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InterAksyon.com
The online news portal of TV5
MANILA, Philippines -- Instead of going to charity, billions of pesos in funds of the Philippine Charity Sweepstakes Office (PCSO) during the previous administration were malversed or wasted due to overpriced contracts, huge public relations expenses, and other operational expenses, Bayan Muna partylist Representative Neri Colmenares said.
Colmenares called for a congressional inquiry into the matter, as he highlighted how PCSO supposedly spent P5.3 billion for public relations that further dwindled its charity fund. The partylist representative said PCSO executed overpriced contracts, avoided bidding procedures, incurred losses of at least P10 billion, and co-mingled its charity fund, prize fund, and operational funds that "secretly allowed it to deduct from the 30 percent slice for charity to bloat its operation expenses."
Colmenares said that the state-run agency, since 2001, had spent around P5.3 billion for advertising and public relations. It also diverted some P150 million of public relations fund to intelligence fund, and gave 40 percent commission from advertisements to its top executives.
Citing records, the partylist lawmaker also said that the PCSO failed to transfer to the charity fund P699 million from 2006 to 2008.
Colmenares said that PCSO also entered into "anomalously priced contracts" running into billions of pesos, including the Berjaya-PGMC contract for the lease of lotto machines,
contract with an Australian firm for the supply of thermal paper, and for the hand-held small town lottery (STL) machines.
In 1995, instead of buying 3,525 machines, the PCSO executed a lease agreement with the Berjaya-PGMC for the lease of its lotto machines. Under the contract, PGMC was to be paid an amount equivalent to 4.3 percent of the total gross sales of these lotto machines. The PCSO was given the option to purchase these machines at the end of the eight-year contract for P25 million.
But instead of purchasing the machines at P25 million when the contract ended in 2004, PCSO renewed the lease for another eight years this time at 6.85 percent of the gross sales of lotto tickets.
The new contract will supposedly run up to 2015 because of the extended amended lease agreements signed by PCSO.
Colmenares said that PCSO also gave PGMC-Berjaya another three percent of the lotto gross sales telecom services and 0.15 percent for maintenance and repair of the machines for a total of 10 percent.
PCSO had gross sales of P27 billion from lotto in 2009, which means that PGMC was entitled to P2.7 billion for that year alone.
"The total sale of lotto from 2001-2004 is P28,889,896,330.00 and 2004 to 2010 is P91,342,952,040.00 which means that instead of buying the machines at P6,000 each and upgrading the same for a few hundred million, the PCSO gave away P11.9 billion pesos," Colmenares said.
"What makes this transaction worse is that PCSO relinquished control of the lotto system, making it possible for manipulation to be conducted in the PGMC computer center in Ortigas without PCSO’s knowledge. There was a reported brownout in the last week of June 2010 in the PGMC which the PCSO and this Congress should investigate," he added.
He said PCSO should also be investigated for entering into a 50-year joint venture with an Australian firm for the supply of its thermal paper amounting to P42 billion.
Congress should also look into the purchase of STL machines at P40,000 each from UBICON, a Korean firm, when each costs only P7,000.
The PCSO mandate is very clear, under Republic Act 1169 as "the principal government agency for raising and providing for funds for health programs, medical assistance and services and charities of national character," Colmenares said.
He said the PCSO has not been faithful to its mandate because of these anomalies, and that these should be investigated.
