Drilon suspects around P33 billion parked in state trading firm PITC


Posted at Nov 23 2020 09:39 AM | Updated as of Nov 23 2020 12:44 PM

MANILA - Senate Minority Leader Franklin Drilon said Monday he suspects over P33 billion in government funds were parked in Philippine International Trading Corporation (PITC), a firm under the Department of Trade and Industry.

Drilon initially said there may be about P18 billion, but after reviewing audited financial statements, he said there could have been more.

"The latest financial statement as of December 31, 2019 indicates that customers’ deposits in PITC is P33.4 billion. Now, assuming that there are also some private sector deposits which is not much, you are talking about funds to the tune of P33 billion in government funds deposited in a small trading firm," he told ANC's Headstart.

Government agencies tap the PITC when they are supposed to purchase goods and products, "and pass on the budget there so that they will say it is already obligated when in truth and fact it is just deposited," said Drilon.

"The Secretary of Finance and the DOF is really straining to raise funds due to the drop in revenues. But here you are, government agencies depositing their budgets in PITC so it is made to appear that they are obligated," he said.

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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."

But Drilon said the Bureau of Fire Protection deposited about P150 million to the PITC and tasked it to build some 98 fire stations. The company also failed to deliver 242 firetrucks, he said.

"The charter of PITC says they are a trading company. How is it that they are now engaged in the construction of 98 fire stations and they have not delivered?," he said.

He also questioned if the interest of these deposits are remitted back to the government once they earn. He also raised how much was remitted to the treasury from the profits of the 1-to-5-percent service fee the PITC charges.

Drilon finds it "worrisome" that this agency is being tapped to lead the procurement of COVID-19 vaccines, which could be allocated some P20 billion from the 2021 budget. With a 1 percent commission, the PITC could earn about P200 million.

The senator said he will initiate an investigation into this "can of worms."

He also called out the Governance Commission for GOCCs (government-owned and controlled corporations) for "not doing its job" of looking into this matter.

"There is really a valid basis to start looking into the operations of PITC and see whether we are being shortchanged or, worse, there are commissions running all over the place," he said.