Senate wants answers after pandemic aid numbers ‘didn’t tally’

The Department of Social Welfare and Development (DSWD) needs to explain how much the agency received in funding for its pandemic cash aid program, and how much of it really went to indigent Filipinos, the chair of the Senate economic affairs panel said on Wednesday.

“Too many people are saying they did not receive anything, while others got double. What’s the real score?” Sen. Imee Marcos said in a statement.

“We are asking the DSWD for an explanation. Why did they give conflicting answers during the briefing (last Oct. 11) when only numbers were involved? And their own numbers did not tally,” she added, without elaborating on which figures she was referring to.

Marcos’ subcommittee asked the DSWD to give records of its transactions with Starpay Corp., including transfers and refunds, to get a better picture of how the social amelioration program (SAP) funds were spent.

The little-known Starpay was one of six electronic wallet firms contracted by the DSWD and the Bangko Sentral ng Pilipinas (BSP) to digitally transfer the second tranche of cash aid to SAP beneficiaries under the Bayanihan law. The five other financial service providers (FSPs) were Robinsons Bank, Unionbank, Rizal Commercial Banking Corp., Globe Telecom’s GCash and PLDT’s PayMaya.

Marcos said the DSWD should give “a clear report and justifications on how much was actually obligated for SAP 1 and 2, and out of this obligation, how much was really remitted.”

“This is important because of Delta and other variants, that we may need one or two more rounds of ‘ayuda’ (cash aid)—and that’s already beyond the budget. How will you augment the department’s new budget if the previous computations are not in order?” Marcos said.

DSWD justification

Marcos presided over the Oct. 11 Senate finance subcommittee hearing on the DSWD’s proposed budget, in which her colleagues led by Sen. Manny Pacquiao raised questions about how the little-known Starpay Corp. was entrusted with P50 billion in funds for distribution under the SAP, beating bigger companies.

Pacquiao said Starpay ended up with the lion’s share of the SAP funds despite acquiring a BSP license only in 2018 and declaring a loss in 2019. “Of the P85.1 billion in funding (for the second tranche of SAP), the DSWD entrusted to Starpay almost 60 percent, or more than P50 billion. The remaining 40 percent was divided among five other FSPs,” the senator said.

DSWD officials led by Secretary Rolando Bautista said Starpay’s advantage was that it could serve people with no mobile phone numbers using offline conduits, unlike more established brands like GCash, which initially was allocated the most number of beneficiaries to serve.

Starpay earlier said it sent money to more than five million beneficiaries within a “very short period of time” and has liquidated all the funds it received from the DSWD. It admitted though that it failed to distribute about P8.2 billion in cash aid that has since been returned to the DSWD.

But Pacquiao alleged that the company kept about P10 billion in SAP funds in its private bank account and let it “sleep” there for 10 months to earn interest amounting to P200 million.

DSWD officials had denied that the agency made any cash deposits to Starpay using a private bank account, saying all transfers were made to the company’s Landbank account, pursuant to BSP regulations.

Service fees

The Bagong Alyansang Makabayan (Bayan) on Wednesday also weighed in on the questions raised about the aid distribution scheme.

“Somebody profited. This was made possible because the DSWD favored Starpay even when the latter did not have the capacity nor track record for large-scale transactions such as ayuda distribution,” Bayan Secretary General Renato Reyes said.

He questioned why Starpay got the bulk of the funds for the SAP in 2020 and 2021 when it had a smaller user base than other digital platforms and had reported losses in 2019.

DSWD officials earlier disclosed that Starpay was prefunded with P51.35 billion worth of grants for distribution to more than 6.9 million beneficiaries.

“In the end, Starpay was not able to do most of the online transactions it promised because only 800,000 downloaded the app while there were some six million beneficiaries,” Reyes said.

During House deliberations on the proposed 2022 DSWD budget in September, Gabriela Rep. Arlene Brosas also noted that some beneficiaries were charged P50 to P100 by the FSPs for transacting over the counter because of issues with the app.

Reyes noted that if five million people transacted over the counter instead of via the app, the company would collect P250 million in service fees alone, adding:

“Why give Starpay the huge contract when people will end up claiming their SAP over the counter? Why didn’t DSWD use the more established apps with a far larger user base? Why was Starpay favored?”