Budget Watch

Senators grill DSWD over P50-B ayuda contract with ‘bankrupt’ e-wallet partner

Bonz Magsambol
Senators grill DSWD over P50-B ayuda contract with ‘bankrupt’ e-wallet partner
'Ito ba ay Pharmally ng DSWD o hindi?' asks Senator Kiko Pangilinan

A Pharmally-like deal?

Senators on Monday, October 11, grilled the Department of Social Welfare and Development (DSWD) over its P50-billion deal with a “lesser-known” financial service provider (FSP) to distribute cash aid in 2020.

At the Senate hearing on the DSWD’s 2022 budget on Monday, Senator Manny Pacquiao, who filed his candidacy for president, questioned why DSWD tapped Starpay for the distribution of the second tranche of the Social Amelioration Program (SAP).

“Kumpara sa GCash, mahirap yata intindihin ‘yung explanation kung bakit ganoon kalaki yung nakuha ng Starpay na pondo para dito sa GCash at PayMaya na mas malaki di hamak yung companies na ito,” Pacquiao said.

(It’s hard to understand how Starpay got bigger deal than well-known and bigger companies like GCash and PayMaya.)

Pacquiao said that in 2019, Starpay even declared bankruptcy.

“Tapos pagdating ng 2020, nakakuha sila ng more than P50 billion na pondo na galing gobyerno. Paano?” he asked. (Then in 2020, they were given P50 billion more funds from the government. How?)

In July, Pacquiao bared multibillion corruption allegations under the administration of President Rodrigo Duterte, including the missing P10.4 billion in pandemic aid.

Starpay rejected the corruption claims of Pacquiao, saying that its transactions were aboveboard and accounted for.

He accused the DSWD of corruption, saying it entered into an agreement with e-wallet app Starpay to disburse SAP funds, but some 1.3 million beneficiaries were unable to get the financial assistance.


In the same hearing, Senator Kiko Pangilinan interjected to ask: “Ito ba ay Pharmally ng DSWD o hindi?” (Is the the Pharmally of the DSWD?)

“Siguro yun ang pinakatanong. Kumpanyang nalugi at ngayon ay may P50 billion na nilaan na pondo, habang mayroon 42 million subscribers ang GCash,” he added.

(Maybe, that’s the question. A company that’s bankrupt and now given P50-billion deal, while GCash has 42 million subscribers.)

Pharmally Pharmaceutical Corporation has been the subject of marathon congressional hearings after bagging biggest contracts for the government’s pandemic supplies at P10 billion so far. This, despite the company’s being only several months old and having just P625,000 in paid-up capital.

In response, DSWD chief Rolando Bautista said that they sought assistance from the Bangko Sentral ng Pilipinas in selecting FSPs they would deal with.

During the hearing, it was bared that initially, Starpay was supposed to handle cash transfers to only 1.6 million beneficiaries. However, the DSWD allowed the e-wallet company to handle more beneficiaries since other FSPs didn’t have offline capability to do transactions.

“Yung iba walang mga cellphones. Kaya po dumaan sa masusing assessment at nakita po namin ang capability ng Starpay at RCBC (Rizal Commercial Banking Corporation) na puwede nilang i-redistribute ang mga hindi po naserbisyuhan ng ibang financial service providers,” Bautista said.

(Some don’t have cellphones. That’s why it underwent a careful assessment and we found that Starpay and RCBC could redistribute the unreleased aid from other financial service providers.)

Aside from Starpay, the DSWD said it also engaged the services of other FSPs including Robinsons Bank, UnionBank, RCBC, GCash, and PayMaya.

Senator Imee Marcos echoed the sentiments of other senators on how Starpay was given the biggest deal considering that it is the smallest of all FSPs.

Meanwhile, Senator Nancy Binay asked the DSWD to provide them with information on how the agency came up with their decision in selecting FSPs.

“Why a certain process was given to a FSP? What’s the decision process?” she asked. – Rappler.com

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Bonz Magsambol

Bonz Magsambol is a multimedia reporter for Rappler, covering health, education, and social welfare. He first joined Rappler as a social media producer in 2016.