COA flags AFP’s unauthorized bank accounts, unliquidated cash advances

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January 13, 2026 | 12:00am

MANILA, Philippines — The Commission on Audit (COA) has flagged the Armed Forces of the Philippines (AFP) over its unauthorized maintenance of six bank accounts with a total balance of P72.86 million and unliquidated cash advances amounting to P201.86 million as of end of 2024.

“Six bank accounts with a book balance of P72.86 million are continuously retained with the LBP (Land Bank of the Philippines) and have not been remitted to the Bureau of Treasury (BTr) despite the absence of a legal basis for (their) retention contrary to Section 11, general provisions of Republic Act 11975,” the COA said in its 2024 annual audit report on the AFP General Headquarters.

The AFP GHQ Central Office was also flagged for P201.86 million in unliquidated cash advances, 82.36 percent of which, or P166.25 million, was classified as past due as they remained outstanding for up to 43 years.

State auditors pointed out that under Section 11 of the general provisions of the 2024 General Appropriations Act (GAA), all state agencies are mandated to close down and revert to the national treasury all the balances of their special accounts, fiduciary or trust funds and revolving funds when “there is no legal basis for their creation” or when then terms for the utilization of the funds have already expired or when the maintenance of the accounts are no longer necessary.

Verification by the audit team revealed that the six bank accounts were retained despite a lack of legal basis or authorization from the Permanent Committee Board.

The PCB, created under Executive Order 292 or the Administrative Code of 1987, is composed of the secretaries of finance and budget as chairmen and officials of COA, as members.

The audit breakdown showed that three of the unauthorized bank accounts were maintained by the AFP Medical Center (AFPMC) with a total balance of P68.167 million while the Presidential Security Command (PSC) was responsible for two bank accounts with a total balance of P4.358 million and the Eastern Mindanao Command (Eastmincom) for one bank account with a balance of P335,386.40.

The COA said accounts served as despository for the collection of military quarters allowance, AFPMC and PSC; inter-agency transfer funds also of AFPMC and PSC; endowment fund from Philippine Charity Sweepstakes Office for AFPMC and professional fees from Philippine Health Insurance System of Eastmincom.

“The Permanent Committee, in its resolution dated Dec. 07, 2022, already resolved that the depository account maintained for military quarters allowance shall be closed and deactivated, and any cash balance thereof shall be transferred to the BTr and booked as trust receipts. This is also consistent with the provisions in the GAA,” the COA said.

State auditors said the concerned AFP units have agreed to the audit recommendation to formally request authorization from the PCB to maintain the bank accounts, or else, close them down and remit the balance to the BTr.

In a reply incorporated in the audit report, the AFPMC said the account for the PCSO endowment fund has been closed down.

The PSC, meanwhile, said it has completed the necessary steps for the closure of the two bank accounts under its name.

The Eastmincom, on the other hand, said it will seek authorization from the PCB to retain its account.

As for the P201.86 million in unliquidated cash advances, the COA said, “Considering the period over which they remained unliquidated, these cash advances have most likely been expended and as such, misstated the affected asset and expense accounts.”