Lawmaker exposes multi-billion PCSO anomalies

MANILA, Philippines - Bayan Muna Rep. Neri Colmenares exposed today various anomalies in the Philippine Charity Sweepstakes Office (PCSO) during the previous administration.

In a privilege speech, Colmenares said the irregularities include “anomalous contracts, diversion of funds and overpriced machines.”

“These anomalies are larger than the government’s botched $330-million national broadband network contract with Chinese firm ZTE Corp. and the P728-million fertilizer scam,” he said.

“The common denomination is that the victims are still the Filipino people, especially the poor who need medical and other assistance,” he said.

Going into specifics, Colmenares cited PCSO’s contract with its lotto machine supplier, Philippine Gaming and Management Corp. (PGMC)-Berjaya.

He said in 1995, the PCSO leased 3,525 lotto machines from PGMC-Berjaya, which was paid 4.3 percent of gross lotto sales generated with the use of such machines.

He said the charity agency had the option of buying the machines for P25 million at the end of its eight-year contract with its supplier.

“But instead of exercising its option to buy the machines for P25 million, the PCSO renewed the lease, this time at 6.85 percent of gross sales, plus three percent for telecom services and .15 percent for maintenance and repair, for a total of 10 percent. The new contract will run up to 2015,” he said.

He pointed out that in 2009 alone, the PCSO grossed P27 billion in lotto sales and paid PGMC-Berjaya P2.7 billion for the leased machines.

Colmenares said between 2001 and 2010, the agency gave away P12 billion to its supplier.

“The PCSO could have saved a lot of money and helped thousands of sick people had it exercised its right to buy the machines and operate them itself,” he stressed.

“The money it gave away to its machine supplier could have helped 12,000 cancer patients, could have bought 12,000 ambulances and could have funded 12,000 organ transplants,” he said.

He also questioned the contract for the supply of hand-held small-town lottery (STL) machines by Korean firm Ubicon.

He claimed that the gadgets cost only P7,000 apiece but were sold to STL operators for P40,000, or an overprice of P33,000.

“These STL operators should immediately file criminal and civil cases against the entire PCSO board for anomalously forcing them to purchase overpriced handheld STL machines,” he said.

He said another anomalous contract bound the PCSO to source its thermal paper for 50 years from an Australian company.

“This contract is worth a staggering P42 billion,” he said.

Aside from irregular deals, Colmenares said the previous board and management of PCSO spent a whopping P5.3 billion for PR (public relations).

Some unscrupulous agency officials pocketed 40 percent of the cost of PR and advertising contracts, he added.