In this exclusive story, we report about how a Vatican probe is being sought on the misuse of diocesan funds partly intended for disaster victims

Published 5:25 PM, June 18, 2012

MANILA, Philippines - Tempest is brewing in one of the richest dioceses in the Philippines.

Priests and lay leaders have asked the Apostolic Nuncio to the Philippines, Archbishop Giuseppi Pinto, to look into the finances of the Diocese of Parañaque under Bishop Jesse Mercado for alleged misuse of funds.

They also want Mercado removed, for sowing division among the clergy for his double-standard policy.

After meeting with the papal representative a few times, the group finally secured a commitment from Pinto that he will refer the complaint to the Curia in Rome.

The move comes on the heels of growing sensitivity within the Catholic Church hierarchy on the issue of finances. This follows the backlash on the leaks of documents in the Vatican.

Complaints against a bishop endorsed to the Vatican are handled by the Congregation for Bishops. "If they find preliminary merit, Rome sends someone or appoints a retired archbishop or bishop to investigate and evaluate the case. Then the report is sent back to the Vatican," a retired archbishop explained.

Mercado is being accused of diverting multi-million donations for victims of typhoons and other calamities.

This is in violation of the Church law, or the Canon 1300 which states that "the intentions of the faithful who give or leave goods to pious causes…once lawfully accepted, are to be most carefully observed, even in the manner of the administration and the expending of the goods…"

In simpler terms, the Church law states that the donation must be used for the intended purpose.

Still, this is just the tip of the controversy.

Pattern of misuse

In one letter submitted to the Papal Nuncio, one disgruntled priest indicated a "pattern of misuse of the (diocese's) funds" and said that "there are more anomalous practices to be uncovered."

"The clergy and the laity have been questioning the lack of transparency and we are concerned that if this is not addressed properly and immediately, this potential scandal would really hurt our Church especially our young diocese," the priest added.

Even as donations for the intended beneficiaries do not reach them, the diocese is also not funding its social programs.

Some priests who sought the donations are at a loss explaining to donors and beneficiaries that the money is locked up in banks.

The tight-fisted set-up has prompted some members of the Parañaque clergy to inquire about the diocese's finances.

Like the Vatican leaks, they got hold of the smoking gun.

As is the usual practice of most Church officials, Mercado chose to remain silent. He ignored requests for interviews, either by text or by email.

We also called his mobile number several times to no avail.

Millions diverted to investments

The diocese covers the cities of Parañaque, Las Piñas and Muntinlupa, where some of the most exclusive subdivisions are located. Mercado's parishioners are among the richest, and some of the most generous donors of the Church.

The Parañaque diocese is part of the ecclesiastical province of the Archdiocese of Manila. In 2002, it was one of the dioceses carved out from the Archdiocese of Manila, in response to the growing Catholic population in Metro Manila.

Mercado, a protégé of the late Manila Archbishop Jaime Cardinal Sin, was installed as its first bishop.

The 61-year-old Mercado became bishop in 1997 and was named as auxiliary bishop of Manila. He was also previous rector of the Pontificio Collegio Filippino based in Rome.

At the height of Typhoon Ondoy which submerged Metro Manila in 2009, Mercado sought contributions to help the flood victims. The diocese's financial report showed it collected P1,631,473.05.

When a destructive earthquake hit Haiti in January 2010, the diocese racked up P1,031,456.37 in collections. That same year, it also collected P129,201.25 for the fire victims in Muntinlupa.

In December 2011, when Typhoon Sendong flooded Mindanao, the diocese rallied parishioners for donations, getting P3,470,589.95.

However, not all the funds were received by the beneficiaries.

For Typhoon Ondoy, only P263,236.60 was released, leaving a balance of P1,368,236.55 not given to intended beneficiaries. For the Haiti collection, a total of P168,891.10 has not been rem