Senators question DSWD over Starpay partnership for cash aid distribution

Senators on Monday grilled the officials of the Department of Social Welfare and Development (DSWD) over its partnership with financial service provider (FSP) Starpay for the distribution of billions worth of financial aid to families affected by the COVID-19 pandemic.

At a Senate budget hearing, Senator Manny Pacquiao questioned the financial standing of Starpay which, he said, was tapped by the DSWD to distribute more than P50 billion for the second Social Amelioration Program (SAP) in 2020.

“Nung 2019, nagdeklara ng paglugi itong Starpay tapos pagdating ng 2020, nakakuha sila ng more than P50 billion na pondo na galing gobyerno. Paano?” he asked.

(In 2019, Starpay had declared that they were losing money. Then in 2020, they managed to get more than P50 billion from the government. How did this happen?)

Pacquiao, who first alleged irregularities in the “ayuda” distribution, argued that only a few people had downloaded the Starpay app as compared to the reach of other financial service providers like G-Cash and PayMaya.

“Mahirap yata intindihin yung explanation kung bakit ganoon kalaki yung nakuha ng Starpay,” he noted.

(It is hard to understand any explanation why Starpay managed to get that huge amount.)

After Pacquiao raised this, Senator Francis Pangilinan then pointed out that this might be a case similar to Pharmally Pharmaceutical Corporation, a small firm with a start-up capital of P650,000, that managed to bag billions worth of government contract for the procurement of medical supplies.

“Ito ba ay Pharmally ng DSWD o hindi?” Pangilinan asked.

(Is this the Pharmally of DSWD or not?)

“Siguro ‘yun ang pinakatanong niya, kumpanyang nalugi at ngayon ay may P50 billion na nilaan na pondo para sa kanilang operations, habang mayroon 42 million subscribers ang G-Cash,” he further pointed out.

(Maybe that is the main question that we want to point out. The company which was facing bankruptcy has P50 billion funds for their operations while there are other FSPs like G-cash with 42 million subscribers.)

Pacquiao seconded Pangilinan’s observation, saying “ang tingin ko mas mahigit pa ito sa Pharmally.”

(I think this is bigger than Pharmally's case.)

Senator Panfilo Lacson also asked if the DSWD had observed “due diligence,” as he noted “familiar names” such as Uy and Lao in Starpay’s stakeholder list based on their registration with the Security and Exchange Commission.

In response, DSWD Secretary Rolando Bautista said all their actions and decisions on the SAP distribution through FSPs were assisted by the Bangko Sentral ng Pilipinas (BSP).

“Lahat po ng aming ginawa, lahat po ng aming aksyon, desisyon ay kumuha po kami ng technical assistance ng atin pong Bangko Sentral ng Pilipinas,” he said.

(We asked for technical assistance from BSP in all our undertakings, our actions, and decisions.)

“Kaya po nagkaroon po tayo ng [Memorandum of Agreement] sa DSWD with the BSP at ang kinalabasan din po nun ay yung terms of reference na ito po yung kasunduan sa ating mga financial service providers,” he added.

(That’s why there’s a MOA between the DSWD and BSP and that resulted in terms of reference with our FSPs.)

DSWD Director Katrina Grace Ongoco further explained that DSWD had sent as many invitations as they could to get proposals from potential FSP partners.

“Nakatanggap po kami ng pito na financial service provider proposals at mula po sa pito, anim lang po ang nakapag-qualify po at ayun po yung aming mga naging partner FSP,” she said.

(We received seven proposals and only six FSPs qualified to be our partner.)

At the latter part of his interpellation, Pacquiao called on the Commission on Audit to look into the SAP funds that were distributed through FSPs, particularly the government money that was transferred to StarPay.

In July, Pacquiao claimed that P10.4 billion in SAP funds were not distributed to beneficiaries.

Pacquiao said the government provided P207.6 billion for the second round of the SAP. Of this amount, the DSWD routed more or less P50 billion to an e-wallet service called “Starpay.”

Of 1.8 million SAP beneficiaries, the lawmaker said only 500,000 downloaded the Starpay app.

“Sa mga hindi nakakaalam hindi pa pwede mag-receive or withdraw ng anumang halaga kung wala kang Starpay app,” Pacquiao previously claimed.

(For those who don't know, you cannot receive or withdraw the cash aid without a Starpay app.)

This e-wallet service, which he said was not popular in the market, had P62,000 in start-up capital. — DVM, GMA News