DTI willing to return PITC’s P1.15 billion interest income

MANILA, Philippines — The Department of Trade and Industry (DTI) is willing to return to the national government the balance of interest income earned from funds with its attached agency Philippine International Trading Corp. (PITC), as the Department of Finance (DOF) called for the funds to be given back to support the fight against the coronavirus pandemic.

“We have no problem on remitting the balance of interest income earned from the funds, especially if it is to fund the requirements to address the COVID-19 pandemic. PITC is a government corporation and we have a whole-of-government approach in fighting the pandemic,” Trade Secretary Ramon Lopez said in a Viber message yesterday.

In a letter to Lopez, Finance Secretary Carlos Dominguez III said the P1.15 billion earned by the PITC from the funds was recorded as interest income when this should have been remitted to the National Treasury.

Dominguez cited a 2019 report by the Commission on Audit, which at that time found PITC recorded its interest earnings “aggregating P581.135 million as of Dec. 31, 2019” as the corporation’s income, instead of remitting these to the National Treasury.

He said the PITC’s interest earnings were from cash and investment balances transferred by several national government agencies to the state-run firm to be used to procure their various requirements.

These fund balances, which are considered as trust liabilities of the PITC, amount to P33.3 billion and P32.6 billion as of the end of 2019 and Oct. 31, 2020, respectively, Dominguez said.

“Following our discussion, we would like to request the return to the Bureau of the Treasury (BTr) by PITC, the interest earned on such funds held in trust. From 2018 to 2019, the interest earned on such funds totaled P1.151 billion,” he said.

Lopez said the PITC has been managing its funds and annually turning over 50 percent of the interest income from the funds to the National Treasury.

Last week, Senate Minority Leader Franklin Drilon urged the Senate to compel the PITC to return alleged funds parked with the state-run firm to the National Treasury, after serving as a procuring agency in behalf of other government agencies.

Both Lopez and PITC president Dave Almarinez have said the funds with the firm are accounted for.

Meanwhile, senators said they are wondering what’s taking PITC so long to return the P33 billion.

“We can cite the anti-graft law, especially the provision on causing undue injury due to gross and inexcusable negligence, if no action will be done soon. It is criminal that there is a sitting unutilized P33.4-billion fund when we are struggling to look for ways to pay for COVID-19 vaccines and provide aid for millions of typhoon victims. And we are yet to receive a convincing answer as to why it is just sitting there,” Sen. Francis Pangilinan said.

“The executive should immediately direct the PITC to return the money to the National Treasury for proper disposition,” he said.

Pangilinan said Dominguez and Budget Secretary Wendel Avisado should exert greater effort in pressuring the PITC to return the money.

Last week, Drilon said DTI’s Lopez appeared to be covering up for PITC officials as evidence of irregularities was “obvious.” But Drilon said he does not see any liability on the part of Lopez, who chairs the PITC.

Sen. Imee Marcos said the government was “hard put” to choose which agency to assign to handle the procurement of vaccines for COVID-19, as doubts are cast on PITC’s credibility.

“We’re really hard put in choosing which government agency will finally handle vaccine procurement. The Department of Health and PhilHealth are surrounded by corruption scandals, while the performance in previous procurement by the PITC, which is the government’s trading arm, has been short of stellar,” said Marcos.

Marcos said the government should ensure a mechanism for purchase and distribution is in place as soon as the Food and Drug Administration (FDA) certifies a COVID-19 vaccine.

“Once the FDA approves the vaccine, government protocols on procurement should already be in place,” Marcos noted.

“The mass distribution of vaccines is just as important a concern as their procurement. We have to make certain that the DOH and LGUs distribute the procured vaccines to our highly vulnerable, high-risk groups,” she added. – Cecille Suerte Felipe, Paolo Romero