Senators question 4 pct markup by Budget Department's procurement service

Warren de Guzman, ABS-CBN News

Posted at Sep 21 2021 07:05 PM

MANILA - Senators questioned the Department of Budget and Management on why its procurement service (PS-DBM) charges a 4 percent markup for supplies it purchases for other government agencies. 

Joshua Laure, the officer in charge director of the PS-DBM Administrative and Finance Group told a Senate hearing on Tuesday that the agency charges a “constant markup” of 4 percent for common use supplies, as well as a 1 percent service fee.

"Doon po sa service fee, depende sa agency, yung DOTr (Department of Transportation) 1 percent po based on our MOA (memorandum of agreement),” Laure told the Senate Finance Committee.

Senator Sonny Angara, who chairs the Senate panel, said this seemed “a little anomalous.”

“What is the policy justification for the service fee and the mark up?,” Angara asked. He said that this seemed out of line with the purpose of the agency to realize economies of scale and thus save on costs. 

“Eh parang nadagdagan ang gastos di ba?” 

(It looks like it is adding to the costs.)

DBM officer in charge Undersecretary Tina Rose Marie Canda said the agency places a 4 percent markup to recover its operating expenses because PS-DBM does not charge against the national budget.

She added that even with the 4 percent markup, the items bought through PS-DBM will still end up cheaper than market rates. 

“They buy in bulk, so ang rationale, they get it at a much lower price. So even if the agencies pay the 4 percent, it is still lower than the market,” Canada told senators.

Senator Imee Marcos meanwhile said the PS-DBM should be abolished. 

The PS-DBM has been a regular at the Senate as the upper chamber’s blue ribbon committee investigates alleged overpriced contracts for personal protective equipment.


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