Press Release
July 1, 2018

In the light of the COA findings in DFPC, DOT
Nancy urges GCG to review all GOCCs' fiscal practices policies

Senator Nancy Binay today called out the Governance Commission for GOCCs (GCG) to fully review fiscal policies of government and controlled corporations particularly those which were flagged by the audit commission.

According to Binay, the GCG, being the government's central advisory and oversight body over the public corporate sector, can start reviewing policies and fiscal practices of GOCCs.

"Perhaps the GCG can start reviewing the policies, requests and operational manuals of GOCCs to check if their resources are used efficiently and prudently so as not to expose the government corporation to any kind of liability. Kailangan munang unahin tutukan yung mga may adverse findings ng COA," she said.

Binay said the fiasco that beset Duty-Free Philippines Corporation (DFPC) is already a compelling reason for GCG to strengthen accountability at the corporate level.

"In light of the 2017 COA findings, the Governance Commission for GOCCs must carry out its oversight functions over GOCCs particularly those that have adverse audit findings. With professionals at the helm of GOCCs, let's elevate corporate governance and good housekeeping to global best practices," she added.


Just recently, COA flagged the DFPC over duty-free passes for various luxury items requested by former tourism secretary Wanda Teo which amounted to over P2.5 million.

Binay said that since the Senate inquiry into the various controversies surrounding the tourism department has yet to be scheduled when Congress resumes session on July 23, it is best that DFPC undertakes the necessary actions recommended by COA in its findings particularly the P3.797 million expenditures by the Department of Tourism (DOT) which was charged to the DOT-Trust Liability Account (TLA).

"Duty-Free Philippines can already start billing DOT and implement the recommendations of COA based on its latest audit reports. On the other hand, the Governance Commission can order the DFPC to file a petition for money claim with COA in relation to the unpaid merchandise including the P1.6-million consultancy contract which was charged against DOT's profit share," she pointed out.

Binay said the GCG has to take seriously its task to coordinate policies for the GOCC sector for the sake of operational harmony.

"Apparently, meron pagkukulang at may operational lapses kung bakit may ganitong uncontrolled withdrawals sa Duty-Free gamit lang ang gate pass slips. The GCG and DFPC should make proactive steps to address COA's findings and to prevent any repeat of similar irregular practice in the future," she said.

During her term as tourism secretary, Teo issued requests to pull out items from DFPC and have these charged to DOT's share in the DFPC's annual share.

"Kailangan natin imbitahin sina former Sec. Wanda Teo at mga opisyales ng tourism agencies under DOT to shed light kung bakit may mga ganitong adverse findings ang COA. Given the audit report on the probable violation of RA 9593, we in the Senate also wanted to know if there is any misuse, conversion or diversion of funds from their intended purpose," Binay added.

The senator added that RA 9593 clearly stipulates that remittances from the DFPC to DOT is intended to fund tourism programs, and is patently illegal to divert the funds for the purchase of branded bags, luxury cosmetic brands, kitchenware, grocery items and household appliances as corporate giveaways.

Binay wanted to know if the DFPC Board has amended the provisions in Section 106 of the Tourism Act setting the procedure for the remittance of contributions to DOT.

In the Tourism Act of 2009, the DOT secretary has to wait for the scheduled remittance of contributions from DFPC after the COA has audited corporation's financial statements, and only then shall the contribution be determined due DOT.

"Accommodating requests outside the mandated procedure is not only violative of the law but also disadvantageous to the government. As a government corporation, the DFPC is expected to exercise great caution in managing its finances, adopt a superior set of best practices in corporate governance, and set the highest fiscal discipline to the best interest of the State. Were the rules expressed in the DFPC manuals and codes implemented? May binago bang proseso? All these we wanted to know," Binay added.

The COA said while corporate gifts are allowed, the withdrawals made by DOT that were charged from its share constituted irregular transactions. As provided in RA 9593 or the Tourism Act of 2009, the DOT's share net profit from the DFPC for a particular year shall be remitted to the Office of the Secretary to fund tourism programs and projects.

News Latest News Feed