SENATE Minority Leader Franklin Drilon over the weekend sought the abolition of the state-run Philippine International Trading Corp. (PITC), saying existing government agencies already have their own procurement offices.
This, even as he pressed for the return of P33.4 billion of the agency’s “parked funds” to the Treasury, pointing out it is “immoral” to let this anomalous setup remain while the government scrounges for funds for its Covid-19 response and to stimulate a recession-hit economy.
Drilon said he will follow up “next week” with Finance Secretary Carlos Dominguez III on the latter’s initiative to write Budget Secretary Wendel Avisado to have an executive order drafted so the President can direct the return by yearend to the national government of long-idled funds at PITC.
Late on Sunday, however, Avisado told the BusinessMirror he has advised Dominguez that crafting an EO to compel the return of the monies will not pass legal muster, and the issue of billions in parked funds from various agencies should be treated as an “implementation” problem.
Drilon said the DOF was looking for available funds to bankroll the government’s P70-billion mass immunization program targetting 60 million Filipinos once a Covid-19 vaccine becomes available.
“They’re looking for over P70 billion. Here we’ve seen government agencies giving their funds to PITC to buy their various needs,” even while allowing the latter to keep billions in idle funds for procurements that have not been consummated, or which must be returned because certain purchases did not proceed as scheduled.
Drilon cited as example the Armed Forces of the Philippines’ supply acquisition process, where it turned over the payment through the PITC, to buy combat boots. Under the budget process, funds not used within a year are returned to the national treasury. And yet, Drilon added, in an apparent move to avoid returning the funds, the agency in question asks PITC to keep it.
Drilon, however, noted in a radio interview that a problem arises when the unspent fund “balloons and is forgotten.” As happened here, he said, the total parked funds hit “P33.4 billion in 2019.”
The senator clarified this information did not come from him or from Dominguez, but “from the Commission of Audit [COA] itself.”
The COA, he added, “discovered that the funds have long lain idle and sleeping in bank accounts.”
Drilon said Dominguez agreed with his view and talked to DBM chief Avisado to work on having the funds returned to the Treasury, “as its spending authority has expired, so it could be realigned.”
GCG law allows dismantling
Meanwhile, Drilon said the law they passed a few years ago reforming the government-owned and -controlled corporations sector by creating a Governing Council on GOCCs (GCG) allows the dismantling of PITC. The latter, set up in the seventies, has outlived its usefulness and is now being used to thwart proper fiscal processes bordering on graft, he added.
Asked whether forcing the return of the P33-plus-billion won’t bankrupt the PITC, Drilon replied in Filipino, “they are not needed anyway. The DBM has a procurement service that does the same thing.”
Under the GCG Act, the Council has the power to “determine whether a GOCC’s task is duplication, or is something the private sector can very well do. They [GCG] can recommend to the President to dismantle and stop the operations of PITC.”
He stressed that the government—or taxpayer—are losing out from the PITC practice of hoarding and then effectively “hiding” funds. “I repeat, the PITC is just a duplication because there is a DBM-PS and agencies have their own bids and awards committees.”
Drilon said one unconscionable consequence of PITC’s usual practice of charging commissions from agencies that ask it to do the procuring for them is that, should it be tasked to procure vaccines for the Philippine government, it might seek the usual commission of from 1 percent to 4 percent. In the case of badly needed Covid-19 vaccines, the 1 percent of P20 billion is a whopping P200 million, the senator said.
“That’s why that agency must be dismantled. What they’re doing is not only illegal, it’s immoral,” he added.
Set up in the 1970s, PITC was tasked to buy generic medicines from India. “In their charter, they’re supposed to help small businesses acquire the capacity to import internationally,” said Drilon. But they strayed into procurement fulltime, he added.