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Senators question state procurement firm with P9 billion owed to gov’t agencies

Senators Franklin Drilon and Ralph Recto raised concern over billions of pesos in government funds parked with the Philippine International Trading Center (PITC) instead of being used by the agencies they belong to.

This was worrisome because the PITC was tasked to procure COVID-19 vaccines for the government’s plan to immunize 60% of the population, Drilon said.

During the Senate’s plenary debates on the 2021 national budget bill, Drilon and Recto questioned the point in government agencies outsourcing their procurements to the PITC, only for their funds to get stuck with the state-owned firm for years.

In the plenary session on Friday, November 20, Drilon said he was “appalled" that this "little-known procurement agency is keeping billions of pesos in taxpayers’ money" through undelivered services and unreturned balances, in some cases since 2009.

This, after it was revealed that P9.6 billion of the Department of National Defense’s (DND) funds has been “sleeping” in the PITC since 2017, which Drilon found to unacceptable.

Senator Panfilo Lacson, who sponsored the DND’s proposed 2021 budget, enumerated a breakdown of the P9.6-billion balance:

  • P6.3 billion owed to the Philippine Army
  • P1.9 billion owed to the Philippine Navy
  • P736 million owed to the Philippine Air Force
  • P582 million owed to the Armed Forces of the Philippines General Headquarters.

The PITC also owed the Philippine National Police some P1.347 billion in undelivered equipment, Drilon pointed out.

“I think Senator Lacson would agree with me that there should be a more detailed examination of this setup. I am appalled that P9.6 billion at least is in PITC’s hands. The money is sleeping there,” Drilon said.

The Senate Minority Leader then urged his colleagues to launch an inquiry into the matter.

“Honestly, I do not know anymore the extent of funds sleeping in the coffers of PITC. I think this requires closer scrutiny,” Drilon added.

Recto then asked Lacson why the AFP outsources “regular procurements” such as ammunition and construction projects.

“Why are regular purchases like bullets parked with PITC?” the Senate President Pro Tempore said.

Relaying responses from DND officials, Lacson said it was mostly because of “failed biddings.” Recto was dissatisfied with the reply.

Drilon afterwards issued a statement citing a Commission on Audit (COA) report that the PITC owes several government agencies P9.176 billion in balances. He expressed alarm at what he called the PITC’s “penchant not to return public money.”

The amount, according to the COA report, consisted of balances of fund transfers from various agencies from 2009 to 2019, which remained unused as of December 2019.

“This is bothersome. This agency is tasked to procure COVID-19 vaccines for Filipinos,” Drilon said.

From its planned procurement of P20 billion worth of COVID-19 vaccines, the PITC will earn a “commission” of at least P200 million, or up to P1 billion, he added.

When procuring for local agencies, the PITC charges this “commission” against the agency – when it should be charging it against the supplier, Drilon said.

According to its website, the PITC is the only state trading corporation in the Philippines. “We are a full-service government-owned trading company with more than 40 years’ experience in the import and export of commodities, industrial products and consumer goods,” the PITC website stated. –

JC Gotinga

JC Gotinga often reports about the West Philippine Sea, the communist insurgency, and terrorism as he covers national defense and security for Rappler. He enjoys telling stories about his hometown, Pasig City. JC has worked with Al Jazeera, CNN Philippines, News5, and CBN Asia.