner with thePresident arranged for 23 July did not include a dialogue about their concerns, theinvitees went away “ frustrated.”(d) Finally, the order by the President aired on national television for thearrest of the coup leaders as “ rogue soldiers” was a precipitating factor behind theOakwood incident. At the time of the President’ s order, the leaders of the plot werealready missing from their respective units.F. Recommendations1. Due diligence by commanding officers - Commanding officers in the fieldneed constantly to warn their men against recruitment for destabilization plots against theGovernment by adventurers in the military. Former military rebels who have turnedtheir back on military adventurism could be used to conduct regular dialogues within the85 This is in reference to the residential quarters of the AFP chief of staff in Camp Aguinaldo

- 42 –AFP for this purpose. The adoption of a program of this nature should go a long waytowards neutralizing the coup virus.2. Effectively address legitimate grievances - The Government and the AFPneed to address the legitimate grievances of the military against corrupt officers, officials,bureaucrats, and practices. More specific recommendations on this matter are made inPart Two of this report.3. A civilian Secretary of National Defense – This Commission reiterates therecommendation of the Davide Commission to have a civilian appointed to the positionof Secretary of National Defense. 86 Beyond the need to institutionalize the supremacy ofcivilian authority over the military, the appointment of persons who have not had longand deep ties to the military, and who have not held positions in the militaryestablishment that itself needs to be reformed, is essential if a reform program is tosucceed. Although military officers acquire a civilian status upon retirement, they arelikely to bring the rigidity of hierarchy, seniority, camaraderie, and other aspects of themilitary culture into the office of the SND that would obstruct reform.4. Return NICA to its original mandate – Likewise, echoing the DavideCommission recommendation, this Commission recommends the appointment of acivilian head for the NICA. Moreover, NICA should be returned to its original mandate,that is, to coordinate all intelligence agencies, military and otherwise. The Presidentmust have a source of intelligence additional to the ISAFP. 87 This should provide theCommander-in-Chief (C-in-C) with a parallel intelligence source in the event that86 The Final Report of the Fact-Finding Commission (pursuant to R.A. No. 6832), recommendation C.2.f.,pp. 524-525.87The Report of the Fact-Finding Commission (pursuant to R.A. No. 6832), recommendation C.2.f., pp.524-525.

- 43 –information gathered by ISAFP is not made fully available to the C-in-C, for any reasonwhatsoever.5. Enforce the law against all violators - Erring officers, troops and civilianpartners in coup plots must be treated in accordance with law to control and reverse theculture of impunity. 88 As already noted, former rebel soldiers that were punished fortheir participation in the coups of the 1980s tended to have abandoned militaryadventurism. To remedy the recurrence of “ negotiation in mutual ignorance” ofapplicable laws, this gap must be addressed in officer education and training.6. Observe or respect the military’s political neutrality - Civilian politicalleaders must restrain themselves from enlisting military support for their personal andpolitical agenda as this can only further politicize the military and grievously endangerthe constitutional system. This is a theme that should constantly be recalled to politiciansand political parties.7. Provide “negotiators” with clear terms of reference - Government“ negotiators” in similar incidents should be given clear terms of reference by theauthorities to avoid misperceptions that could promote another coup plot in the future.In this regard, strict adherence to the law as recommended in number 5 above need notdeter rebel soldiers from “ negotiating” with government. In a “ negotiation” of a similarnature, it is incumbent on the Government “ negotiators” to demonstrate to and persuadethe other side that it is to their common interest to “ negotiate” . The law itself embodiesthe basic principle that punishment must be tailored to the degree of participation in theoffense to be penalized.88 Although Commissioner Narciso concurs with this recommendation, he stresses that the discussions atOakwood between Cimatu and the rebel soldiers should be taken into account by the Government in itstreatment of the latter.

- 44 -Part Two – The Grievances of the Officers and Enlisted MenExpressed at Oakwood: The Challenges of Corruption Control and ofthe Modernization of the AFP.I. IntroductionIn the Sections of the Report which follow, we examine the grievances expressedby the officers and men who went to Oakwood. In Part One, we stated our convictionthat those officers and enlisted men went to Oakwood fully armed not merely to manifest,in a particularly dramatic way, their protests and grievances but rather to seize power,expecting an upsurge of “people power” support and reinforcement from other units ofthe AFP, and thereby eventually to bring the Government down. It is important to makeclear too that we make no benign assumption that, had the Oakwood mutiny succeededand the Government actually brought down in the subsequent days or weeks, the newrebel military government would have promptly gone about the tasks of redressing thosegrievances. Such an assumption is quite speculative. That appears to be a lessonderivable from the current history of, e.g., Myanmar and, a few decades back, of othercountries in Latin America. That is also a lesson recently taught us in our own countryby the Martial Law Government of former President Marcos which had grandlyproclaimed the establishment of a “New Society”.We have inquired into those grievances because we believe firmly that thosekinds of grievances, if real, and if recklessly neglected and allowed to fester by the seniorechelons of the AFP and by Government itself, tend practically to ensure the replicationof the rebellion in the future. And that next rebellion might attract the overt support ofother units of the AFP and of great segments of civilian society. We have, accordingly,inquired into each of the grievances voiced by the officers and enlisted men at Oakwoodand sought to determine the extent to which those grievances are based on present dayrealities in the AFP and in our society generally.

- 45 –Our inquiries into the Oakwood grievances strongly suggest that two principalthemes run through all of those grievances: the first is the need for corruption control inthe AFP; the second is the need for modernization of the AFP. These two felt needs maybe seen to be inter-related; they tend to shape each other. Disregard of one tends toaggravate the effects of the other. Thus, in quick illustration, the ability effectively tomodernize the AFP is influenced by the degree of success, or failure, in securing controland reduction of the incidence of corruption. Again, the implementation and funding ofmodernization programs may provide new opportunities for corruption. Further, thedemand for corruption control has led to multiplication and layering of controls in, e.g.,AFP procurement procedures, which may, paradoxically, slow down modernizationinitiatives and increase dissatisfaction levels within the AFP. Conversely, where demandsfor modernization and for control of corruption are met with reasonable success, theesprit des corps of the AFP should rise and intensify, and that should reinforce the drivetowards modernization and corruption control. Finally, should corruption be leftuncontrolled and unheeded, the AFP itself could implode and collapse, withunpredictable consequences for the Republic. That would, of course, tend to render thedemand for AFP modernization somewhat academic.II.The RSBS ProblemA. IntroductionThe RSBS problem constitutes a major grievance of the young officers andenlisted men who went to Oakwood (the Oakwood officers and soldiers) on 27 July 2003.The RSBS problem is referred to as one of the “ issues/demands discussed during thenegotiations” in 27 July 2003 between the Oakwood officers and soldiers, on the onehand, and the Government’s negotiating team, led by Ambassador Roy A. Cimatu, on theother hand. The Report dated 28 July 2003, rendered by Cimatu to the President (the

- 46 –Cimatu Report) described the demands of the Oakwood officers and soldiers in respect ofthe RSBS problem in the following terms:“ Update and accelerate the audit and on-going investigation of the reportedanomalies in the AFP-RSBS system to include measures which have beenundertaken thus far to resolve immediate issues.”The RSBS problem has been around for a very substantial period of time. It isnot, therefore, a recent “ provocation” leading to the Oakwood events. Rather, the RSBSproblem is one of the very few specific examples cited by the Oakwood officers andsoldiers of corruption in the AFP and in Philippine society generally. The RSBS problemis also widely, if imperfectly, known by AFP military personnel. It was, for instance,brought up by the officers and soldiers the Commission listened to at the SouthernCommand, AFP, Zamboanga City, in September 2003.B. The Nature and Scope of the RSBS Problemperspective.The RSBS problem is a complex one and is best discussed from a chronological1. The establishment of the RSBSOn 30 December 1973, 15 months after the imposition of martial law, PresidentialDecree No. 361 established the “ Armed Forces Retirement and Separation BenefitsSystem” (RSBS or System) with the declared objective of “ payment of retirement andseparation benefits provided by existing laws to military members of the [AFP] and suchsimilar laws as may in the future be enacted applicable to commissioned officers andenlisted personnel of the AFP.” (Section 1, Presidential Decree No. 361) The purportedintent of the decree to establish a “ separate fund or scheme to ensure payment of[retirement and separation] (retirement) benefits for members of the AFP, [in lieu] of

- 47 –complete reliance upon the yearly [congressional] appropriations for the AFP,” isindicated in the Whereas Clauses of the decree.Under the decree, the RSBS was to be funded from three principal sources: (1)congressional appropriations; (2) compulsory contributions from members of the AFP;and (3) all earnings of the RSBS which were simultaneously decreed to be exempt from“ any tax whatsoever” . The decree appropriated the sum of two hundred million pesos(P200 Million) to be paid to the RSBS over four (4) years, the first remittance to be madein July 1974. At the same time, the officers and enlisted personnel in the active service ofthe AFP were required to contribute to the RSBS an amount equivalent to four percent(4%) of their monthly base and longevity pay (later modified to five percent [5%] ofmonthly base pay only, by Presidential Decree No. 1656 dated 21 December 1979),which contributions were automatically deducted from their pay from the AFP.The decree also provided that payment of retirement benefits to AFP personnelalready retired at the time of the creation of the RSBS, was to be borne not by the RSBSbut rather by the annual congressional appropriations for the AFP. A proviso, however,stated that where the total cash requirements for such retirees’ pension paymentsexceeded one hundred million pesos (P100 Million) in any year, the excess was to beborne “ out of the funds of the RSBS” . Nevertheless, this obligation on the part of theAFP-RSBS would start only four (4) years from approval of the decree, i.e., start onlyfrom 30 December 1977. It must be noted that the decree did not expressly and directlyrequire the RSBS to pay the pension benefits falling due each year as members of theAFP reached compulsory retirement age. Even so, the stated purpose of the decreeinevitably gave rise to the nation-wide expectation that the RSBS would, at some time inthe future, take over from the National Treasury all, or at least part of, the burden ofpaying retirement benefits to retiring AFP personnel.

- 48 –After the initial or seed money of two hundred million pesos (P200 Million) hadbeen paid into the RSBS, no further sums were appropriated by the Martial LawGovernment and paid into the RSBS. Neither did Congress, during the subsequentadministrations (of Presidents Corazon C. Aquino, Fidel V. Ramos, and Joseph Estrada)appropriate any further sum of money for the pension system supposedly constituted bythe RSBS. What did happen was that, every year since the establishment of the RSBS in1973 until today, the amounts necessary for paying retirement benefits to retiring AFPpersonnel were included in the regular annual appropriations for the AFP, in the GeneralAppropriations Act (GAA).2. Conversion of RSBS into an Investment CompanyBy 21 December 1979, the effective transformation of the RSBS from a pensionfund, ostensibly projected by the original decree of 30 December 1973, into aninvestment company was obvious. As such, RSBS engaged in two (2) major activities:firstly, receiving of contributions from AFP soldiers; and secondly, investing suchcontributions. Presidential Decree No. 1656, dated 21 December 1979, however,continued the pension-rhetoric of the original decree, and provided that the funds of theRSBS “ shall be allowed to grow to be able to provide perpetually the cash requirementcovering the retirement benefits payable to military members of the AFP on a selfsustainingbasis” . (Emphasis added.) The new decree did not identify the date when theRSBS would begin to be responsible for providing for the cash requirements of AFPpensions. To the contrary, the new decree made clear that prior to the time when“ perpetual self-sufficiency of the funds of the System is attained as determined byactuarial evaluation,” the yearly requirements for retirement benefits shall be included inand funded out of the annual appropriations for the AFP. The decree did not establishany standards for actuarial determination of when “ perpetual self-sufficiency” of RSBS isattained. The mirage-like quality of a “ perpetual self-sufficiency” status for RSBS as apension system is underscored by the fact that in the meantime, and in any case, the

- 49 –National Government would continue to fund the annual pension payments of retiringmembers, as well as of members already retired. This was a burden to which the RSBSwas not obligated under the decrees to contribute anything, and to which it did not in factcontribute anything.At the same time, the decrees made available to RSBS a guaranteed andexpanding pool of cheap funds for its investment operations. The only statutoryobligation of RSBS was to return the compulsory contributions of members of the AFPupon retirement. Effectively, RSBS was allowed to use the contributions of AFPpersonnel without paying compensation for such use, to generate investment revenueswhich, under the decrees, were tax-exempt. Possibly embarrassed by the exceptionallyprivileged situation of RSBS, the RSBS Board of Trustees (19 years after the creation ofRSBS) adopted on 25 February 1992 a Standard Operating Procedure (SOP) providingfor a “ grant” of four percent (4%) interest per annum on members’ contributionscompounded yearly, effective January 1992, and payable, on a tax-exempt basis, uponreturn of a member’s contributions upon retirement from the service. Effective January1996, the tax-exempt interest “ granted” on members’ contributions was increased to sixpercent (6%) 1 per annum compounded annually. Since this “ grant” of interest wasmandated not by statute or decree but by a “ policy” of the Board of Trustees, the “ grant”could at any time be modified and withdrawn by another “ policy” of the same Board.1Compare the average yield of risk-free Philippine Treasury Bills of 91-day tenor for the following years:1974 - 10.047% 1981 - 12.606% 1988 - 14.406% 1995 - 11.345%1975 - 10.342% 1982 - 13.811% 1989 - 19.333% 1996 - 12.393%1976 - 10.186% 1983 - 14.173% 1990 - 23.396% 1997 - 13.116%1977 - 10.501% 1984 - 14.916% 1991 - 21.351% 1998 - 15.266%1978 - 10.888% 1985 - 26.185% 1992 - 16.118% 1999 - 10.197%1979 - 12.254% 1986 - 16.274% 1993 - 12.251%1980 - 12.141% 1987 - 11.390% 1994 - 13.620%See Summary from the Central Bank Center for Statistical Information (CBCSI) Department of EconomicResearch-Domestic, Central Bank furnished by Deputy Governor Armando L. Suratos. The above yieldswould have been net of tax in the hands of RSBS, since it is not subject to the gross receipts tax (GRT).

- 50 –Thus, it is clear that the military personnel’ s compulsory contributions constituted acontinuing significant source of investible funds. 2Evaluating the investment operations of the RSBS, at least two (2) points need tobe stressed. The first is that the structure of RSBS set out in the decrees is noteworthy forbeing almost non-existent. Presidential Decree No. 361, as amended, merely stated that:“ The System shall be administered by the Chief of Staff of theArmed Forces of the Philippines through an agency, group, committee orboard, which may be created and organized by him and subject to suchrules and regulations governing the same as he may, subject to theapproval of the Secretary of National Defense, promulgate from time totime; …” . (Emphases added.)By administrative regulation, a nine-man Board of Trustees was set up for RSBS.Each member was an active or retired AFP officer. Each was appointed by the Chief ofStaff who also appointed the President of RSBS.Under R.A. No. 2629, investment companies in the Philippines are subject tocertain reporting requirements to the Bangko Sentral ng Pilipinas (BSP). The RSBS,however, did not bring itself under the jurisdiction of the BSP. Moreover, since theRSBS was not organized either as a regular corporation (whether stock or non-stock) oras an investment company, it also escaped the regulatory jurisdiction of the Securities andExchange Commission (SEC) both under R.A. No. 2629 and the Corporation Code.2Per the Audited Financial Statements of RSBS, the yearly inflow of members’ contributions in the lastfive years amounted to:(1) 1998 – P451,634,724.00(2) 1999 – P463,737,682.00(3) 2000 – P499,687,112.00(4) 2001 – P526,328,795.00(5) 2002 – P566,728,324.00On year-end 2002, the aggregate total of members’ contributions returnable upon members’ compulsoryretirement stood at P3.459 Billion.

- 51 –Thus, the investment activities of the RSBS were carried out without regard to theapplicability of the disciplines to which all other investment companies in the Philippineswere subject, and without regard to the public character of the funds compulsorilycollected from all AFP military personnel.The second point that must be noted is that under Presidential Decree No. 361, asamended, the investment of funds of the System had to be “ decided by the Chief of Staffof the [AFP] with the approval of the Secretary of National Defense” . (Emphasis added.)The burden of responsibility thus placed upon the shoulders of the AFP Chief of Staffand the Secretary of National Defense (SND) was inevitably magnified by the absence ofthe normal disciplines imposed upon investment companies by the SEC. The RSBS’ sfreedom from (or disregard of) the regulatory disciplines of the SEC and the reportingrequirements of the BSP, in the context of the military culture of obedience to the ordersor directions of a superior officer, in retrospect, made it particularly vulnerable to thedifficulties and temptations of “ behest” or DOSRI-type loans and investments that theregulatory institutions precisely seek to prevent and control.RSBS thereupon engaged in the aggressive pursuit of high yields, i.e., yieldshigher than those of risk-free Philippine Treasury bonds and bills. Two strategies wereadopted: first, investment in real estate which basically consisted of the purchase of largetracts of raw land in the purported hope of developing such land into, e.g., resorts, golfand country clubs, etc., and portfolio loans to new companies, none of which were listedin the Manila or Makati Stock Exchanges. Some of these loans were made to companiesthemselves engaged in real estate development activities, either as fully-ownedsubsidiaries of RSBS or as affiliated companies with RSBS owning from forty percent(40%) to fifty percent (50%) of the capital stock. Second, RSBS engaged in heavy shorttermborrowing for expanding still further its real estate and loan portfolios. Some

- 52 –indication of the aggressiveness with which RSBS resorted to short-term borrowing maybe had by noting the very substantial interest expense booked by RSBS. 33. The RSBS bubble bursts: the 1997 Asian Financial Crisisand the 1998 Senate Blue Ribbon Committee Investigation ofthe RSBSIn a robust and rising economy, the RSBS strategy might have been sustainablefor sometime. 4 In 1997, however, the Asian financial crisis broke out, first in Thailandand soon thereafter, reached the Philippines. This financial crisis resulted in a verysubstantial devaluation (40%-45%) of the Philippine Peso vis-à-vis, e.g., the U.S. Dollar;a general slow down in economic activities; and perhaps, most importantly, a precipitousdrop in real estate values in the country.The extent to which the financial crisis adversely impacted upon the financialcondition of RSBS is reflected in the massive losses that RSBS sustained almostimmediately. In 1998, RSBS reported a loss of seven hundred fifty-nine million pesos(P759 Million); in 1999, RSBS’ s losses escalated to nine hundred ninety-four millionpesos (P994 Million). In 2000, RSBS’ s losses decelerated to four hundred sixteen millionpesos (P416 Million) and in 2001, to thirty-eight million pesos (P38 Million).3In 1997, RSBS paid P457 Million as interest expense. In 1998, interest expense was P763 Million andin 1999, the figure was P584 Million. These figures are derived from the audited financial statements ofRSBS. These statements do not reveal who, and how many, the lenders to RSBS were.4In 1994, RSBS booked net income of P1.065 Billion and retained earnings of P5.629 Billion.In 1995, RSBS showed net income of P1.374 Billion and retained earnings of P6.937 Billion.In 1996, RSBS booked net income of P1.460 Billion and retained earnings of P8.093 Billion.In 1997, RSBS’ s net income dropped dramatically to P164 Million (later re-stated as P22 Million by itsnew external auditor) although its retained earnings increased marginally to P8.176 Billion (re-stated asP7.517 Billion).In 1998, RSBS booked a net loss of P759 Million while its retained earnings contracted to P6.622Billion. (All figures derived from RSBS audited financial statements.)

- 53 –In 1998, the Senate Committees on Accountability of Public Officers andInvestigation (Blue Ribbon) and on National Defense and Security (collectively, SenateBlue Ribbon Committee) carried out an extensive joint inquiry into the “ coup rumors andalleged anomalies in the AFP-RSBS” . The major finding of the Senate Blue RibbonCommittee was alarming: the very extensive real estate acquisitions made by RSBS hadbeen attended by massive overpricing of such acquisitions.Essentially, the Blue Ribbon Committee found that the real estate purchases byRSBS were uniformly documented by two (2) sets of instruments: firstly, a unilateraldeed of sale executed by the seller of the property only; secondly, a bilateral deed of sale,covering the same piece of land, executed both by the seller and by RSBS as buyer. Theprice stated in the second, bilateral, instrument was invariably much higher than the pricereflected in the unilateral deed of sale. The discrepancies between the purchase pricebooked by RSBS and the purchase price reflected in the unilateral deed of sale actuallyregistered in the relevant Registry of Deeds, totalled about seven hundred three millionpesos (P703 Million). The two (2) sets of purchase price figures obviously could notboth be correct at the same time. Either the purchase price booked and paid out by RSBSwas the true purchase price of the land involved, in which case RSBS had obviouslyassisted or abetted the seller in grossly understating the capital gains realized by him andin defrauding the National Treasury; or the purchase price in the unilateral deed of salewas the consideration actually received by the seller from RSBS, in which case, the buyerRSBS had grossly overpaid, with the differential, in the belief of the Senate Blue RibbonCommittee, going into the pockets of RSBS officials. A third possibility was that thedifferential between the purchase price booked and paid by the buyer-RSBS and theselling price admitted by the seller of the land, had been shared by buyer and seller insome undisclosed ratio.

- 54 –After a prolonged investigation (20 hearing days), the Senate Blue RibbonCommittee rendered a set of detailed recommendations in its Committee Initial ReportNo. 16 dated 21 December 1998 and a second, additional, set of recommendations in itsCommittee Final Report No. 51 dated 20 May 1999.In its Initial Committee Report, the Blue Ribbon Committee made the followingrecommendations notable for their specificity:“ 1. For the Office of the Ombudsman, to prosecute and/or cause theprosecution of Gen. Jose Ramiscal, Jr. (Ret.), past RSBS president, whohad signed the unregistered deeds of sale covering the acquisition of thelands in General Santos, in the towns of Tanauan and Calamba and inIloilo City, hereinafter mentioned; Mr. Wilfredo Pabalan, RSBS projectmanager in General Santos City; the lawyers in the RSBS legal office,namely, Meinrado Enrique Bello and Manuel Satuito; and the lawyers whonotarized the deeds thereof, namely, Ernesto P. Layusa, Alfredo Nasserand Cecilio Casalla, for (1) falsification of public documents, or violationof Art. 172, par. 1, in relation to Art. 171, pars. 4 and/or 6, of the RevisedPenal Code, and (2) violation of R.A. 3019, or the anti-graft law,particularly Section 3 (e) and (g) thereof.2. For the Department of Justice, to prosecute and/or cause the prosecution ofAtty. Nilo Flaviano and his partner, Atty. Antonio Geoffrey Canja, forfalsification of public documents by submitting to and registering with theRegistry of Deeds in General Santos City deeds of sale of the landspurchased by RSBS from their principals not bearing the true considerationpaid for by RSBS.3. For the Department of Justice, to prosecute and/or to cause the prosecutionof Attys. Alfredo Nasser and Ernesto P. Layusa and Mr. Jesus Garcia andMrs. Elizabeth Liang, Concord Resources, Inc. treasurer and president, forfalsification of public documents by submitting to and registering with theRegistry of Deeds of Calamba the deed of sale with Concord Resources,Inc. not bearing the true consideration paid for by RSBS.4. For the Bureau of Internal Revenue, to collect the deficiency in thepayment of capital gains tax, documentary stamp tax and income tax fromthe vendors of the parcels of land in General Santos City, Iloilo city andthe Municipalities of Tanauan and Calamba sold to RSBS, and to cause

- 55 –their prosecution for tax evasion, or more specifically for violation ofSections 21, 24 and 173 of the National Internal Revenue Code.5. For the City Treasurers of General Santos City and Iloilo City and theProvincial Treasurers of Batangas and Laguna to collect the deficiencytransfer tax due on the lands sold by their owners to RSBS; and6. For the Integrated Bar of the Philippines, to investigate and recommend tothe Supreme Court the disbarment of, or imposition of appropriatedisciplinary sanctions on, lawyers Nilo J. Flaviano, Antonio Geoffrey H.Canja, Alfredo Nasser, Ernesto P. Layusa, Cecilio Casalla, MeinradoEnrique Bello, Manuel Satuito and other lawyers for their involvement aslawyers in the presentation to and registration with the Registry of Deedsof General Santos City, Iloilo City, Batangas and Laguna of falsifieddeeds of sale covering various real estate acquisitions by RSBS.”In its Final Report, the Blue Ribbon Committee made certain additional, equallydetailed, recommendations which are quoted or summed up below in the following terms:1. That a conservatorship committee, consisting of the Secretary of NationalDefense, the Chief Actuary of the GSIS or the Insurance Commission anda member-representative of the RSBS should be appointed by thePresident of the Philippines. This Committee should work with the RSBSBoard of Trustees to preserve the System’ s assets and no disposition offunds and other assets of RSBS should be allowed without approval of theConservatorship Committee.2. The enactment of a law revising or creating a new RSBS charter with itsorganization, powers and functions clearly defined and with “ theparameters of investment” carefully specified.3. The passage of a law prohibiting the use of unilateral deeds of sale as basisfor land transfer.4. “ The prosecution by the Ombudsman of Gen. Lisandro Abadia for (a) hissham divestment of shares of Antipolo Properties, Inc. while he wascommanding general of the Philippine Army in clear violation of Sec. 9 ofRA 6713, otherwise known as the Code of Conduct and Ethical Standardsfor Public Officials and Employees; (b) for committing corrupt practices ingranting and securing special favors to API and Marilaque stockholders,including himself, in violation of Secs. 3 (e), 3 (f) and 3 (h) of RA 3019,

- 56 –otherwise known as the Anti-Graft and Corrupt Practices Act; and (c) forgranting interest-free,” behest” loans to Chinatown Steel Towers, Inc.,totaling some P900 Million in violation of Sections 3 (e) and (g) of RA3019.”5. “ The prosecution by the Ombudsman of Gen. Jose Ramiscal, Jr., forhaving been a willing patsy (sic) of Abadia in the granting of specialfavors to API and Marilaque as discussed earlier in violation of Sec. 3(e), Republic Act No. 3019. Ramiscal’ s prosecution is likewiserecommended for violation of the same section of the same law in that hehad given undue advantage to a private party by signing a contract with aland coordinator of the Calamba/Tanauan property bought by RSBSwithout a proper bidding as discussed in your Committees’ initial report.”6. “ The prosecution by the Ombudsman of Gen. Jose Ramiscal, Jr. and Col.Oscar Martinez for granting interest-free, “ behest loans” to RSBS Land,Inc. and Riviera Golf Club, Inc. in the amounts of P200 million and P110million, respectively, to the detriment of the System in violation of Sec. 3(e) of the anti-graft law.”7. “ The prosecution by the Ombudsman of Gen. Jose Ramiscal, Jr., forgranting interest-free loans to BRADCO on various dates totaling P85million that caused injury to the System, thereby according undue benefitsto BRADCO to the prejudice of the soldier-members of RSBS in violationof the same section of the anti-graft law.”8. ” The censure by the Senate of Gen. Jose Ramiscal, Jr., Col. OscarMartinez, Meinrado Bello, Capt. Alfredo Abueg, Jr., Cesar Ibo, ManuelSatuito, Ruben Garcia and Ariel Palacios for holding multiple positions ingovernment and receiving double compensation in violation of theConstitution and the Administrative Code of 1987. The Office of theOmbudsman is requested to delve into the records of RSBS and itscorporate affiliates to determine who are the other RSBS officials andmilitary officers who may have committed similar offenses.”9. “ The prosecution by the Commission on Elections of Gen. LisandroAbadia, chair of Antipolo Properties, Inc., and Marilaque Land, Inc.; andAlexander Asuncion, president of API and of Marilaque for knowinglyallowing the use of the helicopters owned by Antipolo Properties,Inc./Marilaque Land, Inc., by Speaker Jose D. Venecia, then a candidatefor the presidency of Lakas, and other Lakas senatorial candidates forpartisan political activities in violation of the Election Code. - - - “

- 57 –10. The Ombudsman or the Department of Justice to dig further into therecords of previous presidents of the RSBS to determine if any of themhad incurred any liability in the course of their management of the System.4. The Extent of Implementation of the Senate Blue RibbonCommittee RecommendationsThe Commission has inquired into the level of implementation reached by eachagency to which the Senate Blue Ribbon Committee had addressed its recommendations.a. Office of the OmbudsmanThe Office of the Ombudsman has made a substantial beginning in implementingthe specific recommendations for criminal prosecution that the Blue Ribbon Committeeset out. The Office of the Ombudsman beginning in 1999, filed with the Sandiganbayana total of two hundred forty (240) complaints against officers and employees of the RSBSfor a variety of charges including:(a)(b)(c)malversation through falsification of public documents (Article 217 inrelation to Articles 171 and 172 of the Revised Penal Code).violation of Section (3) of R.A. No. 3019, the Anti-Graft and CorruptPractices Act.violation of Article 171 of the Revised Penal Code (Falsification of PublicDocuments).However, none of the two hundred forty (240) cases has, as of today, progressedto the trial stage. In the lead case charging Gen. Jose Ramiscal, Jr. (Ret.), former RSBSpresident and four others with misappropriating to their personal use two hundred fiftymillion pesos (P250 Million) of RSBS funds, a motion to dismiss upon the ground of lackof jurisdiction was filed before the Sandiganbayan upon the ground that RSBS was aprivate entity. The Sandiganbayan upheld this defense and dismissed the criminal

- 58 –charge. The Office of the Ombudsman went to the Supreme Court on Petition for Reviewby certiorari and very recently, on 12 August 2003, the Supreme Court reversed theSandiganbayan and held that the RSBS is a government entity and that its funds are in thenature of public funds. 5 The Supreme Court held that the Sandiganbayan has jurisdictionto try the criminal case against Ramiscal, et al. and ordered the reinstatement of that caseand directed the Sandiganbayan to resume proceedings thereon with dispatch.The recommended charges against Gen. Lisandro Abadia (Ret.) were reviewed bythe Deputy Ombudsman for the Military. In a Memorandum for the Ombudsman(Aniano Desierto] dated 31 January 2001, the OMB-Military stated that “ [t]here is nosufficient evidence to prove that there was sham divestment on the part of Gen. Abadia,”and that there is no law prohibiting Abadia from joining a private corporation likeAntipolo Properties, Inc. (API) after retirement from the service as CSAFP, adding,however, that “ this would appear as immoral considering API’ s involvement in RSBSduring the watch of Gen. Abadia” . The Memorandum also stated that the charge ofviolation of the Anti-Graft and Corruption Act “ has no leg to stand on” and referred tothe transactions between RSBS and API as “ purely business decisions,” covered bysufficient collateral and Board approval. At the same time, however, the Memorandumrecommended that the records of the cases against Abadia be re-evaluated by anothergroup “ to remove any cloud of bias/prejudice that the original panel may have [had] inthis case” . The Ombudsman then referred the Abadia case to the Fact-Finding andIntelligence Bureau (OMB-FFIB) “ for evaluation of the evidence and review of OMB-Military’ s action” .On 30 April 2001, the OMB-FFIB reported to the Ombudsman that the records ofthe case (including the records of the SEC) showed “ a dearth [of] divestment papers”5People of the Philippines v. Sandiganbayan et al, G.R. No. 145951. Motions for reconsideration havebeen filed with the Supreme Court by the respondents which Motions are presently pending resolution bythe Supreme Court.

- 59 –upon which to base “ a truly considered conclusion” . Moreover, the relevant loandocuments had not been examined so that “ reason and prudence therefore dictate a needto dig more beneath the surface of prior findings” . Accordingly, the FFIB referred thecase back to the OMB-Military “ for further appropriate action” . To date, however, thecase against Abadia, recommended in 1999 by the Blue Ribbon Final Report No. 51, isstill pending review in the Office of the Ombudsman and has not been filed with theSandiganbayan, nor definitively dismissed.b. Department of JusticeThe Commission has been advised by the Office of the Chief State Prosecutor,Department of Justice (DOJ), that the prosecution of the persons named in the BlueRibbon Committee recommendation addressed to the DOJ, has been assigned ordelegated to or undertaken by the Office of the Special Prosecutor, Office of theOmbudsman, apparently by agreement between the two (2) offices. Thus, all criminalprosecutions are now being handled by the Office of the Ombudsman.c. Bureau of Internal RevenueIt appears that the Bureau of Internal Revenue (BIR) did not previously receive acopy of the Senate Blue Ribbon Committee’ s Reports. However, on 3 September 2003,upon the request of the Commission, a copy of the Blue Ribbon Committee’ s Reports andworking papers were forwarded to the Office of Commissioner Guillermo L. Parayno, Jr.On 11 September 2003, Commissioner Parayno informed the Commission that a TaskForce has been created that would look into the tax liabilities of the sellers of the realestate purchased by the RSBS.

- 60 –d. The Department of Finance-Bureau of Local GovernmentFinanceThe Department of Finance (DoF) had, it also appears, similarly not received acopy of the Senate Blue Ribbon Committee Reports. Upon the request of theCommission, a copy of each of the Senate Blue Ribbon Committee Reports, and theworking papers of the Committee, have been forwarded to the Bureau of LocalGovernment Finance (BLGF) of the DoF. The BLGF has jurisdiction and supervisionover the City Treasurers and the Provincial Treasurers who were addressees of the BlueRibbon Committee’ s recommendation concerning collection of deficiency real estatetransfer taxes in respect of the real estate transactions of the RSBS. In a letter dated 30September 2003, the Executive Director, BLGF, advised the Commission that theDepartment of Finance was in the process of implementing the Blue Ribbon Committee’ srecommendation.On 19 September 2003, the Executive Director, BLGF, upon instruction ofUndersecretary of Finance Inocencio P. Ferrer, Jr. directed in writing the RegionalDirectors of Regions XI, VI, IV-A, and IV-B to submit a report on the real estatetransactions referred to in the Senate Blue Ribbon Committee Reports, particularly theamount of local transfer taxes, the amount of consideration on which the local transfertaxes were based and real property taxes paid on said properties, for the year 1997 andonwards. The Regional Directors were also required to provide the DoF with certifiedtrue copies of Tax Assessments, Tax Declarations, official receipts and other pertinentdocuments relative thereto and to instruct the City and the Provincial Treasurersconcerned to collect the deficiency transfer tax due on the lands sold by their owners toRSBS. The Regional Directors are to submit their reports to the Bureau within ten (10)days from receipt of the instruction.

- 61 –e. Integrated Bar of the PhilippinesIt appears, finally, that the Integrated Bar of the Philippines (IBP) too had notbeen previously furnished a copy of the Senate Blue Ribbon Committee’ s Reports. Oncemore, upon the request of the Commission, the Senate Blue Ribbon Secretariat furnishedMr. Jose Anselmo I. Cadiz, President, IBP, copies of the Blue Ribbon Committee Reportsand of its working papers. Mr. Cadiz soon thereafter informed this Commission that theIBP Commission on Bar Discipline has commenced its evaluation of the evidence againstthe lawyers identified in the Senate Blue Ribbon Committee Reports for possibledisbarment or other appropriate disciplinary measures. By a letter dated 29 September2003, Mr. Cadiz and Mr. Rogelio A. Vinluan, Director, Commission on Bar Discipline,advised that complaints have been prepared by the IBP against the lawyers concerned andwere about to be served.f. Current RSBS Senior ManagementThe Commission, in the interest of objective fact-finding, is bound to note that thecurrent senior management of RSBS succeeded in staunching the hemorrhaging of RSBSand decelerating the System’ s massive losses. In the year 2002, RSBS even booked asmall net income of one hundred seven million pesos (P107 Million). Currentmanagement is also working on a new design for RSBS that would hopefully become, atsometime in the future, upon injection of vast amounts of public funds, a funded andactuarially sound pension system. This design is, however, far from complete andfundamental problems of RSBS remain, e.g., the real estate acquisition costs booked byRSBS are, if the charges filed by the Ombudsman are correct, grossly overstated and themajor portion (up to 80%) of the total RSBS assets are in the form of illiquid and overvaluedreal estate investments. Moreover, it is open to substantial doubt whetherproposals for the structural reform of RSBS (in the form of a new legislative charter forRSBS) would actually reach Congress in the foreseeable future.

- 62 –C. Principal Findings of the Commission1. The RSBS never discharged the mandate originally set out in PresidentialDecree No. 361. The RSBS was never a true pension system and it has not to date paid asingle peso of retirement benefits to AFP personnel reaching compulsory retirement. Allpayments of retirement benefits to AFP military personnel, before and after promulgationof Presidential Decree No. 361, have been made from the regular annual appropriationsof the AFP set out in the GAA. Neither the Department of National Defense (DND) andthe AFP nor Congress, has seriously addressed the requirement of “ perpetual selfsufficiency”as a pension system, probably because they realized the massive amounts offunding that would be necessary.2. The funding requirements of a true pension system escalate as thecompensation of AFP military personnel is increased. The pension entitlement of AFPretirees, by law, increase automatically with every increase in the compensation of AFPpersonnel in the active service.3. The RSBS did not contribute anything at all towards reducing the burden onthe National Treasury of payment of AFP retirement benefits. There is no doubt in ourminds that the RSBS could have done so, in some substantial degree. The net effect ofthe failure of RSBS in this respect is that all retirement benefits paid to AFP retirees areand have been fully non-contributory on the part of the soldiers and officers. The annualappropriation for payment of retirement benefits to AFP retirees is fully drawn downfrom public tax revenues, to which the RSBS has never contributed and to which AFPpersonnel contribute to a limited extent (only the basic pay of AFP military personnel issubject to regular Philippine income tax).4. The RSBS, in its present conception and structure, is fundamentally flawed.Structurally, a fund where all investment decisions are made by the CSAFP and the SNDcannot be expected to be run like an independent private pension system administered by

- 63 –private professionals. The current structure creates powerful incentives for the grantingof “ behest” loans and investments and for the non-commercial pricing of real estate andother acquisitions by the System.D. Recommendations of the Commission in respect of the RSBS Problem1. Liquidate present RSBS in an orderly manner - The present RSBS shouldbe liquidated in an orderly and professional manner so as effectively to conserve whatevervalues in its asset portfolio remain.2. Return the soldiers’ RSBS contributions - The soldiers’ contributionstogether with accrued interest should be returned to them as promptly as feasible, in aphased and programmed basis as RSBS is liquidated. The soldiers can probably earnbetter yields than six percent (6%) per annum, compounded annually, at existinginstitutions like the AFP Savings and Loan Association (AFPSLAI).3. Initiate an AFP Service and Insurance System - A major initiative shouldbe undertaken immediately by the Government in respect of the design and developmentof an AFP Service and Insurance System (AFP-SIS), possibly as an analogue of theexisting Government Service and Insurance System (GSIS). The requirements of actuarialand financial viability of a separate AFP-SIS must be carefully studied. Some problemscan be anticipated by limiting compulsory membership in a separate AFP-SIS to militarypersonnel joining the AFP after establishment of a separate AFP-SIS. The new systemmust be completely independent from the SND and from the CSAFP. The new pensionplan should be contributory on the part of the soldiers, just as all GSIS benefits forcivilian government employees and all Social Security System (SSS) benefits for privatesector employees, are contributory. The new and independent system must be subject toall the financial and investment disciplines that private pension funds are subject to underapplicable BSP and SEC regulations.

- 64 –The financial requirements of a realistically sustainable level of retirementbenefits, given the current structure of compensation for AFP personnel, must becarefully studied.4. Implement fully the recommendations of the Senate Blue RibbonCommittee - All the specific recommendations made by the Senate Blue RibbonCommittee in its Reports must be vigorously, transparently and consistentlyimplemented, including the criminal prosecutions of, inter alia, Ramiscal and Abadia.Such implementation should be monitored and quarterly reports be provided to the Officeof the President, the DND and to the AFP-GHQ, and AFP personnel generally.III.The AFP Procurement System: Conversion and Other ProblemsA. IntroductionThe AFP procurement system is a favorite focus for complaints and protests byofficers and enlisted personnel of the AFP. The officers and men who went to Oakwoodseverely criticized the AFP procurement system. Indeed, the Cimatu Report stated thatthe officers and enlisted men in Oakwood demanded that appropriate reforms be put inplace with respect to:” a) The AFP Finance and Budget System, and Logistics and ProcurementSystem to include alleged institutionalized malpractice within the AFP;b) The pilferage, sale [of], trafficking [in] government manufactured andissued arms and ammunitions usually ending in enemy hands;”

- 65 –B. The AFP Procurement SystemThe AFP procurement system is governed by a whole set of regulations, policiesand practices. The applicable statute is Republic Act No. 9184, the “ GovernmentProcurement Reform Act” , which was approved on 10 January 2003. The statutedeclares its objective as “ providing for the modernization, standardization and regulationof the procurement activities of the government and for other purposes” . Theimplementing rules and regulations under this statute have been drafted but still awaitapproval. This statute is notable for a number of reasons: one of which is that it providesfor the procurement of common supplies through the medium of the GovernmentElectronic Procurement System where transactions are carried out through thegovernment’ s internet portal. Secondly, the statute establishes a mechanism forresolution of protests where decisions of bids and awards committees in all stages ofprocurement may be protested.Pending the effectivity of the implementing rules and regulations to bepromulgated under Republic Act No. 9184, the current procedures of procurement in theAFP remain lengthy, complex, and circuitous. The process begins with the issuance of aprocurement directive or a request for procurement. The mode of procurement mayeither be public or selective bidding, or open canvass or negotiated contracts. Theensuing contracts or purchase orders go through a long series of time-consuming controlchecks at various offices. Eventually, the manufacturer or supplier is informed of theapproval of the directive or requisition for procurement and is asked to deliver the itemsbeing purchased. After delivery, the items delivered are inspected and if accepted, thenecessary papers are processed for payment. The full process, consisting of twenty-three(23) discrete steps, is set out in Annex “ H” of the Commission’ s Report.The procurement of weaponry and other defense requirements under the AFPModernization Program involve three (3) distinct major phases, namely:

- 66 –(a)(b)(c)Formulation and issuance of the Circular of Requirements (COR) or BidEvaluation Plan (BEP);Bidding and award; andProject implementation.A substantial bottleneck exists at the initial stages of this procurement process since theCOR-BEP is formulated at the headquarters of a major service (e.g., PA, PN, PAF) of theAFP and then has to go to the AFP General Headquarters (GHQ) for another, thoroughbut effectively redundant, evaluation before approval can be obtained at the DND level.In certain cases, approval of the Office of the President must also be obtained. Theprocess of procurement under the AFP Modernization Program, a process involvingtwenty-nine (29) separate steps, is outlined in Annex “ I” of the Commission’ s Report.Thus, procurement under the AFP Modernization Program is even lengthier and morecomplex than the ordinary APF procurement process.C. Procurement and Delivery Temptations: The Incentives to andModalities of Corruption.1. ConversionBy “ conversion” , we mean the transforming of allocated funds into cash, mostcommonly in collusion with suppliers and some of the officers involved in theprocurement process in an AFP unit. 6 The process of conversion involves the disregardor short-circuiting of the procurement process (the ordinary procurement process or theAFP modernization procurement process). The short-circuiting, as it were, of theordinary complicated procurement process may also involve disregard of administrative6See, e.g., The Power of Reform in the AFP Logcom: A True Story; the Struggle Continues --- (1992), p.35 et seq. The authors of this study are not revealed; they acted through a representative who is named –Manuel B. Mariano. Mr. Mariano, a retired BGen., PA and Commander of the AFP Logistics Command,testified before the Commission on 1 September 2003.

- 67 –regulations, e.g., funds which are allocated for a particular use or acquisition of particularequipment or other articles, wind up being used either for other purposes – which maywell be programmed for other expenditures of the command unit involved – or wind upin the personal bank account of the commander of an AFP unit resorting to conversion.In other words, there may or may not be an actual delivery of supplies for use of an AFPservice unit. If supplies are actually delivered at the end of the process, a lesser quantitythan what was originally ordered is delivered. If no delivery of supplies is actuallyeffected, a cash payment is commonly the end result of the process.The cash generated by the conversion process may either be used by thecommander resorting to conversion to procure items needed by the service unit but whichwere not programmed; or the cash may wind up in the private bank account of the unitcommander involved. In either case, the resulting cash is about thirty percent (30%) lessthan the amount allocated in the budget of the service involved, and only seventy percent(70%) is delivered to the commander of the unit. The thirty percent (30%) represents the“ profit” or “ fee” of the suppliers who undertook to carry out the paperwork and physicallegwork involved in conversion less taxes and “ goodwill” to the various offices andpersonalities involved in the processing of the purchase documents. Frequently, thisthirty percent (30%) is described euphemistically as the “ cost of money” , that is to say,the “ cost” of generating a certain amount of cash (70% of the allocated item) from abudgetary allocation. If the cash, or the resulting supplies and material or the equipmentare re-sold to a third party and the proceeds thereof appropriated by the commander to hispersonal use, a second and more serious illegality is committed: the malversation ofpublic funds or the misappropriation of public property.Clearly, the length and the complexity of the procurement processes of the AFPcreate an incentive (and, in the minds of some, a justification) for recourse to conversionby the commander involved. The time and bother of undertaking every step of theprocurement process is avoided by in effect paying the supplier, who attends to the

- 68 –paperwork, the thirty percent (30%) “ cost of money” . Thus, the “ cost of money” aside, sofar as the “ converting” commander is concerned, recourse to conversion is a fast,convenient, and flexible course of action; delivery of goods may or may not actuallyresult, however; and the cash generated may or may not be used by the commander toservice the legitimate military requirements of his men.It may also be noted that the “ cost of money” is not always thirty percent (30%)of the allocated item; it may be greater. The greater the time pressure on the commanderof the unit involved to procure certain goods or services which may be needed by his unitor to satisfy his personal needs or desires, the higher will be the “ cost of money”collected or retained by the supplier.The fact that the cash generated as a result of the conversion process has been“ cleared” and all administrative requirements complied with on paper, facilitates themisappropriation of such cash by an unscrupulous military commander. The cashbecomes very difficult to trace. 7 So that he could increase the amount of cash he canpersonally appropriate, such a commander might try to skimp on support funds for hisunit and release just enough for it to operate at bare subsistence level. This wouldcertainly neglect basic upkeep resulting in the gradual deterioration of physical facilities7 It appears to the Commission that the practice of conversion is extensive and deep-seated in the AFP.The AFP Comptroller General, MGen. Carlos C. Garcia, J6, AFP, stated that he regards “ conversion” asproblematical only when the “ converted cash” [i.e., the cash generated by resort to conversion], is used forillegal or unauthorized purposes. The suggestion, apparently, is that the practice of conversion is notinherently objectionable and it is the use made of the cash generated that determines the legality oracceptability of “ conversion” . (Testimony of MGen. Carlos C. Garcia before the Commission, on 29August 2003.)Such a suggestion disregards the other illegalities entailed by conversion: e.g., disregard by AFPcommanders of the AFP’ s own regulations. Further, the Commission considers that the AFP shouldforestall its commanders placing themselves in situations of severe conflicts of interest, where the diversionof “ converted funds” to the satisfaction of personal desires of commanders may appear so attractive andeasy to get away with. No one has a right to be surprised when commanders succumb, with alarmingfrequency, to such attractions.

- 69 –and induce operational shortcomings or other weaknesses that would adversely affect itsperformance.When one visits an AFP Office or Field Unit, one may wonder to what extentconversion has played a part in the poverty or splendor of that Field Unit or Office. Andas the contagion of conversion is allowed to spread through failure of leadership,incompetence, or human greed, the danger of collapse of the AFP from within may beexpected to rise. The tragedy is that such failure of the military organization wouldalmost certainly push the Republic itself to the brink of disaster.Primarily, the Maintenance and Other Operating Expenses (MOOE) fund of anAFP major service unit is tapped for conversion. A specific conversion process beginswhen the unit comptroller receives the Sub-Allotment Advice (SAA) of the unit’ squarterly MOOE from the comptroller of the major service unit involved. The SAA isreferred by the comptroller to the unit’ s Operating Program Budget (OPB) to determinethe more specific category of expenditure which the SAA is supposed to fund. Thecomptroller then informs the commander of the unit involved that the SAA has beenreceived and advises his superior on the manner in which it may be utilized so far asconcerns, projects or activities specifically found in the OPB. Not surprisingly, a unitcommander tends to follow the comptroller’ s advice on how this SAA can be utilized togenerate either cash or particular equipment and supplies. But the decision to engage inconversion is the commander’ s.2. “ Centrally Managed Funds” and “ Contingency Funds”We have noted above that commanders resorting to conversion have commonlytapped Maintenance and Other Operation Expenses (MOOE). To understand why, it isuseful to note the budgetary process relating to the AFP.

- 70 –The budgetary process begins with the receipt of a “ Budget Call for Estimates” , adocument issued by the Department of Budget and Management (DBM) reminding theAFP to prepare budgetary estimates in accordance with approved overall budget ceilingsand parameters. A consolidated budgetary estimate from the AFP major components:GHQ, PA, PN, and PAF, is submitted to the CSAFP, for submission to the DND. DNDpresents the DND budget proposal to DBM for consolidation into the NationalGovernment’ s budget which is forwarded to both Houses of Congress.After approval of the GAA, the DBM releases portions of the budgetaryallocation for each AFP major component, on a quarterly basis, and additional releases asthe need arises. Each AFP component has its own programs and discretion to allocatefunds to subcomponents based on agreed priorities.The budgetary allocations of an AFP major service unit principally consist of (a)Personnel Expenses and (b) Maintenance and Other Operating Expenses (MOOE). GHQand the offices of the commanders of the respective major service units withhold thirtypercent (30%) or more from the total annual MOOE allocated to the AFP and to eachmajor service unit, respectively. The funds withheld are then referred to as “ CentrallyManaged Funds” (CMF):“ The Maintenance Operating Expense Budget of the AFP for CY2003 amounts to P9.1 Billion, and this is distributed as follows: We haveDirect Support Funds (DSF) P2.5 Billion; Centrally Managed Funds(CMF), which is what they call the retained fund or retentions in theamount of P4.4 Billion; Operational Enhancement Fund (OEF) P903Million; DBM Reserve P829 Million and the General Administrative andSupport Services or what we call the Command and Management Fund inthe amount of P531 Million. The next component of operational supportis the centrally managed funds or the retention.” 88Testimony of MGen. Carlos C. Garcia before the Commission, on 29 August 2003.

- 71 –The Centrally Managed Funds may partly or wholly be treated as “ ContingencyFunds” by the commander and disbursed at his discretion to support other requirementsnot foreseen or specifically included in the regular budget program (OPB) of the majorservice unit.In theory, there are certain advantages which the AFP can derive from theretention of “ Centrally Managed Funds” :“ economies of scale; commonality of requirements; insuredstandardization and uniformity of specifications of goods to be procured,non-availability of peculiar articles in the field; unburdened operatingunits of administrative and logistics concern; the flexibility of the Chief ofStaff AFP to channel resources to priority area.” 9These advantages, however, may remain merely theoretical. A very substantive problemis that of implementing the requirements of transparency and accountability in respect of“ Contingency Funds” . Not surprisingly, a significant portion of “ Contingency Funds”may wind up as personal assets (e.g., cars, house and lot, etc.), or in the personal bankaccount of a commander.3. “ Washing”“ Washing” is the term applied to “ laundering” of funds which result fromconverting the SAA allocated to a particular AFP service unit into cash. “ Washing”refers to conversion which is effected not by the AFP service unit to which the SAApertains, but rather by another AFP operating unit, the commander of which may beunusually accommodating and friendly to the commander of the first operating unit. The“ laundering” service rendered by the second AFP service unit attracts a certain “ cost” or“ fee” : ten to twenty percent (10% to 20%) of the amount covered by the SAA is left withthe service unit doing the “ washing” and this amount may, for instance be distributed9Ibid.

- 72 –among the various signatories of a purchase order involved in the conversion process.The “ laundering fee” is in addition to the “ cost of money” retained by the supplier doingthe paper work.It is, of course, not possible to determine with any specificity the extent to whichconversion and “ washing” are resorted to by commanders of AFP service units. Theinformation received by the Commission in the course of its fact-finding inquiriesprovides reasonable grounds to believe that conversion is a fairly widespread practice inAFP procurement. Not all of the cash or goods resulting from recourse to conversionmay be misappropriated by the commander of the unit involved and indeed, it may bevery difficult for an outside agency to determine whether or not such misappropriation infact occurred. It appears, however, to the Commission that a very substantial penalty isbeing paid by the AFP or the Government itself for permitting its procurementprocedures to remain in their present lengthy, complex, and multi-layered form.4. “ Rigged Bidding”Conversion is not the only form of irregularity that haunts the AFP procurementsystem. Collusion between officers involved in procurement and dealers may result in“ rigged bidding” where a favored supplier or contractor is identified before hand and“ allowed” to win the award. In some cases, multiple bidders may appear to preventdeclaration of the bidding as a failed bidding. The multiple bidders may, however, turnout to be companies owned by one and the same person or group. Consider the followingexample:” Sometime in 1995, … PhP 64,982,600.00 was particularlyallocated for the Philippine marines (PMAR) project at the MarineTraining Base, Ternate, Cavite broken down as follows:

- 73 –Date SAA No. Amount (PhP) Purpose07 September 95 3797C 12,000.000.00 Rehab of 6km MainAccess Road18 September 95 3960M 8,037,000.00 Construction ofOpen Canal/Drainage21 February 96 0492C 2,600,000.00 Construction ofMedical DentalBuilding08 March 96 0681C 25,400,000.00 Construction ofPMAR facilities01 July 96 2509C 2,374,000.00 Construction ofDeep/PumpHouse/ReservoirT O T A L ------------------------- 64,982,600.00The road was only partially completed; but the amount of PhP 65Mhad already been consumed. Philippine Marine Officials claimed that theamount was insufficient to complete the project. However, verificationwith the Naval Civil Engineer’ s Office showed that the suppliers, BerlynConstruction and NB Cast as well as the several cheque payments toCatzar Trading were encashed into one (1) FEBTC Account. BerlynConstruction and NB Cast were found out have the same building addresswith identical business telephone nos.” 105. Purchase Order (PO) SplittingThe splitting of purchase orders takes place where the quantity of goods orservices being procured is covered by several purchase orders, with each PO setting outonly a limited amount that falls within the signing authority of the commander of theservice unit doing the procurement. Sometimes the splitting of purchase orders isresorted to in order to speed up the procurement process, since then the papers do not10 Report submitted by the Office of the Deputy Ombudsman for the Military to the Commission dated 10September 2003.

- 74 –have to be elevated to higher headquarters. But this practice tends to be used as a screento avoid scrutiny of the transaction considered as a whole. To cite an example:“ In the procurement of 500 units of US Kevlar helmets involving atotal amount of P3,865,310.00 for use of the Philippine Marine Corps.The total amount was split into fourteen (14) purchase orders and seven(7) suppliers, each consisted an amount of P300,000.00. … The NavalInternal Auditors found that only two (2) of the seven (7) suppliers werelegitimate. … the full payment for the Kevlar helmets was made withoutdelivery…” Later, “ 299 units of Kevlar helmets (made in Taiwan, notUS) were delivered and to date the balance of 201 units remainundelivered.” 11 (Emphasis added.)Another case illustrates recourse to the splitting of POs combined with a “ riggedbidding” or no bidding at all, resulting in a ” ghost” delivery or under-delivery as thefollowing example shows:“ This pertains to an anonymous complaint relative to the allegedirregularities in the procurement of the Combat Clothing for candidatesoldiers by the Army Support Command, Phil. Army, Fort Bonifacio,Makati worth P37,214,580.00. The fund was released Under Advice ofAllotment No. 2003-01/100/2200-96 for the procurement of enlistmentclothing allowance of 2,500 candidate soldiers on March 4, 2003. Theanonymous complainant averred that no public bidding was conducted forthe procurement of the said CCIE. The quality of the delivered combatclothing were “ poor quality” …Initial findings revealed that there were nopublic bidding conducted by the said unit to procure ... Severalprocurement directives per Infantry Battalion were issued authorizing thepurchase of the said item, which involve an amount less than P 1 million,that it may not be subject to public bidding as provided for the ExecutiveOrder No. 40.” 12 (Emphasis added.)11 Ibid.12 Ibid.

- 75 –6. Other Problemsa. AmmunitionMuch like the AFP procurement system, the distribution system for AFP firearmsand ammunition is governed by administrative policies and regulations. 13 The complaintsraised at Oakwood about arms and ammunition allegedly sold to groups hostile to theRepublic will be examined in the light of these regulations and policies.The distribution system for arms and ammunition attempts to be responsive to theneeds of the tactical units who are the end-users. The system has to be sufficientlyflexible to adapt to the needs which may change suddenly because of the forces of natureor the incidence of hostile action. In the effort to provide flexibility, numerous ForwardService Support Unit (FSSU) and Military Supply Units (MSU) have been established inthe various regions of the archipelago. The replenishment of ammunition used by aservice unit is secured by a process which includes the following:(a)(b)(c)(d)(e)The concerned AFP unit submits an After Battle Report (ABR) to the areacommander to which the unit belongs.The area commander signs a request for the replenishment of ammunitionand forwards the same to the nearest FSSU or MSU.A Request and Issue Voucher (RIV) which details the quantity and type ofammunition is accomplished.Before transport of the ammunition requested to the requesting unit, aTally Out form is completed to check the quantity and type of ammunitionwithdrawn from the FSSU or MSU.The FSSU/MSU dispatches a radio message to the receiving or destinationunit that the cargo of ammunition has been claimed and is on its way.13These administrative policies and regulations include (a) AFPR G-400-031 dated April 21, 1992(Security, Maintenance and Surveillance of Ammunition in the AFP); (b) AFPPR G-141-021 dated March9, 1993 (Safeguarding and Storage of Small Arms Ammunition); (c). AFPR G-401-141 dated February22, 1994 (Accounting of Issuance of Firearms and Ammunition to AFP Personnel); (d) Circular Nr 1dated January 11, 1993 (Ammunition Basic Load and Issuances).

- 76 –Despite the numerous safeguards with respect to the proper storage, distribution,and disposal of firearms and ammunition, AFP firearms and ammunition do get lost orfall into the hands of criminal elements or groups that pose threats to the nationalsecurity. This may be due to one or more of the following factors:(a)(b)(c)(d)(e)(f)(g)(h)Individual sale by a soldier of ammunition issued to him.Pilferage from the stock of ammunition maintained by a serviceunit and subsequent sale of such ammunition.Illegal issuances or transfers of ammunitionA military camp where the ammunition is stocked and stored maybe overrun by hostile forces.As a result of encounters and ambuscades by hostile forces,soldiers may lose ammunition assigned and distributed to them.During a mutiny or attempted coup d’etat, firearms andammunition may be stolen from the arsenal, armory or other placeof storage of a service unit.Firearms and ammunition are sometimes issued (knowingly orinadvertently) to defunct military unitsSoldiers who go on Absence Without Official Leave (AWOL)might take along the weapons and ammunition assigned to them.The following case exemplifies a transfer or issuance of ammunition attended byfailure of documentation but eventually held excusable:While the Office of the Chief of the Chemical and OrdnanceService (OTCOCS) of the AFP was monitoring the status of stock transferlast September 2002, personnel of its Ammo Branch discovered that the6 th FSSU received six-hundred twenty-one thousand six hundred(621,600) cartridges of 5.56 mm ammunition but was never reflected in itsreports. Records showed that the shipment arrived at the Iloilo City piersometime in March 2002. In a bid to avoid ‘double handling’ , the SupplyOfficer (G4) of 3 rd Infantry Division (3ID) based in Jamindan, Capiz hadthe supplies unloaded and transported directly to 3ID Headquarterswithout proper documentation but with the approval of the Commander ofthe 6 th FSSU. Ideally, the said ammunition was to be transported first to

- 77 –the 6 th FSSU facility in Camp Delgado, Iloilo City for proper storage andaccounting before it could be issued to end-users. Findings revealed thatthe 621,600 rounds of ammunition were still intact and in the possessionof the 3ID. The Investigation Report also stated that “ the allegeddiversion … of ammunition was acted in good faith in facilitating thetransport of said cargo and no other malicious intent, much less criminalliability except failure to coordinate/secure clearance from higherHeadquarters… ” 14 The officers involved were admonished for theiractions and the case was subsequently dropped and closed.Another case of the diversion of ammunition occurred sometime in December1997 but this time the cargo ended up in civilian hands:Records show that sometime on December 28, 1997, ammunitionreplenishments officially intended for the 103 rd Brigade, 1 st InfantryDivision, PA and the 3 rd Marine Brigade of the Philippine Marines never gotto them but were apparently diverted to the Special Para-Military Force(SPMF) or ‘Magic 8’ in Jolo. 15 The then SOUTHCOM Commander, Lt.Gen.Romeo Padiernos (Ret), admitted that he authorized the transfer ofammunition to the men of Mayor Bagis (one of the ‘Magic 8’ ) but only forGarand ammunition 16 . However, Captain Luna’ s testimony on thecomposition of the transferred ammunition coincided with the documentsretrieved from the 9 th FSSU in Zamboanga City. In addition, Gen. NarcisoAbaya stated that “ we have not come across any written directive or AFPpolicy that authorizes the transfer of firearms and/or ammunition toparamilitary forces … This is a continuing concern in our Internal SecurityCampaign as there continues to be non-AFP, but government-recognizedgroups in Mindanao, a situation that resembles the status of the ‘Magic 8’ ” . 17The AFP has acknowledged limitations on its ability to counter-check theaccuracy of field reports on the status of firearms and ammunition. It has also stressedthe need to be electronically connected to various AFP depots nationwide so as to achieve1415Investigation Report submitted by 3ID to the CS,AFP dated 23 September 2003Exhibit ‘W” (Affidavit of Capt Danilo F. Luna dated August 5, 2003.)16 Testimony of Lt. Gen. Romeo B. Padiernos (Ret) before the Commission dated 29 August 2003.17Letter to the Fact Finding Commission by the CS, AFP dated 29 September 2003.

- 78 –immediate verification of the accuracy of the inventories reportedly maintained in suchdepots. Despite limitations on its ability to counter-check field reports, the AFP hasinvestigated and brought to court a number of erring AFP personnel. Thus, there are six(6) Dropped and Closed cases, one (1) Discharged, nine (9) under military courtinvestigation, and six (6) pending before regular courts of justice. 18b. Petroleum, Oil and Lubricants (collectively “ POL” )POL products are obviously important for military operations. PetronCorporation is presently the sole supplier to the AFP of POL products. For calendar year2003, the POL allocation of the AFP is one thousand seven hundred twenty-one millionpesos (P1,721 Million), representing nineteen percent (19%) of the MOOE for this year. 19The AFP Quarter Master General (Quarter Master) has charge of distributing POLproducts to AFP units. The Quarter Master initiates the distribution of fuel allocation tooperating units of the AFP by issuing a delivery advice to such units. Upon receipt ofthis advice from the Quarter Master, the AFP unit contacts the nearest Petron Bulk Plantand arranges for the delivery of fuel to the AFP base fuel dump by means of tank trucksor lorry trucks. That fuel is stored in the base fuel dump and from there distributed toAFP operating units.The conversion of fuel into cash has at times been practiced in the AFP. TheCommission has no way of determining with any precision the extent of this particularconversion practice but believes such practice is not insubstantial. Cash is generatedthrough the unauthorized sale of fuel by an AFP base fuel dump to private sector gasstations or end users at a lower price. The cash resulting from this conversion may beused either for requirements of the AFP unit or end up in a commander’ s private pocket.The fuel directed to be delivered to an AFP unit’ s fuel dump might be less than the1819Testimony of MGen. Cicero Castellano before the Commission dated 29 August 2003.“ FY 2003 AFP POL Allocation,” submitted to the Commission by J6, AFP, dated 6 October 2003.

- 79 –amount stated in the delivery advice from the Quarter Master. The difference could beconverted into cash by pre-arranged sale to a commercial gas station. More simply,notwithstanding the delivery advice, no fuel at all might be hauled to an AFP base fueldump and instead delivered to a commercial gas station. The documentation of thetransaction will show proof of delivery to the AFP unit and would otherwise be generallyin order. But the diverted delivery or “ ghost” delivery is in effect transformed into cash.D. The AFP Grievance Mechanism: The Limitations of Internal ControlsThe AFP grievance apparatus is part of an AFP internal process designed toaddress problems, gripes, or complaints and to find solutions to various issuesconfronting the AFP and its personnel. The system is intended to help commanders, staffofficers, and the AFP policy and decision makers to resolve conflicts within the militaryorganization and to institute internal reforms.There are many types of grievances that may be brought up to the AFP grievanceapparatus. For present purposes, however, we will focus on the machinery only to theextent that it deals with problems or conflicts integral with the problems of graft andcorruption, favoritism, and other grievances like those given expression by the officersand enlisted personnel who went to Oakwood. The grievance machinery was establishedto provide organizational due process consisting of established procedures for handlingcomplaints and grievances, provide protection and unity of action for resorting to suchprocedures, and systematic and thorough review of the substance of the complaints andgrievances. There are at least two (2) aspects of this machinery that need to be noted.First, there is the Chain of Command which is a continuous line of authority thatlinks all individuals in the AFP and specifies who reports to whom. An issue is raised bya soldier. The soldier asks his supervisor to discuss the problem and examine its variousaspects. On the supervisor’ s level, he will normally seek to find ways and means toresolve the problem. If he is unable to do so to his satisfaction, he may elevate the issue

- 80 –to the next level in the Chain of Command. If on the latter level, the grievance is stillunsettled, the grievance can be elevated still further to the next level. In other words, theissue may continue to climb up the Chain of Command passing through each link or levelin the effort to find a solution.The second aspect to be noted relates to certain staff officers or entities that mayenter the picture to resolve particular protests or grievances. These are: the Office of theInspector General (IG); the Office of Ethical Standards and Public Accountability(OESPA); and the Office of the Provost Martial (PM). The IG looks into theeffectiveness of the utilization of resources, the state of morale and welfare of personnel,and the operational readiness of service units. OESPA conducts investigations of chargesof graft and corruption and related cases. The PM focuses upon violations of militaryregulations by military personnel. Grievances or disputes that can be resolved at a lowerlevel of the Chain of Command may be brought before these offices for possibledisposition.The AFP grievance apparatus, however, has certain structural limitations whichessentially arise from the nature of the military institution in which it must function. Themilitary has strong traditions that follow certain norms peculiar to a military organization.The basic indoctrination of a soldier is to follow orders given by a superior and not to askwhy. Thus, the military is different from the private sector of the community in thatamong the military gripes are accepted, but can be resolved only up to certain levels ofthe hierarchy. Decisions of senior officers can not be countermanded by officers orpersonnel subordinate in rank. The discretionary power of the commander of a majorservice unit in making decisions is, as a practical matter, absolute. Commanderscustomarily invoke the notion of “ command responsibility” as justification for theirbeing vested with the power to make the final choice.In truth, of course, very few officers and soldiers have the courage to present acomplaint directly to the commanding officer.It is simply unreal to expect an officer or

- 81 –soldier to bring to his immediate superior, and much less to the commanding officerdirectly, a complaint to the effect that the commanding officer is probably guilty of acorrupt and illegal act, such as pocketing the cash realized through a resort to conversion.Most military personnel are apprehensive that, if they criticize a senior officer, they couldbecome “ marked men” who could subsequently be given a “ hard time” , e.g., assignmentto a non-performing department, curtailing of privileges, delay in consideration forpromotion, and so forth.In short, military culture is an authoritarian culture and natural status barriersexist between enlisted men and officers and between junior officers and senior officers.In a context which includes such culture and barriers, internal mechanisms alone cannotrealistically be expected to do away with the problems of corruption control.E. Recommendations of the CommissionIn respect of the procurement system of the AFP and the very substantialproblems relating thereto, the Commission puts forward the following recommendations:1. Simplify AFP procurement procedures - The procurement procedures ofthe AFP should be drastically simplified to reduce the incentives for conversion and otherforms of misappropriation of public funds. The “ cost of money” is in effect a heavypenalty paid by AFP service units for complying with the complex requirements of theAFP’ s own procurement procedures.2. Control commanders’ discretionary powers over the CMF - Therequirements of transparency should be made more stringent to control the discretionarypowers of commanders in the disbursement or retention of “ Centrally Managed Funds,”and correspondingly increasing the accountability of such commanders in respect of suchdisbursements.

- 82 –3. Reduce the amount of CMF in GHQ/service HQ hands - The ability of theGHQ AFP to retain “ Centrally Managed Funds” (CFM) should be reduced by distributingmore of such funds to the HQ of each of the major services of the AFP, after carefulreview. Similarly, the ability of the HQ of each of the major service units to retain“ Centrally Managed Funds of, e.g., the PA, should be reduced by distributing more ofsuch funds to, e.g., the Division Commanders.4. Strictly implement control measures over supplies - Existing controlmeasures in respect of the management of issued or acquired supplies should be strictlyimplemented and substantive penalties imposed for failure of supervision by commandersof service units, including relief from command.5. Set tenure limits for AFP finance and procurement officers - Tenure limitsshould be set for comptrollers, logistics officers, procurement, and special disbursingofficers to a maximum of, e.g., four (4) years. Two (2) years each for junior and seniorpositions, respectively would appear reasonable. The ability of AFP operating units toreceive cash advances should be increased (presently limited to 10%) of total annualMOOE Funds.6. Establish an autonomous Internal Affairs office (IAO) - Apropos, thefundamental limitations of the existing AFP grievance mechanism to deal with theproblems of corruption control in the AFP, one recommendation that may be made is thatan Internal Affairs Office (IAO) that can handle grievances of AFP personnel, outside ofthe Chain of Command, should be organized as an entity separate from the AFP andreporting directly to the Commander-in-Chief, that is, the President. Possibly, the Officeof the Inspector General (IG) and the Office of Ethical Standards and PublicAccountability (OESPA) could be merged into such an IAO. If and when established, theexistence of such IAO should be brought home to AFP personnel by a countrywideinformation drive.

- 83 –IV.Modernizing the AFP: Funding and Consequential ProblemsA. IntroductionSome of the issues raised by the Oakwood officers and soldiers relate to themorale and welfare of AFP personnel. Two (2) of these issues are summed up in theCimatu Report on the discussions at Oakwood on 27 July 2003, in the following terms:“ Personnel Morale and Welfarea. The AFP has a very strained and low standard medical and healthservice delivery system. The services provided by the AFPhospitals have long been below standard and inadequate for theneeds of the soldiers and their families;b. The AFP housing program is way behind its target goal ofproviding quarters to its personnel. In the Bonifacio Naval Stationalone, 70% of the occupants are retired and refuse to vacate theresidences that are supposed to be awarded to officers in the activeservice. Three Military Commandants have failed to evict theretired officers who have successfully sought legal protection. … ”The specific problems relating to the medical and health service delivery system of the AFPare dealt with in another portion of the Report of the Commission. In this section of theCommission’ s Report, we propose to deal with certain aspects that we have found to becommon with respect to the medical and health service delivery system of the AFP, thehousing program of the AFP, and the poor and semi-obsolete character of much of theequipment and weaponry of the AFP. We deal principally with these common aspects underthe rubric of the “ AFP Modernization Program” , since such program was designed to address,among other things, the medical and health service problems, the housing problems of theAFP, and the acquisition of new equipment and weapon systems for the AFP.B. The Sad and Obsolete State of AFP EquipageThe so-called AFP Modernization effort is really just an upgrade programdesigned to bring the combat-ready status of the AFP to a minimum acceptable level

- 84 –since, at present, it is way below even that modest benchmark. It has been that way sincethe ‘70s with the state of AFP equipage having inexorably deteriorated over the years.Severe limitations in funding support, a succession of world-wide economiccrises, poor planning, indifferent decision making, and seeming irrationality in thedisposition of modernization funds (as detailed in this report) have effectively combinedto stunt the growth of the Armed Forces. Looking at the AFP budget from various angles- in terms of per capita, percent of GNP or percent of national budget, and other suchstandards - the AFP can easily qualify as one of the cheapest armies in the world.Among of the most telling weaknesses of the AFP is its equipage. Based oncomplaints aired by soldiers in the field as well as assessments of those at Headquarters,the most obvious problems are briefly discussed below, by branch of service:Army – Crying out for immediate attention is the plight of wounded soldiers whocannot be airlifted immediately to the nearest medical facility. The macabre but true storyof a dead soldier being carried around for three (3) days by a combat patrol for lack of ahelicopter to pick up the body, was recounted to the Commission during its visit to thefront lines in the South.Army units still use old model radios which require dozens of D-sized batteriesthat are quickly drained of power. Even a two or three (2 or 3 day) patrol would entaillugging around heavy bags full of replacement batteries – an anachronism in these digitaltimes when some reasonably-priced commercial models with wafer-thin but long-lastinglithium batteries can easily fit into one’ s pocket.The condition of basic weapons arouses concern. Most of the M-16s have to bereplaced by new ones. Some of these rifles are so ancient that they literally look likerelics, and they easily malfunction. No new pistols have been issued since the ‘60s.

- 85 –Transport and combat vehicles are comparatively small in number. A visit to aMilitary Supply Unit (MSU) in Zamboanga City revealed many carcasses of old vehicleslying around in depots, cannibalized and eviscerated.Navy - The capability of the Navy for mine warfare, anti-submarine operations,and airborne maritime patrol have been allowed to atrophy. The elemental need for patroland service ships remain and has become more urgent over time. Professional progress byofficers through the established billets aboardship is seriously curtailed. Many officersreach the rank of Navy Captain (Colonel in the Army) without completing their billetassignments, while others may not even have gone aboardship at all. Only few can earnthe prestigious and professionally all-important Command Badge.The Navy has vast sea areas to protect that cannot be adequately covered byseaborne patrol alone. Even if we double or triple the number of patrol vessels,smuggling goes unabated and poaching and destruction of fish, coral, and other marinelife are rampant. The Kalayaan Group of Islands (KIG) in the Western Frontier can onlybe adequately covered by long-range maritime patrol aircraft.Air Force – The PAF should have capability both for external defense and foroperations against internal threats. With its transport aircraft inventory severely depleted,and the number of its combat jets down to virtually nil, the PAF has been limited to itscurrent role of close air support for ground forces.Even in that regard, however, it is hampered by, among other problems, poor pilotto aircraft ratio. 20 Some two hundred forty (240) combat pilots compete for around sixty(60) operational aircraft. Moreover, at any given time, there are forty to fifty (40-50)trainee pilots forced to queue for the use of three (3) trainer planes. With many cadetsrecruited among civilians, PMA graduates must wait in line although in their caseGovernment has already spent much money to put them through cadet training.20See Section VII below entitled “ The Problem of Pilot to Aircraft Ratio.”

- 86 –C. The AFP Modernization Act and the AFP Modernization Trust FundOn 23 February 1995, Republic Act No. 7898, known as the “ AFP ModernizationAct” , was signed by the President. In this Act, the principal components of the AFPModernization Program were set out in the following terms:(a)(b)(c)force restructuring and organizational development;capability, material, and technology development including theacquisition of new equipment and weapon systems and the phase outof uneconomical and obsolete major equipment and weapon systemsin the AFP inventory; andbases and support system development, which includes the provisionof “ adequate support systems and housing facilities to AFP units andpersonnel” , human resource development, including the improvementof “ the quality of life of soldiers and their families” , and the reorientationof “ values of all personnel in the AFP” . (Section 4,Republic Act No. 7898.)The problem that runs through the particular complaints raised by the Oakwood officersand soldiers, and as well by AFP personnel and soldiers in other parts of the country(Zamboanga City and Basilan), relates to the very limited funding made available for thecarrying out of the various principal components of the AFP Modernization Program. TheCommission’ s inquiry into the matter of funding in turn made us acutely aware of certainproblems which severely affect the ability of the AFP to, for instance, provide improvedhousing and adequate medical and dental services for AFP personnel, as well as toimplement the other components of its modernization program.On 30 March 1992, Republic Act No. 7227, known as the “ Bases Conversion andDevelopment Act of 1992” , was promulgated. This Act empowered the President toauthorize the Bases Conversion Development Authority (BCDA) to sell or otherwisedispose of Metropolitan Manila military camps including Fort Bonifacio. 21 The proceeds21Section 8, Republic Act No. 7227.

- 87 –of such sale or transfer – thirty-two and a half percent (32.5%) of which was allocated tothe AFP – net of all expenses related to the sale, were authorized to be used for“ the transfer of the AFP military camps and the construction of new camps, theself-reliance and modernization program of the AFP, the concessional and longtermhousing loan assistance and livelihood assistance to AFP officers andenlisted men and their families, and the rehabilitation and expansion of the AFPmedical facilities.” (Emphases added.)The statute envisaged a two (2) phase sales program in respect of Fort Bonifacio:(1) Phase I- for immediate disposal --- 498.40 hectares; and (2) Phase II --- 224.90hectares, or a grand total of 723.30 hectares of Fort Bonifacio lands.Strangely enough, the source of funding for the AFP Modernization Program wasapproved by Congress even before approval of the AFP Modernization Act itself. On 23February 1995 (three years after the Bases Conversion and Development Act of 1992 wasenacted) the AFP Modernization Act (Republic Act No. 7898) was promulgated. Section11 of this statute established an “ AFP Modernization Act Trust Fund” (AFP-MATF) tobe used exclusively for the lodging of funds to be devoted to implementation of the AFPModernization Program. The AFP-MATF was to be funded from the followingidentified sources:“ a. Appropriations for the AFP Modernization Program;b. The proceeds from the sale, lease or joint development of militaryreservations, as may be authorized by Congress, include suchimmovable and other facilities as may be found therein, not covered bythe Bases Conversion Development Act, as provided for in R.A. No.7227;c. Shares of the AFP from the proceeds of the sale of military campprovided for under R.A. No. 7227;d. Proceeds from the sale of the products of the government arsenal;e. The proceeds from the disposal of excess and/or uneconomicallyrepairable equipment and other movable assets of the AFP and thegovernment arsenal;

- 88 –f. Funds from the budgetary surplus, if any, as may be authorized byCongress subject to the provisions of Section 8 of this Act;g. All interest income of the Trust Fund.” (Section 11, R.A. No. 7898;underscoring added)The next day, i.e., 24 February 1995, Republic Act No. 7917, amending Section 8(d) of Republic Act No. 7227 by increasing the allocated share of the AFP in theproceeds of sales or transfers of military camps from thirty-two and a half to thirty-fivepercent (32.5% to 35%), was approved. At the same time, this amendatory statute addeda list of fifteen (15) government agencies that would share, in specified percentages, inthe proceeds generated by the sale of the AFP military camps. 2222Beneficiary-AgenciesSharea. For the account of the Bases Conversion Development Authority 27.5%b. For the account of the National Housing Authority, National12%Home Mortgage Finance Corporation and Home Insurance andGuaranty Corporationc. For the account of the Philippine Health Insurance Corporation 3%d. For the account of the Department of Public Works and5%Highways and Department of Transportation andCommunicationse. For the account of the Philippine Veterans Affairs Office 2%f. For the account of the Commission on Higher Education 1%g. For the account of the Department of Science and Technology 2%h. For the account of the Office of the Secretary, Department of1%Justice and the Ombudsmani. For the account of the National Bureau of Investigation, Bureauof Corrections, Philippine National Police and the Bureau of JailManagement and Penologyj. For the account of the Supreme Court of the Philippines and theLower Courts, Sandiganbayan, Court of Appeals and Court ofTax Appeals2% but not toexceed P2 Billion1% but not toexceed P1 Billionk. For the account of the Department of Education, Culture and2%Sports and Department of Social Welfare and Developmentl. For the account of the Department of Labor and Employment ½% but not toexceed P5 Millionm. For the Department of Social Welfare and Development 1%n. For the account of the Mount Pinatubo Assistance, Rehabilitation 3%and Development Fundo. For the account of the Philippine Economic Zone Authority 2%

- 89 –Republic Act No. 7917 also set out a provision stating that the proceeds of salesof the military camps were “ deemed appropriated” for the purposes specified in RepublicAct No.7227, the Bases Conversion and Development Act, as amended.D. Sale of Fort Bonifacio Properties by the BCDAThe major injection of funds into the AFP-MATF was to come from the BCDA.By 19 March 1995, the BCDA had sold two hundred fourteen (214) hectares of FortBonifacio land to the Bonifacio Land Corporation (BLC) and promptly started remittingthe proceeds to, inter alia, the AFP-MATF. By 9 December 1997, the BCDA hadremitted the total net proceeds of the sale of two hundred fourteen (214) hectares of FortBonifacio land, amounting to twenty two billion pesos (P22 Billion). The thirty-fivepercent (35%) share of the AFP amounted to seven billion eight hundred seventeenmillion pesos (P7.817 Billion).On 17 September 1999, however, the sale of land to the BLC was partiallyrescinded. BLC returned to the BCDA sixty-four (64) hectares of land for failure of theBCDA to transfer peaceful possession of such land to the buyer BLC. This sixty-four(64) hectare-piece of land had been physically taken over by numerous civilian andretired AFP squatters. The BCDA had tried to eject the squatters but failed. A fire-fightensued between the squatters (some of whom had firearms) and the police and securitypersonnel of the BCDA, and a number of deaths ensued. The BCDA gave up its effortsto recover physical possession of the area held by the squatters. 23 Accordingly, only onehundred fifty (150) hectares were effectively sold by the BCDA to the BLC, whichgenerated total net proceeds of fifteen billion six hundred seventy million pesos (P15.67022(Cont.)See Section 8 (d) of R.A. No. 7227 as amended by R.A. No. 7917, in relation to Sections 4.52-4.56 ofAdministrative Order No. 236. Save for the BCDA, no visible relationship between the functions of thevarious beneficiary agencies and the AFP Modernization Program appears.23 Letter dated 5 September 2003 from BCDA President and CEO Rufo Colayco, to the Commission.

- 90 –Billion). The thirty-five percent (35%) share of the AFP was, accordingly, reduced to fivebillion four hundred eighty-four million pesos (P5.484 Billion).E. Actual Status of the AFP-MATF as of August 2003On 8 January 1996 (or approximately two (2) years before full remittance of the netproceeds of the initial sale of Fort Bonifacio lands, or just as the BCDA started remittingthe proceeds of the sales of the Fort Bonifacio land), Administrative Order No. 236 wasissued by the President of the Philippines. This Administrative Order directed the BCDAto remit the proceeds of the sales of government lands under Republic Act No. 7227, asamended, to the General Fund of the Government in the National Treasury. TheAdministrative Order in turn required the Bureau of Treasury to set up separate SpecialAccounts in the General Fund, that is, a Special Account for the AFP-MATF and SpecialAccounts for each of the other beneficiary-agencies. The BCDA complied with therequirements of the Administrative Order and remitted the thirty-five percent (35%) shareof the AFP to the National Treasury for credit to the Special Account of the AFP-MATF.The effects of the remittance of the AFP share of the Fort Bonifacio proceeds to theNational Treasury include the following:(1) The funds pertaining to the AFP became commingled with all other fundsof the National Government in the National Treasury. Because money is fungible innature, this meant that the funds of the AFP-MATF were in effect used for the budgetedexpenses of the AFP and other agencies of the National Government. In recognition ofsuch use, the Bureau of the Treasury upon request of the AFP, started crediting the MATFwith a certain amount of interest income. Operationally, this meant that disbursements forapproved specified projects included in the AFP Modernization Program needed to beincluded in the budget of disbursements of the National Government prepared by the DBMfor each year. This system does not necessarily prejudice the AFP Modernization Programsince the gestation period of some specific modernization projects could be substantial and

- 91 –could well be booked months, perhaps a year, in advance of actualdisbursement.(2) At the same time, the ability of the National Treasury actually to disbursefunds for approved AFP modernization projects has, among things, to depend upon theactual level of tax revenues achieved by the National Government in any given year.The Commission has been advised by the DBM that a new and subsequentappropriation act by Congress was not necessary before disbursement for an approvedmodernization project could be effected. The DBM has stated that the “ deemedappropriated” provision in Republic Act No. 7917 has the effect of a “ continuingappropriation” provision. 24 Thus, the remittance of the AFP share in the Fort Bonifacioproceeds to the National Treasury did not mean that a new congressional appropriationprovision would be necessary for actual disbursements of such funds.The actual status, as of 15 August 2003, of the AFP-MATF in the NationalTreasury is set out in a footnote below. 25It remains only to note that of the BCDA24Letter addressed to the Commission, dated 28 August 2003, by Undersecretary Mario Relampagos,DBM.25Status of the AFP Modernization FundAs of 15 August 2003 (in Philippine Pesos)FundSourceAmountSAROIssuedNCAIssuedAmountObligatedBalanceFrom BCDA 5,484,000,000 5,484,000,000 251,339,228 248,764,760 5,235,235,240From FY 2002GAA5,000,000,000 4,035,300,000 -- 1,864,371,895 2,170,928,105(Programmed)From GAAResiduum(a) CY 2000-01 46,225,184 46,225,184 46,225,184 46,225,184 --(b) CY 200110,918,184 5,031,981 623,173 5,031,981 --From Ayala Lease271,144,000 271,144,000 271,144,000 158,408,302 112,735,69810,812,287,368 9,841,701,165 569,331,585 2,322,802,122 7,518,899,043

- 92 –remittances totaling five billion four hundred eighty-four million pesos (P5.484 Billion),a balance of five billion two hundred thirty-five million pesos (P5.235 Billion) remains inthe National Treasury. Only the amount of two hundred fifty-one million pesos (P251Million) has been covered by an issuance of a Notice of Cash Allotment (NCA),apparently to support the acquisition of an initial quantity of the new squad automaticweapon (SAW) for the AFP.F. Potential Additional Sources of Funding for the AFP-MATFBecause the AFP-MATF is to support not just the acquisition of new and moremodern weapons and weapon systems for the AFP, but also the improvement of themedical and dental facilities of the AFP and the provision of additional improved housingfor AFP officers and personnel, and because the amounts actually remitted by the BCDAto the National Treasury for the Special Account of the AFP-MATF amounted only to fivebillion four hundred eighty-four million pesos (P5.484 Billion), the Commission inquiredinto the potential additional sources of funding for the Modernization Act Trust Fund. Asnoted earlier, the BCDA had actually sold only one hundred fifty (150) hectares out of thetotal authorized (Phase I) sale of 498.40 hectares of Fort Bonifacio land. The Commissionasked the BCDA whether additional Fort Bonifacio land could be sold in order to augmentthe proceeds already remitted to the AFP-MATF. In response, the BCDA provided theCommission with information which can only be described as startling and appalling.25 (Cont.)SARO – Special Allotment Release OrderNCA -- Notice of Cash AllocationGAA -- General Appropriation ActSee letter dated 27 August 2003 to the Commission from Undersecretary Mario Relampagos, DBM, Annex“ M” .

- 93 –In essence, the BCDA advised the Commission that a total of one hundredfifty-nine (159) hectares 26 of Fort Bonifacio land may be disposed or otherwisesold, 27 over and above the one hundred fifty (150) hectares already sold to the BLC.Such potential additional sale of Fort Bonifacio land has, however, been attended by verysignificant problems. The difficulties encountered by the BCDA in seeking to eject thecivilian and retired military personnel physically occupying the area squatted upon, havealready been referred to above. A program for removing and relocating such squattersfrom Fort Bonifacio land will have to be formulated and implemented by the law26a. The JUSMAG area … … … … … … … … … … … … … . 40 hectaresb. The NOVAI area (Bonifacio Naval Station Area) … .. 47 hectaresc. Philippine Marine Corps Headquarters Area … .… . … 12.4 hectaresd. Squatted area … … … … … … … … … … … … … … … .. 59.6 hectares159.0 hectares27The BCDA has estimated that if the above-identified properties could be sold at present or in the nearfuture, it would generate the following net proceeds:a) JUSMAG Area at P30,000.00 per square meter … … … … … … … … . P 12.0 Billionb) NOVAI Area at P30,000.00 per square meter..... P 14.1 BillionLess: Replication cost … … … … … … … … … .. 1.5 Billion … .. 12.600 Billionc) Squatted Area at P12,000.00 per square meter… P7.152 BillionLess: Assumed Cost of Relocating Squattersat 50% of selling price… … … … … … … .... 3.576 Billion …3.576 BillionTOTAL --------------------------------------------------------------------------- P 28.176 Billionx 35% (AFP share)P 9.8616 BillionNote that the above estimated BCDA values do not include the potential selling price of the 12.4hectares constituting the Philippine Marine Corps Area.In respect of the section of Fort Bonifacio referred to above as the “ squatted area” , the BCDA, by letterdated 13 October 2003, invited the attention of the Commission to Executive Order No. 70 of the President,dated 11 February 2002. Executive Order No.70 has declared certain sites within Fort Bonifacio with atotal area of 119.94 hectares as “ socialized housing sites” which are to be “ open for disposition to qualifiedoccupants and beneficiaries” (Section 1, EO No. 70). It is unclear to the Commission to what extent thearea above referred to as the “ squatted area” is, if at all, included in any of the four (4) socialized housingsites referred to in the Executive Order. The metes and bounds of these sites have yet to be determined byland surveyors. It appears that areas covered by these sites would be open to acquisition by qualifiedbeneficiaries by purchase and sale. It is also unclear to what extent on the proceeds of the sale of such lotsto the beneficiaries would be subject to the provisions of Republic Act No. 7227 (the BCDA Act of 1992)and Republic Act. No. 7898 (AFP Modernization Act).

- 94 –enforcement agencies of the Republic, in accordance with law and, hopefully, withoutbloodshed. Upon the other hand, the JUSMAG and the NOVAI areas are presently thesubject matter of litigation. These litigations need to be described at least briefly.1. The JUSMAG Area CaseThe JUSMAG area previously occupied by officers of the Joint U.S. MilitaryAdvisory Group and their families is right behind the Forbes Park Village in Makati City.This area consists of approximately forty (40) hectares and the houses and lots thereinare rented out by the AFP Quarters or Housing Board to officers of the major serviceunits of the AFP. A Contract of Lease covering a particular house and lot is entered intoby the AFP Quarters or Housing Board with the AFP officer to whom the quarters areallotted or assigned, the rental for which is automatically deducted from the housingallowance of the lessee-officer involved. Under the Contract, monthly charges forutilities such as electric power and water services are billed to and paid separately by thelessee-officer. Under the same Contract, the lessee-officer binds himself to vacate hisassigned quarters on the effective date of his retirement or separation from the service ofthe AFP so that the quarters concerned can then be assigned to officers in the activeservice eagerly awaiting housing assignments. Many of the officers residing in theJUSMAG quarters are of general or flag officer rank. Many of them have alreadyreached compulsory retirement age but, nevertheless, continue to occupy the samequarters. 2828According to the records of the BCDA, the husbands of the women who constitute the membership ofSHAI, may be grouped as follows (as of 23 October 2002):AFP Officers in the active services ------------------------------------------------- 50Retired AFP Officers ----------------------------------------------------------------- 49Resigned AFP Officer ---------------------------------------------------------------- 1Deceased AFP Officers --------------------------------------------------------------- 6TO T A L ------------------------------ 106

- 95 –On 29 April 1991, the wives of the officers, retired or still in the active service,occupying AFP quarters at the JUSMAG area in Fort Bonifacio, formed the SouthsideHomeowners Association (SHAI). On 30 October 1991, the SHAI was somehow able tosecure a title (Transfer Certificate of Title No. 15084) in its name to the bulk of theJUSMAG Area (35.5. hectares) from the Register of Deeds of Pasig City, VicenteGarcia, on the basis of a purported Deed of Sale, allegedly executed by the Director ofthe Land Management Bureau Abelardo Palad. The price indicated in the Deed of Salewas eleven million pesos (P11 Million) or thirty pesos (P30.00) per square meter.Upon instruction of former President Fidel V. Ramos, on 17 November 1993, theRepublic of the Philippines filed a complaint for the cancellation of the said TransferCertificate of Title and for recovery of possession of the land. The Republic argued,among other things, (1) that the Deed of Sale was a fictitious instrument, Director28 (Cont.)The officer-husbands may also be grouped by rank (as of 23 October 2002):Officers in the active service:General (4 stars, Chief of Staff) ----------------------------------------------- 1Lt. General (3 stars) ------------------------------------------------------------- 2Major General (2 stars) --------------------------------------------------------- 4Brigadier General (1 star) ------------------------------------------------------ 8Colonel --------------------------------------------------------------------------- 18Lt. Colonel ----------------------------------------------------------------------- 10Major ----------------------------------------------------------------------------- 5Captain --------------------------------------------------------------------------- 2T O T A L --------------------------------------- 50Retired Officers:General (4 stars, Chief of Staff) ---------------------------------------------- 2Lt. General (3 stars) ------------------------------------------------------------ 2Major General (2 stars) -------------------------------------------------------- 6Brigadier General (1 star) ----------------------------------------------------- 15Colonel --------------------------------------------------------------------------- 18Lt. Colonel ---------------------------------------------------------------------- 6T O T A L -------------------------------------- 49The ranks referred to above include equivalent ranks in the Philippine Navy and the Philippine NationalPolice. See letter dated 30 September 2003 from the BCDA to the Commission.

- 96 –Abelardo Palad having denied signing the said Deed; (2) that there is no record of thealleged payment of P11 Million, stated purchase price by SHAI, no receipt thereforhaving been presented by the SHAI; (3) that the survey plan in respect of the supposedlytitled area was fictitious; (4) that the JUSMAG property is part of the Fort Bonifaciomilitary reservation and the sale of such property had not been authorized by thePresident; and (5) that the property was accordingly inalienable.The case was assigned to Judge Celso Laviña, Branch 71, Pasig Regional TrialCourt (RTC). During the pre-trial conference, the issues of the case were somehowlimited to one (1) single issue (to which the Assistant Solicitor General in charge of thecase agreed), i.e., whether the Deed of Sale was a forgery or not. All the other claims inthe Republic’ s complaint were not, therefore, litigated before the RTC.During the trial, the Republic presented an expert witness from the NationalBureau of Investigation (NBI) who testified that the signature of Palad in the allegedDeed of Sale was forged. Palad himself testified that he had not signed the Deed of Saleand that his supposed signature thereon was a forgery. SHAI, on the other hand,presented an opposing expert witness from the PNP who testified that Palad’ s signaturewas genuine. The SHAI had claimed to have paid the eleven million pesos (P11 Million)stated purchase price in cash but presented no receipt therefor of any kind. The Republicpresented the Cashier of the Land Management Bureau who testified that the OfficialReceipt Number referred to in the Deed of Sale was non-existent and fictitious. The trialcourt ruled in favor of SHAI. The Republic, through the Solicitor General’ s Office,appealed to the Court of Appeals. The Court of Appeals (16 th Division) upheld thedecision of the trial court.The Republic has now appealed the case to the Supreme Court. 29 On or about 23July 2003, the DND represented by then Secretary of Defense Angelo T. Reyes and the29Republic of the Philippines vs. Southside Homeowners Association, Inc., G.R. No. 156951.

- 97 –AFP represented by CSAFP, Gen. Narciso L. Abaya filed a Motion for Leave to File aPetition-in-Intervention and to Admit their Attached Petition-in-Intervention. Similarly,on 28 July 2003, the BCDA filed with the Supreme Court a Motion to Intervene and toAdmit Petition-in-Intervention. It appears that both Motions for Leave to Intervene arepresently pending before the Supreme Court.A criminal case for falsification of public documents has also been lodged withthe Regional Trial Court, Pasig against the officers of SHAI.2. The NOVAI CaseThe Navy Officers Village Association, Inc. (NOVAI) case is similar to the SHAIcase. The NOVAI, however, is composed only of Navy officers and the land, with anarea of forty-seven and a half (47.5) hectares, on which the quarters they occupy are built,is adjacent to the Dasmarinas Village, Makati City. The Navy officers 30 had beenoccupying the Bonifacio Naval Station (BNS) quarters under a Contract of Lease orOccupancy entered into with the AFP Quarters or Housing Board. As in the SHAI case,the Lease Contract typically required payment of monthly rentals automatically deductedfrom the housing allowances of the officer-lessees and explicitly provided that theofficers would vacate the quarters upon retirement from the active service. The NOVAIclaims that a Proclamation numbered 4287, allegedly signed by former President Aquinowas issued in their favor. There is also a Deed of Sale dated 15 November 1991allegedly signed by Palad, Land Management Bureau, supposedly under thatProclamation. Palad has, as in the JUSMAG case, testified that he did not execute or sign30Not all NOVAI members are occupants of housing quarters in the BNS. The NOVAI has, per BCDArecords, 246 members, of which 123 are occupants of BNS quarters, while 141 are non-occupants. Thereare also 34 officers who occupy BNS quarters but who are not members of NOVAI. Per the BCDArecords, the NOVAI officer-occupants of BNS quarters may be grouped as follows:Officers in the active service ---------------------------------------------------------- 58Officers retired -------------------------------------------------------------------------- 51Officers deceased ----------------------------------------------------------------------- 4T O T A L -------------------------------------------- 113

- 98 –that Deed of Sale. Moreover, after verification, the Director of the Records Division ofthe Office of the President, Malacanang, Mrs. Aurora Aquino, has certified thatProclamation No. 4287 is fictitious, spurious, and a forgery.On 23 December 1993, the Government initiated proceedings against the NOVAIofficers for cancellation of the supposed title obtained by the defendants, before Branch67 of the Regional Trial Court of Pasig City. 31 The case has yet to be decided by the trialcourt.30 (Con.t)The same officer-occupants may be grouped by rank as follows:Officers in the active service:Vice Admiral -------------------------------------------------------------------------- 1Read Admirals/Major Generals ---------------------------------------------------- 1Commodore/BGen./Gen./Chief Supt. (1 star) ------------------------------------ 6Captains/Colonels -------------------------------------------------------------------- 20Commander/Lt. Coonels ------------------------------------------------------------ 13Lt. Commander/Majors ------------------------------------------------------------- 13Lt. Senior Grade ---------------------------------------------------------------------- 1Lt. Junior Grade ---------------------------------------------------------------------- 3Senior Police Inspector -------------------------------------------------------------- 1T O T A L --------------------------------------------- 59Retired/Deceased Officers:Admiral-------------------------------------------------------------------------------- 1Vice Admirals ------------------------------------------------------------------------ 2Rear Admirals/Major Generals ---------------------------------------------------- 4Commodore/BGen./Gen./Chief Supt. (1 star) ---------------------------------- 30Captains/Colonels ------------------------------------------------------------------- 14Commander/Lt. Colonels ---------------------------------------------------------- 2Lt. Commander/Majors ----------------------------------------------------------- 1T O T A L ------------------------------------------- 54See Annexes “ J-L” to this Report for lists of the officer-occupants in the JUSMAG (SHAI) and NOVAIareas, submitted to the Commission by the BCDA.See, further, the (1) list of overstaying retired military officers occupying government quarters at BNSarea as of September 2003; (2) list of retired military (non-commissioned) personnel still occupyingquarters at BNS; and (3) list of overstaying retired military officers occupying government quarters atSouthside Housing Area (SHAI) as of September 2003, constituting Annex “ A” to the Report dated 6October 2003, of Lt. Gen. Rodolfo C. Garcia AFP, to the Commission; Annex “ M” to the Report of thisCommission.31Republic of the Philippines vs. Navy Officers Village Association, Inc., Civil Case No. 63983, RTCPasig, Branch 67, Judge Apolinario B. Santos, presiding.

- 99 –G. Principal Findings of the CommissionThe proceeds from the sale of military lands authorized by the Bases Conversionand Development Act (Republic Act No. 7227) so far made to the AFP-MATF, have beenmuch more modest than originally envisaged. As noted earlier, only five billion fourhundred eighty-four million pesos (P5.484 Billion) have been actually injected into theAFP-MATF Special Account in the National Treasury. Only one hundred fifty (150)hectares of Fort Bonifacio land have been actually sold or disposed of by the BCDA andthe proceeds thereof distributed to the AFP and the other beneficiary-agencies.The most significant potential source for additional funds for the AFPModernization Program remains the Fort Bonifacio property already authorized to be soldby the BCDA by Republic Act No. 7227. The BCDA has identified an additional onehundred fifty-nine (159) hectares of Fort Bonifacio land that can, in the estimate of theBCDA, generate P9.8616 Billion for the AFP Modernization Program, i.e., as the thirtyfivepercent (35%) share of the AFP. The realization of these potential additionalproceeds is made difficult (a) by the existence of the JUSMAG (SHAI) area litigation; and(b) the NOVAI (BNS) area litigation. The extraordinary nature of these litigations can notbe over-emphasized. These litigations involve the supposed conversion of a total ofeighty-seven (87) hectares of prime land, previously admittedly owned by the Republic ofthe Philippines and leased by officers of the AFP, to private property of such officers,many of whom have already been retired. If what the Republic of the Philippines, DND,CSAFP, and the BCDA have asserted before the Supreme Court is true, such conversionor attempted conversion involves a most serious breakdown of discipline and grievousanomalies at the most senior levels of the AFP officer corps. 32 If this purportedconversion of Fort Bonifacio land into private property of the occupant-officers (active orretired) and the interception of P24.6 Billion of potential Fort Bonifacio proceedssucceeds, it would render just about impossible the planned improvement of medical and32See Petition for Intervention by the Department of Defense and the AFP. Attached to the Motion forLeave to File Petition in Intervention, dated 23 July 2003, Republic of the Philippines v. SouthsideHomeowners Association, Inc., et al., G.R. No. 156951, Supreme Court, p. 15.

- 100 –dental facilities of the AFP and would seriously aggravate the scarcity of housing facilitiesfor the younger officers and enlisted men of the AFP. The acquisition of modern weaponsand weapon systems for the AFP’ s major services would similarly fail. The extent of themisappropriation of Fort Bonifacio land with which the Government has, in the SHAI andNOVAI cases, charged senior military officers, is so epic in scale as to make theoverpricing of land uncovered by the Senate Blue Ribbon Committee and complained ofby the Government in the two hundred forty (240) RSBS cases (P703 Million), seem likepetty shoplifting in comparison. Clearly, the nature of the problems blocking realizationof the potential additional proceeds from Fort Bonifacio property, relates to practically allof the major grievances given expression at, inter alia, Oakwood, and to the viability ofthe AFP Modernization Program itself.H. Recommendations of the Commission in Respect of the FurtherFunding of the AFP Modernization Program1. Vigorously pursue recovery of the JUSMAG and NOVAI properties - Theefforts of the Republic of the Philippines, BCDA, DND, and the CSAFP to recover theJUSMAG and the NOVAI properties must be pursued as vigorously as possible by the mostcompetent lawyers that the government agencies can deploy. If, indeed, falsification ofpublic instruments (including a presidential proclamation) was resorted to in connectionwith either or both of these litigations, the appropriate criminal proceedings should becommenced and pursued. 332. Pursue recovery of the ‘squatted” land in Fort Bonifacio - The recovery of59.6 hectares 34 from the civilian and military squatters inside Fort Bonifacio must bepursued by the appropriate agencies of the Government by all lawful means, including the33It appears that two criminal cases have been filed against NOVAI officers; (a) People v. Domingo, etal., Criminal Case No. 98-164382, Branch 15, RTC Manila for “ Forging the Signature of the ChiefExecutive” ; and (b) People v. Domingo, et al., Criminal Case No. 97-297010, Branch 28, MTC, Manila, forFalsification of Public Documents. These cases are pending before the respective trial courts.34The land squatted upon was originally 64 hectares in area. A portion of this area – 4.4 hectares – wassubsequently cleared by the BCDA and included in a joint venture development project that BCDA enteredinto with a private company.

- 101 –use of public force where necessary and reasonable, while paying due attention to theconstitutional standard of ” a just and humane manner” of eviction. 35 The legal effects ofExecutive Order No. 70, dated 11 February 2002, upon the status of such land occupied bycivilian and military squatters, must be clarified. The concern of the Government forlandless citizens is, of course, completely understandable. At the same time, theGovernment must take into account two (2) things. The first is that the ability of squattersto maintain by force their unlawful occupancy of public land against the Republic of thePhilippines and BCDA should not be rewarded. That ability tends to signal the weakenedcondition of the institutions of Government in general and of law enforcement in particular.Second, the Government must not forget the many thousands of homeless AFP officers andenlisted men, whose plight is referred to below in “ V. – Problems of Housing: AFPOfficers and Enlisted Personnel” , and of the continuing validity of the basic statutory intentset out in Republic Act No. 7898 (the AFP Modernization Act): the proceeds of sales ofFort Bonifacio land are intended for the modernization of the AFP.3. Substantially increase AFP’s share in Fort Bonifacio’s sale proceeds -The share allocated to the AFP Modernization Program in sale’ s proceeds generated bythe Based Conversion and Development Authority (BCDA) should be increased verysubstantially. The Commission remains unaware of any rational explanation fordribbling away 37.5% of the proceeds of sales of Fort Bonifacio land to fourteen (14)other non-military-related government departments and offices. It appears onlyreasonable to us that all those proceeds from the sales of military land should be sharedonly by the AFP (for its modernization program) and the BCDA.4. Reinforce Office of the Ombudsman by increasing funding and othersupport - It has become very clear to the Commission that meaningful reform, whether inthe military or in the civilian sectors of government service, is simply not feasiblewithout independent, vigorous and able prosecutorial services of the Government. In ourGovernment, the Office of the Ombudsman – more specifically, the Office of the Special35See Article XIII, Section 10, 1987 Constitution.

- 102 –Prosecutor attached to the Office of the Ombudsman – is supposed to function as theprincipal prosecution arm vis-à-vis erring public officials. Thus, the Special Prosecutorof the Office of the Ombudsman has filed two hundred forty (240) criminal charges in theRSBS matter alone. The Ombudsman has also filed one hundred ninety-five (195)separate indictments in respect of extensive irregularities in the procurement of goods forthe Philippine Navy. The Ombudsman may be expected to be even more heavilyengaged in the future in respect of efforts to reform the procurement service of the AFPas a whole, not to speak of government procurement in general. The Commission’ sfinding has earlier been noted that the internal grievance resolution process of the AFP,constituted by the Office of the Inspector General, AFP, has important structural andother limitations upon its ability to deal with the kind of grievances analyzed in theCommission’ s Report.In a lengthy Memorandum dated 1 October 2003, submitted to the Commission,the Ombudsman went into some detail about the funding and other formidable difficultiesfaced by his office in discharging its constitutional and statutory role in the effort to bringcorrupt and other erring public officers to justice. The Ombudsman underscored ashocking statistic: upon starting on his term of office, the incumbent Ombudsman foundthat the success ratio (or conviction rate) of the Office of the Ombudsman, in respect ofcases brought before the Sandiganbayan, had declined to six percent (6%). This means,the Ombudsman was courageous enough to state, that the high-ranking public officialsand military officers charged before the Sandiganbayan have a ninety-four (94%) chanceof walking away free at the end of the proceedings. 36The Commission is bound to note that no government can accept this successratio for any substantial period of time, without running a grave risk of forfeiting its36Under R.A. No. 8249, approved on 5 February 1997, public officials with Salary Grade 26, under theCompensation and Position Classification Act of 1989 (Republic Act No. 6758), and below are to be triedbefore the ordinary courts of the Republic. Under Republic Act No. 8249, the Sandiganbayan hasexclusive original jurisdiction over cases involving “ Philippine army and air force colonels, naval captainsand all officers of higher rank” . (Section 4)

- 103 –legitimacy altogether. It is, of course, true that this low success ratio is the result of aconfluence of factors bearing upon the Office of the Ombudsman, and possibly theSandiganbayan itself. It is also true that criminal conviction and incarceration are not theonly strategies necessary for a serious effort to control and abate the level of corruption inthe AFP. Even so, the minimum recommendation that we feel compelled to address tothe President and the appropriate government authorities, is that the Office of theOmbudsman must be given the budgetary and other support that it needs, with allpossible dispatch, if the grievances referred to in Oakwood, and more generally invarious parts of the AFP itself, are to be addressed seriously and effectively. While allgovernment offices and agencies are limited in their activities by the scarcity ofbudgetary resources, the highest priority should be given to corruption control in theAFP. An indispensable part of that control is the ability of the Office of the Ombudsmanefficiently to investigate and prosecute even high-ranking officers in the AFP.V. The State of the AFP Medical Services.A. IntroductionIn a thesis submitted in 1997 to the Asian Institute of Management (AIM) on“ Corporate Strategy for the Armed Forces of the Philippines Medical Services” , Commo.Noel L. Felicia made the following introductory observations:The showroom of military health care is the AFP Medical Center(AFPMC). The AFPMC is the final destination for the seriously sick andwounded soldier and dependents. It was established 60 years ago at CampMurphy, Quezon City (now Camp Aguinaldo). Much later, it was transferredto its present site at V. Luna Road, Quezon City. The AFPMC was formerlycalled the V. Luna General Hospital (VLGH) and was named after the firstCommanding Officer of the Philippine Army Medical Service, LCOLVictoriano K. Luna, who was killed in action in Bataan during the SecondWorld War. The AFPMC is a tertiary hospital that has a 1,300 bedcapacity… (p. iii)… The AFPMC of long ago was a picture of quality service. Highlyqualified doctors abound, free medicines were provided, and wives whocalled emergency were immediately picked up by ambulances regardless of

- 104 –the rank of their husbands. The AFPMC before was an envy of otherhospitals. It has a Presidential Suite and the first transplant in the countrywas done in V. Luna in 1975.However, through the years the delivery of health servicesdeteriorated. V. Luna became the subject of numerous complaints. Thegravity of the complaints even reached Malacanang. President Fidel V.Ramos, on 23 January 1997, exhorted the members of the PhilippineAssociation of Military Surgeons to provide the best in health care,medicines, diagnostic armamentarium and expertise to the soldiers and theirfamilies. 37 (Emphases added; p. iv)The complaint about the AFP Medical Center (V. Luna) has spread to AFPmedical services in general. Thus, the Cimatu Report of 28 July 2003 sets out thefollowing as among the grievances expressed by the soldiers:“ The AFP has a very strained and low standard medical and healthservice delivery system. The services provided by the AFP hospitals have longbeen below standard and inadequate for the needs of the soldiers and theirfamilies.”This part of the Commission’ s Report contains (1) a description of contemporaryAFP medical services principally as set out in the “ Handbook on Benefits and Privilegesof AFP Military Personnel and Their Dependents” and as conveyed to the Commissionby Col. Regino Rufino, the AFP Surgeon General, in writing and orally on 12 September2003; (2) a narration of views expressed by some of the troops in the course of dialogueswith various levels of the AFP personnel stationed in Zamboanga City and Basilan; and(3) some reflections and recommendations of the Commission.B. The AFP Medical Services Today on Paper1. Hospitals and DispensariesThe medical services offered by the AFP include hospitals and dispensaries, aMedical Corps, a Veterinary Corps, a Medical Administrative Corps, and a Nurses Corps.37The V. Luna General Hospital has sometimes, facetiously, been called the “ Mona Lisa GeneralHospital.” The allusion is not to Leonardo da Vinci’ s art but to a popular song which includes the words:“ they just lie there and they die there” .

- 105 –The entire service is currently headed by the Surgeon General AFP who supervises theAFP Medical Services.There are over fifty-six (56) AFP health facilities, thirty-one (31) of which arehospital-based with a total bed capacity of three thousand one hundred sixty (3,160). Therest are Medical Dispensaries and Medical Companies. The Surgeon General enumeratesthem as: one (1) Medical Center (VLGH), five (5) General Hospitals, twenty-five (25)Station Hospitals, sixteen (1) Medical Dispensaries, and nine (9) Medical Companies.The hospitals and dispensaries are distributed regionally according to thefollowing table:Region Hospitals DispensariesNCR 6 6I 1 2II 1 0III 5 3IV 6 2V 0 0VI 1 0VII 2 2VIII 2 0IX 3 1X 1 1XI 1 1XII 1 0ARMM 1 0The hospitals are classified into tertiary, secondary, and primary levels. Tertiaryhospitals can handle all cases – curative, corrective, rehabilitative, medical. To this levelbelong four (4) hospitals: Fort Bonifacio General Hospital, AFP Medical Center (V.Luna), Villamor Airbase Hospital, and Naval Hospital. All of these are in Metro Manila.The rest are either secondary or primary health facilities. (Veterans Memorial Hospital isnot included in the AFP Hospitalization Program.) The facilities are mostly co-locatedwith Retained Hospitals of the Department of Health (DOH).

- 106 –The most prestigious of these tertiary hospitals, as already noted above, is theAFP Medical Center (V. Luna).There are twenty (20) secondary hospitals, i.e, those able to handle minor surgicalprocedures. Seven primary hospitals are able to handle out-patient and emergency cases.The following health facilities are located in Mindanao: the Camp NavarroGeneral Hospital (SOUTHCOM) in Zamboanga City with two (2) satellite StationHospitals in Jolo, Sulu and Panacan, Davao City; three (3) Philippine Army DivisionHospitals based in Cagayan de Oro, Cotabato, and Pagadian; one (1) Philippine Air ForceHospital in Zamboanga City, and one (1) Philippine Navy Medical Dispensary also inZamboanga City.2. The AFP Medical CorpsThere are four hundred seven (407) authorized positions for medical personnel inthe AFP Medical Corps. As of September 12, 2003, only three hundred ninety-three(393) of these are filled. The positions are distributed throughout the entire AFP medicalservice. Doctors are assigned on a temporary and rotational basis as the needs of themedical service may dictate. Each major service unit (PA, PN including PMar and PAF)of the AFP has a Chief Surgeon. In the five (5) area command hospitals, assigneddoctors are from different major service units.Doctors are given military rank. One who has passed the Medical BoardExamination is commissioned as captain. A specialist who is below forty (40) years oldis commissioned as major, and if forty (40) years old or over, as lieutenant colonel.The turn-over rate of doctors is forty percent (40%). Doctors who do internshipwith the AFP medical services seldom stay after passing the board examinations because

- 107 –of salary concerns. However, AFP doctors are allowed to engage in private practice afteroffice hours.The Surgeon General admits that one of the perennial problems encountered inthe field is the lack of doctors assigned to military facilities. Felicia in his AIM thesiselaborates on this with reference to AFP Medical Center (V. Luna) thus:Annually the AFP quota for resident doctors who are eventuallycommissioned in the Medical Corps is eighty-eight. This number is easilyfilled up by applicants; however they are not the top medical graduates inthe country. This is because the AFPMC is not the first consideration ofthe best medical practitioners. They either opt to work abroad (77%) or atprestigious private and government hospitals (23%). Somehow thisresults [in] low quality of service and causes complaints from patients.The need for the best medical hands is further aggravated by the lack offunds to enlist the services of specialists or regular consultants.(Emphases added; pp. 63-64)Similarly, the Surgeon General notes that budgetary constraints are a seriousproblem. Not only are budgetary allocations insufficient but low budgets are alsoaggravated by the fact that the medical treatment centers do not operate as profit centers.They provide health care services free of charge. For this reason, in the distribution offinite medical supplies, priority is given to military personnel in the active service. Afterthem follow their dependents and other authorized civilians.Felicia provides the following comparison of "Per Capita Cost Per Patient Per Dayin FY 1996" (p. 63):Government HospitalsPrivate HospitalName Amount Name AmountVeterans Memorial MC P454.00 Sta. Luke’ s P850.00East Avenue MC P413.76AFP MC P190.00

- 108 –Budgetary constraints have an obvious impact on both the quality of equipmentand the supply of medicines. The medicine supply, moreover, is affected by the vagariesof the AFP procurement system. To quote again from Felicia’ s study:What aggravates the situation at AFPMC is the presence of dealersduring the procurement of medicines and equipment. These individualsact as middlemen during the transaction. The usual mark-up added by thedealers in the original cost of the items is 25%. There were attempts bythe leadership to transact direct with suppliers but [the need for] timelypayment poses a problem. So the Center is forced to transact with thedealers since these individuals have the capital to initiate delivery of theitems being requested. (Emphases added; p. 65)3. Medical Management in Combat AreasThere are six (6) echelons of medical support. The first to third echelonsadminister aid on the spot. When the patient is stabilized, he or she is evacuated to anAFP medical facility or to a DOH facility, which facilities constitute the fourth to sixthechelons of medical support.In a Memorandum dated 24 September 2003, submitted to the Commission, theSurgeon General made the following candid and important observations:The following are contributory factors to poor pre-hospital care:(1) Human factora. Individual soldier is not adequately trained on self- andbuddy aid;b. Battle casualties are initially cared for by squad aid men.Most aid men are not trained on Trauma Management; thusthere is improper handling and management of casualties;c. In some units, aid men [have] multi-role functions. Thismay affect medical care of troop’ s casualties;

- 109 –d. No fully-manned Forward Surgical Team available.(2) Equipment factora. No individual kits are provided each fighting soldier;b. Aid man’ s medical kits are not well supplied and equipped.Thus, patient management may be compromised no matterhow well trained an aid man is.Battle casualties are not immediately given proper medical care and evacuated tohigher echelons of care due to the following factors, thus leading to an ineffectivemedical evaluation system:(1) Medical installations are frequently located far from the area ofconflict. AFP hospitals are fixed installations; thus, they cannot bemoved near the battle zone.(2) Medical installations around the area of conflict are not wellequippedto handle battle casualties.(3) Vehicles to transport casualties are frequently not immediatelyavailable. The gold [sic] period for giving trauma care to battlecasualties is within 6 hours from the time of injury, after which,complications may set in.(4) Inaccessible area for evacuation of casualties. This may be due torough terrain, weather condition and others.(5) Highly mobile troop movement.(6) Poor communication system.The establishment of a visibly creditable medical system in the forwardareas would contribute to high morale and promotion of the individual soldier’ swillingness to fight. (Emphases added.)The absence of a visibly creditable medical system in the forward areasaccentuates the importance of air support which, sadly, is today very inadequate. With thepresent resources of the PAF, its main preoccupation is support for ground forces.Evacuation of the wounded is an important responsibility. For the accomplishment of

- 110 –this task, UH-IH helicopters are used. Authority to deploy aircraft, particularly of UH-IHhelicopters, is vested in GHQ and the Commanding Officers of the unified commandareas. Currently these are deployed thus:PlaceNumberSouth Command 6Davao 2Cotabato 2Palawan 1Villamor 1Legaspi 1Kawayan 1Camp Aquino 1Lucena 1The use of a UH-1H must be cleared with the unified command. For example, ifthere is any operation between Zamboanga and Davao and there is no aircraft availablefrom Davao, the aircraft will have to come from the SOUTHCOM in Zamboanga.Delay in deployment will always happen due to lack of aircraft. In the past, oneaircraft at least was assigned per battalion. That is no longer possible because of aircraftshortage. Hence, availability has to be determined by the unified area command directingground operations and not by the PAF.Other factors can also cause delay, such as absence of suitable landing site orinclement weather.4. Doctor-to-Patient RatioThe ideal ratio should be one (1) doctor per four (4) out-patients. In ICU cases, itshould be one to one (1 to 1). Actually, however, because of the admitted lack of military

- 111 –doctors, there is one (1) doctor per two hundred ninety-four (294) military personnel, andone (1) doctor per one thousand four hundred seventy (1,470) if dependents are included.5. Health InsuranceMembers of the Armed Forces are members of the National Health InsuranceProgram (NHIP) set up by Republic Act No. 7875 for which seventy-five pesos (P75)premium is deducted monthly from their salaries. The benefits include:(1) Room and Board in accredited hospitals for 45 days per year andanother 45 days for dependents.(2) Medicines up to P3,000 for ordinary cases; up to P9,000 for ICUcases; and up to P16,000 for catastrophic cases.(3) Diagnostic, laboratory and other medical requirements also up toP1,700 for ordinary cases; up to P4,000 for ICU case; and up toP14,000 for catastrophic cases.(4) Professional fees when attended by accredited physicians up toP16,000. The rates for physicians depend on whether he or she is ageneral practitioner or a specialist.(5) Other hospital facilities.(6) Surgical Family Planning Procedures for members and theirspouse.(7) Outpatient care treatment which includes hemodialysis,radiotherapy, and surgical operations.To be eligible to avail of insurance benefits, a member must have paid a minimumof three (3) months contribution within six (6) months before confinement.6. General Assessment made by the Surgeon GeneralThe Surgeon General rates the AFP medical services seven (7) on a scale of ten(10). He says that the “ Mona Lisa” appellation of the AFP Medical Center (V. Luna) is a

- 112 –thing of the past. He points to lack of information as largely responsible for criticism ofthe service. He admits, however, that there is a continuing shortage of financial supportand of medical personnel. The establishment of consortia with private hospitals is beingexplored as a possible remedial measure.The two (2) recommendations made by the Surgeon General in his Memorandumof 24 September 2003 are worth quoting:“ ‘Re-Tooling’ our military personnel with the basic First AidTraining can transform them into a Combat Medic or Combat Life Saveror eventually a Medical Specialist which possesses the skills andknowledge of a physician. They can do a medical assessment of theinjured patient in the battlefield and apply appropriate treatment.‘Re-Structuring’ the Medical Service Organization itself may bemore advantageous than disadvantageous in the long run. An in-depthand thorough re-study of the previous proposal on the eventual merger ofthe Offices of The Surgeon General (with its Chiefs of Corps, namely,The Chief of Medical Corps AFP, The Chief Veterinary Corps AFP andThe Chief Medical Administrative Corps AFP), The Chief Dental Serviceand The Chief Nurse into the Office of The Chief Health Services isstrongly recommended. Its main objectives are consolidation ofresources, elimination of duplication of functions and streamlining.”C. The AFP Medical Services as Seen by the Troops TodayOn 19-20 September 2003, the Commission visited and talked with ScoutRangers, Marines, Navy, and Army personnel of SOUTHCOM in Zamboanga City andBasilan. These include Scout Rangers of the First Scout Ranger Battalion based inBasilan, officers and enlisted men of the SOUTHCOM in Zamboanga City, the MarineBattalion Landing Team 5 (MBLT5) also based in Zamboanga City, and personnel of theCamp Navarro General Hospital in Zamboanga City.

- 113 –The dialogues revealed no real surprises about the state of health servicesavailable to the soldiers. What the Commission heard was mostly a repetition ofinformation heard from others and also of matters admitted by the Surgeon General orreferred to in the Felicia study. Some of the observations follow:(1) Soldiers confined in hospitals are allotted only thirty pesos (P30)per day for hospital meals. Soldiers suggest that PHILHEALTHfunds should be used for the purchase of medicine and also toimprove meals.(2) The absence of pediatricians in SOUTHCOM Hospital forces thesoldiers to seek out private hospitals for the medical needs of theirchildren.(3) The supply of medicines is determined by higher authority basedon the program submitted by the SOUTHCOM Hospital and alsoon higher authority’ s own “ program” . As a result, sometimesmedicines not needed by the hospital are sent and charged to thehospital budget. (E.g., supply of fluid for obstetric cases whicheventually is donated to outside hospitals.)(4) There are no medical kits given to each front line soldier. There isone (1) kit for an entire company. The needed medicines have tobe bought by the commanding officer upon request. The absenceof the kits renders inutile the first aid training that they receive.(5) Only P2,225 is allotted for medical services from the P65,000quarterly MOOE received by the battalion.(6) The Commanding Officer (CO) of the Camp Navarro GeneralHospital (CNGH) identified the poor state of on-base housing fordoctors as one disincentive for the recruitment of new doctors.(7) The CO suggested that the medical facilities of the Edwin AndrewsAir Base (EAAB) hospital be consolidated with that of CNGH inorder to maximize access to both equipment and personnel. Sincethe EAAB facility cannot carry out surgical procedures, injuredpatients initially airlifted there end up being treated in CNGH.(8) An enlisted man of the Fifth Marine Battalion reported a sadexperience with CNGH. He was confined for TB, but no anti-TB

- 114 –medicine was available. He learned that the necessary medicinehad already been ordered more than two months earlier. He endedup buying his own medicine. When discharged, he was givenmedicine that was about to expire but was assured that themedicine would nevertheless still be good for six (6) months.(9) An officer of the Fifth Marine Battalion reported a comparableexperience with V. Luna General Hospital where he was confinedsince he had difficulty in walking. For days, his attendingphysician did not visit him. He asked to be discharged but was notallowed to leave because he needed the authorization of, amongothers, his attending physician. Out of sheer frustration, he forcedhimself to get discharged and drove himself to a private hospitalfor treatment. He did not bother to get reimbursement for expensesbecause of utter exasperation.Two (2) pointed observations not heard elsewhere were made by Marines. Thefirst was about V. Luna itself: two (2) alternatives were suggested – either make itsfacilities available near where the front troops are, or abolish it altogether and use thefunds for obtaining service from private hospitals.A second suggestion was about the ranking of military doctors. The view wasexpressed that the giving of military ranks to doctors adversely affects the doctor-patientrelationship. Higher ranking patients sometimes receive better medical attention thanthose of lower ranks, and some doctors with higher ranks do not necessarily give all theattention needed to patients lower in rank.D. Findings and RecommendationTwo fairly obvious general conclusions can be drawn from what has been said:(1) the AFP military service needs more money – for medicine, food, facilities, doctors;and (2) it can stand closer scrutiny of its management practices.

- 115 –On the financial side, part of the funding of the AFP Modernization Programgenerated from the sale of Fort Bonifacio land should be dedicated to the modernizationand upgrading of medical services, in accordance with the original statutory intent.On the management side, geographic distribution of hospitals should be reviewed.Consolidating existing hospitals into fewer units could probably result in better medicalservices.The suggestion that doctors be hired as doctors and compensated according totheir level of expertise and experience and not according to rank, probably meritsconsideration and trial and validation.A government counterpart to the premium paid by soldiers to PHILHEALTHinsurance should enhance the benefits which the military can receive.The close relationship between the prompt availability of adequate medicalservices when needed by troops engaged in encounters with hostile forces, and thefighting efficiency and morale of such troops, needs no documentation. What is neededis, after realization thereof, dedication of more efforts and funds to the improvement ofthe AFP medical services.VI.The Problem of Benefits for Soldiers Killed in ActionA. The ProblemThe Report to the President by Cimatu after concluding his negotiations with theMagdalo group in Oakwood, contained the following grievance aired by the soldiers:“ The issuance of death benefits to families of soldiers who died in battle and otherbenefits due them are very much delayed, as late as over a year afterwards.” (Emphasisadded.)

- 116 –To learn more about the matter, the Commission invited Rear Admiral MateoMayuga, Deputy Chief of Staff for Personnel, AFP. He testified before the Commissionon 12 September 2003. The following is derived from his testimony.B. Pension ManagementThe budget for pensioners for any given year is computed by the Deputy Chief ofStaff for Financial Services and is included in the yearly appropriation for the AFP byCongress. The Adjutant General and financial service units actually release the funds.Appropriation for death benefits is based on an estimate of expected casualties.AFP casualty statistics for 2002 counted one hundred forty (140) killed in action, onehundred twenty-one (121) other major casualties, and three hundred seventy (370) minorcasualties. In case casualties exceed the projected figures, the AFP budgeting systemallows the AFP some elbow room, e.g., through the use of savings generated when AFPgoes below the total strength ceiling of one hundred twenty-five thousand (125,000).C. Benefits of Soldiers who Die in CombatRepublic Act No. 340 approved on 26 July 1948, provided for benefits forsoldiers who die in combat, but covered only those who shall have served twenty (20)years or more. To remedy the absence of provisions for those who have served less thantwenty (20) years, Presidential Decree No. 1044 was promulgated on 28 October 1976. Itprovides several benefit packages, depending on the number of years of service, formilitary personnel who die in combat. In the case of one who has served less than twenty(20) years, available benefits include the following:(1) Monthly annuity for the surviving spouse and children, in theamount of 50% of the next higher grade last held (PresidentialDecree No. 1044)

- 117 –(2) A one time death gratuity of P6,000.00 payable by the VeteransAdministration Office (Republic Act No. 6110)(3) Commutation of unused leaves of absences into cash.(4) Educational benefits for children of the deceased soldier. Thisbenefit is good for ten (10) years and is transferable to anotherdependent (Presidential Decree No. 577)(5) Scholarship under Republic Act No. 6963.(6) Foundation-sponsored scholarship programs, e.g.: HEROFoundation Program. The foundations directly give the money.(7) Assistance by the AFP Educational Benefits System Office.(8) The Office of the President grants special financial assistance tofamilies of combat casualties. P41 Million have been allocated,but only about 20% of the bereaved families have receivedassistance from the Office of the President, commonly due tofailure of the bereaved to produce essential documents. This is theeasiest benefit that can be claimed.(9) Burial packages.D. Complaints of Delay in Release of Pension BenefitsDelays do happen. Among the more common causes of delays are lack of properdocumentation, and failure to present clearances for issued equipment such as firearms.Because of the frequency of delays, a 6-month separation benefit is given in advance tohelp the bereaved family during the expected delay. But delays can exceed six (6)months. To respond to this problem, the AFP expects to set up, fairly promptly, satelliteoffices in Cebu and Zamboanga, to decentralize the processing system. The normalperiod for processing is three to six (3-6) months.E. Processing NeedsThe AFP Modernization Program includes, as one of its components, bases andsupport system development, including human resources development. Thus, theModernization Program envisages the modernizing of the personnel information

- 118 –management system, which in turn should facilitate the process of gathering the necessarypersonal information.F. Findings and RecommendationsAside from the relatively small amount that is received by way of death benefits,the common problem is that of processing delays. A major cause of delays is thecompletion of the documentation needed. Another cause of delay is the verification ofidentities of beneficiaries, especially when there are illegitimate offspring left behind.What is needed is the strengthening of the record system of the personal data of soldiersand their dependents. The data should not only be accurate and up to date but alsoimmediately accessible. Clearly, computerized information systems are called for.VII.The Problem of Pilot-to-Aircraft Ratio or Too Few AircraftA. IntroductionThe Report to the President dated 28 July 2003 by Cimatu also contained thefollowing statement:“ Finally, officers from the Air Force brought the issue of blatantfavoritism and disproportionate pilot to aircraft ratio causing delay intraining and promotion.” (Emphasis added.)To learn more about the ratio of pilot-to-aircraft and related problems, theCommission invited MGen. Apolonio Ugale, Jr., Vice-Commander, PAF, to appearbefore the Commission. He testified before the Commission on 12 September 2003. Theinformation set out below has been derived mainly from his testimony.

- 119 –B. On Pilot-to-Aircraft RatioCurrently, there are one thousand eighteen (1,018) pilots (with ranks from SecondLieutenant to Lieutenant General), two hundred thirty-six (236) of which are involved incombat (15 th Strike Wing and 205 th Helicopter Wing).Aircraft inventory counts a total of two hundred twenty-five (225). Of these, onehundred nine (109) are in storage or are grounded, and one hundred sixteen (116) are“ supportable,” i.e., budget is available for spare parts, etc. But of the supportable aircraft,only sixty-two (62) are operational while forty-nine (49) are ” down and parked” forinspection or maintenance.The following is a chart of supportable aircraft:TypeNumberC-130 4F-27 1N-22 3F-5 0S-211 7SF-260 TP 6SF-260 M 4T-41 D 14OV-10 12MG 520 21Laya 1UH-IH 27Bell 205 2S-76 5Bell 412 6S-70 1Aero Commander 1LC 210 1

- 120 –Pilots are classified into: (1) Line pilots (their office is the cockpit of an aircraft),numbering seven hundred eighty-three (783); and (2) management pilots (designated tokey office positions but who must know aircraft operations in order to carry out theirduties), numbering about four hundred (400).PAF Circular No. 2, series of 1977 is the basis for computing pilot to aircraftratio. The ideal is 3:1; the current ratio is 4:1.The PAF expects fifty (50) additional aircraft in 2004. Twenty (20) UH-IH havebeen promised to the President by the United States; twenty (20) UH-IH are in thebidding process under the AFP Modernization Program; and twelve (12) Surface AttackAircraft have already been bidded out. More aircraft can be available for use if thebudget for maintenance can be increased, thereby enabling the PAF to activate more ofthe aircraft that are presently grounded. Correspondingly, this will partly relieve the lowpilot-to-aircraft ratio even as more pilots graduate.C. On the complaint about delay in training and promotion ofpilotsTraining of pilots is carried out by the PAF Flying School. The classes are a mixof aviation cadets who have joined the Flying School and of PMA graduates who haveopted for service in the Air Force. Currently, there are two (2) on-going classes: MPTClass ‘03 (52 members) scheduled to graduate by November 2003 made up of eleven (11)student officers from PMA ‘00 and forty-one (41) other officers from the officercandidate school ‘90 Alpha. MPT Class ‘04 is made up of forty-nine (49) members:thirty (30) officers from PMA ‘00 and another nineteen (19) from the Officer CadetSchool ‘99 Bravo. The class will graduate by November 2004.Currently in the pipe line is MPT Class ‘05 which will consist of forty-four (44)students all from PMA Class ‘01. This will be followed by MPT Class ‘06 consisting of

- 121 –thirty-two (32) from PMA Class ‘02 and eighteen (18) Aviation Cadets, and MPT Class‘07 made up of fifty (50) students consisting of twenty-seven (27) from PMA Class ‘03and others.It will be noted that it takes some waiting for PMA graduates who have opted forthe Air Force to start their flight training. The delay is caused by the lack of traineraircraft. Delays started when trainer planes were reduced from four (4) to three (3). Eachof these planes must be placed under “ park and fly” after every twenty-five (25) flyinghours. If used three (3) hours in the morning and three (3) hours in the afternoon, thetwenty-five (25) flying hours are quickly consumed and the plane must be grounded.Interestingly, even as the lack of trainer aircraft is acute, on 3 February 2003, the103 rd Officer Student Squadron consisting of non-PMA graduates has been revived. Thiswill mean more waiting for PMA graduates for whose training the government hasalready spent so much. At the same time, as noted above, the PMA is not the onlysource of applicants for admission to the PAF Flying School and all applicants aredelayed in their flight training by lack of trainer aircraft.AFP has undertaken a lease program for three (3) additional trainer planes – 900hours for twenty-one million pesos (P21 Million).D. On Air Force ModernizationPlans for the modernization of the Air Force have been in existence since 1996.To date, P2.865 Billion has been programmed for the Air Force modernization program.This includes allocation for the acquisition of various types of aircraft, for the upgradingof some others, and for training and administrative matters. So far, however, onlyP127.391 Million has been released. The rest await completion of various requirements

- 122 –of the AFP procurement system. (A more detailed account of problems in procurement isfound elsewhere in this report.)VIII. The Inadequacies of AFP Housing for Officers and Enlisted PersonnelWe have already noted that the lack of government quarters for officers andenlisted personnel of the AFP were adverted to by the officers and men who went toOakwood. We have also earlier referred to the problem posed by retired officers andenlisted personnel who have continued to occupy their assigned quarters despite theirretirement from the active service, thus depriving junior officers and enlisted personnel inthe active service of the right to occupy those quarters. 38 The JUSMAG (SHAI) case andthe NOVAI case relating to officers and enlisted personnel housing sites in FortBonifacio land, including the Bonifacio Naval Station, have been dealt with earlier. Inthis section of the Report, we focus, although briefly, on certain problems relating to thelack of adequate housing for AFP personnel.A. On-Base Housing and Allocation ThereofAt present, there are only seven thousand five hundred sixty (7,560) units of AFPwidegovernment housing quarters; in other words, the AFP is able to provide housing fora mere six percent (6%) of its total present strength. 39 The formidable backlog in housing38See IV above dealing with “ Modernizing the AFP: Funding and Consequential Problems” . See alsothe Cimatu Report dated 28 July 2003.39See Report submitted by Lt. Gen. Rodolfo C. Garcia AFP to the Fact-Finding Commission dated 6October 2003. The information here set out is derived principally from the Report of Gen. Garcia. ThisReport included the following figures for “ Homeless Military Personnel” (“ Homeless” referring topersonnel who are not assigned AFP housing quarters or do not own their own homes):Total %Living in Squatter Areas 15,815 14.7%Renting or Living with Relatives 37,027 34.6%Total Homeless Personnel 52,842 49.3%

- 123 –was initially addressed through the AFP On-Base Housing Program for which an averageof one hundred million pesos (P100 Million) annually was programmed and included inthe appropriations for the AFP in the GAA. However, the inability of the government toprovide sufficient funds has made the construction of more on-base housing units amatter of, apparently, lower priority. For the last five (5) years, the annual appropriationsfor AFP on-base housing construction have fallen short of the one hundred million pesos(P100 Million) envisaged.This acute and still growing shortage of housing units has focused attentionamong junior officers and enlisted personnel on the process of awarding quarters to newoccupants in the active service. An established set of criteria with corresponding pointallocations is used in the determination of new awardees. The criteria for awarding of onbasequarters has four (4) principal elements: 40(a)(b)(c)(d)Date of Application – assigned a range of points from 2 points for one yearold application to 40 points for applications filed eleven (11) and more yearsago;Maximum presence (i.e., assignment in an office inside the camp whichrequires continuous presence) – assigned a range from 10 points for personnelassigned to other AFP units in Mindanao, to a maximum of 30 points to theChief of Coordinating/Special/Technical Staffs and CO GHQ &HSC/AFPWSSUs;Seniority – assigned a minimum of 10 points for 2 nd Lieutenant/Ensign to amaximum of 20 points for Army Colonel/ Navy Captain;The Camp or Base Commander’ s favorable endorsement – assigned amaximum of 10 points.The AFP admits, however, that reality dictates some deviation (“ palakasan” ) in theadministration of this process, even as it is claimed that such deviation is the exceptionrather than the rule.40See Criteria for Assigning of Quarters (through a rational decision making process) attached to theReport submitted by Lt.Gen. Rodolfo Garcia to the Commission dated 6 October 2003.

- 124 –There is another consequence of the lack of government housing quarters for theAFP, and that is, the emergence of privately-owned quarters (POQ) in some militarybases. These POQs apparently came about originally as a result of an ad hocarrangement made between military base authorities and military personnel in the activeservice, with the latter being permitted to construct and own quarters, at their ownexpense, inside the base in order to satisfy at least partly the demands for housing. Thearrangement had also the result of at least temporarily veiling the AFP’ s inability toprovide the housing itself. Initially, the arrangement was thought to be beneficial to bothparties. Later, however, the scheme turned out to be detrimental to the management anddevelopment of the military bases where it had been allowed. The arrangement also gaverise to “ overstaying” by a number of military personnel who owned their own houses andwho retired from the active service but continued to live in their POQs.B. Off-Base Housing in Military LandsIn the effort to ease the demand for on-base housing, the AFP commencedassisting its personnel to acquire their own lots and houses, in a joint effort with privatesector developers and other Government agencies (e.g., the PAG-IBIG Fund) through the“ AFP Off-Base Housing Program.” In addition to encouraging the acquisition of housingunits offered by private developers, the AFP initiated the utilization of idle military landsas “ off-base housing sites” in the effort to make housing units more affordable to AFPpersonnel. In the past six (6) years, the AFP has assisted a total of seven thousand threehundred seventy-one (7,371) personnel (2,653 officers and 4,728 enlisted personnel) or atotal of seven percent (7%) of APF strength, through the “ Off-Base Housing Program” .In this connection, the AFP has identified eighteen (18) areas suitable for AFPhousing, located in different military reservations in different parts of the country.However, only three (3) of the eighteen (18) areas have been actually proclaimed by thePresident as available for off-base housing purposes: (a) Camp Riego De Dios in Tanza,Cavite; (b) Camp Servillano Aquino in Tarlac Province; and (c) Camp Evangelista in

- 125 –Cagayan de Oro City. The other sites identified still need to be the subject of apresidential proclamation. These 18 areas, as estimated by the AFP Housing Boardwould help directly at least 39,512 out of the 52,800 “ homeless” military personnel. TheRiego de Dios Project in Tanza, Cavite, a joint venture development project with theLaguna Properties Holdings Co. (an Ayala company) was inaugurated on 5 July 2003. Noother off-base housing project appears to be close to completion in the short-term.Aside from lack of funds, the apparent relative ineffectiveness of the AFPHousing Program, both off-base and on-base, appears to be attributable in part to theabsence of an organization or agency specifically mandated to administer the program.Policies and regulations are formulated and promulgated by the AFP Housing Board, butactual implementation thereof is left to the Unit Commanders.C. RecommendationsThe Commission’ s recommendations on this matter may be summarily stated inthe following manner:(1) The AFP budget should provide for increased allocation of funds for theAFP On-Base Housing Program as well as its Off-Base Housing Program;(2) The “ overstaying” of retired military personnel in AFP housing should bestopped and rectified;(3) The number of privately owned quarters in all military bases should bereduced, if not totally eliminated; and(4) Strict implementation of existing criteria for the awarding of governmentquarters to officers and enlisted personnel in the active service must be ensured.

- 126 -Part Three -- Findings and Recommendations of theCommission: Reiteration and CollationIn this last Part of the Report, we set out again the findings and recommendationsof the Commission in respect of the events of 27 July 2003 at Oakwood. We considerthat these findings and recommendations need to be presented together lest therecommendations appear hanging in space devoid of reference on the ground, as it were.The recommendations of the Commission concerning the grievances of the officers andmen who went to Oakwood, upon the other hand, may make some sense though standingalone. Our hope is that Part Three of the Report may serve the reader-friendly purpose ofan Executive Summary that we have decided to forego.I. Findings of the Commission Concerning the Events of 27 July 2003 atOakwoodA. Analysis and FindingsIn the section that follows, we seek to present the findings of the Commission, aswell as the inferences and possible insights that appear to be derivable from the events of27 July 2003 at Oakwood. The over-arching theme is the distinction that, theCommission believes, must be drawn between, on the one hand, the objectives which theMagdalo group sought to realize by going to Oakwood -- that is, the forcible seizure ofpower and the overthrow of the existing Government – from, on the other hand, thegrievances and the complaints the existence of which constituted the profferedjustification for their attempt to seize control of government by force of arms. TheCommission believes that the mutiny had been planned and was not spontaneous andthat it was part of a larger plan to achieve political change by military force. At thesame time, it will be seen from Part Two of this report that some of the grievances givenexpression by the rebels at Oakwood, although utilized by them to radicalize soldiers andyoung officers and to recruit adherents to “Oplan Andres,” are to a substantial degree

- 127 -real, and not merely fictitious. Finally, those grievances are not unique to the militarybut rather reflect insistent demands for reform made by practically all sectors of oursociety. The total picture is, indeed, a complex one and the challenges inherent thereintruly formidable.1. The Mutiny was Planned and not “Spontaneous”a. The rebel group did not take control of Oakwood only to air theirgrievances nor was the incident “spontaneous”. Facts gathered by the Commission pointto the political goal of taking power by the Magdalo group and the establishment of afifteen (15)-member council after the restoration of former President Estrada to thePresidency for three (3) days only. By early 2003, it was clear that recruitmentconducted by the rebel leaders exploited the soldiers’ legitimate grievances against theAFP, for which Honasan’s NRP was the purported sole solution. The “Last Revolution”stressed that since the incumbents in the Government and senior military officers wouldnot give up power voluntarily, they would have to be removed by force.b. The fact that groups identified with Honasan (Diablo and PGBI) andEstrada (PMAP and DEMOKRASYA) were apparently part of the support group for aplanned replication of “people power” further indicates the political character of theincident. They attempted to mass at the EDSA Shrine and to go to the Oakwood area, butwere prevented from doing so by the Government’s blocking forces.c. That the event was not “spontaneous” is strongly indicated by severalfactual circumstances, including: (1) the wide recruitment of military personnel, whichhad begun months before the mutiny at gripe sessions at which the bloodletting rite andthe oath of loyalty were undertaken by each recruit; (2) the purchase of uniforms andcombat boots, rebel flags, and arm bands utilized at Oakwood; (3) the provision to therebels of backpacks that must have been purchased ahead of time; (4) the purchase of

- 128 -expensive communications equipment and vehicles that were later recovered atOakwood and various other places by the authorities; (5) the reservation for Gambalaunder the name of George Uy for 19-28 July at Oakwood, and his actual occupation ofthe room where he was visited by Trillanes on 24 July; (6) the rebels’ use of two stagingpoints in Dasmarinas Village and Mandaluyong City; and (7) the prepositioning of rebelvehicles in the armories of Fort San Felipe and Sangley Point at Naval Base Cavite.d. The discovery of the plot prompted the rebel group to implement PlanCharlie and stage the Oakwood occupation as soon as the President ordered the arrest ofthe leaders in the evening of 26 July.2. Discovery and Pre-emptiona. The fortuitous scheduling of the coup attempt close to the President’ s thirdSONA scheduled for 28 July 2003, helped in the timely adoption of countermeasures toavert the plot. Security arrangements for the SONA probably helped Government forcessuch as TF Libra under Abu and TF Ayala under Teodosio prepare the countermeasuresactually adopted during the Oakwood incident.b. However, the Government authorities failed to prevent the Marines fromTernate, Cavite from moving to Oakwood despite intelligence reports about them.Neither did the authorities succeed in preventing the rebels from occupying Oakwood.Since Oakwood was a “ soft target” and prematurely committing Government troops inthe area could expose the “ hard targets” such as Malacanang Palace, military camps, andtelevision and radio stations that are more critical to the survival of the Government, theauthorities continued to watch troop movements and opted not to deny Oakwood to therebels. Hitting the “ hard targets,” according to Plans Alpha and Bravo, was apparentlypremised on the achievement of the goals of a wider and larger recruitment of rebel

- 129 -troops and civilian components of the plot. As this did not materialize due to the earlydiscovery of the plot, Plan Charlie was activated.c. The rebels failed to elicit significant support especially from the seniorofficers in the military. Thus, the Oakwood coup attempt is the first one in the country’ shistory that had been led by junior officers. This suggests (1) a breakdown in the chainof command that the leaders themselves referred to, (2) alienation of the Magdalo groupfrom their senior officers, which may reflect sentiments shared by other junior officers inthe AFP, and (3) a general decline of professionalism in the AFP officer corps.d. The rebel leaders, it appears, also miscalculated the state of publicsentiment or opinion as they failed to draw civilian support from sources other than thePGBI, Diablo, PMAP, and DEMOKRASYA.3. Demands and GrievancesThe grievances aired by the rebels referred to the RSBS, the military procurementsystem, particularly the practice of “ conversion” , the transfer of arms and ammunition tounauthorized parties, and anomalies in the construction and repair of various facilities atMarine Base Cavite.a. The Commission has looked at these grievances and found some are notwithout foundation. Nevertheless, it appears that the real impetus for the rebellion, theoperative goal of the Magdalo group, was to seize power by force and implementHonasan’ s NRP.b. The goal and the plotting and the willingness to use armed violence tosecure political changes and thereby, hopefully, correct the grievances proclaimed appearto reflect a certain psychological basis which, in the Final Report (1990) of the Davide

- 130 -Commission, was described as a “ Messianic complex” . 1 There is the idealism taught atthe PMA which is later challenged by the realities of combat duty and life in the realworld. This creates a powerful emotive force that when combined with the issue of graftand corruption and the poor conditions in the field, could make soldiers vulnerable torecruitment by both military and civilian coup plotters.c. This, however, does not diminish the reality and legitimacy of theirgrievances, with respect to, for instance, the RSBS, the Modernization Fund, and a fewother cases discussed in detail in Part II of this report.d. Moreover, the military’ s rigid hierarchy, subordination to seniors, andstrict culture of obedience make the grievance mechanisms such as the Inspector GeneralArmed Forces of the Philippines (IG) and the Office of Ethical Standards and PublicAccountability (OESPA) ineffective. 24. The Negotiated Return to Barracksa. Many groups persuaded the rebels to return to barracks, including theirclassmates from the PMA and military officers the rebels trusted such as Lim, Oban,Domingo, and Danga. Two groups of negotiators were apparently cleared to negotiatewith the rebels by Secretary Romulo. The first consisted of Biazon, Honasan, Sotto,Defensor, and Velasco who apparently obtained authorization from the ExecutiveSecretary at various times and through various means. The second was led by Cimatuwho, after obtaining the acceptance by the rebels as the principal Government negotiatoreventually succeeded in concluding the return to barracks agreement.1 The Final Report of the Fact-Finding Commission (pursuant to R.A. No. 6832), Chapter III, Sections Aand B, and Chapter VII, Section A, October 1990.2See below, “ The AFP Grievance Mechanism: The Limitations of Internal Controls” , Part Two, II-D.

- 131 -b. Varying accounts of the details of the discussions with the rebels could bedue to the large number of people present at different stages of the process, their locationrelative to the scene of the negotiations as well as to the participants, the variety ofpersonal and positional interests they represented, and the environment of tension andcrisis.c. Not having a more clearly defined mandate other than to end the incidentas soon as possible and without bloodshed and damage to property, a military frameworkdefined the terms of the agreement, i.e., that the core group would bear full responsibilityfor the incident under military law while the followers would be processed according tothe Articles of War. The discussions between the Government group led by Cimatu andthe Magdalo group is also a classic case of “ mutual ignorance” of the applicable laws,neither side being aware of Article 134 of the Revised Penal Code that penalizes coupd’ etat. This is a disturbing revelation. Neither, it also appears, was there anyone with aworking knowledge of what Article 105 of the Articles of War actually provides.d. Some have alleged that differences in the interpretation of the terms of thereturn to barracks agreement by the rebels, by the negotiators, and by the civilianprosecutorial agencies of the Government may have created a perception that the rebelofficers were “ betrayed” by the filing of charges in civilian courts. Assuming thissentiment exists and if it becomes widely shared by officers in the AFP, it could becomea tool of recruitment and tend to discourage future negotiations with the Government in asimilar situation.5. Other Findingsa. Search and Recovery of Materials Left by Rebels

- 132 -(1) Materials, including documents left by the rebels in Oakwood and in thevehicles recovered in Naval Base Cavite indicated some civilian support, in cash and inkind, had been extended to the rebels. Communications equipment left at Oakwood,vehicles, uniforms, flags, arm bands, backpacks, and other paraphernalia obviously cost asubstantial amount of money. The use as staging points of two houses owned by personsclose to former President Estrada described above tends to reinforce the belief that somesupport from certain civilian sectors had been provided.(2) There is reasonable basis to believe that the documents and diskettesrecovered by Government authorities were not merely fabricated and planted by militaryauthorities. Testimonies regarding the details of the process of recovery and the placeswhere they were recovered tended to be, in part, inconsistent with each other. This isdue perhaps to the haste with which the Oakwood management sought to clear thepremises, the different views held by the Oakwood management, and the ISAFPoperatives on what “ valuable” means, as well as the ISAFP officers’ desire immediatelyto recover whatever materials might have intelligence value.(3) Authorities that came to investigate and gather evidence regarding theincident appeared less than careful in the observance of standard evidence-collectionprocedures.b. Root Causes(1) The politicization of the military amid the erosion of civilian politicalinstitutions that had oversight powers over the military, particularly during and since theimposition of martial law, is a cause of military adventurism. The AFP’ s role as apartner in national development efforts led them to assume roles that used to be played bycivilian authorities. This tended to increase their political leverage over other sectors ofsociety, and contributed to their politicization as they interfaced directly with the people

- 133 -and the problems of the country. During the martial law period, there were noinstitutional checks on the military’ s power and influence as well as on the uses to whichits power was used, other than the personal power of President Marcos.(2) Failure on the part of the Government to enforce the law deprives the lawof its power to deter, particularly among those who had engaged in previous coup plotsagainst the Government but who were granted unconditional amnesty in 1995 withoutprior punishment. A number of former coup plotters who had been punished for theirparticipation in the coup attempts of the 1980s and returned to the military after the 1995grant of unconditional amnesty, have turned their back on military adventurism.Members of their units did not join the Magdalo group in Oakwood. But some of thosewho received unconditional amnesty without prior punishment were in the list ofmembers of the NRP Council. This suggests that consistent enforcement of the law maybe a critical factor in neutralizing the coup virus.(3) The key role of the AFP in the campaigns against communist insurgencyand Moro secessionism creates civilian Government dependence upon the military. Inaddition to the clearing of areas of insurgents and defending such cleared areas, soldiersare required to discharge the tasks of consolidation and development that properly belongto civilian authorities. 3 Not only is the military’ s political power enhanced, but theirpoliticization is also thereby increased as they confront the problems of thesecommunities on a prolonged basis.(4) Enlistment by civilian persons, including politicians, of military supportfor their personal and political ambitions contributes to military politicization andadventurism. Former President Marcos (and not the AFP) initiated the enlargement ofthe role of the military during his incumbency, particularly during martial law. Civilian3Army Col. Noel Buan, at the Dialogue between the Commission and the First Scout Ranger Batallion,Isabela City, Basilan, 19 September 2003.

- 134 -persons, including politicians, also sought and encouraged the military breakaway ofFebruary 1986 and January 2001, giving thereby the AFP great political leverage over thecivilian leaders who appear to rely on the military for political survival. Whenadequately motivated, military adventurers could exploit this situation to destabilize andoverthrow the Government.(5) At the same time, officers and troops under diligent and respectedcommanding officers did not join in the 27 July mutiny, suggesting the critical roleplayed by this breed of military leaders in dealing with the coup virus.c. Provocations(1) Grievances about graft and corruption in the military, such as the RSBS,the Modernization Fund, and the procurement system provide a fertile ground for therecruitment of officers and men for military intervention and even the overthrow ofGovernment. The expression of grievances resonates to the wider polity who share thesesentiments, even as they do not approve of the means used and the solution proffered bythe Magdalo group.(2) The Commission believes that the discovery or disclosure of the plot ledthe rebels prematurely to launch “ Oplan Andres” , a plot larger than the Oakwoodincident. Failure to attain the force requirements of Plans Alpha and Bravo compelledthe rebels to launch Plan Charlie.(3) Moreover, members of PMA ’ 94 and ’ 95 were “ frustrated” when thedialogue about their concerns they expected would take place during the dinner hosted bythe President on 23 July, did not take place. PMA ’ 94 and ’ 95 had the opportunity to talkto Abaya at the “ White House” . 4 They talked about their class being unjustly linked to a4 This is in reference to the residential quarters of the AFP chief of staff in Camp Aguinaldo

- 135 -plot against the Government as well as about their commitment to fight graft andcorruption ever since their graduation from the Academy. When the dinner with thePresident arranged for 23 July did not include a dialogue about their concerns, theinvitees went down “ frustrated.”(4) Finally, the order by the President aired on national television for thearrest of the coup leaders as “ rogue soldiers” was a precipitating factor behind theOakwood incident. At the time of the President’ s order, the leaders of the plot werealready missing from their respective units.II. Recommendations of the Commission Concerning the Events of 27 July 2003at Oakwood.1. Due diligence by commanding officers - Commanding officers in the fieldneed constantly to warn their men against recruitment for destabilization plots against theGovernment by adventurers in the military. Former military rebels who have turnedtheir back on military adventurism could be used to conduct regular dialogues within theAFP for this purpose. The adoption of a program of this nature should go a long waytowards neutralizing the coup virus.2. Effectively address legitimate grievances - The Government and the AFPneed to address the legitimate grievances of the military against corrupt officers, officials,bureaucrats, and practices. More specific recommendations on this matter are made inPart Two of this report.3. A civilian Secretary of National Defense – This Commission reiterates therecommendation of the Davide Commission to have a civilian appointed to the positionof Secretary of National Defense. 5 Beyond the need to institutionalize the supremacy of5 The Final Report of the Fact-Finding Commission (pursuant to R.A. No. 6832), recommendation C.2.f.,pp. 524-525.

- 136 -civilian authority over the military, the appointment of persons who have not had longand deep ties to the military, and who have not held positions in the militaryestablishment that itself needs to be reformed, is essential if a reform program is tosucceed. Although military officers acquire a civilian status upon retirement, they arelikely to bring the rigidity of hierarchy, seniority, camaraderie, and other aspects of themilitary culture into the office of the SND that would obstruct reform.4. Return NICA to its original mandate – Likewise, echoing the DavideCommission recommendation, this Commission recommends the appointment of acivilian head for the NICA. Moreover, NICA should be returned to its original mandate,that is, to coordinate all intelligence agencies, military and otherwise. The Presidentmust have a source of intelligence additional to the ISAFP. 6 This should provide theCommander-in-Chief (C-in-C) with a parallel intelligence source in the event thatinformation gathered by ISAFP is not made fully available to the C-in-C, for any reasonwhatsoever.5. Enforce the law against all violators - Erring officers, troops and civilianpartners in coup plots must be treated in accordance with law to control and reverse theculture of impunity. 7 As already noted, former rebel soldiers that were punished for theirparticipation in the coups of the 1980s tended to have abandoned military adventurism.To remedy the recurrence of “ negotiation in mutual ignorance” of applicable laws, thisgap must be addressed in officer education and training.6. Observe or respect the military’s political neutrality - Civilian politicalleaders must restrain themselves from enlisting military support for their personal and6The Report of the Fact-Finding Commission (pursuant to R.A. No. 6832), recommendation C.2.f., pp.524-525.7Although Commissioner Narciso concurs with this recommendation, he stresses that the discussions atOakwood between Cimatu and the rebel soldiers should be taken into account by the Government in itstreatment of the latter.

- 137 -political agenda as this can only further politicize the military and grievously endangerthe constitutional system. This is a theme that should constantly be recalled to politiciansand political parties.7. Provide “negotiators” with clear terms of reference - Government“ negotiators” in similar incidents should be given clear terms of reference by theauthorities to avoid misperceptions that could promote another coup plot in the future.In this regard, strict adherence to the law as recommended in number 5 above need notdeter rebel soldiers from “ negotiating” with government. In a “ negotiation” of a similarnature, it is incumbent on the Government “ negotiators” to demonstrate to and persuadethe other side that it is to their common interest to “ negotiate” . The law itself embodiesthe basic principle that punishment must be tailored to the degree of participation in theoffense to be penalized.III.Recommendations of the Commission Concerning the Grievances Voiced byMutineers at OakwoodA. The RSBS Problem1. Liquidate present RSBS in an orderly manner - The present RSBS shouldbe liquidated in an orderly and professional manner so as effectively to conserve whatevervalues in its asset portfolio remain.2. Return the soldiers’ RSBS contributions - The soldiers’ contributionstogether with accrued interest should be returned to them as promptly as feasible, in aphased and programmed basis as RSBS is liquidated. The soldiers can probably earnbetter yields than six percent (6%) per annum, compounded annually, at existinginstitutions like the AFP Savings and Loan Association (AFPSLAI).

- 138 -3. Initiate an AFP Service and Insurance System - A major initiative shouldbe undertaken immediately by the Government in respect of the design and developmentof an AFP Service and Insurance System (AFP-SIS), possibly as an analogue of theexisting Government Service and Insurance System (GSIS). The requirements of actuarialand financial viability of a separate AFP-SIS must be carefully studied. Some problemscan be anticipated by limiting compulsory membership in a separate AFP-SIS to militarypersonnel joining the AFP after establishment of a separate AFP-SIS. The new systemmust be completely independent from the SND and from the CSAFP. The new pensionplan should be contributory on the part of the soldiers, just as all GSIS benefits forcivilian government employees and all Social Security System (SSS) benefits for privatesector employees, are contributory. The new and independent system must be subject toall the financial and investment disciplines that private pension funds are subject to underapplicable BSP and SEC regulations.The financial requirements of a realistically sustainable level of retirementbenefits, given the current structure of compensation for AFP personnel, must becarefully studied.4. Implement fully the recommendations of the Senate Blue RibbonCommittee - All the specific recommendations made by the Senate Blue RibbonCommittee in its Reports must be vigorously, transparently and consistentlyimplemented, including the criminal prosecutions of, inter alia, Ramiscal and Abadia.Such implementation should be monitored and quarterly reports be provided to the Officeof the President, the DND and to the AFP-GHQ, and AFP personnel generally.

- 139 -B. The AFP Procurement System: Conversion and Other ProblemIn respect of the procurement system of the AFP and the very substantialproblems relating thereto, the Commission puts forward the following recommendations:1. Simplify AFP procurement procedures - The procurement procedures ofthe AFP should be drastically simplified to reduce the incentives for conversion and otherforms of misappropriation of public funds. The “ cost of money” is in effect a heavypenalty paid by AFP service units for complying with the complex requirements of theAFP’ s own procurement procedures.2. Control commanders’ discretionary powers over the CMF - Therequirements of transparency should be made more stringent to control the discretionarypowers of commanders in the disbursement or retention of “ Centrally Managed Funds,”and correspondingly increasing the accountability of such commanders in respect of suchdisbursements.3. Reduce the amount of CMF in GHQ/service HQ hands - The ability of theGHQ AFP to retain “ Centrally Managed Funds” (CFM) should be reduced by distributingmore of such funds to the HQ of each of the major services of the AFP, after carefulreview. Similarly, the ability of the HQ of each of the major service units to retain“ Centrally Managed Funds of, e.g., the PA, should be reduced by distributing more ofsuch funds to, e.g., the Division Commanders.4. Strictly implement control measures over supplies - Existing controlmeasures in respect of the management of issued or acquired supplies should be strictlyimplemented and substantive penalties imposed for failure of supervision by commandersof service units, including relief from command.

- 140 -5. Set tenure limits for AFP finance and procurement officers - Tenure limitsshould be set for comptrollers, logistics officers, procurement, and special disbursingofficers to a maximum of, e.g., four (4) years. Two (2) years each for junior and seniorpositions, respectively would appear reasonable. The ability of AFP operating units toreceive cash advances should be increased (presently limited to 10%) of total annualMOOE Funds.6. Establish an autonomous Internal Affairs office (IAO) - Apropos, thefundamental limitations of the existing AFP grievance mechanism to deal with theproblems of corruption control in the AFP, one recommendation that may be made is thatan Internal Affairs Office (IAO) that can handle grievances of AFP personnel, outside ofthe Chain of Command, should be organized as an entity separate from the AFP andreporting directly to the Commander-in-Chief, that is, the President. Possibly, the Officeof the Inspector General (IG) and the Office of Ethical Standards and PublicAccountability (OESPA) could be merged into such an IAO. If and when established, theexistence of such IAO should be brought home to AFP personnel by a countrywideinformation drive.C. Modernizing the AFP: Funding and Consequential Problems1. Vigorously pursue recovery of the JUSMAG and NOVAI properties - Theefforts of the Republic of the Philippines, BCDA, DND, and the CSAFP to recover theJUSMAG and the NOVAI properties must be pursued as vigorously as possible by the mostcompetent lawyers that the government agencies can deploy. If, indeed, falsification ofpublic instruments (including a presidential proclamation) was resorted to in connectionwith either or both of these litigations, the appropriate criminal proceedings should becommenced and pursued. 88It appears that two criminal cases have been filed against NOVAI officers; (a) People v. Domingo, et al.,Criminal Case No. 98-164382, Branch 15, RTC Manila for “ Forging the Signature of the Chief Executive” ;

- 141 -2. Pursue recovery of the ‘squatted” land in Fort Bonifacio - The recovery of59.6 hectares 9 from the civilian and military squatters inside Fort Bonifacio must be pursuedby the appropriate agencies of the Government by all lawful means, including the use ofpublic force where necessary and reasonable, while paying due attention to theconstitutional standard of ” a just and humane manner” of eviction. 10 The legal effects ofExecutive Order No. 70, dated 11 February 2002, upon the status of such land occupied bycivilian and military squatters, must be clarified. The concern of the Government forlandless citizens is, of course, completely understandable. At the same time, theGovernment must take into account two (2) things. The first is that the ability of squattersto maintain by force their unlawful occupancy of public land against the Republic of thePhilippines and BCDA should not be rewarded. That ability tends to signal the weakenedcondition of the institutions of Government in general and of law enforcement in particular.Second, the Government must not forget the many thousands of homeless AFP officers andenlisted men, whose plight is referred to below in “ V. – Problems of Housing: AFPOfficers and Enlisted Personnel” , and of the continuing validity of the basic statutory intentset out in Republic Act No. 7898 (the AFP Modernization Act): the proceeds of sales ofFort Bonifacio land are intended for the modernization of the AFP.3. Substantially increase AFP’s share in Fort Bonifacio’s sale proceeds -The share allocated to the AFP Modernization Program in sale’ s proceeds generated bythe Based Conversion and Development Authority (BCDA) should be increased verysubstantially. The Commission remains unaware of any rational explanation fordribbling away 37.5% of the proceeds of sales of Fort Bonifacio land to fourteen (14)and (b) People v. Domingo, et al., Criminal Case No. 97-297010, Branch 28, MTC, Manila, forFalsification of Public Documents. These cases are pending before the respective trial courts.9The land squatted upon was originally 64 hectares in area. A portion of this area – 4.4 hectares – wassubsequently cleared by the BCDA and included in a joint venture development project that BCDA enteredinto with a private company.10See Article XIII, Section 10, 1987 Constitution.

- 142 -other non-military-related government departments and offices. It appears onlyreasonable to us that all those proceeds from the sales of military land should be sharedonly by the AFP (for its modernization program) and the BCDA.4. Reinforce Office of the Ombudsman by increasing funding and othersupport - It has become very clear to the Commission that meaningful reform, whether inthe military or in the civilian sectors of government service, is simply not feasiblewithout independent, vigorous and able prosecutorial services of the Government. In ourGovernment, the Office of the Ombudsman – more specifically, the Office of the SpecialProsecutor attached to the Office of the Ombudsman – is supposed to function as theprincipal prosecution arm vis-à-vis erring public officials. Thus, the Special Prosecutorof the Office of the Ombudsman has filed two hundred forty (240) criminal charges in theRSBS matter alone. The Ombudsman has also filed one hundred ninety-five (195)separate indictments in respect of extensive irregularities in the procurement of goods forthe Philippine Navy. The Ombudsman may be expected to be even more heavilyengaged in the future in respect of efforts to reform the procurement service of the AFPas a whole, not to speak of government procurement in general. The Commission’ sfinding has earlier been noted that the internal grievance resolution process of the AFP,constituted by the Office of the Inspector General, AFP, has important structural andother limitations upon its ability to deal with the kind of grievances analyzed in theCommission’ s Report.In a lengthy Memorandum dated 1 October 2003, submitted to the Commission,the Ombudsman went into some detail about the funding and other formidable difficultiesfaced by his office in discharging its constitutional and statutory role in the effort to bringcorrupt and other erring public officers to justice. The Ombudsman underscored ashocking statistic: upon starting on his term of office, the incumbent Ombudsman foundthat the success ratio (or conviction rate) of the Office of the Ombudsman, in respect ofcases brought before the Sandiganbayan, had declined to six percent (6%). This means,the Ombudsman was courageous enough to state, that the high-ranking public officials

- 143 -and military officers charged before the Sandiganbayan have a ninety-four (94%) chanceof walking away free at the end of the proceedings. 11The Commission is bound to note that no government can accept this successratio for any substantial period of time, without running a grave risk of forfeiting itslegitimacy altogether. It is, of course, true that this low success ratio is the result of aconfluence of factors bearing upon the Office of the Ombudsman, and possibly theSandiganbayan itself. It is also true that criminal conviction and incarceration are not theonly strategies necessary for a serious effort to control and abate the level of corruption inthe AFP. Even so, the minimum recommendation that we feel compelled to address tothe President and the appropriate government authorities, is that the Office of theOmbudsman must be given the budgetary and other support that it needs, with allpossible dispatch, if the grievances referred to in Oakwood, and more generally invarious parts of the AFP itself, are to be addressed seriously and effectively. While allgovernment offices and agencies are limited in their activities by the scarcity ofbudgetary resources, the highest priority should be given to corruption control in theAFP. An indispensable part of that control is the ability of the Office of the Ombudsmanefficiently to investigate and prosecute even high-ranking officers in the AFP.D. The State of the AFP Medical ServicesTwo fairly obvious general conclusions can be drawn from what has been said:(1) the AFP military service needs more money – for medicine, food, facilities, doctors;and (2) it can stand closer scrutiny of its management practices.11Under R.A. No. 8249, approved on 5 February 1997, public officials with Salary Grade 26, under theCompensation and Position Classification Act of 1989 (Republic Act No. 6758), and below are to be triedbefore the ordinary courts of the Republic. Under Republic Act No. 8249, the Sandiganbayan hasexclusive original jurisdiction over cases involving “ Philippine army and air force colonels, naval captainsand all officers of higher rank” . (Section 4)

- 144 -On the financial side, part of the funding of the AFP Modernization Programgenerated from the sale of Fort Bonifacio land should be dedicated to the modernizationand upgrading of medical services, in accordance with the original statutory intent.On the management side, geographic distribution of hospitals should be reviewed.Consolidating existing hospitals into fewer units could probably result in better medicalservices.The suggestion that doctors be hired as doctors and compensated according totheir level of expertise and experience and not according to rank, probably meritsconsideration and trial and validation.A government counterpart to the premium paid by soldiers to PHILHEALTHinsurance should enhance the benefits which the military can receive.The close relationship between the prompt availability of adequate medicalservices when needed by troops engaged in encounters with hostile forces, and thefighting efficiency and morale of such troops, needs no documentation. What is neededis, after realization thereof, dedication of more efforts and funds to the improvement ofthe AFP medical services.E. The Problem of Benefits for Soldiers Killed in ActionAside from the relatively small amount that is received by way of death benefits,the common problem is that of processing delays. A major cause of delays is thecompletion of the documentation needed. Another cause of delay is the verification ofidentities of beneficiaries, especially when there are illegitimate offspring left behind.What is needed is the strengthening of the record system of the personal data of soldiers

- 145 -and their dependents. The data should not only be accurate and up to date but alsoimmediately accessible. Clearly, computerized information systems are called for.F. The Problem of Pilot to Aircraft Ratio or Too Few AircraftPlans for the modernization of the Air Force have been in existence since 1996.To date, P2.865 Billion has been programmed for the Air Force modernization program.This includes allocation for the acquisition of various types of aircraft, for the upgradingof some others, and for training and administrative matters. So far, however, onlyP127.391 Million has been released. The rest await completion of various requirementsof the AFP procurement system. (A more detailed account of problems in procurement isfound elsewhere in this report.)G. The Inadequacies of AFP Housing for Officers and Enlisted PersonnelThe Commission’ s recommendations on this matter may be summarily stated inthe following manner:(1) The AFP budget should provide for increased allocation of funds for theAFP On-Base Housing Program as well as its Off-Base Housing Program;(2) The “ overstaying” of retired military personnel in AFP housing should bestopped and rectified;(3) The number of privately owned quarters in all military bases should bereduced, if not totally eliminated; and(4) Strict implementation of existing criteria for the awarding of governmentquarters to officers and enlisted personnel in the active service must be ensured.

- 146 -Concluding ObservationsA person or body given the task of making recommendations is naturallyinterested in the level of acceptance and implementation given to such recommendations.In the present instance, the Commission feels bound to reiterate its belief that many of thegrievances voiced at Oakwood are founded in fact and must be addressed with greatseriousness and all the political will that can be mustered. Similarly, therecommendations put forward by the Commission in respect of the Oakwood mutinyitself need to be considered with equal seriousness and strong political determination.Our hope is that these sets of recommendations not be allowed simply to rest on someofficial shelf, even as most, perhaps all, of the recommendations made by the DavideCommission in 1990 seem to have been benignly neglected, probably on the same shelf,since then.Our final recommendation, accordingly, is that one official of high competence,commitment and integrity, with direct access to the President and enjoying the trust of allpolitical groupings, be designated with all dispatch, on a full time basis, with the task ofimplementing the recommendations here collated. Regular and frequent monitoring ofthe implementing measures which need to be taken by a number of government agencies,will be indispensable. Some of these recommendations are necessarily cast in relativelygeneral terms: these will need to be specified in more operational terms. Some of therecommendations may need legislative action, e.g., the strengthening of the Office of theOmbudsman. The necessary legislation should, of course, be drafted forthwith. Butmuch can be done while legislation is being sought. Thus, competent prosecutors couldbe detailed from, perhaps, the Department of Justice, and assigned to assist theOmbudsman’ s Office in prosecuting the criminal cases relating to the extraordinaryoverpricing of the RSBS real property acquisitions. Other recommendations need nocongressional enactment, for instance, more thoughtful and energetic handling of thecases brought by the Republic in the JUSMAG (SHAI) and NOVAI matters. The person

- 147 -or agency designated to implement, and to monitor the implementation of, the aboverecommendations will have to establish an order of priority, if only because of thefiniteness of time. That person must have a strong sense of the importance and urgencyof the task involved; a truckload of common sense will also be most helpful.Finally, that person must also believe with all his heart that reforming andmodernizing the AFP, and with it stabilizing and strengthening the Republic, is not onlynecessary and worth doing, but also can be done, done urgently and done well.

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Annex ABrief History of the Fact Finding CommissionA. Origin and Mandate of Administrative Order No. 78On 30 July 2003, three days after three hundred twenty-three (323) officers andmen, mostly from elite units of the Armed Forces of the Philippines (AFP), took over theOakwood Premier Apartments in Makati City, President Gloria Macapagal Arroyo signedAdministrative Order (AO) No. 78 to create the Fact Finding Commission to investigatethe events widely known as the failed rebellion or mutiny of 27 July 2003. 1The Commission is an independent fact finding body. It is independent of theOffice of the President and other agencies conducting parallel investigations forprosecution of those liable under Republic Act (RA) 134 of the Revised Penal Code ---punishing rebellion, or trials under the Articles of War, and other similar investigationsheld in aid of legislation. It conducted information gathering proceedings designed toenable the orderly transmission and collection of information to the Commission. ItsRules of Procedure are similar to the Fact Finding Commission that investigated thefailed coup d’etat of December 1989 popularly known as the Davide Commission createdby the President of the Philippines under AO No. 146 of 6 December 1989, and RA No.6832 of 5 January 1990.AO No. 78 states the Commission’s mandate to investigate and “evaluate all thefacts and circumstances surrounding the rebellion, its roots, and the provocations thatinspired it”. 21 Copy of the AO No. 78 attached as Annex B.2 Sections 1 and 8 of AO No. 78.

The Commission is granted the powers of an investigating body under Section 37,Chapter 9, Book I of the Administrative Code of 1987 to “summon witnesses, administeroaths, take testimony or evidence relevant to the investigation, and to issue compulsoryprocesses to produce documents, books, records and such other matters, in theperformance of its functions”, 3 and is authorized to “deputize the Armed Forces of thePhilippines, the National Bureau of Investigation, the Philippine National Police, and anyother law enforcement agency to assist it in the performance of its functions.” 4 It mayalso engage the services of resource persons, professionals, and other personnel whichmay be necessary to carry out its functions.B. Members of the CommissionThere are six (6) Commissioners, with retired Supreme Court Justice FlorentinoP. Feliciano heading the Commission as its Chairman. In 1995, Feliciano took earlyretirement from the Court to join the Appellate Body of the World Trade Organization(WTO). Upon his election to the Appellate Body of the WTO, he served until early2002. He is Senior Counsel at the Sycip Salazar Hernandez and Gatmaitan Law Offices.He is also Judge at the World Bank Administrative Tribunal.The other members of the Commission are Justice Minerva Gonzaga Reyes, whoretired as Justice of the Supreme Court in 2001; Father Joaquin G. Bernas, Dean of theSchool of Law at the Ateneo de Manila University and member of the 1986Constitutional Commission; Professor Carolina G. Hernandez, a political scienceprofessor at the University of the Philippines, founding President of the civil societyresearch organization Institute for Strategic and Development Studies, and member of the3 Section 2 of AO No. 78.4 Section 5 of AO No. 78.

1990 Davide Commission; Commodore Rex C. Robles, a retired officer of the PhilippineNavy, AFP, and head of the private sector consulting firm RCR Consultancy; andCaptain Roland A. Narciso, formerly of the Philippine Air Force (PAF) until he joinedthe Philippine Airlines as a commercial pilot in 2000, and a member of PhilippineMilitary Academy Class ‘95 from which most of the leaders of the 2003 rebellion come.The Commission Counsel is led by Atty. Mario E. Ongkiko, Managing Partner inOngkiko Kalaw Manhit and Acorda Law Offices as Commission Counsel. Atty. RobertoC. San Juan (Sycip Law) is Deputy Commission Counsel while the other members areAtty. Casiano Flores, Jr. (Flores Flores and Barot Law Offices), Atty. Arturo M. deCastro (De Castro and Cagampang Law Offices), Atty. Antonio Z. Bucoy, (PobladorAzada and Bucoy Law Offices), Atty. Angelito S. Lazaro, Jr. (Ongkiko Kalaw Manhitand Acorda Law Offices), Atty. Fidel I. Borja (Office of the Solicitor General), and Atty.Edmundo Pintac (Office of the Solicitor General). Retired RTC Judge Leonardo Ansaldois the Commission Clerk of Court.The rest of the Commission’ s support structure consists of staff fulfilling variousfunctions namely, External Relations (3) headed by Ms. Jingjing Villanueva-Romero(President, STRATOS) as Commission Public Information Officer, Ma. Stephanie R.Hilario and Maria Pacita C. Joson (Public Relations Assistants); Ms. Josephine C.Romero in the Research Division (1); Commission Staff (8) who are Roberto T. Feliciano(Acting Chief of Staff and Executive Assistant, Office of the Commission Chairman),Leah N. Magno (Private Secretary, Office of the Commission Chairman), Jocelyn B.Paraiso (Stenographer/Secretary, Office of the Commission Chairman), Atty. PedroAriston (Executive Assistant, Office of Fr. Bernas), Rowena N. Termulo-Cruz (ExecutiveAssistant, Office of Professor Hernandez), LTSG Jose Gaspar A. Anduiza PN (ExecutiveAssistant, Office of COMMO Robles), CAPT. Antonio C. Salgado, Jr. PAF (ExecutiveAssistant, Office of Capt. Narciso), Atty. Dave Escalona (Legal Assistant, Office ofCAPT Narciso); Secretariat (5) headed by Atty. Susana Dumlao-Vargas (Deputy

Executive Secretary for Administration and Finance, Office of the President), andDirector Teresita M. Mendoza (Finance Office, Office of the President), GeroncioCalvelo, Jose Benjamin M. Tomelden, Pilar Satparam, Rolando Waje and Reynaldo M.Siojo (Office of the President); Stenographers (7) Romeo O. Asis (RTC Branch 35,Manila), Phinky B. Toboro (RTC Branch 28, Manila), Antonia C. Buo-Rivera (RTCBranch 55, Manila), Winefreda O. Paas (RTC Branch 55, Manila), Ma. Theresa P.Concepcion (RTC Branch 142, Makati City), Mercy F. Magparangalan (RTC Branch140, Makati City), and Myrna M. Macatangay (RTC Branch 150, Makati City); Sergeantat-Arms(1) Carlos E. Castro (Process Server, RTC Branch 158, Pasig City); Security (3)SPO2 Dionisio Rabanera, PNP, PO1 Oidor C. Fiesta, PNP and PO2 Cesario C. Toledo,PNP; Drivers (7) Celso Santiago, Danilo Eloriaga, Jeffrey Sioson, Zosimo Pambid,(Office of the President), Roberto Yap, Roberto Dolores and Noly Encado; and Utility (2)Noel Panganiban and Jomar C. Unday.The Commissioners who are retired justices waived their rights to compensation.All except two lawyers of the Commission Counsel, and a number of support personnelserve on a pro bono arrangement. The rest are seconded from their regular governmentagencies and private firms on special detail to assist the Commission in fulfilling itsmandate.The Commission designated Justice Reyes as Commission Vice Chairman andProfessor Hernandez as Commission Spokesperson.C. Fact-Finding Methodology and ProcedureResolution No. 001 promulgated on 8 August 2003 contains the Rules ofProcedure of the Fact Finding Commission. The Rules of Procedure governs the

Commission’ s fact finding approach to enable it to gather facts in an orderly andsystematic manner. It also allows for flexibility and transparency in the investigation.Other resolutions passed by the Commission relate to the appointment ofCommission Officers, Counsel, and staff; the designation of the Commission’ spermanent office and venue of regular hearings; and the trip to Zamboanga City andBasilan. 5D. TimetableThe Commission’ s tenure is August to October 2003. Its investigation startingfrom 12 August to 14 October 2003, includes twenty (20) days of hearings, two (2) daysof video showing on 2 and 4 September, and five (5) days of visits to various AFP campsand detachments in the Southern Command (Zamboanga City and Isabela City, Basilan)on 18, 19, and 20 and in Camp Aguinaldo on 29 September and 14 October, and inVillamor Air Base on 6 October 2003.E. WitnessesDuring the course of its investigation, testimonies in various forms of ninety five(95) witnesses were taken. These are supported by transcripts, sworn statements, videos,exhibits and other material evidences. The witnesses from the Open Hearings total sixtyseven (67), and those recalled eleven (11) individuals. The testimonies of twenty two (22)witnesses were taken in Executive Session while twenty three (23) were interviewed prior5During the visits to Zamboanga City and Isabela City, Basilan, the Commission engaged in dialogueswith the officers and enlisted personnel of different of the AFP in SOUTHCOM. During these dialogues,comments including complaints were submitted to the Commission by officers and enlisted men both orallyand in writing. On 16 October 2003, the written texts of these comments and complaints were transmittedby the Commission to the Chief of Staff AFP Gen. Narciso L. Abaya.

to the taking of sworn statements. The complete record of witnesses is attached to theReport in List 1 of Annex A.F. Other Sources of InformationTranscripts of the witnesses’ testimonies form part of the documentary materialcollected by the Commission. Exhibits marked during the testimonies includepresentation materials, books, video tapes, computer diskettes, and open and confidentialdocuments. These exhibits, marked “ A” to “ Z” , “ AA” to “ ZZ” , and “ AAA” to “ CCC” arelisted in detail in List 2 of Annex A. Besides these materials, a list of documents anditems filed before the Commission is in List 3 of this annex.

ANNEX B

ANNEX CRepublic of the PhilippinesTHE FACT-FINDING COMMISSION(pursuant to Administrative Order No. 78 of the President of the Republic of thePhilippines dated 30 July 2003)IN RE:RULES OF PROCEDURE OF THEFACT-FINDING COMMISSION.Promulgated:x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x8 August 2003RESOLUTION NO. 001WHEREAS, by express mandate of Administrative Order No. 78, an independentCommission, hereinafter known as the COMMISSION, was created to conduct athorough fact-finding investigation of the failed rebellion or failed coup d’ etat on 27 July2003 and evaluate all the facts surrounding said occurrence and submit its findings andrecommendations to the President, the Congress, and other appropriate authorities;WHEREAS, to effectively and expeditiously carry out the above purposes andobjectives, it is necessary that, within the scope of its express and implied powers andfunctions under Administrative Order No. 78, certain rules of procedure be adopted;NOW, THEREFORE, the Commission has resolved, as it hereby resolves, toadopt the following Rules of Procedure:RULE 1INTRODUCTORY PROVISIONSSECTION 1. Title. - These rules shall be known and cited as the RULES OFPROCEDURE OF THE FACT-FINDING COMMISSION.The Commission shall mean the Commission created under Administrative OrderNo. 78, dated 30 July 2003.

SECTION 2. Applicability. - These rules shall apply to the proceedings beforethe Commission and any of its officials.SECTION 3. Construction. - These rules shall be liberally construed in order topromote the effective and expeditious implementation of the Administrative Order No. 78dated 30 July 2003 and the performance of the functions and duties of the Commission.RULE 2OBJECTIVES AND POWERS OF THE COMMISSIONSECTION 1. Objectives of the Commission. - The Commission shall have thefollowing objectives:(a)(b)to make a thorough investigation of all the facts and circumstancessurrounding the failed rebellion or failed coup d’ etat of 27 July 2003, itsroot causes and provocations, andto recommend measures to prevent similar occurrences.SECTION 2. Powers of the Commission. - The Commission shall have all thepowers expressly vested upon it by Administrative Order No. 78 dated 30 July 2003 andsuch other powers as may be necessary or appropriate for or incidental to the effectiveexercise of its express powers.The Commission shall:(a)(b)(c)Conduct a thorough fact-finding investigation of the failed rebellion orfailed coup d’ etat of 27 July 2003 and the involvement therein of militarypersonnel and civilian personalities including public officials andemployees, evaluate all the facts and circumstances of the same, andsubmit its findings and recommendations to the President, the Congressand other appropriate authorities;Receive, review and evaluate the evidence adduced before it and for thispurpose, summon witnesses, administer oaths, take testimony or receiveevidence relevant to the investigation, and issue subpoena adtestificandum or subpoena duces tecum for the production of documents,books, records and other articles;Perform such other acts as may be incidental to or necessary orappropriate for the carrying out of the objectives of Administrative OrderNo.78 dated 30 July 2003.

RULE 3THE COMMISSION COUNSEL AND HIS DEPUTIESSECTION 1. The Commission Counsel. - The Commission shall have a ChiefCounsel and at least three (3) Deputy Counsel.The Chief Counsel and the Deputy Counsel may be incumbent officials of anygovernment investigative or prosecutorial agency deputized by or detailed to theCommission. They must be of known reputation for competence, integrity, probity,dedication to duty and independence of mind who must have at least ten (10) years ofexperience as fiscal, prosecutor, judge, investigator, hearing officer or trial lawyer. Ifthey are from the private sector, they must be members in good standing of the IntegratedBar of the Philippines, of known reputation for competence, integrity, probity, dedicationto duty and independence of mind, with at least ten (10) years of experience as triallawyer.SECTION 2. Duties of the Chief Counsel. - The Chief Counsel shall have thefollowing functions and duties:(a)(b)(c)(d)(e)(f)(g)Be responsible for the gathering of evidence, the search for witnesses andthe presentation of witnesses at hearings of the Commission;Supervise and coordinate the taking of sworn statements or depositions ofwitnesses by any other officer, agent or lawyer of the Commission, or anyofficer of any investigative or prosecutorial agency of the governmentrequested to take the same pursuant to Sec. 3, Rule 5 of these Rules;Prepare a list of prospective witnesses and, in coordination with and priorconsultation with the Chairman, prepare the schedules for the reception oftheir testimony.Obtain the support/assistance of, and effectively coordinate with,investigative and prosecutorial agencies of the government, as well as anyother agency or instrumentality of the government, including governmentownedor controlled corporations, in gathering relevant data, facts orevidence, or gaining access to books, records, documents or papers whichhe may deem necessary in connection with the fact-finding inquiry;Sign summons and subpoenas, subject to attestation or approval by theChairman;Perform the functions and duties inherent in or incidental to the position ofChief Counsel of bodies similar to the Commission; andPerform such other duties as the Commission may direct.

SECTION 3. Duties of the Deputy Counsel. - The Deputy Counsel shall assistthe Chief Counsel and shall perform such functions and duties as may be assigned tothem by the Commission or by the Chief Counsel.RULE 4SPECIAL COUNSELSECTION 1. Special Counsel. - The Commission shall have as many SpecialCounsel as the Commission may determine from time to time, who must be members ingood standing of the Integrated Bar of the Philippines with at least five (5) yearsexperience as fiscal, prosecutor, investigator, hearing officer or trial lawyer. They maybe incumbent officials of any investigative or prosecutorial agency of the governmentdeputized by the Commission or on detail to it, or lawyers who are or have been in theprivate practice of law for at least five (5) years and who are presently members of thePhilippine Bar in good standing.SECTION 2. Duties of Special Counsel. - The Special Counsel shall assist theOffice of the Chief Counsel in interviewing or taking sworn statements or depositions ofwitnesses and in gathering evidence. They shall perform such other functions and dutiesas the Commission or the Chief Counsel may prescribe.RULE 5FACT-FINDING PROCEDURESECTION 1. How May Facts/Evidence be Obtained. - The Commission mayobtain facts/evidence through oral testimony, sworn statements or depositions of partieswhom it may consider to have knowledge of any fact or to have possession of anyevidence which may be relevant for purposes of attaining the objectives of theCommission. Depositions of witnesses may be taken as determined by the Commission.SECTION 2. Testimony of Witnesses. - The testimony of witnesses may begiven at a hearing of the Commission, or before any person designated by theCommission.SECTION 3. Sworn Statements. - (a) Sworn statements of witnesses may betaken by the Chief Counsel, any of the Deputy Counsel or any of the Special Counsel ofthe Commission. Upon request of the Commission, sworn statements may also be takenby prosecutors, investigators or hearing officers of any investigative or prosecutorialagency of the Government who may be deputized for that purpose.

(b)(c)(d)Sworn statements may be taken only from witnesses identified in writingby the Commission or by any of the Commission’ s Counsel when dulyapproved by the Commission.The taking of depositions need not strictly follow the procedure providedfor in the Rules of Court.The witness concerned shall be entitled to a copy of his sworn statement.SECTION 4. Depositions. - The taking of depositions may likewise beauthorized by the Commission. They may be taken only from witnesses identified inwriting by the Commission.A verbatim transcript shall be made of all depositions.The deponent shall be entitled to a copy of the deposition.SECTION 5. Oath/Affirmation. - Every witness must take an oath oraffirmation before giving testimony at a hearing or deposition-taking. The oath may beadministered by the Chairman, any of the members of the Commission, the ChiefCounsel, Deputy Counsel or Special Counsel.The sworn statement shall be subscribed and sworn to by the witness before theofficial or deputy of the Commission who took the sworn statement or before any personauthorized to administer oaths.SECTION 6. Refusal of a Witness to Appear/Testify Before the Commission. -Should a witness refuse to appear or to testify despite service of a subpoena, theCommission may take appropriate action against him for contempt.SECTION 7. Refusal of Witness to Give Sworn Statement or to Submit toDeposition-Taking. - Should a witness refuse to give testimony or to answer anyquestion during the taking of his sworn statement or deposition, the Commission maytake appropriate action against him for contempt.RULE 6HEARINGS OF THE COMMISSIONSECTION 1. General Rule: Exceptions. - Hearings of the Commission toreceive the testimony of parties summoned by it shall be open to the public. However,the Commission may, motu proprio or upon request of the person testifying, hold anexecutive or closed-door hearing where the requirements of national security or publicsafety or the personal safety of the witness warrant the holding of such executive orclosed-door hearing.

SECTION 2. Parties Allowed to be Present During an Executive or Closed-DoorSession. - Only the members of the Commission, any of its counsel, Secretary of theCommission, and the witness and his counsel, if he has any, shall be allowed to bepresent at an executive or closed-door hearing.SECTION 3. How Testimony is Taken in an Executive or Closed-Door Hearing.- In an executive or closed-door hearing, the witness must first be sworn in, unless suchhearing is merely a continuation of a previous hearing or session where the witness hadtestified. Stenographic or electronic recording of such testimony shall be made;provided, however, that said testimony, in whatever manner recorded, shall be treated asconfidential and shall not be released to the public without the express authority of theCommission.Except as provided for above, no person shall make public any testimony giventherein by a witness.SECTION 4. Television and Other Media Equipment. - Members of the mediamay use their cameras or other equipment at the place of hearing until the Commissionshall announce the start of the proceedings. Thereafter, all cameras and video equipmentshall be restricted to a designated area until the termination of the proceedings.RULE 7SUPPLEMENTAL RULESSECTION 1. The Rules of Court. - In the absence of any specific applicableprovision in these Rules, the pertinent provisions of the Rules of Court of the Philippinesmay be resorted to by the Commission.RULE 8AMENDMENTSSECTION 1. Amendments. - These Rules may be amended or supplemented bya majority vote of all the members of the Commission.RULE 9EFFECTIVITYSECTION 1. Effectivity. - These Rules shall take effect immediately.

PROMULGATED, this 8 th day of August 2003 in the City of Manila, MetroManila.

ANNEX D-1Republic of the PhilippinesTHE FACT-FINDING COMMISSION(pursuant to Administrative Order No. 78 of the President of the Republic of thePhilippines dated 30 July 2003)IN RE: APPOINTMENT OF COMMISSION COUNSELPromulgated:8 August 2003x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - xRESOLUTION NO. 002WHEREAS, by express mandate of Administrative Order No. 78, an independentCommission, hereinafter known as the COMMISSION, was created to conduct athorough fact-finding investigation of the failed rebellion or failed coup d’ etat on 27 July2003 and evaluate all the facts surrounding said occurrence and submit its findings andrecommendations to the President, the Congress, and other appropriate authorities;WHEREAS, to effectively and expeditiously carry out the above purposes andobjectives, it is necessary that the Commission engages the services of lawyers comingfrom the private and public sector on a contractual or pro-bono basis;WHEREAS, the Commission has already engaged the services of a number ofpublic and private lawyers to the Commission in the discharge of its tasks and objectives.NOW, THEREFORE, the Commission has resolved, as it hereby resolves, toapprove the appointment of the following lawyers of the Commission, including theirposition, status and compensation where proper:Atty. Mario E. Ongkiko Chief Counsel Pro-bonoAtty. Casiano Flores, Jr. Deputy Counsel Regular (Contractual)Atty. Vitaliano Aguirre II Deputy Counsel Pro-bonoAtty. Roberto C. San Juan Deputy Counsel Pro-bonoAtty. Arturo M. de Castro Deputy Counsel Pro-bonoJudge Leonardo Ansaldo (ret.) Clerk of Court Regular (Contractual)Atty. Antonio Z. Bucoy Deputy Counsel Pro-bono

Atty. Angelito S. Lazaro, Jr. Special Counsel Pro-bonoAtty. Fidel I. Borja Assistant Counsel Pro-bonoAtty. Edmundo Pintac Assistant Counsel Pro-bonoSubject to the condition that the Chairman is hereby authorized to fix the compensationor allowance which the Commission shall pay to the lawyers engaged on contractualbasis.Unanimously approved.

ANNEX D-2Republic of the PhilippinesTHE FACT-FINDING COMMISSION(pursuant to Administrative Order No. 78 of the President of the Republic of thePhilippines dated 30 July 2003)IN RE:APPOINTMENT OF EXECUTIVE ASSISTANTSAND OFFICE STAFF.Promulgated:x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x8 August 2003RESOLUTION NO. 003WHEREAS, by express mandate of Administrative Order No. 78, an independentCommission, hereinafter known as the COMMISSION, was created to conduct athorough fact-finding investigation of the failed rebellion or failed coup d’ etat on 27 July2003 and evaluate all the facts surrounding said occurrence and submit its findings andrecommendations to the President, the Congress, and other appropriate authorities;WHEREAS, to effectively and expeditiously carry out the above purposes andobjectives, it is necessary that the Commission engages the services of executiveassistants, secretaries and office staff coming from the private and public sector on acontractual or pro-bono basis;NOW, THEREFORE, the Commission has resolved, as it hereby resolves, toauthorize the Chairman to engage the services of competent and able executive assistants(as requested by the several members of the Commission), secretaries and/or office staffas may be needed by its operation and to fix the terms and compensation of such staffafter consultations with Assistant Executive Secretary Susana Dumlao-Vargas.Unanimously approved.FLORENTINO P. FELICIANO (SGD.)Chairman

MINERVA P.G. REYES (SGD.)Vice ChairmanJOAQUIN G. BERNAS, S.J. (SGD.)MemberCAROLINA G. HERNANDEZ (SGD.)MemberCOMMO. REX C. ROBLES, AFP (Ret.) (SGD.)MemberCAPT. ROLAND A. NARCISO (SGD.)Member

ANNEX D-3Republic of the PhilippinesTHE FACT-FINDING COMMISSION(pursuant to Administrative Order No. 78 of the President of the Republic of thePhilippines dated 30 July 2003)IN RE:TRIP TO ZAMBOANGA CITY ANDBASILAN.Promulgated:x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x15 September 2003RESOLUTION NO. 003WHEREAS, by express mandate of Administrative Order No. 78, an independentCommission, hereinafter known as the COMMISSION, was created to conduct athorough fact-finding investigation of the failed rebellion or failed coup d’ etat on 27 July2003 and evaluate all the facts surrounding said occurrence and submit its findings andrecommendations to the President, the Congress, and other appropriate authorities;WHEREAS, the Chairman and other members of the Commission deem itnecessary for the Commission members to go to Zamboanga City and Basilan for thepurpose of conducting on the spot ocular inspection of the conditions of the ArmedForces of the Philippines, their housing facilities, their supplies and other pertinentcircumstances.NOW, THEREFORE, the Commission has resolved, as it hereby resolves, toundertake a trip for the Commission, its members and executive assistants to go toZamboanga city and Basilan on 17 September 2003 to return on 19 September 2003 andto authorize the Chairman to disburse the necessary funds to defray the transportation andother out-of-pocket expenses needed for the trip after consultations with AssistantExecutive Secretary Susana Dumlao-Vargas.It is hereby further resolved, that the findings and reports on the trip shallofficially form part of the records of the Commission.Unanimously approved.

FLORENTINO P. FELICIANO (SGD.)ChairmanMINERVA P.G. REYES (SGD.)Vice ChairmanJOAQUIN G. BERNAS, S.J. (SGD.)MemberCAROLINA G. HERNANDEZ (SGD.)MemberCOMMO. REX C. ROBLES, AFP (Ret.) (SGD.)MemberCAPT. ROLAND A. NARCISO (SGD.)Member

ANNEX ELIST OF DOCUMENTS SUBMITTEDDURING THE COMMISSION HEARINGS AND MARKED AS EXHIBITSEXHIBITNO.DESCRIPTION OF DOCUMENT/Sor EXHIBIT/S“ A” Ten (10) diskettes retrieved from Oakwood by ISAFP andallegedly left by the soldiers.“ A-1” Pamphlet which was provisionally marked until their actualpresentation.“ B” Pamphlet entitled “ Leaders of Coup Task Groups” consisting ofeight (8) pages, marked “ secret.”“ C” “ The Last Revolution” pamphlet consisting of eight (8) pages bythe New Filipino Heroes.“ D” The “ National Recovery Program” authored by Gregorio“ Gringo” Honasan.“ E” “ A Study of Corruption in the Philippine Navy” by Lt.J.G.Antonio Trillanes“ F” “ Corruption in the Philippine Navy Procurement System” by LT.Antonio F. Trillanes“ G” Colored pictures with the red and white flags at the back andwith the figure of a man similar to Sen. Honasan“ H” Colored pictures with the red and white flags at the back andwith the figure of a man similar to Honasan.“ I” Copy of Executive Order No. 246, Malacanang Palace,consisting of three (3) pages, providing for the creation of NICAand other purposes dated July 24, 1987.“ J” Copy of “ Administrative Order No. 68,” Malacanang Palace,consisting of five (5) pages, providing for the strengthening ofNICA dated April 8, 2003.

EXHIBITNO.DESCRIPTION OF DOCUMENT/Sor EXHIBIT/S“ K” Copy of NICA “ Briefing on the 2003 SONA and the AttendantDestabilization Activities” consisting of twelve (12) pages,undated.“ L” Acknowledgment Receipt dated 14 August 2003 covering six (6)pieces of security video cassette tapes dated August 14, 2003delivered to the Commission by Oakwood Premier Apartments.“ L-1” to “ L-6”Six (6) pieces of Oakwood Apartment security video cassettetapes covering the period 26 July 2003 (0025 H) to 28 July 2003(0330 H)“ M” List of Guests, Oakwood Premier Hotel, Ayala Center on July 25,2003 (Friday).“ M-1” List of Guests, Oakwood Premier, Ayala Center on July 26,2003, (Saturday).“ M-2” List of Guests, Oakwood Premier, Ayala Center on July 27, 2003(Sunday).“ N” Letter of Gen. H. Ebdane, PNP Chief dated July 31, 2003addressed to Her Excellency President Gloria Macapagal Arroyo,transmitting a comprehensive report on the “ Mutiny by a Groupof AFP Junior Officers”“ N-1” Report to the President by Gen. Ebdane re: “ Mutiny by a Groupof AFP Junior Officers” consisting of nine (9) pages, undated.“ O” Pamphlet re: “ Chronology of Events Known to the NBI as a Resultof its Investigation” consisting of eleven (11) pages.“ P” Booklet “ Final Report on the Proposed Curriculum of thePhilippine Military Academy” consisting of forty-five (45)pages.“ Q” Statement of Capt. Philip G. Alvarez, Jr. (in closed door session),consisting of four (4) pages undated.“ R” Oakwood Premier Ayala Center Invoice No. 1490 dated 31 July2003 of “ George Uy,” consisting of two (2) pages withRegistration Card.

EXHIBITNO.DESCRIPTION OF DOCUMENT/Sor EXHIBIT/S“ S’ Booklet of Audited Financial Statements of AFP-Retirement andSeparation Benefits System (AFP-RSBS)“ S-1” AFP-RSBS Financial Statement 2002“ S-2” AFP-RSBS Financial Statement 2001“ S-3” AFP-RSBS Financial Statement 2000“ S-4” AFP-RSBS Financial Statement 1999“ S-5” AFP-RSBS Financial Statement 1998“ T” Report of Department of Budget and Management re: the legalbasis, the sources, releases and utilization of AFP modernizationfunds“ U” Senate Final Report N. 51 with attachments, Initial; Report No.16 of Annexes “ A” to “ B” re: Senate inquiry on “ Coup Rumorsand Alleged Anomalies in the AFP-Retirement Separation andBenefits System”“ V” Transmittal Letter from Office of Senate President F. Drilondated August 19, 2003 with enclosure submarked as Exhibit “ V-1” below“ V-1” Transcript of the Hearing of the Committee of the Whole onSenate Resolution No. 68 dated August 14, 2002.“ W” Affidavit of Capt. Danilo Luna dated August 5, 2003 consistingof three (3) pages“ X” Affidavit of Ury Pesigan dated August 11, 2003 consisting ofone (1) page only“ Y” Letter from the Commandant, Philippine Marine Corps to theFlag Officer in Command, PN dated June 19, 1996 withenclosure.

EXHIBITNO.“ Z” withsubmarkings“ Z-1” to “ Z-5”DESCRIPTION OF DOCUMENT/Sor EXHIBIT/SLetter addressed to the Fact-Finding Commission from DelRosario, Mendoza, Tiamson, Gabriel and Pulido Law Officesdated August 25, 2003 with enclosed Affidavits of A. Trillanes IV,G. Alejano, G. Gambala, J. Layug and M. Maestrecampo,respectively“ AA” Report on the Investigation on the July 27, 2003 Incidentsubmitted by CIDG Police Director Matillano consisting oftwelve (12) pages.“ BB” Copy of DILG Sec. Joey Lina’ s Letter of Indorsement, datedAugust 4, 2003, to Hon. Simeon Datumanong re: Affidavit-Complaints against Sen. Honasan, et al.“ BB-1” Affidavit-Complaint of Police Director Eduardo Matillano datedAugust 4, 2003 consisting of six (6) pages.“ CC” Affidavit of Gen. Romeo Padiernos dated August 20, 2003consisting of one (1) page (provisionally marked, subject toconfirmation)“ DD” , withsub-markings“ DD-1“ to“ DD-4”“ EE” , withsub-markings“ EE-1” to“ EE-11”“ FF” , withsub-markings“ FF-1” to“ FF-15”“ GG” and“ GG-1”“ HH” withsub-markings“ HH-1” to“ HH-8”List of military personnel present at the Makati SiegeCriminal Case No. 03-284 entitled “ People vs. Capt. Milo D.Maestrecampo, et al”, RTC Branch 61, Makati CityI.S. No. 2003-1120, entitled “ PNPCIDG vs. Gregorio Honasan, etal.”, for coup d’etatOmb. Case No. ___________, entitled PNPCIDG vs. Lt. Sg.Antonio Trillanes IV, for violation of R.A. Nos. 6713 and 3019I.S. No. 03-22347 entitled PNP vs. Coral Lozano for coup d’etat

EXHIBITNO.“ II” , withsub-markings“ II-1” to “ II-15”“ JJ” , withsub-markings“ JJ-1” to “ JJ-24”Laarni Enriquez CaseDESCRIPTION OF DOCUMENT/Sor EXHIBIT/SAffidavits of military officers who attended meetings with SenatorHonasan“ KK” Pamphlet of NCRPO Security Preparations Re: Oakwood Incident“ LL” Lists of Evidence Recovered“ MM” Affidavit of Liezel T. Magpoc dated July 30, 2003, consisting oftwo (2) pages.“ NN” Deed of Absolute Sale between Laarni Enriquez dated October 28,1999 consisting of four (4) pages“ OO” Summary of InformationLt. Col. Edwards Oban, Jr., consisting of five (5) pages.“ PP” Pamphlet re: “ Disposition Form M/Gen. Guillermo Ruiz” datedJanuary 6, 1999, marked “ CONFIDENTIAL” , consisting ofseven (7) pages.“ QQ” Affidavit of Major Rene Glen Page dated August 20, 2003consisting of five (5) pages.“ QQ-1” Signature of Major Rene Glen Page on page 5 of his Affidavit.“ RR” Affidavit of Capt. Windell Frederick Rebong dated September 3,2003 consisting of one (1) page, plus Annex “ RR-1”“ RR-1” Inventory List (Annex “ A” ) made by Capt. Rebong as integral partof the above Affidavit (Exhibit “ RR” )“ SS” “ After Operations Report re: Magdalo Group Rebellion” ,submitted by Maj. Rolando Acop to the Chief, ISAFP, dated July29, 2003 consisting of three (3) pages marked “ SECRET”

EXHIBITNO.DESCRIPTION OF DOCUMENT/Sor EXHIBIT/S“ TT” Sales Invoice No. 0007 dated June 30, 2003 of EREV MilitarySupply and General Merchandise issued to one Manuel Cabochan“ UU” Newspaper clipping of the Philippine Daily Inquirer column ofAmando Doronila entitled “ Mutiny Ended with Surrender” ofAugust 18, 2003 issue.“ UU-1” Continuation of Exh. “ UU” on page A20 of said INQUIRER ofAugust 18, 2003 Issue“ VV” and“ VV-1”Affidavit of Sec. Eduardo R. Ermita on “ OPLAN GREENBASE”dated August 27, 2003 consisting of two (2) pages“ VV-2” and“ VV-3”An alleged document purportedly emanating from the Office ofthe Presidential Adviser on the Peace Process, stamped with“ THIS IS A FAKE DOCUMENT” and “ THIS SIGNATUREWAS JUST SUPERIMPOSED THRU COPYING MACHINE”markings, consisting of two (2) pages.“ WW” Format/Cover Sheet marked, in bold letter, “ CONFIDENTIAL”“ WW-1” Format/Cover Sheet marked in bold letter “ SECRET”“ XX” MEMO Negotiation with Magdalo Rebel Group from Amb. RoyA. Cimatu to The President, dated July 28, 2003 consisting of five(5) pages“ YY” Pamphlet Circular No. 9 re: “ FP Housing Regulations” datedMarch 22, 1990 consisting of eighteen (18) pages“ ZZ” Handbook on Benefits and Privileges of AFP Military Personneland their Dependents (Revised Edition consisting of sixty-six [66]pages).

EXHIBITNO.DESCRIPTION OF DOCUMENT/Sor EXHIBIT/S“ AAA” Report of Security Officer Maribert O Martin of DasmarinasVillage Association, Inc. re: report of heavily armed soldiers whoexited the subdivision’ s Pasay Road Gate dated July 27, 2003consisting of three (3) pages“ BBB” Sinumpaang Salaysay of Peter Nolasco dated August 13, 2003consisting of two (2) pages“ CCC” Deed of Sale of Motor Vehicle between Car Option Sales, Inc.and Isidro Samaco dated July 23, 2003 consisting of one (1) page“ CCC-1” Deed of Sale of Motor Vehicle between Car Option Sales Center,Inc. and Isidro Samaco dated July 23, 2003 consisting of one (1)page“ CCC-2” Deed of Sale of Motor Vehicle between Car Option Sales Center,Inc. and Francisco Dimaculangan dated July 23, 2003 consistingof one (1) page“ CCC-3” Deed of Sale of Motor Vehicle between Car Option Sales Center,Inc. and Francisco Dimaculangan dated July 23, 2003 consistingof one (1) page“ CCC-4” Deed of Sale of Motor Vehicle between Car Option Sales Center,Inc. and Francisco Dimaculangan dated July 23, 2003 consistingof one (1) page

ANNEX FLIST OF DOCUMENTS, ETC.RECEIVED BY THE COMMISSIONDESCRIPTION OF DOCUMENT/S, ETC.DATERECEIVED123456789AFP Basic Comptrollership Manual (Vol. I)Operations Manual re AFP Program Evaluationand Management Review Analysis Division,OJ-6“ The Power of Reform in the AFP Logcom: ATrue Story…. The Struggle continues….”ABS-CBN VHS Tapes, Magandang Gabi Bayanre: Oakwood IncidentBriefing Manuscript and Annexes presented byMGen. Pedro Cabuay, Jr.Letter dated 28 August 2003 from Lt. Col. PedroG. Herrera-Davila with attached Affidavits ofMajor Rene Glen O. Paje, Capt. Edmar B.Sorioso, 1 st Lt. Lindsy Rex B. Sagge, Mr.Josefino U. Marcellones, Capt. Manuel DariusM. Resuello, 2Lt. Angle L. de los Santos, Capt.Enstein B. Calaoa, Jr. and Major Pedro SumayoNBI CHRONOLOGY OF EVENTS KNOWN TOTHE NATIONAL BUREAU OFINVESTIGATION ASA RESULT OF THEINVESTIGATION (JULY 27, 2003OAKWOOD PREMIER INCIDENT)Letter dated 20 August 2003 from Comdr. PabloNierva re: Overstaying Retired Admirals andCommodores in Navy Base, Fort BonifacioLetter dated 29 August 2003 from Lt. Col. DonatoCaselan re: Top Ranking Retirees Squatting inFort Bonifacio14 August 200315 August 200329 August 20031 September20034 September20034 September2003

101112131415DESCRIPTION OF DOCUMENT/S, ETC.Letter dated 5 September 2003 from RamonCardenas“ After Battle Report of 4 th Scout Ranger Battalion”submitted by Major Rene Glen PajeThesis of CDR. Noel L. Felicia entitled “ CorporateStrategy for the Armed Forces of thePhilippines Medical Service” submitted byRAdm. Mateo M. MayugaIssues and Concerns and Recommendations re:Health Matters Affecting the AFP submitted byCol. Rafael ReginoLetter dated 27 September 2003 from Col. AbnerM. Torres, Deputy Chief Office of EthicalStandards and Public Accountability (OESPA)with attached: (a) OESPA OrganizationalStructure (Encl “ A” ); (b) OESPA Duties andresponsibilities (Encl “ B” ); (c) Findings on theMarine Base Ternate (Encl “ C” ) and Graft casesinvestigated from 1999 to 2003 with casesummary and status (Encl “ D” )Letter dated 29 September 2003 from Gen. NarcisoL. Abaya with attached (a) Letter of Instruction20/01 (TANGGOL-BAYAN CHARLIE) and (b)Amendment to Special CAFGU ActiveAuxiliary (SCAA) dated 26 July 1993DATERECEIVED5 September20038 September200318 September200325 September200329 September200330 September20031617List of Cases filed Against Eduardo Domingo 2 October 2003Letter (undated) from Gen. Narciso Abaya inresponse to the 30 September 2003 letter withattached copy of the Korean Gun BoatAcquisition document and its related materials,etc.6 October 200318Letter dated 6 October 2003 from Lt. Gen. RodolfoC. Garcia re: Report on the Housing Problemsand Concerns of the AFP Housing Program6 October 2003

192021222324252627DESCRIPTION OF DOCUMENT/S, ETC.Staff Memorandum No. 10 dated 8 May 1987signed by MGen. Eduardo ErmitaBriefing Manuscript and Briefing Slides re: (a)AFP Procurement System; (b) Recovered Itemsfrom Mutineers; (c) Storage, Accounting andDistribution of AFP Firearms and Ammunition;(d) U.S. Security Assistance to the AFPAFP Housing Board ( 11 September 2003)Confidential and Intelligence Fund (CY 2003):AFP Medical Center Mid-Year PerformanceReview (January to June 30, 2002), PhilippineMilitary Academy Mid-Year PerformanceReview (January to June 30, 2002), PhilippineNavy Mid-Year Performance Review (Januaryto June 30, 2002), Philippine Army Mid-YearPerformance Report (January 1 to June 30,2002), Philippine Air Force Mid-YearPerformance Report (January 1 to June 30,2002)Letter dated 25 August 2003 from Capt. ManolitoMontiel with attached documents requiredduring the appearance of Lt. Gen. Rodolfo C.Garcia, Vice Chief of Staff, AFP.Memorandum for the Commissioners dated 25September 2003 re: Feedback fromSOUTHCOM Officers and Enlisted PersonnelReport submitted by the PAF re: PAF OfficerProfile; Status of PAF Modernization Funds;Status of PAF Modernization Projects andIssues and Concerns Regarding theImplementation of AFP/PAF ModernizationProgramAfter Operations Report dated 28 July 2003Maps of BCDA Areas in Fort BonifacioDATERECEIVED6 October 2003

DESCRIPTION OF DOCUMENT/S, ETC.DATERECEIVED28293031323334353637383940Memorandum dated 28 July 2003 from Amb. RoyA. Cimatu re: Negotiation with Magdalo RebelGroupLetter dated 15 August 2003 from Lt. SG A.Trillanes, et al.The Roots of Rebellion (Tracing the Roots andCauses of Makati Seige)Synopsis (Negotiating with the Magdalo Group)from Amb. Roy A. CimatuStatements of President Gloria Macapagal-ArroyoSECRET: The Oakwood Military RebellionPNP Report re: Mutiny by a Group of AFP JuniorOfficers (Chronology of Events, Analysis andRecommendations)Petroleum, Oil and Lubricant: AFP GeneralAppropriation FY 2003 (In Million Pesos)Corruption in the Philippine Navy ProcurementSystem by Lt. SG Antonio F. Trillanes (March2002)A Study of Corruption in the Philippine Navy byLt. SG Antonio F. Trillanes (October 2001)CONFIDENTIAL: Basic Security Requirementscontained in AFPR G 200-012Chronology of Events Leading to OakwoodMilitary RebellionOpinion No. 107, S. 1995, 2 nd IndorsementOctober 3, 1995 (by Teofisto Guingona)

DESCRIPTION OF DOCUMENT/S, ETC.DATERECEIVED414243444546NCRPO Security Preparations re: OakwoodIncident submitted by PNP NCRPO Office ofthe Regional Operation DivisionOpinion No. 041, S. 1999 June 1, 1999 addressedto Atty. Rene A.V. Saguisag (by: JusticeSerafin Cuevas)Personal Services: Additional Fund RequirementsBrought About by R.A. No. 9188 (FullImplementation of R.A. No. 9166)Incident Report: August 4, 2003 by MichaelBrown (submitted by Jose F. Justiniano)Letter dated 15 September 2003 from Atty. ReneA.V. Saguisag with attached “ SinumpaangSalaysay” of Cabaltera, Cesar, Hiponia, MolonHow I Helped Quell the Oakwood Mutinysubmitted by Commo. Tirso R. DangaAFP-Retirement and Separate Benefits System (RSBS) Files47From RSBS:a. RSBS Audited Financial Statements from1998-2002 (submitted on 21 August 2003)b. Actuarial Studies of RSBS (13 th and 15 th )c. List of Investment Portfolio as of 31 July2003d. Inventory of Real Estate Properties:Jaro/Pavi, Iloilo, General Santos, Morong/Hermosa, Bataane. Investment Policiesf. Outstanding Loan Portfoliog. Other Information: RSBS cases in theSupreme Court and Sandiganbayan, PerDiem/ Allowance of Board of Trustees andCommittee Member27 August 2003

DESCRIPTION OF DOCUMENT/S, ETC.DATERECEIVEDh. Appraisal Reports: 1998 Appraisals andLatest AppraisalRSBS Additional Schedule and Documents:a. Inventory of Real Estate Properties: NorthMatrix Ville, Las Pinas Royale Estate,Orchard, San Lorenzo South Project,Village East III, Eastridge Golf andCountry Club, BRAPCO, Mount Zion, SanLorenzo South Project – Landbanking;Riviera Golf and Country Club –Landbanking, Calamba/Tanauanb. Additional Investment PoliciesRSBS’ s AUDITED FINANCIAL STATEMENTSFOR THE YEARS 1995, 1996 AND 1997AFP-RSBS Secretary’ s Certificate executed byAtty. Francisco M. Paredes re: increase of theinterest rate of membership contribution, withattachmentsDepartment of Budget and Management (DBM) File48Letter dated 27 August 2003 from UndersecretaryMario Relampagos1 September20034 September200325 September2003Letter dated 28 August 2003 from UndersecretaryMario RelampagosLetter dated 3 September 2003 from Usec.Relampagos re: ACCRUAL OF THE SALESPROCEEDS OF MILITARY CAMPS UNDERR.A. NO. 7227, AS AMENDED BY R.A. NO.7917 TO THE GENERAL FUND; DEPOSITOF THESE SALES PROCEEDS TO SPECIALACCOUNTS IN THE GENERAL FUND;AND DISBURSEMENTS FROM THESESPECIAL ACCTS.3 September2003Letter dated 24 September 2003 fromUndersecretary Mario Relampagos

DESCRIPTION OF DOCUMENT/S, ETC.DATERECEIVEDLetter dated 3 October 2003 from UndersecretaryMario L. Relampagos, DBM with attachedreports.Bases Conversion and Development Authority (BCDA) File49Letter dated 5 September 2003 from President andCEO, BCDA, Rufo Colayco with attachmentsLetter dated 9 October 2003 from Atty. ArnelPaciano Casanova, Bases ConversionDevelopment Authority with attached: (1)Profile of SHAI membership, etc. and (2)Profile of NOVAI, etc.From BCDA:Memorandum dated 10 September2003 from Atty. Arnel Casanova re:Cases of SHAI (JUSMAG AREA) andNOVAI (Bonifacio Naval Station Area);Memorandum dated 18 September 2003 fromAtty. Casanova re: Disposition of Lands inFort Bonifacio with attached copies ofproclamations.Letter dated 13 October 2003 from Atty. ArnelPaciano D. Casanova, Bases ConversionDevelopment Authority5 September200310 September200319 September200313 October2003SENATE50Transcript of Stenographic Notes re: SENATECOMMITTEE OF THE WHOLE HEARINGON AUGUST 14, 2003, 9:00 A.M., SESSIONHALL, 2 ND FLOOR, SENATE OF THEPHILS. (327 pages)18 August 2003Senate Committee Initial Report No. 16 re: “ couprumors and alleged anomalies in the AFP-RSBS”

DESCRIPTION OF DOCUMENT/S, ETC.DATERECEIVEDOFFICE OF THE OMBUDSMAN51Letter dated 10 September 2003 from DeputyOmbudsman for the Military Orlando C.Casimiro re: Charges of LT. F/G Antonio F.Trillanes III Earlier Investigated by the Officeof the Deputy Ombudsman for the MilitaryLetter dated 17 September 2003 from SpecialProsecutor Dennis Villa-Ignacio with attachedList of the 240 AFP-RSBS cases/complaints,etc., List and identification of theproperties/amounts involved per criminalinformation and Status of the case against retiredGeneral Lisandro Abadia.Letter dated 1 October 2003 from OmbudsmanSimeon V. Marcelo10 September200317 September20031 October 20035253545556575859Philippine Navy Operating Program and BudgetCY 1999 (Copy Nr. 111 of 115 Copies)Philippine Navy Operating Program and BudgetCY 2000 (Copy Nr. 113 of 120 Copies)Philippine Navy Operating Pragram and BudgetCY 2001 (Copy Nr. 92 of 98 Copies)Philippine Navy Operating Program and BudgetCY 2002 (Copy Nr. 082 of 100 Copies)Philippine Navy Operating Program and BudgetCY 2003 (Copy Nr. 089 of 110 Copies)Philippine Navy Program Performance Review andAssessment Calendar Year 1999Philippine Navy Program Performance Review andAssessment Calendar Year 2000Philippine Navy Program Performance Review andAssessment Calendar Year 2001

DESCRIPTION OF DOCUMENT/S, ETC.DATERECEIVED60616263646566676869707172737475Philippine Navy Program Performance Review andAssessment Calendar Year 2002Philippine Navy Program Performance Review andAssessment 1 st Semester Calendar Year 2003Philippine Air Force Operating Program CY-1999Philippine Air Force Operating Program CY-2000Philippine Air Force Operating Program CY-2001Philippine Air Force Operating Program CY-2002Philippine Air Force Operating Program CY-2003Philippine Army Annual Operating Program CY1999Philippine Army Annual Operating Program CY2000Philippine Army Annual Operating Program CY2001Philippine Army Annual Operating Program CY2002Philippine Army Annual Operating Program CY2003 (Interim)Philippine Army Annual Program PerformanceReview and Assessment Calendar Year 1999Philippine Army Annual Program PerformanceReview and Assessment Calendar Year 2000Philippine Army Annual Program PerformanceReview and Assessment Calendar Year 2001Philippine Army Annual Program PerformanceReview and Assessment Calendar Year 2002

DESCRIPTION OF DOCUMENT/S, ETC.DATERECEIVED76777879808182838485Philippine Army Annual Program PerformanceReview and Assessment Calendar Year 2003GHQ AFP Camp Aguinaldo Performance ProgramReview and Assessment FY 1999GHQ AFP Camp Aguinaldo Performance ProgramReview and Assessment FY 2000GHQ AFP Camp Aguinaldo Performance ProgramReview and Assessment FY 2001GHQ AFP Camp Aguinaldo Performance ProgramReview and Assessment FY 2002GHQ and KBIs Operating Program and Budget FY1999 – 2003Breakdown of MOE by GHQ Proper, UCs andAFPWSSUs (for 1999 – 2003)Memorandum dated October 8, 2003 from Maj.Gen. Carlos F. Garcia with attached List ofUnliquidated SDO Cash AdvancesPolicies on Cash AdvancesMemorandum dated September 26, 2003 from Maj.Gen. Carlos F. Garcia with attached documents:(1) Improvement of the AFP ComptrollerProgram; and (2) List of AFP Object Class(es)and Description of each Object Class

Annex GName of WitnessLIST OF WITNESSESPosition/AssignmentDate ofTestimony(in Open Hearingunless indicated)26 August 20031. ABAYA, NARCISO L. (Gen.) Chief of Staff, ArmedForces of the Philippines2. ABU, EFREN L. (Maj. Gen.)Vice Commander, 14 August 2003Philippine ArmyCommander, Joint TaskForce Libra3. ADAN, EDILBERTO P. (Maj. Gen.) Superintendent, 20 August 2003Philippine MilitaryAcademy4. ALEJANO, GARY C. (Capt.)Philippine Marine Corps 15 August 2003(Detained at IDC Compound, ISAFP)(Filed Affidavit)5. ALVAREZ, PHILLIPP G. (Capt.) Faculty Member/ Course 20 August 2003Director, Philippine (Closed Door)Military Academy6. ANGUE, FELICIANO A. (Capt.) Commanding Officer,BRP Emilio Jacinto,Phil. Navy7. AUSTRIA, CYRANO A. (Col.) Asst. Chief of Staff forLogistics, Phil. Army29 August 2003(Closed Door)29 August 2003(Closed Door)8. BAILON, TEOFILO (Capt.) AFP-ISAFP 8 September 20039. BANGIT, DELFIN (Col.) Troop Commander,Presidential SecurityGroup10. BATOON, BENHUR Head, Real EstateDepartment, AFP-RSBS(Closed Door)9 September 200318 August 2003(Closed Door)21 August 20035 September 2003(Closed Door)8 September 200311. BLANCAFLOR, BIENVENIDO (Dir.) Office of theOmbudsman12. BROWN, MICHAEL Security Manager,Oakwood PremierApartments13. BUENO, ORLANDO Detachment 24 September 2003Commander, (Interviewed)Dasmarinas VillageSecurity Detachment14. BULAWAN, DANTE B. (Sgt.) Philippine Army 1 September 2003(Interviewed)

Name of WitnessPosition/AssignmentDate ofTestimony(in Open Hearingunless indicated)15. CABALTERA, RONIE S. (Pfc.) Philippine Army 1 September 2003(Interviewed; FiledAffidavit)16. CABUAY, PEDRO R. (Maj. Gen.)Deputy Chief forIntelligence, AFP12 August 2003Acting Chief, ISAFP17. CASANOVA, ARNEL PACIANO(Lawyer)General Counsel, BasesConversion andDevelopment Authority9 September 200318. CASIMIRO, ORLANDO C. (Lawyer) Deputy Ombudsman for 21 August 2003Military 5 September 2003(Closed Door)19. CASTELLANO, CICERO L. (Maj. Gen.) Deputy Chief of Staff for 29 August 2003Logistics, AFP20. CESAR, MARLON J. (Pfc.) Philippine Army 1 September 2003(Interviewed; FiledAffidavit)21. CIMATU, ROY A. (Ambassador)Special Envoy to the 22 September 2003Middle EastFormer Chief of Staff,AFP22. COLAYCO, RUFO President and CEO,Bases Conversion andDevelopment Authority9 September 200323. CORPUZ, VICTOR (Brig. Gen.) Former Chief, ISAFP 25 August 200326 August 200324. CRUZ, EXEQUIEL T. (Brig. Gen.) Deputy, AFP, T16 25 September 2003(Interviewed)25. DAEN, GERALD L. (2Lt.) Philippine Army 1 September 2003(Closed Door)26. DANGA, TIRSO R. (Commodore) Commander, GHQ, AFP 20 August 200327. DAVILA, PEDRO HERRERA (Lt. Col.) Legal Counsel, ISAFP 25 August 200328. DE LEON, ERNESTO H. (Vice-Adm.) Flag Officer in 29 August 2003Command, Phil. Navy29. DIMAUNAHAN, LORENZO L. (Lt. Col.) Philippine Marine Corps 29 August 200330. DOMINGO, RUBEN G. (Vice-Adm.) Commander, WesternCommand, AFP22 September 2003(Closed Door)31. EBREO, ALVIN H. (Capt.) Philippine Army 1 September 2003(Closed Door)32. ECLARIN, DENNIS (Capt.) Company Commander,4 th Scout Ranger Coy20 August 2003(Closed Door)

Name of WitnessPosition/AssignmentDate ofTestimony(in Open Hearingunless indicated)33. ENRIQUEZ, ERNESTO C.(Lt.Commander)Chief, PEMRAD, J6 25 September 2003(Interviewed)34. ERMITA, EDUARDO R. (Sec.) Presidential Adviser on 3 September 2003the Peace Process35. GAMBALA, GERARDO (Capt.)(Detained at the IDC Compound, ISAFP)Philippine Army 15 August 2003(Filed Affidavit)36. GARCIA, CARLOS F. (Maj. Gen.) DCS for29 August 2003Comptrollership, J6,GHQ, AFP37. GARCIA, CESAR P. (Brig. Gen.) Director General, 14 August 2003National IntelligenceCoordinating Agency(NICA)38. GARCIA, RODOLFO C. (Lt. Gen.) Vice Chief of Staff, AFP 19 August 2003Chairman, AFP 12 September 2003Modernization Program39. GAVERZA, JOSUE S. (Col.) Asst. Chief of Staff forCompt., G6, PA29 August 2003(Closed Door)40. GOLEZ, ROILO (Sec.) National Security 12 August 2003Adviser41. HIPOLITO, WINSTON M. (Pfc.)42. JAYME, CESARPhilippine ArmyPresident, AFP-RSBS1 September 2003(Interviewed; didnot file anAffidavit;)18 August 2003(Closed Door)21 August 200343. JIMENEZ, RUSTICO R. Supervising AuditorCOA, GHQ, AFP,CGEA44. LADIA, LIBRADO S. (Lt. Gen.) Inspector General,Armed Forces of thePhils.45. LANUSA, LORNA D. Comptroller, AFP-RSBS25 August 2003(Interviewed)29 August 200318 August 2003(Closed Door)21 August 200346. LAYUG, JAMES (Lt. SG.)Philippine Navy 15 August 2003(Detained at IDC Compound, ISAFP)(Filed Affidavit)47. LIM, DANILO (Col.) Commander, 1 st Scout 28 August 2003Ranger Regiment48. LINA, JOSE D. (Sec.) Department of Interior 26 August 2003and Local Government

Name of WitnessPosition/AssignmentDate ofTestimony(in Open Hearingunless indicated)14 August 200349. LOMIBAO, ARTURO C. (Police ChiefSupt.)Director for Intelligence,PNP50. LUNA, DANILO (Capt.) Former Operations 25 August 2003Training Officer, FieldArtillery Battalion, Phil.Marine Corps51. MAESTRECAMPO, MILO (Capt.)Philippine Army 13 August 2003(Detained at IDC Compound, ISAFP)52. MACALISANG, FLORANTE U. (Col.) Chief of Staff, Philippine 28 August 2003Marine Corps53. MAGDANGAL, CHRISTOPHER A. (Lt. Aide-de-Camp to 9 September 2003SG.)President GMA, SDO,President Escort54. MALABANAN, GERONIMO B. (Cmdr.) Naval PublicInformation Officer,Headquarter Phil. Navy27 August 2003(Interviewed; FiledAffidavit)28 August 2003(Closed Door)8 September 200355. MANCENIDO, ARTHUR P. (Col.) ACof AS forComptroller, A-656. MARCELLONES, JOSEFINO L. Deputy Director forCorporate Security,Ayala Land57. MARIANO, MANUEL (Gen., Ret.) Former Commander, 1 September 2003Logistics Phil. Army58. MARGATE, EMERSON L. (1Lt.) Philippine Army 1 September 2003(Closed Door)59. MATILLANO, EDUARDO S. (Police Dir.) Director, Criminal 25 August 2003Investigation andDetection Group60. MAYUGA, MATEO M. (Rear Adm.) Deputy Chief of Staff forPersonnel, Armed Forcesof the Phils.61. MILLENA, PONCIANO S. (Maj. Gen., Former WESCOMRet.)Commander3 September 200312 September 200322 September 200362. MOLON, JESUS F. (Cpl.) Philippine Army 1 September 2003(Interviewed; FiledAffidavi;)63. NOLASCO, PETER President, Car OptionSales Center24 September 2003(Interviewed)64. OBAN, EDUARDO JR. SL. (Lt. Col.) Executive Officer, Off.of the Deputy Chief ofStaff for Capability,Material and TechnologyDev’ t, J9, GHQ, AFP28 August 2003

Name of WitnessPosition/Assignment65. PADIERNOS, ROMEO A. (Lt. Gen., Ret.) Former Commander,SOUTHCOM,Zamboanga City66. PAJE, RENE GLEN (Maj.) Battalion Commander,4 th Scout RangerBattalion, 1 st ScoutRanger Regiment,Special OperationsCommand, PA,Compostela Valley67. PAMA, ALEXANDER (Capt.)Commander, NavalIntelligence and SecurityForceAssistant Chief, NavalStaff Intelligence68. PAREDES, FRANCISCO (Gen.) Head, CorporateDirector, AFP-RSBS69. PEREZ, HERNANIE B. (Col.) AC of AS for Logistics,A-4, HSSG, HPAFDate ofTestimony(in Open Hearingunless indicated)29 August 20031 September 200322 September 2003(Closed Door)21 August 200329 August 2003(Closed Door)70. PESIGAN, URI (Capt.) RHAC, Phil. Marines 25 August 200371. QUE, PETER Vice-President,Operations,Japanese IT StandardsExamination of thePhils. Foundation, Inc.(JITSE-Phil)9 September 200372. RAGIL, PERFECTO (Maj.) Member,Communication-Electronics andInformation SystemsServices, AFP3 September 200373. REBONG, WINDELL (Capt.) Operations Officer, 25 August 2003Military IntelligenceGroup 21, ISAFP9 September 200374. REGINO, RAFAEL R. (Col.) Chief, ThoracicCardiovascular Surgery,AFPMC12 September 200375. RELAMPAGOS, MARIO L. (Usec.) Department of Budget 21 August 2003and Management 26 August 200376. RELANO, RAUL D. (Maj. Gen.) Deputy Chief of Staff forCMO, J722 August 2003(Interviewed; FiledAffidavi)

Name of WitnessPosition/AssignmentDate ofTestimony(in Open Hearingunless indicated)18 August 2003(Closed Door)77. REYES, ANGELO (Sec.) Secretary, Departmentof National Defense78. RIVERA, ELVIN E. (1Lt.) Philippine Army 1 September 2003(Closed Door)79. ROSETTI, ROBERT General Manager, 21 August 2003Oakwood PremierResidences9 September 200380. SAGGE, LINDSEY REX B. (Lt.) Chief, Admin. and 25 August 2003Personnel 3 September 200381. SOMERA, FLORENTINO JR. B. (1Lt) Philippine Army 1 September 2003(Closed Door)82. SUBALA, PERCIVAL M. (Brig. Gen., Former Commandant,Ret.)Philippine Marine Corps83. SUMAYO, PEDRO (Maj.)Chief, InformationSystem ManagementOffice, ISAFPGroup Comdr., Mil.Intelligence Group 21,ISAFP84. TABUT, EFREN A. (Col.) Asst. Chief of NavalStaff for Logistics, N4,Headquarters Phil. Navy85. TRILLANES, ANTONIO IV F. (Lt. SG.)(Detained at IDC Compound, ISAFP)86. UGALE, APOLONIO JR. D.(Maj. Gen.) Vice Commander,Philippine Air Force87. VAFOPOLOUS, COSTAS Chief Operating Officerand Vice President,Ayala Hotels88. VARONA, ERIBERTO C. (Rear Admi.,Ret.)89. VELASCO, RENATO S. (Police Supt.)90. VELASCO, REYNALDO VICENTE (Dep.Dir. Gen.)24 September 2003(Interviewed)25 August 20033 September 200329 August 2003(Closed Door)Philippine Navy 13 August 2003Director, GovernmentArsenal, Department ofNational DefenseSenior DeputyPresidential Chief ofStaff, Office of thePresidentDirector General,Philippine InformationAgencyRegional Director,National Capital RegionPolice Office (NCRPO)12 September 20039 September 200329 August 200327 August 200327 August 2003

Name of WitnessPosition/Assignment91. VELASQUEZ, ERICSON T. (Dir. Supt.) Admin. Officer, Officeof the Regional Director,NCRPO92. VILLA-IGNACIO, DENNIS (Atty.) Special Prosecutor,Office of theOmbudsman93. WYCOCO, REYNALDO (Dir.) Director, NationalBureau of Investigation94. ZUNO, JOVENCITO (Lawyer) Chief State Prosecutor,Department of JusticeDate ofTestimony(in Open Hearingunless indicated)27 August 20035 September 2003(Closed Door)14 August 200321 August 2003

ANNEX HPROCUREMENT FLOW 1(1) The process initially starts from either:a. Procurement Directive (PD) coming from higher headquarters orb. a requisition for procurement from a unit or office which is thenapproved by the Commander of the Logistics unit. After this, theLogistics staff will issue a PD on the items to be procured. Thenagain, this PD shall be approved by the Commander of the Logisticsunit.(2) The procurement unit would then carefully plan and determine the mode ofprocurement of said PD.a. If the mode of procurement is public or selective bidding, the AFPLogistics Center (AFPLC) Bids and Awards Committee (BAC)undertakes the whole activity.b. If other modes of procurement are undertaken other than selectivebidding, the procurement unit prepares the Purchase Order (PO) orWork Order (WO) and on the process, select through open canvassproposal, the manufacturer/supplier/distributor to be awarded of saidPO/WO.(3) All the contracts and PO/WO are prepared by the AFPLC BAC andProcurement Unit, respectively.(4) The contracts/PO/WO have to be reviewed by various offices.a. The contracts/PO/WO are dispatched to the Logistics Staff who willreview the transactions and in turn recommends for its approval ordisapproval to the Commander.b. The contracts/PO/WO also have to pass to the Comptroller for anotherreview and prepare the Request for Obligation and Allotment (ROA)report. The ROA report is attached to the contracts/PO/WO.(5) The contracts/PO/WO with the ROA are forwarded to Field Accounting Unit(FAU) for obligation.(6) The contracts/PO/WO are finally forwarded to the Commander for hisapproval or disapproval if within his level of authority 2 .(7) When these contracts/PO/WO are approved, these documents are sent back tothe procurement unit through the proper channels(8) The procurement unit will serve the contracts/PO/WO to themanufacturer/supplier/distributor.1This annex was drafted by Commissioners Robles and Narciso together with theirExecutive Assistants (LTSG Anduiza and CAPT Salgado) based on the testimony ofMGEN Cicero L Castellano AFP, the Deputy Chief of Staff for Logistics, J4, AFP beforethe Commission on 29 August, 2003.2 DO # 47, DND dated April 30, 1996

(9) The proponents are obligated to deliver said supplies within a certain periodas prescribed and indicated in the contracts/PO/WO based on the date it wasserved them. Penalties are instituted for delays or failure of delivery.(10) As for the delivery, the proponent brings the supplies to the warehouse oroffice to be temporarily accepted by the Supply Accountable Officer (SAO)to ascertain the completeness of the quantity delivered based on thecontracts/PO/WO.(11) The SAO then informs the Technical Inspection and Acceptance Committee(TIAC) of said delivery to conduct the required inspection.(12) The TIAC conducts the inspection of said supply and determines if it meetsthe prescribed specifications. After the inspection, they will eitherrecommend to accept the supply by signing the TIAC report or reject itoutright.(13) Aside from the TIAC’s inspection, the Commission on Audit (COA) andCommodity Managers are also being requested to conduct a pre-auditinspection to confirm the delivery.(14) In the same manner, inspection of transactions are done by:a. The Unit Management Staff if the amount of the transaction is lessthan PhP 1M andb. PEMRAD if above PhP 1M(15) After all the inspections, the Disbursement Voucher DV for thecontracts/PO/WO are prepared by the Procurement Office attaching all thenecessary documents.(16) These documents are forwarded to the Finance Service Unit (FSU) forprocessing and indexing.(17) Then it goes to the FAU for journalization/certification on the availability offunds (CAF) which is stamped on the DV.(18) These documents are again to fiscal control by:a. The Unit Management Staff if below PhP 1M andb. PEMRAD if the DV amount is above PhP 1M.(19) After thorough verification of the DV with its supporting documents, thechecks/ACIC are prepared by the FSU.(20) The check is signed and countersigned by:a. The Commander, AFPLC and CO, FSU if PhP 1M and belowb. The DCS for Comptroller, J6, AFP and CO, AFPFC if between PhP1M-2Mc. The TDCSAFP and CO, AFPFC if PhP 2M and above(21) However, if there is no NCA/NTA, the Office of J6, AFP still has to requestfor fund release (SARO/GARO) from the Department of Budget andManagement for this purpose.(22) When funds are available, the check is released to themanufacturer/supplier/distributor.(23) After the payment of the transactions, the materiel/supplies/services procuredcan now be issued to the end-users based on the issuance directive comingfrom higher headquarters or Major Service Command/AFPLC.

ANNEX IAFP MODERNIZATION PROGRAM PROCUREMENT FLOW 1(1) COR/BEP FORMULATIONa. Issuance of LOI for PMTb. COR Approval by the Major Service Modernization Board (MB)c. BEP Approval by the Major Service MBd. COR Approval by the Major Service MB Executive Committee(EXECOM)e. BEP Approval by the Major Service MB EXECOMf. COR Approval by AFPMBg. BEP Approval by AFPMBh. SND Approvali. Issuance of Procurement Directive(2) BIDDING AND AWARDINGa. Pre-Procurement Conferenceb. 1 st Publication of ITBc. 2 nd Publication of ITBd. 1 st Pre-Bid Conferencee. 1 st Stage Bid Openingf. Evaluation of Proposal/ Formulation of Final Techg. Bid Submissionh. 2 nd Pre-Bid Conferencei. 2 nd Stage Bid Openingj. Evaluation to Determine Lowest Calculated Bidk. Post Qualification to Determine LCRBl. Awarding of Contract to LCRB by CSAFPm. Contract Negotiationn. SND Approvalo. Submission of Contract to NEDA/ DOJp. President’s Approvalq. SND issues Notice to Proceed(3) PROJECT IMPLEMENTATIONa. Project Implementationb. Operation Phase-inc. Final Acceptance1This annex was drafted by Commissioners Robles and Narciso together with theirExecutive Assistants (LTSG Anduiza and CAPT Salgado) based on the documentssubmitted to the Commission by MGEN Apolonio D Ugale Jr AFP, the Vice Commanderof the Philippine Air Force.

RETIRED OFFICERS OCCUPYING AT JUSMAG WITH PROPERTIES AT AFPOVAI, ANDCAVALRY HILLSPage 1 of 2ANNEX JRANK NAME JUSMAG AFPOVAI CAVALRY 11 MGEN ADALEM, MARIANO P Deceased 3 32 BGEN AROMIN, SAULITO R Deceased 3 33 BGEN ESPADERO, PETER H Deceased 3 34 BGEN. ILANO, CESAR F Deceased 35 BGEN. OLAY, DANILO P Deceased 36 CPT JARQUE, JOSE RENE N Resigned 3 37 GEN CIMATU, ROY A ReT 3 38 GEN VILLANUEVA, DIOMEDIO P ReT 39 LTGEN FLORES, GUILLERMO C ReT 310 LTGEN ILETO, JAIME V ReT 3 311 MGEN BELO, VICENTE C ReT 3 312 MGEN CAGURANGAN, ALFONSO P JR ReT 3 313 MGEN CIRON, RUBEN F ReT 3 314 MGEN COSTALES, ALEXANDER C ReT 3 315 MGEN DE VEYRA, RUFO LETO A ReT 316 MGEN JAVIER, JULIUS L ReT 3 317 MGEN LOGICO, EPINETO C ReT 3 318 MGEN MILLENA, PONCIANO S ReT 3 319 MGEN ROSALES, MELCHOR A ReT 3 320 BGEN ABELLA, CESAR C ReT 3 321 BGEN ATAYDE, FRANCISCO E ReT 3 322 BGEN GO, CESAR L ReT 3 323 BGEN MALTO, JUANITO J ReT 3 324 BGEN PANTILLA, EDGARDO T ReT 3 325 BGEN REYES, EUGENIO F ReT 326 BGEN RIMANDO, JUANITO R ReT 3 327 BGEN SALAC, DOMINGO B ReT 328 BGEN SALDUA, ANTONIO J ReT 3 329 BGEN TADIAR, ARTEMIO A JR ReT 3 330 BGEN TIGAS, VICENTE C ReT 331 COMMO TOLIN, FRANCISCO F ReT 332 C/SUPT CAPITAN, WARIETO A ReT 333 C/SUPT CASTILLO, MARCELLO S ReT 3 334 C/SUPT REYES, BAYANI C ReT 3 335 CAPT SANTOS, CAMILO L ReT 336 COL ALMOJERAM, JESUS B ReT 337 COL AMADOR, DOMINADOR P ReT 3 338 COL BAROLA, ROLANDO B ReT 3 339 COL BAYABOS, HILARIO L ReT 3 340 COL BAYANG, JUANITO W ReT 341 COL FRANCISCO, CRUZ S ReT 342 COL GALON, HERCULES R ReT 3 343 COL LARDIZABAL, MARION L ReT 3 344 COL LAUZ, ILDEFONSO G ReT 3 345 COL MEDRANA, SANTIAGO H JR ReT 3 346 COL MERCADER, GILBERT L ReT 347 COL OABEL, ANGELITO R ReT 3HILLSOTHERS1Data unavailable

RETIRED OFFICERS OCCUPYING AT JUSMAG WITH PROPERTIES AT AFPOVAI, ANDCAVALRY HILLSPage 2 of 248 COL OCHOSA, JOSE REYNALDO B ReT 3 349 COL REYES, VICTOR F ReT 3 350 COL SANCHEZ, LUISITO G ReT 3 351 COL TAN, ALBERTO L ReT 352 COL TOLING, JESUS T ReT 3 353 LTC CANTOS, GENEROSO D ReT 354 LTC DUMAG, ROMEO R ReT 355 LTC LIM, ROMEO Y ReT 356 LTC NUQUI, TAJ MAHAL KIRAM T ReT 357 LTC PLATON, BAYLON P ReT 358 LTC SAMORO, CRISTINO L ReT 3

ACTIVE OFFICERS OCCUPYING AT JUSMAG WITH PROPERTIES AT AFPOVAI, ANDCAVALRY HILLSPage 1 of 2ANNEX KRANK NAME JUSMAG AFPOVAI CAVALRY 11 GEN DEFENSOR, BENJAMIN P 3 32 LTGEN CAMILING, GREGORIO M JR 3 33 LTGEN CAROLINA, ERNESTO G 3 34 MGEN ABIOL, AVALINO L 35 MGEN ALCASID, REYNALDO R 3 36 MGEN ATIENZA, PEDRO V. JR 37 MGEN DAGUDAG, ALFONSO P 38 BGEN BAGASIN, SAMUEL B 3 39 BGEN CABALQUINTO, ALAN D 310 BGEN CANATOY, JAIME L. 3 311 BGEN FRANCIA, DANILO AUGUSTO B 312 BGEN ILAGAN, MARCIANO R 3 313 BGEN TABAMO, DIOSDAO D 314 SUPT HEREDIA, RENATO F 315 C/SUPT GADOR, EDUARDO H 316 CSUPT VIDUYA, TEODORICO 317 DIR AGLIPAY, EDGARDO C 318 COL BARBIETO, JOSE T 3 319 COL BOAC, ERNESTO D 3 320 COL CABADING, RUDIVAL S 321 COL CABANTOG, ARTEMIO S 322 COL CADUNGOG, PEDRITO S 3 323 COL CALLELERO, FRANCISCO D 324 COL CORTEZ, ANTONIO M 325 CAPT DANGA, TIRSO R 326 COL DE GUZMAN, JAMES S 327 COL ESPINO, IRINEO C 328 COL ESTRELLA, SEVERINO P 3 329 COL GABRIEL, ALBERTO I 3 330 COL GAVERZA, JOSUE S JR 3 331 COL LAGASCA, FELISICIMO V 3 332 COL LANUZA, FRANCISCO B 333 COL MACLANG, RODRIGO G 3 334 COL MAGDAY, BENJAMIN C 3 335 COL MALIGALIG, LEOPOLDO L 336 COL NIDUAZA, FERNANDO Q 3 337 LTC CABANTAC, ROMULO M 338 LTC CANNU, RODOLPH G 339 LTC NANO, ERNESTO C 340 LTC ORDOYO, CEASAR RONNIE F 341 LTC PADILLA, TOMAS A 3 342 LTC TANABE,CHRISTOPHER I 3 343 MAJ BANAS, TYNE T 344 MAJ LAGNADA, HILARIO VICENTE C 345 MAJ MANANGQUIL, JESUS A JR 346 MAJ PAJARILLO, ARNULFO P 347 MAJ TIAM-WATT, ALVIN M 348 CPT DOMENDEN, EDWIN D 3 3HILLSOTHERS1Data unavailable

ANNEX LOCCUPANT MEMBERS(As of January 2000)(BNS)Rank Branch Status1 ABAYA, MERCADO C. Chief Supt PNP Retired2 ADVINCULA, JULIAN L. Capt PN Retired3 AGUDELO, JOSE T. Commodore PN Retired4 AGUSTIN, CRISOLITO LCdr PN Active5 ALIANZA, JOSE B. LtSg PN Active6 ANDAYA, RUPERT S.7 APOLINARIO, TOMAS A. Capt PN Deceased8 AQUINO, JACINTO V. Commodore PN Retired9 BALBAS, BRAULIO B. Bgen. AFP Retired10 BARCILLO, RAUL I. Capt PN Active11 BAYLON, NAPOLEON C. Radm. PN Active12 BERSABAL, ANASTACIO Cdr PN Active13 BISENIO, ANTONIO Lt.Col. PM Active14 BLANCAS, NICASIO A. PN Retired15 BORJE, ADOLF A. Commodore PN Retired16 BRIONES, WALTER A. Capt PN Retired17 CABANLIG, EDUARDO Bgen. AFP Retired18 CALUNGSOD, JAIME Maj. PN Retired19 CALUNSAG, ROGELIO T. Capt PN Active20 CAPADA, ARTURO V. Commodore PN Retired21 CASILLIAN, JULITO II Commodore PN Retired22 CODERA, ISIDRO O. Commodore PN Retired23 CORONA, BENEDICTO S. Colonel PM Active24 CORPUZ, DANILO S. Cdr PN Active25 CORTEZ, DANILO M. Cdr PN Active26 CRUZ, DE LA RUBEN G. Commodore PN Retired27 CUEVA, DELA LORETO G. LCdr PN Active28 DADOR, SOLOMON Capt PN Retired29 DARANCIANG,ROMEO Gen AFP Retired30 DAUZ, OCTAVIUS S. Vadm PN Active31 DELGADO, DANIEL Commodore PN Active32 DIAZ, RODOLFO A. Lt.Col. PM Active33 DIN, ABRAHAM Capt PN Retired34 DIVINAGRACIA, JOSE P. Commodore PN Retired35 DOMINGO, EDUARDO T.36 DUMANCAS, MARIANO J. Vadm PN Retired37 EBRO, RENE LEANDRO P. Commodore PN Retired38 ESPEJO, RUBEN C. Commodore PN Retired39 ESPINOSA, EDGARDO V. Bgen AFP Active40 ESTRADA, CESAR A.41 EVANGELISTA, QUERICO JR. Capt PN Active42 FAJARDO, DARIO T. Commodore PN Retired43 FAJARD, IRVING J. Lt PN Active44 FALLA, ILDEFONSO G. Maj. PM Active45 FERNANDEZ, LUISITO F. Vadm. PN Retired46 FLORES, SALVADOR Colonel PM Retired47 GABALES, HERNANITO P. Commodore PN Retired48 GALLOS, EDGARDO B. Commodore PN Retired49 GARCIA, JOSE G. Capt PN Retired50 GARRIDO, PIO H. Admiral PN Retired51 GLORIA, EMMANUEL Colonel AFP Active52 GOJO, ROMELINO Lt.Col. PM Retired

Source: BCDA Census AFP Housing Board(BNS)53 GRANADA, EDITO C. LCdr PN Active54 GUZMAN, ARMANDO L. LCdr PN Active55 GUZMAN, GUERRERO E. RAdm. PN Retired56 HERNANDEZ, NICANOR Commodore PN Retired57 HINGCO, VICTORINO S. Commodore PN Active58 IGLESIA, AUGUSTO C. LCdr PN Active59 LADIA, LIBRADO Colonel PN Active60 LEON, DE ERNESTO H. Capt PN Active61 LEON, DE JUAN A.62 LEON, DE MANUEL Radm. PN Retired63 LIBUNAO, JUANITA Colonel PN Active64 LISTON, NARCISO Capt PN Retired65 LIWAG, RAMON C. Cdr PN Active66 LOS BANEZ, NESTOR S. Cdr PN Active67 LOYOLA, EDUARDO R. LCdr PN Active68 MADAMDA, ARMANDO Q.69 MAGNAYE, RIDRIGO A. LCdr PN Active70 MALIGALIG, PROCESOR Capt PN Retired71 MAMHOT, SWEN Capt PN Active72 MANDAL, GODOFREDO A. Cdr PN Active73 MANLONGAT, JUSTO Capt PN Active74 MARCELO, ONOFRE Q.75 MARIANO, GENEROSO V. Capt PM Active76 MATIC, BAYANI T. Commodore PN Retired77 MEANA, ROMEO T. Commodore PN Retired78 MELEGRITO, JESSIE M. S/Inspector PNP Active79 MEMBRERE, DANILO A. Cdr PN Active80 MONTESA, ADOLFO81 NAKPIL, WILLY Capt PN Active82 OREVILLO, ALBERTO Commodore PN Retired83 PADRE, ELENOR Commodore PN Active84 PAGINAG, ANTONIO Capt PN Retired85 PANES, MARINO P. Commodore PN Retired86 PAREDES, BRIGIDO T. Bgen. AFP Retired87 PASCUAL, PERFECTO C. Cdr PN Active88 PATINO, BERNARDO E. Capt PN Active89 PEREZ, PABLO Commodore PN Retired90 PIZARO, DANILO E. Commodore PN Retired91 RABUSA, AURELIO A. LCdr PN Active92 RAMOS, ROBERTO LCdr PN Active93 REBLORA, ROBERTO B LCdr PN Active94 REGALA, JESUS L. Capt PN Active95 REGALADO, BALTAZAR Capt PN Retired96 RUIZ, GUILLERMO R. Mgen. AFP Retired97 SAGUDO, FORTUNATO U. Cdr PN Active98 SALIPSIP, DOMINGO99 SANCEDA, BENEDICTO Cdr PN Active100 SANTOS, VALENTIN Colonel PM Retired101 SANTOS, RENATO M. Capt PN Active102 SIAPNO, ANTONIO Commodore PN Active103 SIMON, RODOLFO J.104 SUBALA, PERCIBAL M. Bgen. AFP Retired105 SUBIDA, ROGELIO Colonel PM Retired106 SUMABONG, CIPRIANO Lt PN Active107 SURATOS, ANTONIO Commodore PN Retired

(BNS)108 TANCIO, BENJAMIN M. LCdr PN Active109 TANDOC, JENE C. LCdr PN Active110 TEODOSIO, EMMANUEL R. Colonel PM Active111 TOGONON, PABLITO R. Lt PN Active112 TOLENTINO, EDUARDO Commodore AFP Retired113 TOLINTINO, MARCOS L. Capt PN Deceased114 TORRES, LAMBERTO C. Commodore PN Active115 VARONA, ERIBERTO C. Radm. PN Retired116 VELASCO, CONSTANCIO Commodore PN Retired117 VELASQUEZ, LORETO Cdr PN Active118 VERA, DE CELINO Cdr PN Deceased119 VERGARA, VILLIE Capt PN Active120 VILCHES, RAFAEL V. Capt PN Active121 VILLAMOR, ANTONIO Bgen. AFP Deceased122 VIRAY, PABLO Colonel PN Active123 WONG, GUILLERMO Capt PN ActiveAdmiral 1Vice Admirals 3Rear Admirals/Major Generals 5Commodore/Bgen/Chief Supt. (1 star) 36Captains/Colonels 34Commander/Lt. Colonels 15Lt. Commander/Majors 14Lt. Senior Grade/Captains 1Lt. Junior Grade/2 nd Lieutenant 3Ensign/1 st Lieutenant 0Senior Police Inspector (S/Insp.) 1Data Unavailable 10TOTAL 123Source: BCDA Census AFP Housing Board

LIST OF OVERSTAYING RET MIL OFFRS OCCUPYING GOVT QTRSAT SOUTHSIDE HOUSING AREA AS OF SEP 03PHILIPPINE ARMYANNEX MNR NAME DATE OF RET QTRS NR1 GEN DIOMEDIO VILLANUEVA PA (RET) 20 May 02 F-32 GEN ROY A CIMATU PA (RET) 04 Sep 02 AQ-113 LTGEN GUILLERMO FLORES PA (RET) 05 Jun 93 AQ-84 MGEN ALEXANDER C COSTALES PA (RET) 21 Dec 00 AOQ3-DR35 MGEN PEDRO V ATIENZA PA (RET) 18 Feb 03 F-2B6 MGEN ALFONSO CAGURANG PA (RET) 28 Nov 99 E-127 MGEN JULIUS L JAVIER PA (RET) 17 Jul 01 AQ-68 MGEN RUFO LETO A DE VEYRA PA (RET) 11 Apr 02 J-269 BGEN VICENTE TIGAS PA (RET) 03 Feb 97 E-2910 BGEN SAULITO R. AROMIN PA (RET) 05 Dec 01 F-111 BGEN JUANITO RIMANDO PA (RET) 07 Sep 94 J-912 BGEN CESAR F ILANO PA (DECE’D) 31 Jul 96 J-2013 BGEN DANILO P OLAY PA (DECE’D) 15 Mar 96 Q-6514 BGEN ANOTNIO J SALDUA PA (RET) 03 Dec 99 AQ-515 BGEN PETER H ESPADERO PA (DECE’D) 04 Nov 00 AQ-1616 COL ROLANDO BAROLA PA (RET) May 97 Q-8317 COL LUISITO SANCHEZ PA (RET) Jun 96 J-518 COL FRANCISCO CRUZ PA (RET) June 96 AQ-1519 COL JUANITO BAYANG PA (RET) Dec 94 J-820 COL MARION LARDIZABAL PA (RET) Dec 96 AQ-1021 COL JOSE REYNALDO OCHOSA PA (RET) Jun 93 J-1622 COL JESUS TOLING PA (RET) Oct 96 E-2623 COL HILARIO BAYABOS PA (RET) Sep 96 Q-6624 COL JESUS ALMOJERA PA (RET) 25 Dec 99 AQ-425 COL ALBERTO L TAN PA (RET) 08 Aug 00 AQ-1426 COL ANGELITO R OABEL PA (RET) 30 Nov 98 AOQ4-DR327 COL HERCULES R GALON PA (RET) 22 Apr 96 E-2828 LTC ILDEFONSO LAUZ PA (RET) Oct 94 F-429 LTC ROMEO DUMAG PA (RET) 27 Mar 92 F-2A30 LC ROMEO Y LIM PA (RET) 6 Feb 01 J-631 LTC VICTOR F REYES PA (RET) 1 Dec 99 J-19A32 LTC BAYLON PLATON PA (RET) 14 Jan 95 E-833 LTC CRISTINO L SAMORO PA (RET) 24 Oct 98 AOQ3-DR134 LTC GENEROSO D CANTOS PA (RET) 01 Nov 02 AOQ3-DR435 MAJ LEODEGARIO A ADALEM PA (RET) 01 Jan 96 AQ-1936 CPT JOSE RENE N JARQUE (RESIGNED) 1 May 00 E-27

PHILIPPINE AIR FORCENR NAME DATE OF RET QTRS NR1 GEN BENJAMIN P DEFENSOR JR PAF (RET) 28 Nov 02 J-102 MGEN EPENITO LOGICO PA (RET) 01 Oct 92 J-123 MGEN JAIME ILETO PAF (RET) 26 Jul 97 F-54 MGEN VICENTE C BELLO PAF (RET) 01 Feb 99 E-115 MGEN AVELINO L ABIOL PAF (RET) 10 Nov 02 E-206 MGEN RUBEN F CIRON PAF (RET) 11 Oct 00 E-227 MGEN MELCHOR P ROSALES PAF (RET) 6 Jan 01 J-138 BGEN JUANITO MALTO PAF (RET) 30 Nov 95 J-19 BGEN EDGARDO PANTILLA PAF (RET) 31 Jul 95 E-210 BGEN FRANCISCO ATAYDE PAF (RET) 30 Sep 94 E-1011 BGEN DOMINGO SALAC PAF (RET) 31 Oct 94 E-412 BGEN CESAR GO PAF (RET) 31 Aug 91 E-2413 COL SANTIAGO MEDRANA PAF (RET) 31 Jan 92 J-1414 COL DOMINADOR AMADOR PAF (RET) 30 Nov 94 J-2215 COL GILBERT MERCADER PAF (RET) 31 May 91 J-2416 LTC TAJMAHAL KIRAM T NUQUE PAF (RET) 16 Mar 98 E-19PHILIPPINE NAVYNR NAME DATE OF RET QTRS NR1 MGEN PONCIANO S MILLENA PN (RET) 22 Feb 00 E-72 BGEN CESAR C ABELLA PNM (RET) 1 Nov 94 E-143 BGEN FRANCISCO F TOLIN PN (RET) 21 Jul 94 E-154 BGEN EUGENIO F REYES PN (RET) 15 Dec 93 J-45 BGEN ARTEMIO A TADIAR JR PN (RET) 28 Dec 97 J-76 CAPT CAMILO SANTOS PN (RET) 27 Feb 97 J-18PHILIPPINE NATIONAL POLICENR NAME DATE OF RET QTRS NR1 C/SUPT WARLITO A CAPITAN PNP (RET) 04 Jan 99 J-152 C/SUPT MARCELO CASTILLO PNP (RET) 27 Apr 93 E-213 C/SUPT BAYANI REYES PNP (RET) 27 Apr 93 J-23R E C A P I T U L A T I O NLOCATION PA PAF PN PNP SUBTOTAL TOTALOFFR EP OFFR EP OFFR EP OFFR OFFR EPSSHA 36 16 6 3 61 61BNS 93 72 93 72 165TOTAL 36 16 99 72 3 154 72 226

ANNEX NLIST OF OVERSTAYING RET MIL OFFRS OCCUPYING GOVT QTRSAT BNS AREA AS OF SEPTEMBER 03NAME RANK BR OFSVCQTR NRDATE OFRETIREMENT1 ABARQUEZ, ALFRED LCDR PN(RET) JPQ 18-B 16-Apr-962 ABAYA, MERARDO C/SUPT AFP(RET) FOQ 10-A 7-Mar-943 ADVINCULA, JULIAN COL PN(RET) FOQ 1-B 7-Mar-934 AGUDELO, JOSE COMMO AFP(RET) FOQ 30-B 18-Jun-965 APOLINARIO, TOMAS CAPT DEC FOQ 32-A Oct-916 AQUINO, JACINTO COMMO AFP(RET) FOQ 27-A 11-Sep-977 AQUINO, JOSE LCDR PN(RET) 1-Jul-028 BALBAS, BRAULIO BGEN AFP(RET) FOQ 3-B 17-Feb-929 BAYLON, NAPOLEON RADM AFP(RET) FOQ 6-A 4-Mar-0110 BLANCAS, NICASIO COMMO AFP(RET) FOQ-5 11-Oct-9411 BORJE, ADOLF COMMO AFP(RET) FOQ 21-A 23-Sep-9812 BRIONES, WALTER CAPT AFP(RET) FOQ 3-A 17-Jun-9913 BUENAVENTURA, ORLANDO BGEN AFP(RET) BO814 CABANLIG, EDUARDO BGEN AFP(RET) FOQ 7 3-Mar-9415 CAPADA, ARTURO COMMO AFP(RET) FOQ 19-B 8-Sep-9716 CASILLAN, JOSELITO COMMO AFP(RET) FOQ 15-B 11-Jun-9917 CODERA, ISIDRO COMMO AFP(RET) FOQ 15-A 2-Jan-9418 CONSTANTE, ERNESTO CDR PN(RET) B-3-C 1-May-0019 CRUZ, ANTONIO LCDR PN(RET) E-3-C 29-Mar-0220 DADOR, SOLOMON CAP PN(RET) FOQ 29-B 13-Mar-9321 DARANCIANG, MARIANO BGEN AFP(RET) FOQ 39 7-Jan-9422 DAUZ, OCTAVIUS RADM AFP(RET) FOQ 12-B 20-Oct-0023 DE LEON, ERNESTO COMMO AFP(RET) A-0824 DE LEON, MANUEL RADM AFP(RET) FOQ 23-B 15-Aug-9925 DE VERA, CELINO CDR DEC FOQ 35-B 1-Sep-9226 DELA CRUZ, RUBEN COMMO AFP(RET) FOQ 2 13-Dec-9227 DELA CUEVA, LORETO CDR PN(RET) F-8-H 1-Jun-0128 DELGADO, DANIEL COMMO AFP(RET) FOQ 20-B 1-Dec-9429 DIAZ, RODOLFO BGEN AFP(RET) D-02-B30 DIN, ABRAHAM CAPT PN(RET) FOQ 18-B 16-Jun-9831 DIVINAGRACIA, JOSE COMMO AFP(RET) FOQ 25-A 4-Sep-9632 DUMANCAS, MARIANO VADM AFP(RET) FOQ 14-B 21-Oct-9433 EBRO, RENE LEANDRO COMMO AFP(RET) FOQ 10-B 14-Dec-9634 ERIA, SERGIO LTC PN(RET) A-7-G 25-Dec-9935 ESPEJO, RUBEN COMMO AFP(RET) FOQ 33-A 9-Nov-9936 ESPINOSA EDGARDO LTGEN AFP(RET) FOQ 24-B 27-Aug-0137 FAJARDO, DARIO COMMO AFP(RET) FOQ 13-B 26-Oct-9438 FALLA, ILDEFONSO MAJ PN(RET) F-3-C 1-Jun-9839 FERNANDEZ, LUISITO VADM AFP(RET) FOQ 11-A 23-Nov-0040 FLORES, SALVADOR GEN AFP(RET) 38 14-May-9841 GABALES, HERNANITO COMMO AFP(RET) FOQ 9-A 29-Dec-91

LIST OF OVERSTAYING RET MIL OFFRS OCCUPYING GOVT QTRSAT BNS AREA AS OF SEPTEMBER 0342 GALLOS, EDUARDO COMMO AFP(RET) FOQ 5 15-Jun-9343 GARCIA, JOSE CAPT PN(RET) FOQ 34-B 5-Feb-9744 GARRIDO, LPIO RADM AFP(RET) FOQ 4 20-Jan-9445 GLORIA, EMMANUEL COL PN(RET) FOQ 2-B 16-Apr-9446 GOJO, ROMELITO LTC PN(RET) FOQ 27-B 3-Apr-9347 GUZMAN, GUERRERO RADM AFP(RET) FOQ 28-A 1-Sep-9948 HERNANDEZ, NICANOR COMMO AFP(RET) FOQ 17-B 10-Jan-9549 HINGCO, VICTORINO VADM AFP(RET) 34-A 6-Mar-0350 INOPEA, CLIFFORD LTC CDD A-8-H 25-Dec-9951 LADIA, LIBRADO MGEN AFP(RET) B-3652 LISTON, NARCISO CAPT PN(RET) FOQ 19-A 29-Oct-9253 MADAMBA, ARMANDO RADM AFP(RET) FOQ 11-B 3-Nov-9454 MALIGALIG, PROCESO CAPT PN(RET) FOQ 7-A 3-Apr-9355 MANLONGAT, JUSTO COMMO AFP(RET) B-25 17-Oct-0256 MATIC, BAYANI COMMO AFP(RET) FOQ 1-A 15-Sep-9457 MEANA, ROMEO COMMO AFP(RET) FOQ 32-B 11-Jan-9458 MONTESA, ADOLFO BGEN AFP(RET) FOQ 31-A 19-Mar-9559 OREVILLO, ALBERTO COMMO AFP(RET) FOQ 13-A 22-Nov-9560 PADRE, ELEONOR COMMO AFP(RET) FOQ 28-B 1-Apr-0161 PAGINAG, FLOR ANTONIO CAPT PN(RET) FOQ 26-A 18-Nov-9662 PANES, MARINO COMMO AFP(RET) FOQ 1 2-Nov-9263 PAREDES, BRIGIDO BGEN AFP(RET) FOQ 3 8-Oct-9264 PATINO, BERNARDO CAPT PN(RET) FOQ 30-A 3-Nov-9965 PEREZ, PABLO COMMO AFP(RET) FOQ 24-A 25-Feb-9566 PIZARRO, DANILO COMMO AFP(RET) FOQ 21-B 12-Aug-9667 RAGEL, ROMUALDO MAJ PN(RET) A-5-E 31-Dec-9668 RAGEL, ROMUALDO MAJ PM(RET) A-05-E 31-Dec-9669 RAMOS, ROBERTO LCDR PN(RET) 17-B 26-May-9970 REGALA, JESUS CAPT PN(RET) FOQ 5-B 19-Apr-0171 REGALADO, BALTAZAR CAPT PN(RET) FOQ 33-B 8-Jan-9872 RUBIA, WILFREDO CDR PN(RET) G-7-G 17-Jan-9873 RUIZ, GUILLERMO BGEN AFP(RET) FOQ 22-A 12-Aug-9674 SALVILLA, REGINALDO LCDR PN(RET) JOQ 13-A 14-Jul-9675 SANTOS, LARRY LTC PN(RET) 7-Mar-9776 SANTOS, RENATO M CAPT PN(RET) FOQ 9-B 28-Jun-0077 SANTOS, VALENTIN COL PN(RET) FOQ 4-B 16-Feb-9378 SIAPNO, ANTONIO RADM AFP(RET) FOQ 12-A 2-Jul-0279 SUBIDA, ROGELIO COL PN(RET) FOQ 16-A 12-Dec-9280 SUMABONG, CIPRIANO LTSG PN(RET) 5-B 15-Apr-0181 SURATOS, ANTONIO COMMO AFP(RET) FOQ 22-B 9-Jan-9582 TOLENTINO, EDUARDO COMMO AFP(RET) FOQ 5-A 26-Apr-9483 TOLENTINO, MARCOS CAPT PN(RET) FOQ 36-A 25-Apr-9584 TORRES, LAMBERTO COMMO PN(RET) 29-A 16-Apr-0185 VAILOCES, AUSTER LTC PN(RET) A-3-C 22-Dec-97

LIST OF OVERSTAYING RET MIL OFFRS OCCUPYING GOVT QTRSAT BNS AREA AS OF SEPTEMBER 0386 VARONA, ERIBERTO RADM AFP(RET) FOQ 23-A 16-Mar-9987 VELASCO, CONSTANCIO CAPT PN(RET) 7-B 31-Dec-9788 VELASQUEZ, LORETO LCDR PN(RET) H-8-H 31-Dec-0089 VERGARA, WILLY CAPT PN(RET) 35-A 4-Jul-0090 VILLAMOR, ANTONIO COL PN(RET) FOQ 26-B 17-Jan-9491 VILLANUEVA, RUFO CAPT PN(RET) FOQ 16-B 7-Nov-9692 VIRAY, PABLO COL PN(RET) FOQ 18-A 1-Dec-9993 WONG, GUILLERMO RADM AFP(RET) B-31 12-Dec-01

ANNEX OLIST OF RETIRED MIL PERSONNEL STILL OCCUPYING AT BNSNAME RANK AFPSN BR OF QTRS NR DATE OFSVCRETIREMENT1. Almenanza, Lutgardo ET2 655490 PN(RET) E-05-D 6-Mar-002. Amansec, Nathaniel CPO 570927 PN(RET) C-01-A 16-Nov-003. Amoroso, Carlito TSg 626762 PN(RET) C-02-B 16-Nov-974. Arche, Oscar PO2 564104 PN(RET) C-03-C 17-Jan-965. Ariar, Cresencio MSg 591504 PN(RET) C-07-G 23-May-966. Aronce, Edgar MSg 571504 PN(RET) C-09-I 1-Jul-997. Aspuria, Antonio TSg 631201 PN(RET) C-10-J 2-Nov-008. Bantog, Alfredo PO2 568824 PN(RET) D-04-D 1-Mar-989. Belisario, Rudy MSg 552104 PN(RET) D-06-F 1-May-9910. Belmoro, Camilo MSg 571173 PN(RET) D-07-G 1-Feb-0111. Bendijo, Larbonie MSg 574084 PN(RET) D-08-H 16-Jun-9812. Bombita, Jose MSg 552067 PN(RET) E-01-A 14-Jan-9913. Buaquina, Noe CPO 566428 PN(RET) E-09-1 1-Jul-9914. Calura, Josie CPO 561836 PN(RET) F-10-J 31-Mar-0015. Casera, Ernesto MSg 561648 PN(RET) F-06-F 1-Sep-9916. Claudio, Pedro CPO 547515 PN(RET) F-06-H 30-Apr-9817. Corpuz, Antonio CPO 553679 DEC F-07-C 7-Jan-9718. Cuarteron, Edwin MSg 561731 PN(RET) F-07-E 23-Jun-0019. Dalope, Gerardo MSg 561997 PN(RET) F-07-G 3-Apr-9620. Decelis, Edwin CPO 545985 PN(RET) F-07-I 23-Nov-9821. Delos Reyes, Nilo TSg 591510 DEC F-08-F 31-Dec-9922. Desquitado, Hipolito CPO 550684 PN(RET) G-06-D 20-May-9523. Dulatre, Benjamin MSg 690911 PN(RET) G-06-J 16-Apr-9824. Dungan, Romeo CPO 577426 PN(RET) G-07-B 21-Jul-0025. Escamilla, Edilberto CD3 699812 DISCH W-04-D 3-Sep-0126. Estallo, Romeo CPO 547598 PN(RET) G-07-C 11-May-9527. Fernandez, Eugenio CPO 541792 PN(RET) G-07-D 13-Feb-9528. Fulo, Arnulfo CPO 570671 PN(RET) G-07-H 1-Mar-0029. Gaa, Ricardo MSg 576302 PN(RET) G-08-D 31-Jan-9630. Gabatino, Bienvenido MSg 551579 PN(RET) G-08-E 27-Feb-9531. Gualvez, Jose MCPO 572541 PN(RET) G-08-I 1-Dec-9932. Hermosura, Eugenio CPO 591372 PN(RET) H-06-F 31-Jan-01

LIST OF RETIRED MIL PERSONNEL STILL OCCUPYING AT BNS33. Jalandoon, Melencio MSg 604904 PN(RET) H-07-G 16-Jun-9834. Lacson, Warlito MSg 552065 PN(RET) H-08-H 19-Mar-9835. Laraya, Manolito SKC 586571 DEC Q-03-C 28-Jul-9936. Larosa, Reynaldo MSg 571172 PN(RET) M-04-D 1-Feb-9937. Macasaet, Ernesto CPO 563792 PN(RET) N-08-H 31-May-0038. Macauyam, Edgar PO3 619388 DEC N-10-J 16-Dec-9839. Malacat, Domingo PO2 564740 PN(RET) O-09-I 3-Feb-9940. Malco, Renato MSg 576303 PN(RET) O-10-J 15-Jan-0041. Manalo, Alberto MSg 593780 PN(RET) P-04-D 1-Feb-0042. Mangubat, Antonio PO1 608987 PN(RET) P-06-F 1-Apr-0043. Manuel, Eduardo PO2 563999 PN(RET) Q-02-B 4-Nov-9244. Martinez, Eduardo PO1 586571 DEC Q-03-C 2-Jul-9945. Martinez, Manuel PO1 561745 PN(RET) Q-04-D 30-Jan-9946. Manongsong, Victor CD1 559911 PN(RET) Q-06-F 17-Oct-0147. Masangkay, Francisco YN1 571118 PN(RET) N-05-E 1-Feb-0248. Molino, Ernesto CPO 605073 PN(RET) R-06-F 1-Jan-0149. Negranza, Alfredo PO3 605050 PN(RET) R-08-H 23-Mar-0150. Noora, Sixto MSg 571175 PN(RET) R-10-J 12-Jan-0051. Nuevo, Jorge MSg 572755 PN(RET) M-06-F 1-Feb-0252. Padrigo, Artemio PO2 591342 PN(RET) S-05-E 30-Jul-9953. Peralta, Magdaleno PO1 572566 PN(RET) S-10-J 1-Dec-9954. Pernito, Antonio PO2 598183 DEC T-01-A 12-Mar-9855. Ragas, Salvador CPO 541668 PN(RET) S-11-K 20-Feb-9556. Raluta, Jaime PO2 564121 PN(RET) T-05-E 17-Jan-9957. Ramos, Edgardo CPO 591063 PN(RET) T-07-G 1-Aug-9958. Raquion, Ernesto PO2 627354 PN(RET) U-10-J 30-Dec-9959. Robles, Roberto MSg 593463 PN(RET) V-01-A 16-Jan-0060. Robles, David CPO 553898 PN(RET) V-08-H 18-Jun-0161. Robles, Gil PO1 619734 PN(RET) W-03-C 19-Dec-9962. San Esteban, Jesus MSg 617426 PN(RET) W-05-E 1-Feb-0063. Serrano, Angel PO2 561847 PN(RET) X-01-A 25-Jul-9964. Serrano, Jaime MSg 591364 PN(RET) Y-02-B 1-May-9965. Torres, Eduardo CD2 596731 DEC Y-08-H 16-Apr-9966. Torres, Rogelio HMC 570671 PN(RET) G-07-H 1-Mar-0067. Torres, Reynaldo CPO 568449 PN(RET) C-08-H 15-Jan-02

LIST OF RETIRED MIL PERSONNEL STILL OCCUPYING AT BNS68. Urbien, Bernardo CPO 572392 PN(RET) E-05-E 1-Feb-0269. Vance Jr., Ceferino CPO 572541 PN(RET) G-08-1 1-Dec-0170. Velasco, Rodolfo MSg 581809 PN(RET) Q-07-G 1-Mar-0271. Villanueva, Edgardo MSg 571108 PN(RET) E-04-D 17-Nov-0072. Villas, Fidel SK1 656772 PN(RET) N-04-D 1-Feb-02

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