Drilon says PITC ‘shortchanged’ gov’t by ‘keeping’ P1-B interest income

Senate Minority Leader Franklin Drilon is not yet done with the Philippine International Trading Corp. (PITC) despite the recent Department of Finance (DOF) endorsement for the return of various funds “parked” in the state trading firm.

This, as Drilon alleged that the PITC shortchanged the government by P1 billion in interest income that it should have remitted to the national coffers pursuant to Presidential Decree No. 1445 or the Government Auditing Code of the Philippines.

In a statement on Saturday, the senator, who earlier exposed the parked P33 billion in PITC’s bank accounts, said that the PITC’s earnings from interest income on fund transfers from various source agencies for the period 2016 to 2019 reached P1,406,727,544.

However, he claimed that only 28% of which or P392,575,316 were remitted to the government covering the same period, “which is a clear violation of Section 65 of PD 1445.”

The PITC has earlier denied it serves as a “parking lot” for unused funds of various government agencies.

But, Finance Secretary Carlos Dominguez III sent a letter to the Department of Budget and Management (DBM) “to request for the endorsement to the President by the [DBM] for the return to the Bureau of the Treasury of the various fund transfers to PITC by certain government agencies, pursuant to DBM’s guidelines on the matter.”

The letter also indicated that a total of P32.6 billion is still with the state trading firm PITC as of October 31, 2020.

“Pursuant to Section 65 of Presidential Decree No. 1445, or the Government Auditing Code of the Philippines, all interest earning of the fund transfers must be remitted to the national treasury,” Drilon said.

Citing the Commission on Audit (COA) findings, the senator said interest earnings on fund transfers from various source agencies invested in Money Market Placement were recorded as income of the PITC, instead of remitting them to the National Treasury which is not in accordance with Section 65 of PD 1445 and Department of Finance (DOF) Circular No. 01-2017.

“It’s a devious scheme. They remit funds to make it appear they are compliant but, in reality, what they remit is ‘loose change’ compared to the amount that they are holding back from the government,” Drilon said.

“To me, PITC is acting more like a network marketing and a money remittance agency ‘taking’ money from across the bureaucracy rather than a trading corporation, which is its primary mandate,” he added.

Drilon said another scheme being committed by PITC is recording its interest earnings as its own corporate income, which the senator called “illegal, not to mention disadvantageous to the national coffers, that should be stopped.”

“PITC’s charter is very clear- it may invest its own corporate funds. But these are not PITC corporation funds, these are deposits from source agencies, transferred to it for a very specific purpose – for the sole purpose of purchasing various products authorized under the appropriations law,” he said.

The COA also categorically stated that “these funds are only held in trust therefore, any benefit derived therefrom (i.e. interest from money market placements and investments) technically accrues to the fund owners”, he noted.

“This is not the money of the PITC but of the different agencies. PITC does not have the authority or right nor the power to retain any portion of the interest income,” Drilon stressed.

As of December 2019, the PITC’s consumer deposits, held in various trusts and money market instruments, as reported by COA, have reached over P33 billion. -MDM, GMA News