LAWMAKERS on Monday said they want to privatize Duty Free Philippines.
Party-list Reps. Ron P. Salo of Kabayan and Salvador B. Belaro Jr. of 1-Ang Edukasyon, in a statement, said given the country’s current and future economic growth, Duty Free Philippines Corp. (DFPC) can even be considered a competitor of local businesses, especially the shops catering to foreign and domestic tourists.
“The reconfiguration of Duty Free Philippines has become a necessity because its relevance as a foreign-exchange and revenue-earning government corporation and its relative importance as an instrument for augmenting the service facilities for tourists have greatly diminished,” Salo said.
“I prefer that it be privatized. It is time for government to get out of this business of running duty-free shops.”
Salo said the business sector can make the duty-free shops relevant again or focus it on specific niche markets. “Duty Free Philippines Corp. is a remnant of a bygone era when our country had a foreign-exchange crisis and was under the tight economic supervision of the International Monetary Fund and the World Bank,” the lawmaker said.
Salo said the important need of the current and foreseeable future is the reverse of what the DFPC was made for.
“The reverse is less government out of operations that directly compete with private business. The reverse is an economy more open for business and open to the world,” he said.
“Those sales, much of that is from concessionaires and consignees, not DFPC itself. Those sales should have been sales of the private sector, not the government. However, Duty Free Philippines took away those sales from local businesses because of their pricing advantage of being duty-free. Here, the government is competing with private business who also happens to be better at generating jobs than the government,” Salo said. Meanwhile, Salo, Belaro and other 20 lawmakers filed House Resolution 1742 to investigate Duty Free Philippines’s alleged “midnight deals” the state firm sold to the private sector or merged into the Department of Tourism or into the Tourism Infrastructure and Enterprise Zone Authority (Tieza).
In the resolution, lawmakers want the state firm to merge with Tieza or the Department of Tourism.
Salo said the surfacing of allegations or suspicions of anomalies at the DFPC involving procurement, public bidding and contracts entered into prompted the call for a House investigation.
“Recurring audit findings by the Commission on Audit also compel the House to undertake a very detailed probe of Duty Free Philippines’s operations. DFPC is supposed to remit earnings to the Department of Tourism. The audited reports show remittance problems year after year,” Belaro added.
The solons said this was “surprising” and there “is no sufficient justification for the premature grant of extensions of these contracts, which can be characterized as midnight deals of the previous officers of DFPC.” In House Resolution 1742, congressmen said they received reports about contracts DFPC entered into “that did not undergo the required public-bidding process and, therefore, are grossly disadvantageous to the government.”
According to publicly available information, lawmakers said among the contracts the DFPC awarded in recent years were: the P50-million contract for a media plan by Telenetwork Media Center Inc.; a P64-million contract for provision of shuttle services by Hafti Transport Inc.; P15.57-million contract for provision of security services by Philand Security Agency Inc.; P13.86-million contract for trucking and hustling services by Amvir Marketing and General Services Corp.; and P780,000 contract for garbage-handling services by Leonel Waste Management Corp.