COA: Wanda Teo may be liable for graft over PTV ad placement

Former Tourism Secretary Wanda Teo may be liable for graft for alleged conflict of interest over the airing of advertisements placed on the program of her brother in state-run People’s Television Network (PTV), according to the Commission on Audit (COA).

In its 2017 audit report, COA said the memorandum of agreement (MOA) between DOT and PTV showed possible conflict of interest and “undue injury to the government” when 75 percent, or P89.9 million, of the total P120 million project cost went to Kilos Pronto.

Kilos Pronto is a program produced by Teo’s brother, Ben Tulfo, under Bitag Media Unlimited Inc. (BMU).

“Considering that the DOT Secretary and the producer of Kilos Pronto are siblings, there is a possible conflict of interest which may be a violation of Section 3(e) of the Anti-Graft and Corrupt Practices Act which states that one of cases that constitute corrupt practices of any public officer and are therefore declared to be unlawful,” COA said.

COA earlier flagged PTV for its payments made to BMU worth P60 million due to lack of supporting documents. 

Teo, who resigned from the DOT following the controversy, has denied irregularity in the advertisement, saying they decided to air it on PTV to support the state-run station.

"There is no conflict of interest because at the end of the day, the contract was between PTV-4 and DOT," Teo said in April.

COA, in its DOT audit, said the agency was non-compliant with its MOA when it failed to submit documents such as accomplishment reports and proof of broadcast to support the P45-million payment to PTV.

It said payments should only be made to the state-run network once it completes the submission of supporting documents.

Low viewership

Furthermore, COA said Kilos Pronto was given undue advantage in the airing of the tourism ad campaign based on airtime schedules provided in the MOA and media plan with PTV.

COA said Kilos Pronto aired 157 six-minute segments and 1,232 one-minute ads, whereas other PTV programs only had a combined 576 60-seconder spot placements aside from one travel program.

“Based on the airtime schedule provided in the MOA and media plan, Kilos Pronto will get most of the cost of airing since the DOT TVC will be frequently aired within their program and it is the only program that will provide a segment for DOT,” the report read.

COA also questioned why the DOT opted to air its ads on PTV in the first place, noting its low viewership compared to other major television networks.

It said the Bids and Awards Committee (BAC) did not even conduct a cost-benefit analysis of the agency-to-agency procurement between the two government entities.

“It was noted that the BAC did not inquire or request quotations from other television networks nor conduct a cost-benefit analysis as basis for the recommendation to use the Alternative Mode of Procurement of Agency-to-Agency Procurement, considering that it is the first time for the DOT to enter into a news-type magazine segment contract,” COA said.

“It should be pointed out that PTV has a low viewership as compared to other networks which could defeat the purpose of increased tourism awareness,” it added.

Cost-efficient

In response, DOT said the mode of procurement had the approval of Teo’s office which claimed good faith in entering the MOA with PTV.

DOT said lawyer Arlene Mancao, who represented Teo during the pre-procurement conference, justified that the preference with PTV is more cost-efficient.

“Given that PTV is a government agency, it is deemed that the budget will only be transferred from one government coffer to another and will still be part of the income of the government,” DOT said.

DOT also argued that ad rates on GMA and ABS-CBN for a daily 30-second spot would cost the government three times more than what PTV offered.

The agency said the agreement with PTV would last for one year. All equipment, production, and personnel needs of DOT for its segments and primetime show would also be provided by the state-run network.

No conflict exists

As for the supposed conflict of interest, DOT said “no such relationship exists” insofar as the BAC is considered since Teo is presumed to have addressed any question of propriety.

“When the proposal came to the BAC, it is presumed that the same has been reviewed by the staff of the Secretary as it already bore her approval and signature,” DOT said.

“Thus, questions of propriety of the transaction and possible conflict of interest should have been addressed by the OSEC as the end-user unit and project officer,” it added.

COA issued a notice of disallowance dated June 5, 2018 on the subject transaction.

It had also mentioned Teo when she purchased P2.5 million worth of luxury items in Duty Free Philippines.

The Office of the Ombudsman has already launched an investigation on the multi-million-peso tourism campaign. —KBK, GMA News