MANILA, Philippines?While it gives away millions of pesos in lottery prizes, the Philippine Charity Sweepstakes Office (PCSO) has been losing heavily for the past several years, the agency?s head said Thursday.

PCSO Chair Margarita Juico told the House committee on appropriations that the agency had incurred P2.2 billion in accounts payable from 2005 to the present.

The bills, mostly owed to hospitals, led to a P1-billion net loss as of end-2009, Juico later told reporters, citing the findings of a consultant from the auditing firm SGV.

?To my dismay, the COA (Commission on Audit) reported that for the last three to four years we?ve been suffering a net loss. I couldn?t believe that myself because everywhere you go they look at PCSO as so wealthy. All of a sudden we have this net loss,? she told the committee.

The House appropriations committee, chaired by Cavite Rep. Joseph Emilio Abaya, Thursday heard for the second day briefings by the Development Budget Coordinating Committee on President Benigno Aquino III?s proposed P1.645-trillion national budget for 2011.

To reflect a profit each year, the PCSO would report its expenses in the financial statement not in the current year that these were incurred, but in the following year, according to Juico.

Overspending

?Every time there?s a profit reflected, they go all out and give benefits or overspend so each year the same thing happens. So there was an accumulation of net losses. I had to get a consultant from SGV to look at the books, and confirmed that we were losing heavily,? she said.

This prompted Abaya to remark: ?I?m just worried that the very reason that your office is in attendance [at this hearing] is that it?s a source of revenue. We don?t want it to be one of GOCCs (government-owned and -controlled corporations) sucking blood from the government later.?

Juico responded by saying: ?I think we?ve made moves to stop the hemorrhage.?

The PCSO has a separate prize fund for lotto winnings.

Juico confirmed that the bulk of the accounts payable was due government hospitals and medical institutions, for which the PCSO allots endowment funds.

The PCSO has a program that takes care of endowment funds to government hospitals and medical institutions for the treatment of the poor.

Too many guarantees

Juico said the problem arose when the then PCSO general manager and board of directors gave away too many guarantee letters to patients without the knowledge of the office in charge of fund allocation.

It reached a point when the accounts payable to hospitals far exceeded the money of the fund allocation, Juico said.

?Fund allocation would say, we owe P400,000 to this hospital, and this hospital would give us a bill, saying ?You owe us P6 million,? she told reporters after the hearing.

The previous PCSO board was chaired by Sergio Valencia. Its members were Jose R. Taruc V, Reynaldo Roquero, Manoling Morato and Fatima Valdes.

P29M owed to Makati Med

During the hearing, Davao Oriental Rep. Thelma Almario said the PCSO owed Makati Medical Center about P29 million, and the National Kidney and Transplant Institute (NKTI) P19 million, a discovery she made while facilitating a request of an ailing constituent availing himself of the endowment fund.

?We believe there?s really a hemorrhage of funds, but this should be reflected in the handouts,? Almario said.

Benigno Aguas, PCSO assistant general manager for corporate planning, said most of the accounts payable were charity funds for government hospitals and medical institutions, such as NKTI, Heart Center of the Philippines and Lung Center of the Philippines, among others.

?We will be giving a report after establishing the accuracy of figures submitted by different department heads,? Aguas, also concurrent PCSO manager of budget and accounting, later told reporters.

Juico said the PCSO was undertaking a ?cash count? to determine the financial standing of the agency.

?We were earning OK, but it couldn?t catch up with the expenditures,? she told reporters, referring to the years before she took over chairmanship of the PCSO under the Aquino administration.

At the hearing, Juico also disclosed that more than 70 lawmakers and more than 50 governors had availed themselves of ambulances from the PCSO for free from 2009 to 2010. Under an arrangement, the PCSO would pay 60 percent of the bill, and local government units, 40 percent.