Recto, Villanueva tell gov’t agencies: Stop dumping money on PS-DBM, PITC

Senate President Pro Tempore Ralph Recto and Sen. Joel Villanueva

MANILA, Philippines — Two senators are warning government agencies against using the Procurement Service of the Department of Budget and Management (PS-DBM) or the Philippine International Trading Corp. (PITC) to purchase pandemic supplies amid overpricing and corruption controversies.

Senate President Pro Tempore Ralph Recto on Tuesday said the Department of Health (DOH) was planning to buy 758,700 sets of personal protective equipment (PPE) next year for P819 million, at an average cost of P1,079 each, based on the agency’s proposed 2022 budget.

The senator urged the DOH to instead buy the PPE sets on its own and “shun the trend” of using the PS-DBM or the PITC to make the purchases for it.

“It’s their doctors and nurses that will be using the items. They should know what to buy,” he said in a statement. “Asking PS and PITC to buy is like asking a clueless male to buy the best woman’s bra.”

If the DOH will make the purchases, it will save money from not having to pay a commission, called “service fee,” to PS-DBM or PITC, which could jack up costs by 5 percent, Recto said.

The DOH could avoid delays in procurement by making pre-procurement groundwork before the 2022 national budget is enacted, he said.

Both the 2021 General Appropriations Act and the 2022 National Expenditure Program (NEP) allowed early procurement activities for anticipated projects, but the agencies they should not issue notices of award of contract until their budgets are approved, Recto said.

He urged the DOH to publish the specifications and volume of the PPE sets to be purchased to draw as many interested parties as possible. “Make public the details. As they say, sunlight is the best disinfectant,” he said.

The warning was raised following the controversial transfer of P42 billion in DOH funds to PS-DBM for the purchase of face mask, face shields, PPE and other pandemic supplies. This became even more questionable after a small obscure company bagged P8.7 billion worth of contracts to supply some of these medical supplies.

Sen. Joel Villanueva had earlier urged all government agencies to stop using the PS-DBM as their buying arm for big-ticket projects “until the agency has been reformed and cleared of controversies.”

In a statement, Villanueva said agencies would be better off holding its own bidding procedures as PS-DBM would just add “another layer of red tape.”

“There is practically no need for agencies to pay a commission to the middle man, which is exactly what PS-DBM’s role is. They can do the bidding of contracts themselves,” he said.

Villanueva said the reason agencies “dump” their funds on PS-DBM was to extend the validity of the fund allotments.

“When expiring allotments are transferred to PS-DBM these are given a new lease on life,” he said.

The transferred funds would be deemed as obligations in the books of agencies and no longer “unspent funds” that must be reverted to the national treasury, Villanueva explained.

In 2020, PITC booked an income of P199.8 million, of which P137 million came from outsourced procurement, according to Recto.

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, he said.

Recto described the two agencies as the “last-minute dumping grounds of about-to-expire allotments of agencies.”

“The reason funds are being transferred to them is not due to their procurement expertise. The true reason is so the agencies don’t miss the deadline for spending” their budget, Recto said.