Press Release

Office of Deputy Speaker and Batangas Rep. Ralph G. Recto

30 August 2022

PS-DBM’s twin, PITC, with P14 B in undelivered orders, must be reformed, too

The PS-DBM’s “controversial twin”, the Philippine International Trading Corp., should also be “disenfranchised as a parking lot of billions in government funds,” Deputy Speaker Ralph Recto said.

“The parking lot is actually a duplex, the PITC being the other one,” Recto said.

Recto said PITC, a DTI agency, should go back to its original mandate as a state international trading arm, undertaking countertrade or importing essential goods for mass distribution by the government such as medicine and fertilizer.

“It has to stop being a local procurement arm of other agencies. It is a job it has largely bungled,” Recto said.

Given “tens of billions of money by hundreds of government agencies,” the PITC however failed to deliver on time the goods, equipment and infrastructure it was contracted to buy “for a fee,” Recto said.

By end of 2019, it had undelivered orders or unreturned advances valued at P33.2 billion from 79 government transactions. 

The following year, the backlog value slightly went down to P31.5 billion, involving 61 contracts.

The latest COA report, for year 2021, placed at P14.9 billion the funds described by government auditors as being held by PITC “in trust for government agencies for the procurement of various items.” 

The top 5 agencies with “parked funds” at PITC have pending orders worth more than P1 billion each, Recto said.

These are the Bureau of Fire Protection (P2.66 billion), Philippine Army (P2.23 billion), DICT (P2.19 billion), Bureau of Customs (P1.33 billion), and DOH (P1.19 billion).

Other agencies with unpurchased items worth more than P500 million are the Philippine Navy (P947 million), TESDA (P783 million), UP-PGH (P687 million), and PNP (P507 million).

Recto noted that based on the mandate of the requesting agencies, “you can surmise that these are essential goods, such as medical equipment from UP-PGH and DOH, or fire prevention equipment or building from the BFP,” Recto said.

“Ang matindi dito ay itong sa Bureau of Fire. May mga pondong 2015 pa na-transfer sa PITC, pero ang tagal bago na-deliver,” Recto said. 

 “In October 2020, I already raised on the Senate floor PITC’s failure to complete” not even one of the 98 fire stations it was contracted to build “at a budget of P892 million,” Recto said.

“Three years ago, P3.27 billion na ang utang ng PITC sa BFP. But as of last December, meron pang balance na P2.66 billion. Anyare?” Recto said.

Sana naman yung P997 million worth of fire trucks, aerial ladders and various equipment undelivered as of end of 2019 would have been delivered to BFP by now, Recto said.

The “original sin” here, Recto said, is that an import corporation under the Trade department was given taxpayer funds for a public works project it has no competence undertaking.

As part of procurement reforms , Recto called on the Marcos administration to disauthorize the transfer of expiring agency allotments to PITCs.

“This loophole which is used to extend the life of allotments that expire at the end of the year, and prevent their return to the Treasury, should be plugged,” Recto said. 

Such practice, he said, creates the fiction that the budget has been spent when it has not been.

Recto said this “pasa-buy” type of government procurement has resulted in delivery delays, overpriced purchases and substandard goods.