Imee Marcos moves to abolish PS-DBM, PITC created during dad's presidency

Katrina Domingo, ABS-CBN News

Posted at Sep 09 2021 02:52 PM

MANILA - Alleging that "systemic corruption" has crippled the Procurement Service of the Department of Budget and Management (PS-DBM) and the Philippine International Trading Corporation (PITC) which were created during her father's presidency, Sen. Imee Marcos this week filed bills proposing for the abolition of the two agencies.

Marcos filed last Monday Senate Bill Nos. 2388 and 2839 seeking to scrap the PS-DBM and PITC, respectively, after lawmakers questioned their handling of government funds amid the country's battle against COVID-19.

"The DBM-PS has become a fertile breeding ground for graft and corruption and should be abolished as it has outlived its functions to the national government," Marcos said in the explanatory note of SB 2388.

"There are reports of source agencies using the interest of money transferred to the PITC to generate savings, which are used by the source agency to fund bonuses among others," she said in the other bill.

Aside from reports of corruption within these agencies, Marcos noted that the passage of the Government Procurement Reform Act in 2002 "undermines the mandate" of both the PS-DBM and the PITC as the law allows "all agencies to establish a single bids and awards committee for its procurement."

PS-DBM

The PS-DBM was created on October 18, 1978 "to establish an integrated procurement system for the national government to take advantage of economies-of-scale in procurement," SB 2388 said.

The agency was tasked to buy items used in the daily operations of the bureaucracy - such as pens, papers and toiletries for public buildings - as the government can procure these items at a lower price when bought in bulk.

The PS-DBM also has a trading function as it resells the items it procured to other government agencies. The PS-DBM charges a 4 percent service fee for procurements it carries out in behalf of other agencies.

Last month, the Senate Blue Ribbon Committee began investigating the transactions of the PS-DBM after the Commission on Audit (COA) questioned the transfer to it of P42 billion from the Department of Health (DOH) without proper documentation.

Senate investigations found that the PS-DBM may have bought overpriced face masks, face shields, RT-PCR test kits and other pandemic supplies mostly from foreign suppliers.

The Duterte administration denies the overpricing allegation.

PITC

Meanwhile, the PITC was created in July 1973 with the primary mandate of facilitating "trade with socialist and other centrally planned economy countries," read SB 2839.

"The PITC was originally crafted as a mechanism to formalize trade with planned economies through government-to-government procurement," it added.

"As of today, only 2 centrally planned economy are in existence, which are Cuba and North Korea," it noted.

The Philippines "has moved away from government-to-government trade" so the PITC has become "archaic and irrelevant in the current times," Marcos said in her explanatory note.

Last year, Senate Minority Leader Franklin Drilon found that P33 billion from the Department of the Interior and Local Government adn the Bureau of Fire Protection were "parked" in the PITC.

According to its website, PITC's mandate is to "embark on major business activities including joint ventures, foreign procurement and distribution, warehousing and dealerships, among others."

It is also supposed to "engage in both export and import trading new or non-traditional products and markets not normally pursued by the private business sector; and provide a wide range of export oriented auxiliary services to the private sector."

Drilon said the Bureau of Fire Protection deposited about P150 million to the PITC and tasked it to build some 98 fire stations. 

The government-owned company also failed to deliver 242 firetrucks, he said.

The COA also recently flagged PITC's purchase of personal protective equipment for medical frontliners from a Davao firm, saying another bidder has been offering lower price proposals.

"The PITC became a repository for unobligated funds of national government agencies, and as such should be abolished as it has outlived the functions of the national government," Marcos said.

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