P581M worth of recovered assets 'not adequately preserved' by PCGG —COA

The Presidential Commission on Good Government (PCGG) has failed to adequately preserve P581 million worth of illegally acquired and government-sequestered assets of the late President Ferdinand Marcos Sr., his family, and associates, exposing them to risks and forfeiture, the Commission on Audit (COA) said.

State auditors said the PCGG, mandated by law to recover and preserve the ill-gotten wealth of the Marcos family and their associates, only had an annual budget that remained below P24 million from 2021 to 2024, or way below its mandated share under the 2024 national budget law, and a budget that hardly included asset preservation.

The 2024 national budget law states that  “all proceeds realized from the sale or administration of assets by the PCGG should be deposited with the National Treasury, provided, that not more than 10% of such proceeds should be used for the payment of awful claims, which include recovery expenses, selling expenses, custodianship and other related costs attributable to the sold or administered assets.”

“From 2021 to 2024, the annual budget allotted to PCGG remained below P24 million, which is less than 10% of the proceeds from the sale of PCGG assets. For the past years, budget allocations have primarily focused on legal services and payment of taxes, insurance premiums, and other fees, leaving minimal funds for asset preservation. Consequently, as of December 31, 2024, the assets valued at P581,334,453.79 were inadequately preserved,” COA said in its 2024 annual audit report on PCGG.

"Recovered, surrendered, and sequestered assets amounting to P581.33 million were not adequately preserved, contrary to the Special Provisions of the GAA (General Appropriations Act) for Fiscal Year 2024, also known as Republic Act No. 11975. This lapse in asset management has left these properties vulnerable to unauthorized occupation by informal settlers and deterioration beyond normal wear and tear, potentially compromising their value, marketability, and eventual disposition,” COA added.

Under the Executive Order 1 issued by then President Corazon Aquino in 1986 that created the PCGG, the agency “will have the power and authority to sequester or place or cause to be placed under its control or possession any building or office wherein any ill­ gotten wealth or properties may be found, and any records pertaining thereto, in order to prevent their destruction, concealment or disappearance which would frustrate or hamper the investigation or otherwise prevent the Commission from accomplishing its task.”

The same COA annual audit report showed that while PCGG’s annual budget reached P23 million in 2021 and 2022, it went down to P15 million in 2023, the first full year of the administration of President Ferdinand Marcos, Jr.

In 2024, PCGG’s budget increased to P25.32 million. PCGG’s obligations in 2024, however, reached P22.25 million, leaving around P1.27 million for asset preservation. 

Breakdown 

Of the P581 million assets, P504.9 million were recovered and surrendered ill-gotten wealth, while the rest were sequestered assets.

The recovered/surrendered assets that were inadequately preserved include:

• Banahaw Broadcasting Corporation (BBC) Naga Property spanning 5,952 square meters and worth P11.9 million (occupied by 15 informal settlers families; with plan to install perimeter fence to prevent additional informal settlers)
• artworks with no storage room worth P28.58 million
• jewelry collections with no recent appraisal worth P340 million 
• Piedras property worth P129 million with unpaid real property tax

The sequestered assets include:

• four units of Galeria De Magallanes condominium units worth P71.9 million
• 17 hectares of land in Carmona, Cavite with no security personnel, no fence and no estimated value.

“The absence of fences and security guards on government lands could result in unauthorized occupancy of individuals, leading to difficulties in eviction, future development, and loss of government revenue, while the lack of proper storage for expensive artworks can lead to significant deterioration and security risks. As a result, artworks are exposed to humidity, dust, pests, and physical damage, which can degrade materials such as canvas, paper, and paint,” state auditors said.

“Inadequate storage also increases the risk of theft, misplacement, and unauthorized access, particularly for valuable or historically significant pieces,” it added.

In addition, COA said the non-payment of Real Property Tax may lead to legal disputes or asset forfeiture.

“These [failures] directly affect the PCGG's mandate to recover and manage ill-gotten wealth, as unpaid taxes can complicate asset recovery, prolong legal proceedings, and diminish the financial returns from sequestered properties. Tax-related issues can delay the disposition of recovered assets, preventing the government from using them for social and economic development,” COA said.

“Outdated jewelry appraisal can result in misrepresentation of the correct valuation of the assets and inaccurate financial reporting,” COA added.

PCGG, in response to state auditors, said such problems occurred due to “budget constraints.”

COA, however, said that PCGG’s Project Procurement Management Plan of Fund for 2024 “revealed the non-inclusion of plans for activities to preserve these assets.”

COA then cited that the PCGG’s Project Procurement Management Plan of Fund for 2024 only included the following:

• administration and maintenance of Asset Information Management System (AIMS)
• ocular inspection of BBC-Naga, Bacolod Real Estate Development Corporation (BREDCO), Puerto Galera Property, Benedicto, and other properties located in NCR and other provinces
• appraisal of shares
• fencing of 480 square meters of land located in Caloocan City and 1,000 sqm. of land located in Puerto Galera, Oriental Mindoro
• artworks restoration
• payment of Real Property Tax
• physical inventory
• payment of security personnel in Tacloban, Cagayan, and Angono
• updating of Transfer Certificate of Title (TCT) and Title Conversion
• payment for legal counsel and consultants
• monitoring and assessment
• courtesy calls to LGUs
• foreign and local travels

“As a result, no additional budget was requested from the DBM,” COA said, referring to the Department of Budget and Management.

“The lack of proper planning for program implementation led to the failure to allocate a budget for asset preservation. Consequently, the recovered, surrendered, and sequestered assets were exposed to risks such as deterioration and unauthorized occupation, which undermined their value, marketability, and future disposition,” COA said.

“This oversight highlights the need for strategic financial planning to effectively manage and safeguard government assets,” COA added.

COA said PCGG agreed to the following recommendations of the state auditors:

• develop and finalize programs accompanied by comprehensive documentation to ensure the effective preservation of recovered, surrendered, and sequestered assets;
• include asset preservation in the budget  proposal to secure appropriate funding, and
• make additional representation for support from the DBM that may be sourced from the proceeds from the sale or administration of PCGG assets.

—LDF, GMA Integrated News