Drilon appalled by P9.6-B in ‘sleeping’ defense funds at PITC

Senate Minority Leader Franklin Drilon on Friday flagged a P9.6 billion fund of the Department of National Defense (DND) that was "sleeping" in the coffers of the Philippine International Trading Corporation (PITC), a state enterprise under the Department of Trade and Industry.

During the Senate plenary debates on the proposed P215 billion budget of the DND for 2021, Drilon asked how much of the DND's funds were still with the PITC.

"Don't be horrified by the figures... Outstanding balance as of 30 June 2020 with PITC, a total of P9.623 billion," said Senator Panfilo Lacson, sponsor of the DND budget.

This consisted of P6.3 billion from the Philippine Army, P1.99 billion from the Philippine Navy, P736 million from the Philippine Air Force; and P582 million from the General Headquarters, according to the senator who is also the chairperson of the Senate committee on national defense.

These funds cover the regular procurement of Combat Clothing and Individual Equipment, ammo, information, and communications technology, and various construction projects. It does not include those for the Armed Forces' modernization program, Lacson noted.

These funds had been with the PITC since 2017, he added.

"I am appalled that P9.6 billion at least is in the PITC's hand... as far back as three years ago, our money is sleeping there," Drilon said.

"The system, Mr. President, if I can guess is that on record, on the financial records of the AFP, it would appear that the budget has been obligated because the amounts are transferred to the PITC for the purposes of purchasing either services or goods," he added.

Lacson agreed and stressed that with this practice, the obligation rate of the government agencies could be "misleading" as the funds are lying idle with the PITC.

The minority leader also pointed out that the PITC, as a depository of the said funds is earning interests.

"Instead of the AFP earning interest, and instead of the national government earning interest, it is the PITC now who earns interest," Drilon said.

Senate President Pro Tempore Ralph Recto asked why the DND has to tap the PITC for regular procurement.

"Kung regular yung P9.6 billion na pinark sa PITC, regular meaning to say bala as an example, those are regular purchases that can be done... regularly by the AFP, so bakit pa pinark sa PITC?" he asked.

"After failed biddings, Mr. President, kaya nila ipinasa sa PITC," Lacson replied after conferring with DND officials.

Earlier in the day, Recto also flagged the Department of Information and Communications Technology's P3.5 billion fund idly lodged at the same government corporation.

The senators agreed that a deeper investigation into the issue of funds being parked in the PITC must be conducted. — DVM, GMA News