PCSO spent P7.2B for PR, ads under Gloria Macapagal Arroyo

MANILA, Philippines—The Philippine Charity Sweepstakes Office (PCSO) spent P7.2 billion for public relations and advertising under the Arroyo regime, including P150 million which was converted into “intelligence funds” shortly before the 2010 elections, according to a lawmaker.

In a privilege speech, Bayan Muna Rep. Neri Colmenares said the PCSO board had allocated roughly P900 million a year for “expensive media advertising, overpriced contracts and perks for its board members” which took up most of the agency’s operating budget.

Colmenares pointed out that the PCSO management was only allowed under its charter to spend 15 percent of its gross receipts for operating expenses with the balance to be returned for charity purposes.

“By bloating the PR fund beyond the 15 percent operation fund, the PCSO essentially diverted the funds intended for charity. We have to investigate deeper if these contracts were (consummated) because we have been given information that the PCSO board did not even bother to have concrete media plans, did not bother to monitor the implementation of these ads, and cannot present any report on whether the spots it bought were aired as contracted,” said Colmenares.

Colmenares said that the PCSO was given so much leeway in spending the agency’s money that some of these funds could have been diverted for political purposes. He showed the Inquirer a letter, dated January 4, 2010, ostensibly written by PCSO General Manager Rosario Uriarte, seeking to realign half of the PR funds or at least P150 million for intelligence funds—a special account not covered by state audit. Colmenares claimed that this was irregular considering that the President could not realign the budget without Congress’ consent.

Colmenares said a closer review of these contracts showed that advertising agencies got a hefty 40 percent commission from these ads.

Aside from the PCSO’s massive media budget, Colmenares said Congress should also look into the the multi-billion peso contracts entered into by the previous PCSO management, such as its decision to extend the lease contract of the lotto machines of Philippine Gaming and Management Corporation (PGMC) when it could have bought the machines for P25 million in 2004; its decision to enter into a 50-year contract to buy thermal paper for lotto stubs from an Australian firm worth P42 billion; and its decision to jack up the price of small town lottery machines worth only P7,000 each and selling them to operators for P40,000.