EDITORIAL - The PS-DBM as an investor

The principal mandate of the Procurement Service of the Department of Budget and Management is to purchase common-use supplies and equipment for the day-to-day needs of government offices. CSEs include a wide range of items, from desktop computers and electric fans to pencils and notebooks, waste baskets, brooms and rulers.

Why a government office cannot directly buy its own toilet air freshener and trash bag is mystifying. The Department of Health may be forgiven for entrusting the procurement of personal protective equipment to the PS-DBM, at a time when the DOH had its hands full trying to contain the spread of COVID-19 long before vaccines became available. Apart from the faster release of funds for the PPEs, the DOH said it believed the PS-DBM had the expertise for such procurements.

Those were PPEs – and the emergency procurement could yet lead to criminal indictments for those behind the deal cornered by the well-connected Pharmally Pharmaceuticals. But why do government offices need to go through another agency to buy mops and rubber bands? Apart from the red tape, the mandate opens broad opportunities for anomalous deals.

Now it turns out that the PS-DBM has not only become embroiled in questionable procurements but also “deviated from its mandate.” The Commission on Audit recently flagged the PS-DBM for putting over P3 billion into high-yield savings accounts with the Land Bank of the Philippines and Development Bank of the Philippines. How did the PS-DBM become involved in earning interest from bank deposits?

“It is not in (the PS-DBM’s) mandate to make investments and it has no authority to invest in (a high-yield savings account),” the COA said. “The practice of investing cash in high-yield savings accounts, therefore, deviates from its mandate of procurement of CSE which requires utilization of funds.”

Another issue raised by state auditors that the PS-DBM must clarify: the source of the funds placed in the DBP account that was created over five years ago “could not be specifically identified.”

After being called out by the COA, the new team in the PS-DBM said the P3 billion is “intact” and would be returned to the National Treasury. Beyond returning funds, those behind the questionable acts must be investigated for possible criminal violations. This latest mess reinforces growing calls in Congress to abolish the PS-DBM. If an agency has to go through another agency engaged in centralized procurement just to buy paper clips, the government is in trouble.