BBM should end ‘pasa-buy’ procurement, dismantle ‘parking lots’

Press Release

10 August 2022

If it wants faster delivery of critical projects and equipment, the Marcos administration must end the “pasa-buy” scheme in government purchases which has created two “mega parking lots” of funds responsible for slow procurement of goods at higher prices.

Deputy Speaker and Batangas Rep. Ralph Recto made this call after noting the spate of Commission on Audit reports linking the Procurement Service of the Department of Budget and Management (PS-DBM) to questionable transactions.

“Pagdating sa aberya sa procurement, dalawang ahensya ang laging starring sa COA reports. Itong PS-DBM at PITC,” Recto said, referring to the Philippine International Trading Corp., an agency under the Department of Trade of Industry.

The two serve as state purchasing arms which other government agencies contract, for a fee, to buy a wide range of goods, including what Recto said are “planes, trains and automobiles.” 

“There would have been no problem if the involvement of the two had led to faster procurement of quality goods at cheaper prices. But the opposite had happened,” he said.

As of August last year, PS-DBM and PITC owed their client government agencies P63.1 billion worth – almost evenly split between the two – of undelivered goods, equipment and infrastructure. 

In COA parlance, this amount represented “unutilized deposits and advance payments of government agencies”, Recto explained.

“Read the COA reports and cry. Some of the equipment were supposed have been delivered five years before but were still in the bidding stage,” he said.

The amount does not, however, include “delivery slippages of equipment and consumables used to fight the Covid pandemic which have been marred by allegations of irregularities.” 

Recto said the two agencies “have become last minute dumping grounds of about-to-expire allotments of agencies.”

Because funding allotments expire at the end of the year, the two agencies serve as “sanctuaries which extend the life of funds and prevent their return to the national treasury.”

“Tulad ng sinabi ko doon sa Senado, hindi naman procurement expertise ang dahilan kung bakit sila napapasahan ng pondo. Ang totoong dahilan ay upang huwag abutan ng deadline at mapaso ang mga pondo ng mga ahenysa,” Recto said.

Once an agency transfers the allotment for a particular project to PITC or PS-DBM, the funds are considered obligated, deemed spent even, he said.

This in turn creates the “expenditure fiction“ that the funds have been utilized, when in fact they are not, Recto said. “This artificial spending inflates fund utilization.”

Ironically, Recto noted that it was upon the insistence of the executive branch that Congress made appropriations “perishable beyond one year” in order to accelerate spending, “only to be circumvented in the other branch.”

“Ang epekto, parang nilagay sa freezer ang pondo, naka-ice para tumagal ng maraming taon,” he said. 

Another issue Recto raised against the two agencies is the “patent lack of technical expertise to assess bids.”

“Kung aircraft, may piloto ba ang DBM at DTI? Kelan pa sila naging eksperto sa train? Or ilan ba ang in-house doctors nila para masabi nila na ang ganitong medical equipment ang pinakamahusay?” he said.

Recto urged the Marcos administration to revert to the system of letting end-users conduct the bidding.

“Kung computers for teachers, then let DepEd handle the procurement. Kung military hardware, sa DND,” Recto said. 

“Sa ganun, kung palpak ang nabili, walang turuan. Responsibility is permanently fixed. No chance to point fingers at scapegoats,” he said.

It would also relieve the PS-DBM of the work of cleaning up the mess of other agencies. Recto said. “In fairness to them, they did not solicit these accounts. These were dumped on them.”