Tuesday, May 06, 2014

PNP Reforms (A continuing article). Part 4d – Deactivation or Reorganization of Outdated NSUs (Finance Service)

The Finance Service is a very old unit that was rendered irrelevant by technology and the shift of mandate of the PNP from the PC.  It is now irrelevant in the strictest terms because its main job—to deliver the pay and allowances of the policemen in the field is now best done by technology just as almost all other government agencies, including the PNP itself, through the use of the ATMs.  But one may wonder why up to this time, the unit, instead of being deactivated or at the very least scaled down, continued to thrive, and in fact, became one of the most coveted and elitist units in the PNP.  The PNP Finance family had become so closed and elitist that one cannot just join the Finance Officers Course unless a current member favorably endorses his application and vouches for his “integrity.”  Why is this so?  Let us examine first the basic facts about the unit.

From its website (http://pnpfs.org/), here is the history of the unit:

1898-1936 Finance work was being done by “PAGADORES”.  At HQs PC level, a paymaster performed similar tasks.

1936 – The Philippine Army was established and absorbed the PC.
The Finance work was under the Quartermaster Service and Finance Personnel wore Quartermaster insignia.
As transactions snowballed in the Philippine Army, finance duties were decentralized, leading to the creation of the position of a Provincial Finance Officer.

1938 – Military Districts were established and Prov’l Finance were replaced by the District Finance Officers.
Unit Finance Officers were also provided for independent posts, camps and stations.

1940 – Continuous military built-up brought about growing and increasing finance activities, thus the emancipation of the finance service from the Quartermaster Service pursuant to Commonwealth Act No. 569 dater 07 June 1940, amending Commonwealth Act No 01.
The finance service Central Office was at the Western Wing of the Old Depot Bldg. at Muella dela Industria in Binondo, Manila.

1941 – The then personnel of the Military Service doing finance functions changed their branch of service to Finance Service with the advent of World War II in 1941. Division Finance Officers were created to replace the District Finance Officers.
At the break of war, Central HQ of FS was transferred to Mariveles, Bataan.
Division Finance Officer was created replacing the District Finance Officer.

1945 – During the liberation period early 1945, it was the Finance Center that took charge in setting the pay and allowances of the USAFFE survivors.

1946 – In June 1946, shortly thereafter, another re-organization took place.
A total of 34 FDS were evenly distributed nationwide each to service a certain number of units.

Oct 5, 1948 – The positions of the Deputy Chief of Finance for the Philippine Constabulary, Philippine Air Force, and Philippine Navy were created pursuant to Circular No. 86 HNDF.

July 1, 1957 – The Office of the Deputy Chief, FC was established when HPA was separated from GHQ.

March 14, 1958 – Finance Disbursing Units (FDU’s) were established for the Major Services were established pursuant to paragraph 20, Department Order No.74 Department of National Defense dated 14 March 1958.

Jan 30, 1959 – At this time, the Finance Service insignia of “DIAMOND” was replaced by a golden eight scallop shell embedded with one pearl and a set of green laurel leaves.

1973 – On July 1, 1973m the Officer of the Chief Finance, AFP was deactivated pursuant to para II, Go # 67, GHQ, AFP dfd 20 Aug 1973 in line with the reorganization of the AFP Comptroller which integrated the functions of accounting, financial recording, and internal auditing.

1976 – The Constabulary Finance Center was reorganized and was renamed PC/INP Finance Center pursuant to HPC/INP GO No. 5-P dated 2 Jan 1976 that took effect on 1 Dec 1976.

1991 – Pursuant to RA 6975 which separated the PC/INP from AFP thus making it a separate Bureau under the DILG, Philippine National Police (PNP) was created and the PC/INP Finance Center was then renamed as Philippine National Police Finance Center.

1993 – Pursuant to NAPOLCOM Resolution 92-36 dated 14 Oct 1992, the PNP Finance Center was renamed PNP Finance Service effective 1 Jan 1993. To date, this organization carries with it the name: PNP Finance Service.
It has five (5) divisions: Disbursement; Revenue and Collection; Financial Information Management Division; Administrative; and Audit & Control.

2010 – Pursuant to NAPOLCOM Resolution # 2010 – 210 , the Restructuring of the PNP Finance Service was approved on August 9, 2010 to which it shall composed the following:
Command Group:

1.  Director - Police Chief Superintendent
2.  Deputy Director for Administration - Police Senior Superintendent
3.  Deputy Director for Financial Management Non- (NUP) Director I (SG 25)
4. Chief of Staff - Police Senior Superintendent

In the same website, here are the functions of the unit:

·         Disbursement
·         Collection
·         Remittance

·         Maintain and supervise the operations of the Modified Disbursement Scheme (MDS) account for offices in the PNP;
·         Coordinate with other offices/units concerning the preparation and distribution of the pay and allowances of uniformed and non-uniformed personnel of the PNP;
·         Process and settle claims for pay and allowances/salaries, travel expenses and retirement benefits/commutation of leave of retired PNP personnel;
·         Maintain financial records of the pay and allowances of uniformed and non-uniformed personnel and other PNP obligations;
·         Supervise and/or recommend the training, assignment, designation, transfer and relief of finance/disbursing officers, collecting officers, agent officers/tellers and their immediate bonding;
·         Recommend policies regarding procedures in the disbursement and accounting of PNP funds;
·         Implement plans, policies, rules and regulations governing disbursement and collection of funds for the PNP;
·         Conduct training of PNP personnel for respective assignment to finance units in various PNP units;
·         Provide technical support and assistance to PNP units on matters pertaining to financial management;
·         Conduct studies and research to upgrade and enhance the effectiveness of PNP units on matters pertaining to financial management, and
·         Perform such other functions as the Chief, PNP may direct.

Finance Service Objectives:

·         Full Implementation  of Finance Service Data Management System (FSDMS)
o   100% Enrolled in ATM for payment of Salary and Allowances
o   100% Enrolled in Salary Deduction and Loans Information System (SDLIS)
o   100% Compliance on Substituted Filing of IT

·         FS Controlled Salary System

Here is the organizational chart of the unit:

Examining the history vis a vis the organizational chart and current objectives of the unit, it cannot be denied that it still plays a critical role in the organization.  But reading closely, one cannot help but ask, "how will all the tansan tansan of police schoolings be useful in any of these jobs?  How will being an airborne ranger, SCOUT, multi medalist for gallantry and bravery be of use in being a finance officer?  And for the jaded people like me who had seen many of these finance guys assume field command positions such as City and Provincial Directors after enriching themselves in the Finance Service, the critical question is, “how do these jobs in the finance service prepared these people to become field commanders?”

This installment in this series of articles will not strictly call for the total abolition of the Finance Service but rather its restructuring into a unit run by NUPs.  For what do policemen have to do with the computation of retirement benefits of their colleagues?  The rules are etched in stone and all the Finance people have to do is follow these rules and disburse money to whom it is due.  If the Finance people insist in staying in that unit, no problem.  But the status of the unit should be made similar to the IAS:  once you get in, you cannot return to the mainstream and be a field officer anymore.  And rightly so.  What experience in the Finance Service prepares you to become a provincial director supervising a thousand policemen running after the criminals, presenting cases in court, interfacing with local government officials, and many other field duties?

Actually, the reason why the Finance Service continued to be a behemoth that it is now is that, in recent times, it had acquired a different kind of relevance:  it became the instrument of the Chief PNP in stealing organizational funds and laundering this stolen money.  Computing how much money that can be had in this unit based on the annual budget of the organization is easy.  The annual PNP budget is around P50 billion and at a rate of just 10% corruption, then the P10B allegedly stolen by Napoles in the course of 10 years is but peanuts compared to the proceeds of the systemic and organized corruption in the PNP.  Using my pulis mateks mateks, 10% of P50B is a cool P5B.  And this is just computed at 10% corruption rate when the actual running rate now is P30%.  At P5B annually, it roughly translates into P400M a month or more than P10M per day.  Thus the rumor that the allowance of the Chief PNP from the DC is P1M per day is very, very much doable and realistic with so much to spare...

If the BRILLIANT LAWMAKERS are not aware of it yet, the Napoles system is nothing new in the AFP and the PNP.  Actually it originated in the AFP and is as old as your lolo sa tuhod and it is called CONVERSION.  I have previously discussed these methods in my earlier articles which you can find here:


This is the current forte of the Directorate for Comptrollership and its operating unit the Finance Service.  The blueprint of this method in the AFP (which is the same with the PNP) was obviously carried over by Napoles to the civilian sector starting in the DOTC when the head was a guy named Leandro Mendoza who used a certain Dominador Reyes as his pointman.  Will you be surprised if I will tell you that both were retired police generals?  Mendoza is PMA Class 69 and Reyes is his classmate whom he appointed as DOTC assistant secretary for finance and comptrollership.

And the PNP scam methods crossed over to the DOTC.


  1. just curious, do they still keep the alpha list at the lobby of the finance hq.?

    1. naku sorry po at matagal tagal na akong hindi nakapunta sa finance office headquarters. napapadaan pa lang ako ay nilalagnat na agad ako sa allergy.

      but let me find out sir!


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