'Pasa-buy' scheme in gov't procurement created 'two mega parking lots' for funds

The institutionalization of "pasa-buy" in government purchases has transformed two agencies into "mega parking lots of funds" which, despite years-long delays in delivering the goods and projects they were contracted to buy, still raked in hundreds of millions in commissions.

Senate President Pro Tempore Ralph Recto said the Procurement Service of the Department of Budget and Management (PS-DBM) and the Philippine International Trading Corp. (PITC), a Department of Trade and Industry-attached agency, owe government agencies at least P63.1 billion.

This represented "unutilized deposits and advance payments of government agencies", Recto said.

"Ang ibig sabihin niyan ay may bilyones na pambili ng mga gamit o proyekto na hindi pa nagagamit ng PS-DBM at ng PITC," Recto said.

The P63.1 billion is almost evenly split by the two "pasa-buy agencies," Recto said, "with PITC accounting for P31.54 billion and the PS-DBM, P31.56 billion.

Recto said the two agencies "have become last minute dumping grounds of about-to-expire allotments of agencies."

"Hindi naman procurement expertise ang dahilan kung bakit sila napapasahan ng pondo. Ang totoong dahilan ay upang huwag abutan ng deadline at mapaso ang mga pondo ng mga ahenysa," Recto said.

"Once an agency transfers the funds for a particular project to PITC or PS-DBM, the funds are deemed obligated. Parang committed na. And this prevents the funds from being returned to the Treasury," Recto said.

This makes the two agencies "sanctuaries which extend the life of funds about to expire," he said.

"In short, we are deluding ourselves with the fiction that the funds are obligated when they are not. It circumvents the provision in the national budget that appropriations must be spent within the fiscal year," he said.

Recto explained that appropriations have been designed by Congress "to be perishable" so that agencies will spend them promptly.

"Ang nangyari, parang cryogenic chambers itong PS-DBM at PITC that deep freezes funds," Recto said.

"At ganun nga nangyari, kasi yung PITC halimbawa, mayroon pang P355 million worth of goods and projects to be delivered out of orders made in 2016," Recto said.

"Yung RITM building na may project cost na P864 million, 2017 na-transfer ang pondo, last March lang ang opening of bids," he said.

The same delays plague subcontracted procurements to PS-DBM, Recto said.

"So the mystery is, if PS-DBM has been plagued with delays in the delivery of goods, if it has this huge backlog of deliverables, then why would the Department of Health contract them to buy things we urgently need to defeat the pandemic?" Recto asked.

Recto said "it also boggles the mind on why agencies would surrender their funds to a small agency which do not have the expertise to vet highly technical purchases."

"Trains, planes and ships have been procured by DBM, which is way over their head as they are more familiar with common-use office supplies like paper and pen," Recto said.

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

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.