Senator to push for restrictions on fund transfers to PS-DBM, PITC in 2022 budget

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Metro Manila (CNN Philippines, September 7) — The "pasa-buy" practice in the government, or the transfer of funds to procurement agencies which will buy supplies on a department's behalf, should be prohibited or restricted by Congress, Senator Ralph Recto said Tuesday.

During the Senate Blue Ribbon Committee hearing on the Department of Health's (DOH) use of pandemic response funds, Recto said this scheme muddles accountability, as agencies end up pointing fingers at each other when questioned on how the money was spent.

This is apparent, he pointed out, in the case of the DOH and the Procurement Service of the Department of Budget and Management (PS-DBM).

The DOH transferred ₱41 billion to the PS-DBM for the purchase of COVID-19 supplies, according to the Commission on Audit. Some of these purchases are being questioned by lawmakers due to alleged overpricing.

RELATED: Ex-DBM official on 'overpriced' face masks, face shields: 'That was the cheapest during that time'

"Pinapasa ng iba't ibang department sa PS-DBM, sa PITC (Philippine International Trading Corporation), para 'yung accountability mawala sa kanila at mapakita sa papel 'pag budget hearing na ito ay obligated, kahit sa katunayan ay hindi," Recto said.

[Translation: Some departments transfer funds to the PS-DBM or PITC so they can also shift the accountability and show in documents during budget hearings that the funds are obligated, when in fact they aren't.]

To address this, the senator said he will propose special provisions in the General Appropriations Act for 2022 that will limit the role of the PS-DBM and PITC, and in effect, put restrictions on the "pasa-buy" scheme.

Extra fee paid

Recto also questioned why the PS-DBM charged the DOH a 4% service fee for handling procurement.

"Why should a government agency charge another government agency 4%?" he asked.

"Palagay ko may mali doon eh. Nawala na 'yung accountability, may komisyon pa 'yung PS-DBM," Recto added.

[Translation: I think there's something wrong with that. Not only is accountability gone, the PS-DBM also gets a commission.]

According to former PS-DBM chief Lloyd Christopher Lao, the service fee goes to the salary increase of the agency's employees. However, Recto said the salary should already be part of the national government's budget.

The senator also argued the DOH should've done the procurement itself so as not to "shortchange" taxpayers.

However, Health Secretary Francisco Duque explained that his department found the need to tap procurement agencies last year due to a thinning workforce after several DOH personnel caught the coronavirus.

He added they faced difficulties in producing or sourcing personnel protective equipment due to a global supply shortage of raw materials at the time. While there are local manufacturers, Duque said these firms are also not capable of producing the necessary volume.

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Earlier, the Health chief vowed the DOH will no longer pass pandemic response funds to the PS-DBM in 2022.

Duque also told Recto that the department fully supports the proposal to restrict fund transfers to government procurement agencies next year.