Solon wants probe on financial aid distribution platform Starpay

RG Cruz, ABS-CBN News

Posted at Oct 13 2021 06:24 PM | Updated as of Oct 13 2021 06:34 PM

MANILA -- A progressive lawmaker has asked the House of Representatives to investigate the Department of Social Welfare and Development’s (DSWD) engagement of financial services provider Starpay Corp. for the distribution of the Social Amelioration Program (SAP).

Bayan Muna Rep. Carlos Zarate pointed out that it's been almost two months since he and the rest of the Makabayan bloc filed House Resolution 2146. 

"Nag-first reading ito August 23 but it was referred to the Committee on Rules. Hanggang ngayon nasa Committee on Rules 'yan dahil possibly naabutan na rin ng budget deliberations yan," he said.

(This underwent first reading on August 23 but it was referred to the Committee on Rules. It's still with the Committee on Rules now, probably because it set aside during budget deliberations.)

"But we are appealing to the House leadership to also fast track the hearing of this when Congress resumes its session in November.”

In July, Sen. Manny Pacquiao bared some P10.4 billion in SAP funds are missing, with about 1.3 million beneficiaries supposedly unable to get critical pandemic aid as he questioned the use of unknown e-wallet Starpay for the program.

Pacquiao alleged that out of the 1.8 million social amelioration program (SAP) beneficiaries, only 500,000 were able to successfully use the Starpay app. He said one needed to download the application to claim their aid. 

Zarate noted that during the 2022 budget deliberations, it was revealed that StarPay had to return undistributed SAP funds to the government. 

"In fact sabi doon, the initial reports and kahit sa mga pagdinig, tinanong din natin ito sa panahon ng budget deliberations eh, dahil nga walang apparently enough resources and capacity itong Starpay at the end of the SAP distribution ay nagsauli ito ng P8 billion dahil 'di na nito kaya i-distribute."

(In fact, in initial reports--and we even asked this during the budget hearing--it was revealed that Starpay ended up returning P8 billion in funds to the government because it could not distribute this due to lack of resources and capacity.)

"Prior to that there were reports itong (this) P8 billion ay nai-park nai-deposit sa isang bangko na kumita din ito ng interest (was deposited in a bank where it also earned interest).”

“Ang tanong ngayon diyan kanino napunta ang interest na yun?" Zarate asked.

(The question is, to whom did this interest go?)

"Another issue na dapat din busisiin ng Kongreso, dahil nga sa kulang or 'di angkop ang sistema ng Starpay, maraming mga SAP beneficiaries na eventually ay [resorted] to over the counter ang pagkuha ng kanilang ayuda," Zarate noted.

(Another issue Congress must look into is that, because of Starpay's systems, many SAP beneficiaries resorted to getting their cash assistance over the counter.)

"Yung sinasabi offline during this transaction ay syempre nangongolekta [ang] Starpay ng P50 per transaction. Can you just imagine kung merong five million na nag-conduct ng over the counter o offline transaction, kahit 50 pesos tumataginting na P250 million kaagad yun,” Zarate said.

(When they say 'offline during this transaction,' of course Starpay collects P50 per transaction. Can you just imagine, if five million were conducted over the counter or offline transactions, Starpay would already have P250 million right away.)

HR 2146 noted that several quarters also questioned the contract entered into by the DSWD with Starpay Corporation, whose starting capital is allegedly only P62,000.

"According to 2020 DSWD annual audit report released by the Commission on Audit (COA), of the total (P47,987,981,03) SAP fund transfers to financial service providers (FSPs), the DSWD channeled P33,210,630,470. or 69.21 percent to Starpay Corporation," it said. 

In contrast, DSWD channeled only 0.010/0 to 11.48 percent of the total funds to the other five financial services providers it had deals with, which happened to be more established names: G-Xchange, Inc., PayMaya Philippines, Inc., Rizal Commercial Banking Corporation, Robinsons Bank Corporation, and Union Bank of the Philippines.

“Ito ang nagtulak bakit natin gusto maimbestigahan ito--bakit itong unknown corporation that allegedly only has P62,000 as its start up capital ay nakakakopo ng ganito kalaking budget for the distribution of social amelioration program nung panahon ng kasagsagan ng mga lockdowns," Zarate said in a Zoom interview.

(This is what we want to investigate--how an unknown corporation that has P62,000 as its start-up capital bagged a huge contract for the distribution of pandemic aid amid the COVID-19 lockdowns.)

The resolution also cited a COA report which said that 135 out of 6,761 SAP beneficiaries it sampled did not receive the second tranche of the pandemic aid but were tagged as "paid" in the database. 

HR 2146 also said that the COA flagged the agency for failing to post the complete list of SAP beneficiaries paid through financial service providers on their official website, which raises the possibility of double payment to some beneficiaries.

Zarate likened DSWD's deals with Starpay to the government's alleged anomalous pandemic deals with Pharmally. 

“That is possible, kaya kailangan talaga ma-imbestigahan ito dahil lo and behold, there is this unknown entity na walang record of experience naipakita to make this very gargantuan transaction distribution ng SAP.”

(That is possible, we really need to investigate this because lo and behold, an unknown entity with no track record of experience was asked to make a garnatuan SAP distribution.)

In an interview on ANC's "Rundown," DSWD Assistant Secretary Glenda Relova said Starpay was one of six financial service providers they picked because it met the standards set by the Bangko Sentral.

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"As I mentioned earlier, the terms of reference in choosing the financial service provider was guided by the Central Bank," she said.

"It was chosen by the DSWD because of the different pareameters like their presence in a particular area, their ability to cash out main beneficiaries balanced with other considerations such as the presence of business model, institutional and historical experience in commercial roll out and their liquidity."

Relova maintained that the DSWD has been transparent in its dealings with Starpay.

”The DSWD has been constantly submitting our reports at the Office of the President on a daily manner and at the Lower House and at the Senate on a consistent basis," she said.

"This is our report and the manner of reporting all liquidation reports is in order," she added.

"The DSWD is always ready to submit all the documents relevant to the distribution of the social amelioration program, and we are confident that every centavo in all transactiosn are being verified and accounted for," she said.

In July, it was reported that Starpay denied supposed links to corruption and emphasized that all target beneficiaries were "successfully paid."