New Appropriations Framework Inspired by Theoretical Physics Will Allow Agencies to Maintain Plausible Deniability About Expenditures While Technically Complying With Transparency Law

Bohiney Magazine | The London Prat

MANILA, PHILIPPINES — A proposal circulating in the House Appropriations Committee would establish what its author describes as a “Quantum Confidential Fund,” a budget appropriation structured on principles borrowed from quantum mechanics in which the fund simultaneously exists as a legitimate government expenditure and does not exist in any auditable form until such time as the Commission on Audit attempts to examine it, at which point, proponents argue, the act of observation causes the money to retroactively have been spent on activities that are classified, the details of which are available to Congress in a sealed envelope that has unfortunately been misplaced. The proposal, submitted by a lawmaker who asked not to be named in initial reporting and whose name appeared in the document heading, represents what its author called “the next logical step in Philippine budget innovation.”

The Problem the Quantum Fund Is Designed to Solve

The proposal was submitted in the context of ongoing public and legislative attention to confidential and intelligence funds in the national budget, following the Sara Duterte impeachment proceedings which included among their charges the alleged misuse of P612.5 million in confidential funds by the Office of the Vice President. The proposal’s author, speaking in a background briefing that was extensively recorded, argued that the Duterte case demonstrated a “design flaw” in the current confidential fund framework: namely, that it still technically required accounting, receipts existed somewhere, and the Commission on Audit retained the theoretical ability to ask questions, all of which created “unnecessary institutional friction.”

The Quantum Confidential Fund would address this friction by establishing a new budget category that exists in a superposition of fiscal states. “You cannot measure its position and its velocity simultaneously,” the proposal states, in what congressional budget staff confirmed was a direct reference to the Heisenberg Uncertainty Principle that they said they had not previously encountered in appropriations legislation. “Any attempt to observe the fund collapses the wave function, rendering the money simultaneously spent and unspent, accounted and unaccounted, present and retroactively never appropriated.” Legal reviewers at the University of the Philippines College of Law said this was not how quantum mechanics worked. The proposal’s author said the lawyers were thinking about it too literally.

The Commission on Audit Responds

The Commission on Audit, which has for years been issuing qualified opinions, adverse findings, and recommendations regarding confidential fund expenditures across multiple government agencies, released a statement noting that it is a constitutional body established to examine and audit all accounts pertaining to government revenue and expenditures and that it takes this mandate seriously regardless of the theoretical framework under which funds are appropriated. The COA statement did not address quantum mechanics directly but included a footnote citing Article IX-D of the Philippine Constitution, which the Commission described as “non-superposable,” meaning it applies whether or not someone is looking at it.

The Commission on Audit annual report on confidential and intelligence funds has consistently identified discrepancies in documentation, receipts, and liquidation reports across several government agencies, findings that the COA said were based on standard auditing methodology rather than quantum observation and that it was confident would survive any epistemological challenge. Three agency heads whose funds were flagged in the most recent report described the COA findings as politically motivated. The COA described the findings as arithmetically motivated and noted that the two motivations were not mutually exclusive.

Civil Society and International Observers React

The proposal attracted immediate attention from transparency advocates, who noted that the Philippines ranked 115th out of 180 countries in the most recent Transparency International Corruption Perceptions Index and that introducing a budget mechanism inspired by the dual nature of light was unlikely to improve that standing. “The problem with confidential funds is not that they are too observable,” said one civil society budget analyst. “The problem is that they are not observable enough. The solution being proposed is the opposite of the solution that is needed. That is a fairly significant directional error.” She said she hoped the proposal would not advance. She also said she had been hoping things would not advance for quite some time and had developed a realistic relationship with that hope.

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The quantum envelope has not been located. The Daily Mash is also unclear where its editorial budget went.

The Commission on Audit and the Persistent Problem of Accountability

The Commission on Audit’s annual audit reports on government expenditures have for years flagged issues with confidential and intelligence fund documentation across multiple agencies, findings that produce public attention during budget season and diminishing consequences thereafter. The COA’s 2024 report, released in early 2025, identified a total of P8.4 billion in disallowances, suspensions, and observations across national government agencies, a figure that budget transparency advocates describe as significant and that the agencies involved describe as “under appeal.” The appeals process, which allows agencies to contest COA findings through the Commission’s internal review mechanisms and ultimately through the courts, means that few disallowances result in actual recovery of funds, a pattern that accountability researchers say creates “moral hazard” in fund management because the cost of non-compliance is typically delay rather than correction. COA Chairperson Elizabeth Gadon said in a recent briefing that the Commission’s constitutional mandate was to flag and report, and that the translation of those findings into consequences was a function of the legal system and the political will of other institutions. She said the Commission continued to audit regardless of what happened to its reports, because that was the job, and that she had found a certain peace in doing the job well irrespective of whether anyone was listening, a sentiment that reporters said was either deeply admirable or quietly heartbreaking depending on how you looked at it.

SOURCE: https://bohiney.com/quantum-confidential-fund-philippines/