SENATE President Pro Tempore Ralph Recto tagged on Tuesday two government agencies serving as “mega parking lots of multi-billion-peso public funds” used in what he uncovered as a ‘Pasa-buy’ scheme involving government procurements.
Recto reported that the institutionalization of “pasa-buy” in government purchases involved the Procurement Service of the Department of Budget and Management (PS-DBM) and the Philippine International Trading Corp. (PITC), an attached agency of the Department of Trade and Industry (DTI).
He described the two agencies as “mega parking lots of funds,” resulting in years-long delays in delivering the goods and projects they were contracted to buy, “while raking in hundreds of millions in commissions” for unknown parties.
Recto noted that PS-DBM and PITC owe government agencies at least P63.1 billion, adding: “This represented unutilized deposits and advance payments of government agencies.”
This means, Recto stressed, “there are multibillion-peso funds available. That means there are billions to buy supplies and projects which have not been tapped yet by the PS-DBM and PITC.”
He observed that the P63.1 billion is “almost evenly split by the two ‘pasa-buy’ agencies,with PITC accounting for P31.54 billion and the PS-DBM, P31.56 billion.”
The two agencies, Recto noted, “have become last-minute dumping grounds of about-to-expire allotments of agencies.”
He added, partly in Filipino: “Procurement expertise is not the basis for their being made the repository of funds. The real reason is to avoid being caught in the fiscal deadline, and so that the agency funds will not lapse,” thus skirting the requirement to return this to the Treasury.
Recto explained that once an agency transfers the funds for a particular project to PITC or PS-DBM, the funds are deemed obligated.
“It’s as if it’s been committed already,” he said, “and this prevents the funds from being returned to the Treasury.”
The senator noted that, in effect, this makes the two agencies “sanctuaries which extend the life of funds about to expire.”
In short, Recto said, “we are deluding ourselves with the fiction that the funds are obligated when they are not. It circumvents the provision in the national budget that appropriations must be spent within the fiscal year.”
Moreover, Recto noted that appropriations have been designed by Congress “to be perishable” so that agencies will spend them promptly.
“What happened is this: the PS-DBM and PITC have become like cryogenic chambers that deep-freeze funds. The PITC for example, still has P355 million worth of goods and projects to be delivered out of orders made in 2016,” he said.
Recto added, “The RITM building with a project cost of P864 million, it was only in 2017 when the funds were transferred, and the opening of bids took place in March.”
Noting that the same delays plagued subcontracted procurements to PS-DBM, Recto said: “So the mystery is, if PS-DBM has been plagued with delays in the delivery of goods. If it has this huge backlog of deliverables, then why would the Department of Health contract them to buy things we urgently need to defeat the pandemic?”
The senator said, “it also boggles the mind on why agencies would surrender their funds to a small agency which does not have the expertise to vet highly technical purchases.”
He added: “Trains, planes and ships have been procured by DBM, which is way over their head as they are more familiar with common-use office supplies like paper and pen.”
Recalling that in 2020, PITC booked an income of P199.8 million, of which P137 million came from outsourced procurement, Recto added that PS-DBM’s 2020 revenue on the other hand reached P1.02 billion, with sales accounting for P877 million and service fees as procuring agent contributing P21.6 million.